MIT Sloan Management Review Research Points to New R&D Framework in Light of Restrictive Immigration Policies

CAMBRIDGE, Mass., Sept. 9, 2025 /PRNewswire/ -- Restrictive immigration policies are limiting multinational enterprises' (MNEs) ability to execute on innovation demands. Growing restrictions on the movement of highly skilled professionals across international borders make it challenging for MNEs to assemble co-located teams with the expertise required for specialized innovation. New research in MIT Sloan Management Review introduces four approaches to rethink R&D strategies in order to maintain innovation excellence when talent is geographically dispersed.

Data shows that 1,786 U.S.-based MNE units applied for visas to bring foreign knowledge workers to the U.S. from 2022 through 2024. Current restrictive immigration polices ultimately limit MNEs' ability to transfer highly skilled foreign employees to central R&D hubs in their home countries.

"Our study found that responding to restrictive immigration policies by dispersing R&D teams among different countries had detrimental effects on innovation," stated Ram Mudambi, the Frank M. Speakman Professor of Strategy at the Fox School of Business at Temple University. "Unfortunately, MNEs have had to resort to suboptimal solutions such as hiring less qualified local candidates, working with employees remotely, or even abandoning projects altogether."

In "Building Innovation Teams Across National Borders," coauthors Mudambi, Solon Moreira, associate professor of entrepreneurship and strategy at Temple University's Fox School of Business, and Deepak Nayak, assistant professor at the Ohio State University Fisher College of Business, argue the case for global talent acquisition and examine the impact of R&D dispersion on innovation performance.

"If we examine innovation projects through the lens of two dimensions — activity codifiability and the relevance of the knowledge to the firm — we can offer managers a structured approach to reimagining how innovation can be effectively restructured and redistributed," said Moreira.

These four strategies from that framework can help companies capitalize on their global talent while managing the inherent challenges of dispersed R&D teams:

1. Immigration Arbitrage — exploit differences in national immigration policies to ensure access to global talent pools through geographic diversification of R&D operations.
2. Modularization and Architectural Isolation — separate innovation activities into specialized knowledge domains while maintaining their core nature.
3. Flexible Geographic Orchestration — a hybrid approach that combines structured global dispersion with boundary-free talent orchestration.
4. Regional Innovation Ecosystem Integration — a two-pronged strategy that combines internally established regional excellence centers (RECs) with strategic partnerships within regional innovation ecosystems.

"Thriving in an environment of restrictive immigration policies requires multinational enterprises (MNEs) to rethink their R&D talent strategies. By adopting a resilient and adaptive mindset, they can not only sustain innovation but also uncover new opportunities for competitive advantage," concludes Nayak.

The Research
The authors studied the impact of the 2004 H-1B visa cap reduction on 707 U.S.-based multinational enterprises, analyzing how immigration restrictions affected the geographic dispersion of inventor teams and innovation outcomes. Key findings include a 4.7% increase in geographic dispersion of inventors following the cap reduction and corresponding decreases of 4.15% in patent output and 5.32% in patent novelty following the visa restrictions. The authors found that sectors that relied on more codified knowledge experienced increased R&D team dispersion with less of a negative impact on innovation, suggesting that sectors that are tacit-knowledge-intensive are more dependent on the geographic proximity of inventor teams.

Read the full framework, backed by several examples of how major MNEs have structured their innovation teams to succeed in a fragmented international landscape, in the MIT Sloan Management Review article "Building Innovation Teams Across National Borders," which publishes at 8 a.m. ET on Sept. 9, 2025.

About the Authors
Solon Moreira is an associate professor of entrepreneurship and strategy at Temple University's Fox School of Business, specializing in innovation, corporate strategy, and technological change. Ram Mudambi is the Frank M. Speakman Professor of Strategy at the Fox School of Business. His research focuses on the geography of innovation, especially in the context of migration and ethnic diasporas. Deepak Nayak is an assistant professor at the Ohio State University Fisher College of Business. His research focuses on organizing human capital within companies and across international borders for innovation.

About MIT Sloan Management Review
MIT Sloan Management Review is an independent, research-based magazine and digital platform for business leaders published at the MIT Sloan School of Management. MIT SMR explores how leadership and management are transforming in a disruptive world. We help thoughtful leaders capture the exciting opportunities — and face down the challenges — created as technological, societal, and environmental forces reshape how organizations operate, compete, and create value.

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SOURCE MIT Sloan Management Review