Current trends of transnationalization of economic activity: innovative aspects

L.I. Mykhailyshyn1, V.S. Svirskyy1
1. Ternopil National Economic University (Ternopil, Ukraine)
Innovative Management
204 - 210


The aim of the article is to study the evolution of the transnationalization process and define key trends and tendencies that have occurred during the expansion of transnational corporations (TNC) as key participants in the innovation development of the global economy.

The results of the analysis. The internationalization of trade and foreign direct investments are core development trends of the past fifty years. The paper describes current tendencies of TNC’s evolution and innovation activity. It is found that TNCs were the main engines of global growth, technological transfer and deepening economic, political and cultural globalization. The importance of large TNCs is illustrated in this article using data measuring revenues of these firms, percentage in the global industrial production and international trade. Volumes of revenue of certain TNCs exceed the national budgets of entire countries, nay regions. The genesis of transnationalization is considered and three main stages of these processes are highlighted.

The key factors of TNC’s intensive development in the modern global economy are the accumulation of sufficient funds for expansion into new markets; effective global horizontal and vertical diversification; flexible transformations of business models; optimization subsidiaries considering economic and political conditions in the country; possibility of extending the life cycle of outdated technologies, goods and services through their movement to subsidiaries; using the latest innovative strategies for the benefits of access to resources, capital and research and development in the parent company country.

Modern transnational corporations were the core engines of the economic development, technological transfer and deepening globalization worldwide. It is found that innovation play a growing role in the competitive advantage of TNC’s in the XXI century. The share of TNCs in the global market innovations in the early 2 000s approached to 50%. Modern TNCs own about 95% of world patents and licenses. In recent decades they are in the Top 100 companies applying for patents. It is noticed, that members of this rating are transnational corporations who mainly represent the electrical equipment and transport industries, information and computer technologies. Despite significant volumes investments in research and development in the Top 100 companies applying for patents there are no TNCs representing such innovative sectors as pharmaceuticals and biotechnology.

The main characteristics of modern innovative structural divisions of multinational corporations and the aims of their operation are analyzed. It is summarized that TNC’s innovative units evolved from simple monitoring and adaptive branches to intercorporate technological alliances. Features of creation and functioning of international strategic alliances in the innovation sphere are described. Strategic intercorporate alliances allow TNCs not only remain competitive in the global economy, but also leads to the emergence clusters of new regional economic cooperation.

Conclusions and directions of further researches. Modern TNCs are the main initiator and consumer of innovations. They are able to change their internal structure flexibly, adapting it to current needs and requirements for the aim to acquire global competitive advantages. The transformation TNC’s innovation requires the development of new management techniques for the formation of new competitive strategies in a global economy of the XXI century. That is the prospect of further research in this area.

globalization, transnationalization, international business, global economy, innovation strategies, transational corporations, research and development

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