Policies to attract and benefit from globalization of R

1
Policies to attract and benefit from
globalization of RD

• Prasada Reddy
• Research Policy Institute
• Lund University
• Sweden

2
Category of RD units

• Technology transfer units (TTUs) - to facilitate
  transfer of parents technology to affiliate and
  local technical services
• Indigenous technology units (ITUs) - to develop
  new products for the local markets, drawing on
  local technology
• Global technology units (GTUs) - to develop new
  products and processes for major world markets
• Corporate technology units (CTUs) - to generate
  basic technology of a long term nature for
  corporate use (Ronstadt, 1977)
• Regional technology units (RTU) - to develop
  products for the regional markets.

3
Corporate RD - prior to the 1960s

• Home Country-based RD
• - need for coordination between manufacturing,
  RD, finance marketing,
• - RD scale economies.
• - sophisticated and advanced home markets,
• - technologically advanced home economies.

4
Evolution of Globalization of RD - 1960s

• The beginnings of internationalization of RD -
  first wave TTUs (adaptation RD) -
• - need to tap markets abroad,
• - technology transfer for cost effective
  production.
• - large local markets,
• - proximity to production facilities.
• Category of industries - mechanical, electrical,
  and engineering, including automobiles.

5
Evolution of Globalization of RD - 1970s

• The growth of internationalization of RD -
  second wave ITUs
• - to enhance market share in local markets
  abroad,
• - need to understand sensitivity of local
  consumer,
• - host country government policies.
• - large and protected markets with unique
  characteristics,
• - proximity to market and production.
• Category of Industries - branded packaged
  consumer goods, chemicals and allied products.

6
Evolution of Globalization of RD - 1980s (1)

• External forces in the business environment
• - liberalization of economies worldwide,
• - homogenization of consumer preferences
  worldwide,
• - emergence of regional markets,
• - science-base of new technologies and
  multidisciplinary innovations.
• Internal forces
• - rationalization of TNCs operations, leading
  to specialization of affiliates,
• - world and regional product mandates for
  affiliates

7
Evolution of Globalization of RD - 1980s (2)

• From internationalization to globalization of
  RD - third wave GTUs/RTUs/CTUs
• - need for monitoring and learning the new
  trends worldwide,
• - need for multi-sourcing of technology inputs.
• - improved information and communication
  technologies,
• - flexibility of new technologies allows
  de-linking of manufacturing RD,
• - comparative advantages of host countries.
• Category of Industries - microelectronics,
  pharmaceuticals, biotechnology and new materials.

8
Evolution of Globalization of RD - 1990s

• Evolving patterns globalization of RD - fourth
  wave (location of RD outside the industrialized
  world)
• - shortage of RD personnel in industrialized
  world,
• - increasing RD costs.
• - availability of RD personnel at lower costs
  in some developing countries,
• - divisibility of RD into core and non-core
  activities,
• - changes in policy regimes, including
  intellectual property rights in host countries.
• Category of Industries - microelectronics,
  pharmaceuticals, biotechnology and new materials.

9
National Policies for attracting global RD 1

• General Agreement on Trade in Services (GATS) -
  RD as a service (trade affiliate to parent)
• RD as a Performance Requirement
• - International framework, TRIMs, PTIAs BITs
• - Incentives vs. subsidies (SCM Agreement)

10
National Policies for attracting global RD 2

• Performance requirements - implications for type
  of RD.
• Standards Regulations (depends on the size of
  the market).
• - technology monitoring units
• Supply-side
• Strengthen national innovation system (domestic
  RD, start-ups)
• Driving force - access to skills
• Access to national research programs

11
Regional Policies for global RD

• Availability of human resources (numbers) in
  required specializations.
• Programs in local universities.
• Science Parks (thematic).
• Focus on areas of competitive strength
• Cluster development
• Incubators
• Regional Investment Promotion Agency