GMR Research Team

Learning Curve Emergence of the metanational corporation Ability to discover, mobilize and leverage the knowledge dispersed around the world as the basis of competition Location of origin not a hindrance to compete

Would you pick Finland as your home base from which to storm the international market for the mobile telephones? Would you select Switzerland as your launching pad to break into the international market for guided missile systems? Would you choose Japan as the location from which to compete with Steinway in the global markets for pianos? Would you rather try to build a global leader in the personal computer business from a base in Silicon Valley or from Taiwan? Can you ever dream of China being the best place to start a global insurance company? If you wanted to dominate the global market for integrated business software, can you ever think of locating your headquarters in Germany?
Higher chances are that you wouldn't have done any of the above. Yet, Nokia became the world leader in mobile telephony from a base in Finland. Oerlikon broke into the international market for missile systems from Switzerland. Acer of Taiwan grew to be the number three personal computer company in the world. Yamaha of Japan has become the world's largest supplier of pianos. AIG, one of the most successful international insurance companies, got its start from China. SAP of Germany became the world's largest supplier of integrated business software.
What do these companies have in common? That they had the advantage of being born in the wrong place!!!
Being in the wrong place actually means that they were outside the traditional capitals of their industries. A large part of the knowledge that they needed to compete globally was not available in their home country. At the very first glance, it may seem to be very unlikely place to look for the keys to future competition in the global knowledge economy. But in fact, it is these global leaders born in the wrong place that are most advanced in the game of unlocking the potential of the knowledge imprisoned in the local pockets scattered around the world. As the knowledge they needed was not available at home, they had to develop the skills sensing, mobilizing and operationalizing technologies and market knowledge drawn from abroad.
Necessity became the mother of invention. They learned the metanational capabilities because they had to. They had no other option left for competing for the global market shares.

It is these global leaders born in the wrong place that are most advanced in the game of unlocking the potential of the knowledge imprisoned in the local pockets scattered around the world

The prefix meta - comes from the Greek term for “beyond" - has been chosen to emphasize a key point: Metanational companies do not draw their competitive advantage from their home country, nor even from a set of national subsidiaries. Metanationals view the world as a global canvas dotted with pockets of technology, market intelligence and capabilities. They see untapped potential in these pockets of specialist knowledge scattered around the world. By sensing and mobilizing this scattered knowledge, they are able to innovate more effectively than their rivals. This new opportunity is being fuelled by the emergence of a global knowledge economy, which means that the opportunities and challenges of exploiting knowledge scattered around the world that becomes a key concern of senior managers across the spectrum of industries from mining to manufacturing and professional services. Though the idea of mobilizing the globally dispersed knowledge has not been very new, but the innovation based on accessing, mobilizing and leveraging pockets of knowledge drawn from around the world has been the exception. However, in the global knowledge economy, this will definitely play a very critical role to success.

As the companies start unlocking the value of the globally dispersed knowledge, they will no longer be captive of their geographical roots

The Metanationals thus fundamentally differ from their counterpart, the multinationals. Unlike most of the today's multinationals, they won't try to prosper by spreading advantages learned in their American, German or Japanese headquarters or subsidiaries across the world. Instead, the Metanationals focus on prospecting for untapped pockets of knowledge around the world.
The rise of the global knowledge economy has given rise to a new opportunity in the global corporate landscape: the chance to build new types of competitive advantage by connecting the globally dispersed knowledge to create new products, services, processes and business models. This global knowledge, scattered around the globe, will become the major concern of the senior managers across the spectrum of industries from mining to manufacturing and professional services. The impact, as it may have been thought, will not be restricted to a couple of industry sectors such as electronics or information technology, or to be more precise, the so called knowledge-intensive industries. Mobilizing this dispersed knowledge for the overall good of the organization will then definitely not be confined to any particular continent or community and will be equally important to the American corporate giants, as it will be important to the Japanese and the Europeans. Thus, as the companies start unlocking the value of the globally dispersed knowledge, they will no longer be captive of their geographical roots. Nor will they be accused of behaving like the twenty-first century imperialists, imposing the exploits of their homeland on malleable markets worldwide. These new metanational leaders will emerge from unlikely locations, far away from the traditional capitals of their industries. The key advantage will not come from crossing the borders between nation-states, but by transcending them. These metanationals will thus thrive on seeking out and exploiting uniqueness. They will value the geographic and cultural differences and exploiting the uniqueness in these. And as they will be consolidating the knowledge in the global arena, they will definitely emerge out as winners to their multinational counterparts in their race for the future market share and grabbing customer loyalty.

Three Distinct Capabilities that are needed…
The prime challenge of building the metanational corporation for an organization is to have it built ahead of its competitors. However, the challenge of sensing, connecting and exploiting complex knowledge that is scattered across the globe is undoubtedly formidable. To stand out of competition, the winners in the new knowledge economy must be ahead of their competitors in sensing, mobilizing and optimizing their operations along the line of this newly acquired global knowledge.
Sensing: Sensing is the race to identify, and access new and relevant technologies, competencies and knowledge of the lead markets emerging in locations dotted around the world. Where for example, the next advance in bio-technology is being hatched? Where are the consumers experimenting with newer models of and uses of mobile phones? However, identifying and accessing knowledge that the rivals already have will only bring in parity. The cutting edge, however, can only emerge out of a sensing network, which can identify the global sources of knowledge and thus, the trends of the global market. But sensing is not enough. A company that has a state-of-the-art sensing network only will land up in being a well-informed global debating society.
Mobilizing: This level of competition is in the effectiveness and speed with which companies can connect these globally scattered pieces of knowledge and information and use them to create innovative products, services and processes. A successful metanational thus needs a set of structures (which may be virtual, temporary or both) to translate these new knowledge into innovative products or specific market opportunities. These new structures need to mobilize knowledge that is scattered in pockets, around the corporation and use it to pioneer new products and services, sometimes may be with the help of lead customers.
Operationalizing: Once the new product, service or business model has been pioneered, its profit potential must be realized. This means, scaling up the supply chain, improving efficiencies, making incremental improvements and engineering to local adaptations. Like traditional multinationals, the metanationals must configure and manage their operations for the sales growth and profitability.

