This paper investigates the relationship between firms’ transition towards upstream-R&D activities and the availability of R&D employees with PhD training. Doctoral trained employees have distinct motivations for research: some have stronger preferences for intellectual freedom and autonomy, while others reveal greater aspirations for targeted research and opportunities for development of new products and processes. These contrasting profiles among PhD trained employees lead to ambiguous predictions about whether a greater presence of employees with a doctoral training enhances the capacity of firms to initiate upstream-oriented R&D. We examine this question by studying a large sample of Spanish manufacturing firms which are active in development activities, and investigate the effect of PhD trained R&D employees on the propensity of firms to initiate upstream-oriented R&D. Our results show that a higher proportion of PhDs in R&D functions has a positive and significant influence on the firm’s initiation of an upstream-oriented R&D strategy.