R & D simply by TNCs

 R  D by simply TNCs Composition

UNCTAD/ITE/IIA/2005/6

UN CONFERENCE IN TRADE AND DEVELOPMENT

Geneva

GLOBALIZATION OF R& M

AND GROWING COUNTRIES

PORTION II

UNITED NATIONS

New York and Geneva, 06\

PART 2

Case studies

Features and impacts in the internationalization of

R& Deb by transnational corporations: China's case

Zhou Yuan1

In recent years, an increasing number of TNCs have

proven R& G laboratories and increased their R& M

spending in China. This paper shows that this

internationalization of R& D by TNCs can benefit developing

countries such as Chinese suppliers, although it are not able to automatically

up grade the local S& T capacities. Therefore , China and tiawan must

upgrade, in parallel to FDI in R& D, its S& T competitiveness simply by strengthening their national innovatory capacities.

1 . R& M laboratories of TNCs in China

Seeing that Nortel Networks Corporation and Beijing

University of Articles and Telecoms jointly set up an R& D centre in 1994, the number of TNCs' R& D laboratories in China continues to be growing progressively. This trend was specifically pronounced recently. Statistics gathered by the Ministry of Technology and Technology show that in 2002, more than 90

R& D laboratories were established by TNCs in Cina, and by

the end of Summer, 2004, over 600 with the world's best-known

TNCs experienced set up their particular R& Deb laboratories in China.

In 2002, the Beijing Municipal Science and Technology

Commission rate carried out an example survey among 82 R& D

labs of TNCs. That survey (China, THE MAJORITY OF 2002)

figured:

• many large and well-known TNCs had build R& Deb

laboratories in China. Of the 82 test laboratories, fifty-five had been set up by Good fortune Global five-hundred TNCs;

you

The views expressed in this study will be those of the author and do not always reflect the views of the United Nations, the Member Declares, or the Corporations to which the writer is linked.

Globalization of R& D and Expanding Countries

•

•

•

TNCs' R& D laboratories in China were unevenly

distributed: metropolises with comparatively strong R& D

sizes, such as Beijing, Shanghai, Guangzhou,

Shenzhen, Xian and Chengdu, were probably the most

attractive places for R& D. According to the survey, 60%

of the R& D laboratories of international TNCs had been located in

Beijing, 18% in Shanghai and 6% in Shenzhen;

TNCs' R& D laboratories were active mostly in hightechnology industries, such as information solutions, software and computers (58 laboratories), the chemical

market (9), pharmaceutical drugs (7) plus the automotive

industry (5);

the majority of the parent companies of the 82 R& D

laboratories had been headquartered in the usa (32),

Europe (20) and Japan (18); these three locations with each other

accounted for 85% of the hq. The Republic of

Korea, Hong Kong (China) and Taiwan Province of China

were found to get additional essential sources of R& D by

TNCs.

TNCs invest elevating amounts of financial resources

into R& D in China. It happened in 1999, of the twelve TNCs in Pudong,

Shanghai in china, whose result was in the range of RMB 1 to 6 billion, only four put in more than RMB 100 , 000, 000 on R& D. By simply 2004,

Motorola alone got invested regarding RMB 1 ) 3 billion in R& D.

R& D activities supported by international investment will be playing a progressively important role in China. In 2000, the proportion of foreign expense to overall R& G expenditure surpassed that of Australia and Asia; the rate in Customer relatively rich in manufacturing (OECD 2003 and China, MOST 2002).

2 . Reasons to buy R& Deb in China and tiawan

The rate of growth of R& D is driven generally by the considerable

S& T human resources of China. Some TNCs just like IBM and

Microsoft Study evaluate all their R& D laboratories as a

110

R& D simply by TNCs in China

primary part of their very own global R& D activities. The mission of these R& D laboratories is to turn into an international R& D

hub, rather than a support laboratory serving the local industry. These R& D labs value not merely the China market, nevertheless also available talents and...

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