The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&Dputer and Internet user penetration. ICT diffusion, however, has risen quickly, as demonstratedby the rise in the number of Internet users from less than one million in 2000to over 50 million in 2006. This number is projected to reach over 80 million by 2010(NASSCOM 2006 and Internetworldstats 2006).A wide range of indicators point to India’s potential for catching up. The country’sadult literacy rate for has risen from 58 percent for men and 31 percent for women in1985, to 68 percent for men and 45 percent for women in 2000 (World Bank 2006).Moreover, the numbers of engineering students graduated annually have risen fromabout 44,000 in 1992 to approximately 184,000 in 2004 (NASSCOM 2006) comparedto 352,000 for China (China Statistics Yearbook 2004) and 76,000 for the U.S.(Morgan Stanley 2005). The ratio of Indian population living below the poverty line, asmeasured by the National Institute of Rural Development, has decreased from 55 percentin 1973–74 to 26 percent in 1999–2000.The Indian economy is expected to grow at a rapid rate of 6–9 percent between 2006and 2010 and beyond. By the year 2032, China will have the world’s largest economy(in terms of GDP at market prices), followed by the U.S. and India, according to amuch publicized scenarios presented in the BRIC report released by Goldman Sachs(Goldman Sachs 2003). In terms of purchasing power parity (PPP), India’s GDP isalready the third largest in the world after the U.S. and China. While much of thecountry is likely to remain poor and industrially backward, other parts have the potentialto grow as fast as China or other East Asian economies. Some urban areas areincreasingly integrated in the new global knowledge-based economy as demonstratedby the cases of Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune.To understand the prospects for India to become a major economic and technologicalpower, a long-term perspective is required, including an assessment of the country’scurrent global position in economic, social and technology development, a review ofhistorical phases of change, and the evolution of government policies.Higher Education, R&D Institutions and Access to Information NetworksThe principal factors contributing to India’s chances of becoming a major global R&Dpower are the size of its educated workforce, entrepreneurial traditions and a significantexisting R&D-related institutional infrastructure. India’s education and research systemis diverse and ranges from internationally competitive institutions to those with inferiorperformance. The country’s pool of young university graduates (those with seven yearsor less of work experience) is estimated at 14 million. This is 1.5 times the size ofChina’s, almost twice that of the U.S., and topped up by 2.5 million new graduatesevery year (Farrell et al. 2005). The number of highly qualified engineering MastersandPh.D-level researchers is however not so large if compared to major industrialnations. India produces about 6,000 Ph.Ds annually. The IT and IT-enabled services270