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Global R&D activities in India
Presentation by Prasada Reddy, Research Policy Institute, Lund University, Sweden, 2005
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Global R&D Activities in India
Research Policy Institute
Lund University, Sweden
• India successful in attracting R&D-related FDI.
• RPI Database - total R&D units (only
regional/global) in 1999 in developing Asia 286.
• Out of which India had 196 units.
• Software, Telecom & Networks,
Biopharmaceuticals and IC design.
• Astra Zeneca (1987) - Biopharmaceuticals.
• Texas Instruments (1986) - Next-generation ICs
and methodologies for designing ICs (500
• Motorola (1994) - 3 units, telecome software,
CMM Level 5.
• Intel (2000) - IC Design (1000 engineers).
• General Electric (2001) - White goods/medical
equipment to aircraft engines (2000 researchers)
• TNCs R&D units in India are stand-alone
units with no manufacturing or marketing in
• Non-equity-based strategic partnerships in
R&D with Indian research institutes
(pharmaceuticals and chemicals) and
Why India as a Location?
• Pools of well-trained scientists & engineers.
• Reputed national research institutes & universities
(e.g. IITs, IISc, IICT & CDR).
• Western style management.
• Intellectual property rights regime.
• English as the business language.
• Indian Diaspora in USA & Europe.
• Astra & TI as pioneers.
Impact of Global R&D 1
• Inculcation of R&D culture.
• Technology transfer - application
• Emergence of scientists and engineers as
entrepreneurs (spin-off firms).
• Demonstration effect on Indian companies.
Impact of Global R&D 2
• Acquisition of new skills by local firms (e.g
• Development of new disciplines and
specializations in universities (e.g. courses on
IPRs to scientists).
• Spontaneous development of clusters (Bangalore,
• Emergence of Venture Capital business.
• Competition for the cream of the talent.
Outflow of R&D-related FDI
• Major investors - IT and Pharmaceutical
• R&D in early stages of drug discovery.
• R&D in software to special customers and
to cater to regional markets (IT companies).
• Technology monitoring.
• To meet the requirements to enter into
European and US markets.
• R&D-related FDI inflow in spite of the national
level policies (early stages).
• More active regional governments.
• Liberalization of FDI policies (100% ownership,
• Liberalization of outward FDI policies.
• Creation of strong national innovation system (e.g.
human resource development).
• International policy regime (e.g TRIPS).