Geography Reference
In-Depth Information
42,000 foreign affiliates located in China are currently employing some
24 million Chinese, and this still only represents 3.1 per cent of the total
employed workforce in China (UNCTAD 2007). As such, the relative
importance of MNE R&D expenditure to China's knowledge-related
activities is four times greater than the relative importance of MNEs to
China's overall employment.
However, the obvious importance of inward FDI to the growth of
China's R&D capacity is not a general observation across either all devel-
oping Asian economies or even across just the BRIICS countries. For
example, in the case of India, the most recent reliable estimates indicate
that in 1999, multinational R&D expenditure accounted for just 3.4 per
cent of domestic private sector R&D, whereas in Brazil the same share
is 49 per cent (UNCTAD 2005). Yet, this percentage is increasing slowly
in China and India, but is more or less constant in the case of Brazil
(UNCTAD 2005).
The types of R&D undertaken in different countries and in differ-
ent regions of the world also appear to be different. In India, over three
quarters of R&D expenditure is on services, and primarily on software
development, whereas in Brazil the R&D of foreign affiliates tends to be
adaptive R&D, not only for local markets but also increasingly for exports
(UNCTAD 2005). In China, most multinational R&D focuses on adap-
tive innovations for the Chinese market, but there is increasing evidence
across Asia suggesting that innovative R&D is growing (Kumar 2001;
Shimizutani and Todo 2007). As such, there is significant variation across
the BRIICS countries in terms of both the relative importance and the role
of R&D-related FDI. Only a small number of developing economies are
significant hosts for inward R&D-related FDI, and amongst the BRIICS
countries China is by far the most important country.
8.6
THE CHANGING ECONOMIC GEOGRAPHY OF
THE BRIICS ECONOMIES
It is well-known in development studies that, in terms of the internal eco-
nomic geography, as countries develop their employment shares in agri-
culture tends to fall. Urbanized countries with the lowest proportion of
employment in agriculture have higher GDP per capita than transforming
economies, which also have higher GDP per capita than agriculture-based
countries (World Bank 2008c) Historically, the reasons for this obviously
relate to structural effects, and many developing economies which have
undergone rapid industrialization from agriculture to manufacturing have
also experienced increasing urbanization. In countries undergoing this
