The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DAvailable survey data is more up-to-date than other indicators and they reveal thegrowing participation by developing countries in the internationalization of corporateR&D. According to data compiled by UNCTAD, there were around 2600 majorityownedforeign affiliates worldwide engaged in R&D in 2004. About 70 percent ofthese were located in the Triad (the U.S., Europe and Japan) and 10 percent in developingeconomies, mostly in Asia (UNCTAD 2004), see Figure 2-10.Figure 2-10 Geographical distribution of foreign R&D affiliates, 2004 (on the basis of majority-ownedforeign affiliates engaged in commercial research, noncommercial research organizationsand testing laboratories).Asia; 216Other countries;183Other developedcountries; 217Japan; 29Western Europe;1387USA; 552Source: UNCTAD, based on the Dun & Bradstreet Who Owns Whom database (UNCTAD 2004).The U.S. and the U.K. were the top two destinations for R&D in a survey of multinationalcompanies in 2004. China and India ranked third and sixth with 35 percentof the companies having R&D units in China, and 25 percent of them in India(UNCTAD 2005a).In another survey of R&D projects worldwide, 1770 greenfield and expansion foreigndirect investment projects, including software development projects, were identifiedbetween 2002 and 2004.73