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- Title
TYRIMŲ IR PLĖTROS IŠORNAUDŲ KŪRIMAS: EKONOMINIS ASPEKTAS.
- Authors
Vasiliauskienė, Ligita; Snieška, Vytautas
- Abstract
Since changes in economy are becoming more and more intensive, companies seek to increase their efficiency, competitiveness and reduce costs. Therefore outsourcing (outside resource using) practice is becoming widely outspread. In the Directive 2004/39/EB of the European Parliament and the Council the term "outsourcing" is described as "entrustment of some activity functions to the third party". Although the translation of the term - "ordered services" is also pointful, short and convenient it does not fully reflects the nature of outsourcing. In the Directive 2006/73/EB1 the term "outsourcing" is sometimes translated as "ordered services" or "provision of ordered services" and sometimes - as "entrustment of some activity functions to an external service supplier". When it is necessary to use more specific description the last translation3 is more relevant. One can find other interpretations of the term "outsourcing". These are "service rent", "transfer of the works to other enterprise" and so on. That is why it is important to explain that in the article the authors use the term of outsourcing as the only one which reflects the nature of the issue in the best way. The purpose of the article is to find out whether it is beneficial to a company to outsource R&D activities or carry out the research in-house. What is more, the authors seek to reveal the impact of outsourcing on overall economic welfare. The methodology used in the article - the analysis of the scientific literature, the analysis, synthesis and comparison of the scientific papers published by Lithuanian and foreign authors. The article is based on the research whether it is beneficial to production companies to outsource R&D activities or carry out the research in-house and whether it is optimal to consider fixed or performance-based contracts with a principal agent. It was deduced that it is more beneficial to companies to consider performance-based contracts because such contracts help to increase the potential of outsourcing and ameliorate social efficiency. On the other hand, stronger protection of intellectual property need not induce more R&D outsourcing and thus need not enhance economic efficiency. However, protection of intellectual property can strongly influence other spheres of economy such as extension of product life cycle. The article consists of two parts. The first part is concerned with R&D outsourcing and the reasons why it can be beneficial to outsource R&D. The importance of cost reduction is highlighted. The second part is destined to highlight the influence of outsourcing to international trade and overall economic welfare. Improvement of international cooperation and reduction of government control are also considered. The analysis of the scientific papers published by Lithuanian and foreign authors gives the base to state that R&D outsourcings have a tendency to increase. However, they still take comparatively little part of overall R&D activity. One of the main reasons for that is the fear of information leakage and trade or production secret reveal in imperfect competition. Yet companies seek to make their products more competitive. Therefore, according to the theory of the product life cycle, they need to reduce costs, and one of the ways of doing it - reducing costs of R&D activity. From the other point of view, R&D outsourcing can be seen as the way of quality improvement and innovation process due to which companies can reduce costs. In a long-term period volumes of international trade can vary subject to changes of economic conditions or trade partners. In this case outsourcings help to increase this proportion and show better trade conditions and benefits from international trade, and vice versa.…
- Subjects
CONTRACTING out; INDUSTRIAL procurement; INDUSTRIAL research; SCIENTIFIC literature; TECHNOLOGICAL innovations
- Publication
Economics & Management, 2007, p932
- ISSN
1822-6515
- Publication type
Article