World Intellectual Property Report 2011

Chapter 1 the Changing faCe of innovation and intelleCtual property
Figure 1.10: Sources of global scientific
publications are changing
Proportion of global publications, by country,
in percent of total, 1993-2003
US
Japan
UK
Germany
France
China
Italy
Canada
Russian Federation
Spain
Other
Proportion of global publications, by country,
in percent of total, 2004-2008
US
China
UK
Japan
Germany
France
Canada
Italy
Spain
India
Other
Source: WIPO, based on data from Elsevier Scopus provided in Royal
Society (2011).
Business R&D is becoming internationalized
Most international R&D investment is still confined to
high-income economies, both in terms of investing and
receiving economies. Furthermore, the largest crossborder
flows of R&D continue to occur among the US, the
EU and Japan. In the US, France and Germany, foreign
affiliates of MNEs account for between 15 and 26 percent
of total business manufacturing R&D. This figure reaches
35 percent in the UK, and more than 60-70 percent in
Austria and Ireland. 48
38
30%
3%
3%
3%
4%
34%
2%
3%
3%
4%
4%
4%
5%
6%
7%
21%
6%
26%
7%
7%
8%
10%
Attracted by rapidly expanding markets and the availability
of lower-cost researchers and facilities, leading multinationals
have nonetheless increased their R&D beyond
high-income countries, in particular in large middleincome
economies. The share of foreign affiliates in local
R&D is higher in large middle-income countries such as
China and Brazil than in high-income economies. 49
The available evidence points to an increase in overseas
R&D out of total R&D expenditure by MNEs, with a
focus on a few centers of excellence. Annual overseas
R&D expenditure by US MNEs, for instance, increased
rapidly from almost USD 600 million in 1966 to around
USD 28.5 billion in 2006. 50 High-income countries are by
far the dominant location of R&D activity by US MNEs,
accounting for about 80 percent of total overseas R&D
expenditure (see Figure 1.11). Increases in R&D shares
have occurred primarily in some high-performing East
Asian economies, in particular China, Malaysia, the
Republic of Korea, and Singapore. Nonetheless, they still
stand at relatively modest levels, with China at about three
percent and India about one percent of total overseas
R&D by US MNEs.
The internationalization of business R&D is also concentrated
in a few sectors. The following industries account
for the bulk in US affiliates’ overseas R&D: transportation
equipment, including the car industry, at 29 percent of
overseas R&D; chemicals, including pharmaceuticals,
at 22 percent; and computer and electronic products,
including software publishers, at 17 percent. 51
48 OECD MSTI, June 2011.
49 See OECD (2010e) and Nolan (2009). In 2003,
the share of foreign affiliates in total R&D was 24
percent in China, 48 percent in Brazil, 47 percent
in the Czech Republic and 63 percent in Hungary.
50 At www.nsf.gov/statistics/seind10/c4/c4s6.
htm and www.bea.gov/scb/pdf/2010/08
percent20August/0810_mncs.pdf.
51 See National Science Board (2010).