The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DAccording to the survey on the growth of Japanese corporate R&D abroad from 1987 to2003, the pharmaceutical industry has showed phenomenal growth since 1987 (MIC2004). This is partly attributable to the clinical tests being carried out in foreign countries.The percentage of Japanese companies having R&D expenditures abroad by industry isillustrated in Figure 9-2. According to the survey, 18 percent of the companies hadR&D sites in overseas countries. For large companies with capital of 486 million dollarsor more, the percentage is even higher (47 percent). By industry, a high percentagein the manufacturing sector is typical for automobile, precision machinery and information/communicationequipment. In the non-manufacturing sector, the most internationalizedis R&D in software and information processing.Type of Operation and Host CountriesThe Japanese companies’ overseas subsidiaries, categorized by type of operation andby countries/regions where they are located, are depicted in Figure 9-3. The mostcommon location for R&D sites of Japanese companies is the U.S., followed by E.U.and China. Production sites are concentrated in China and ASEAN4.Figure 9-3 Number of overseas subsidiaries of Japanese companies by operation type andby country/areas in year 2004, Unit: Number of subsidiaries in foreign countries.Type ofoverseassubsidiaryNIESASEAN4Chinaother AsiaNorthAmericaCentraland SouthAmericaEU-15Central andEast EuropeOceaniaTOTALProduction 612 1190 1346 188 759 216 454 84 68 4917Sales 830 383 463 52 637 177 969 101 141 3753R&D 25 29 67 6 108 4 60 3 8 310Other 107 89 122 15 244 53 161 5 26 822TOTAL 1574 1691 1998 261 1748 450 1644 193 243 9802Note: Definition of regions:NIES (Korea, Taiwan, Singapore, Hong Kong)ASEAN4 (Thailand, Indonesia, Malaysia, Philippines)North America (United States, Canada)EU-15 (United Kingdom, Germany, France, Italy, Netherlands, Belgium, Greece, Luxembourg, Denmark, Spain, Portugal,Austria, Finland, Sweden, Ireland)Central and East Europe (Poland, Hungary, Czech Republic, Slovakia, Bulgaria, Romania, Slovenia, Albania, Croatia,Serbia and Montenegro, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia)Source: JBIC 2004a, JBIC 2004b.211