Comparative investment strategies in training and technology
by Martin K. Starr
International Journal of Technology Management (IJTM), Vol. 8, No. 1/2, 1993

Abstract: The amount invested in new technology and expenditures made for training people to use the new technologies can differ widely among firms. We have been studying these cost differentials for various categories of companies and have found interesting differences based on the age of companies, the type of industry, and the nationality of the parent company. This paper deals with the last category. That is, we report on our study of companies associated with unique nationalities and culturally disparate management models. Based on these studies, which began ten years ago, and which were updated in both 1989 and 1990, a comparison is drawn between various US and foreign-affiliated firms that are operating in the USA using American workers. Specifically, we have focused on Japanese and European firms, including manufacturing transplants, operating in the USA. We have found significantly different investment strategies for: (1) buying new technology, (2) doing R&D, and (3) spending on training, according to the national orientation of the firm. These diverse investment strategies are associated with distinctly disparate performance levels of the firms. In general, simultaneously larger investments in both technology and training appear to be rewarded. This characterizes the Japanese-affiliated firms. Smaller investment levels for all three categories characterize the European-affiliated firms. US firms tend to spend considerably more on R&D than any of the foreign-affiliates.

Online publication date: Sun, 24-May-2009

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