Geography Reference
In-Depth Information
8.5
MULTINATIONAL R&D IN THE BRIICS
COUNTRIES
Following these arguments, it is clear that the modes of FDI in develop-
ing and transition economies ought to evolve over time from greenfield
investments to increasing numbers of mergers and acquisitions, as the
knowledge base of these countries steadily expands. The possibilities for
upgrading R&D and innovation capabilities of many BRIICS countries
over the long term are bound to grow. For example, in 2001 China, India
and Russia together accounted for one third of the world total number of
tertiary educated technical people (UNCTAD 2005), while the Bangalore
high technology industries alone employ 35,000 US educated or trained
people (UNCTAD 2005). Yet, of all developing economies, China's
growth in its R&D capacity has been the most remarkable. Between 1996
and 2003 China increased its domestic R&D expenditure by over 3.8
times, such that by 2002 China became the only developing and transition
economy in the world's top ten R&D expenditure countries. It was ranked
6th in the world in terms of total R&D expenditure, and 7th in terms of
business R&D expenditure (UNCTAD 2005). Amongst developing and
transition economies, China is now ranked number 1 for both total and
business R&D expenditure (UNCTAD 2005), Brazil is ranked number
2, immediately followed by Russia and India. In terms of business R&D
Russia is number 2 and Brazil is number 3 (UNCTAD 2005). After the
US and UK, China is now the third ranked country in the world in terms
of the total number of R&D-related foreign affiliates (UNCTAD 2005).
However, although in absolute figures the scale of China's growth in
both domestic R&D and inward FDI-related R&D is so notable, we can
get a sense of the relative global and regional contribution of China's
knowledge sectors by considering other indicators of innovation. For
example, the total 2002 R&D expenditure of developing countries in
South, East and South East Asia, including both China and India, is
only 14 per cent of the value for Japan, and 6.7 per cent of US R&D
expenditure (UNCTAD 2005). Similarly, if we consider the number of US
patents and trademarks granted to the residents of particular countries
during 2001‒2003, we see that China had 1543, India 1022, Russia 956,
Brazil 524, South Africa 428, and Indonesia 108. As we see in Figure 8.2,
for comparison the respective figures for Taiwan and Korea are 20,414
and 12,195 (UNCTAD 2005). Similarly, in terms of US patents and
trademarks granted to firms or organizations during 2001‒2003, we see
that India had 558, China 475, Brazil 254, South Africa 167, Russia 163,
and Indonesia 31. Once again for comparative purposes, as we see in
Figure  8.2, the equivalent figures for Taiwan and Korea are 12,686 and
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