These new structures need to mobilize knowledge that is scattered in pockets, around the corporation and use it to pioneer new products and services, sometimes may be with the help of lead customers

To understand these new opportunities, managers need to recognize, that the knowledge that their companies need to be the global leader, is becoming more dispersed and more diverse. Though it was possible in the not-so-far past to identify one market as the lead market, another as the fount of innovation, and yet another as the major source of innovation and the other as the source for global supply, but this distinction is fading away at a very fast pace. There is no single hotbed with a monopoly on the technological innovation. Researchers have found eight fundamental forces that are driving this trend towards greater global dispersion of the knowledge that the companies need to win globally. These are as follows:

Capabilities that the Metantionals need to build....
GOAL	CAPABILITIES
Sensing new knowledge faster and more effectively than	Prospecting Capabilities:The prediposition to prospecting for emerging packets of innovative technology the competitors, and new market needs.This prospecting capability allows companies to anticipate emerging hotbeds of relevant knowledgeaheads of the competitors. Accessing Capabilities: The ability to 'plug in' to innovative technology and new market needs through an established network of relationships with the foreign customers, suppliers and distributors, universities, and technical institutes. This provides access to emerging pockets of relevant knowledge.
Mobilizing dispersed knowledge to innovate more creatively than competitors.	Moving Capabilites: A effective process for setting up new system that will identify and move globally dispersed knowledge so that it can be marshaled for innovative problem solving. Melding Capabilities: A capability to melp knowledge about new technology and novel customers needs from diverse source into coherent innovation, overcoming the problem associated with the melding complex knowledge and integrating it into solutions.
Opertionalizing innovations more effectively than competitors	Relaying Capabilities: An ability to transfer newly created solutions, in usable from, into the day-to-day operations thet underpin the supply chain. Leveraging Capabilities: The capability to leverage innovation across global customer segments or application and to assemble an efficient global supply chain by flexibly combining the operational strength from different sites.These may either be established sites in an exciting network of operations or sites by partner.

Forces driving dispersion of Technological Knowledge …

* Industry convergence:
As industries converge, different streams of technology converge, and companies will need to master a more diverse range of technologies. But, these industries and technologies have tended to grow up in different locations around the world.

* Technology transfer:
As multinationals transplant competencies to new locations through their subsidiaries, new pools of competencies will develop. As a result, the pools of specialist knowledge a company could usefully access for innovation becomes more dispersed.

* Offshore sourcing:
As companies tend to get into contract manufacturing located outside the traditional clusters, the sources of new knowledge that flow from manufacturing process improvements will also become more dispersed.

* Technological complexity:
As products become more and more complex, the relevant sources of knowledge needed to design market, and deliver them to the customers become more dispersed. Most of the knowledge required to produce a simple, standard product may be found in a single location. But considering the specialist knowledge required today to produce a product of international standard, the plethora of the knowledge and the capabilities needed simply doesn't exist in a single country.
l “Random" breakthroughs:
New technological breakthroughs still have a large element of serendipity. Random events seldom occur in the strongest existing clusters or locations with the most resources devoted to a particular problem. Take for instance, the World Wide Web which happened to be invented in Geneva, Switzerland; Dolly, a lamb created from the DNA of an adult sheep mammary was ‘created' in Scotland, which was not the most obvious place of breakthrough in the genetic engineering.

Forces driving dispersion of Market Knowledge …

* New customer interactions:
As products and services are introduced into the new, formerly peripheral markets, new knowledge about potential customer applications or tastes will emerge from fragmented locations, which at a later stage may be utilized through out its presence in the globe.

* Globalization of customers:
As corporate customers, distributors and retailers themselves become more global, the relevant knowledge that they have accumulated will become more dispersed in small pockets across their own organizations. While obtaining a particular knowledge, it may be found that the knowledge is dispersed through out the continent.

* Solution selling:
As more and more companies start selling ‘solutions', rather than separate products and services, they will need to bring together the dispersed knowledge, as the know-how that underpins all of the pieces of a complex solution is unlikely to be found in the single location.

Developing these six capabilities may seem deceptively simple task, more for the existing multinationals that already see themselves as ‘transnational' entities. Two major hidden traps that exist in the belief of attaining these capabilities may be summarized as follows:

As industries converge, different streams of technology converge, and companies will need to master a more diverse range of technologies

New Challenges … * Global spread is no longer a distinct competitive advantage * A single national market no longer leads in most industries * Valuable knowledge is increasingly scattered * Valuable knowledge is sophisticated and sticky New Opportunities … * New sources of differentiation * New opportunities to unlock global consumers' latent needs * New ways to create unique advantage * Instant global reach and scale.

First is the mistaken belief that the six metanational capabilities can simply be squeezed into the existing structure of a multinational organization.
The second trap being the common belief that given ever more powerful information and communication technologies, mobilizing dispersed knowledge will basically mean to find suitable technology to connect people and places.
The road from global to metanational is challenging and uncertain. At the outset of this new millennium, the challenge of the globalization has changed - the race to penetrate the global markets is thus changed by the race to learn from the world. In the forthcoming days, these companies will have to harness and exploit this hidden potential by building new structures, teams, and processes around the global lead customers, global platforms and global platforms.

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