Global Innovation in Emerging Economies by Reddy Prasada;

Author:Reddy, Prasada;
Language: eng
Format: epub
Publisher: Taylor & Francis Group

Note: The respondents were asked to rank the motives for locating R&D in India as they perceive on a scale of 0 to 5, with 0 as not a motive at all and 5 as the most important motive. Since there may be more than one equally important motive, the respondents were given the freedom to assign the same value to more than one motive.

Source: Adapted from P. Reddy (1997, p. 1829).

The survey also revealed the linkages of different types of R&D units both within the corporate structure and external organizations. All the units were linked to the MNCs’ corporate R&D in their respective home countries. More than 80 percent of R&D units of the new technologies firms were also linked to the parent’s R&D units worldwide, whereas the figure was only 50 percent for the R&D units in conventional technologies. The CTUs were the most integrated into the global corporate R&D network of the MNCs, with 100 percent of them linked to parents’ R&D units worldwide. The corresponding figures for other types of units are: GTUs (87.5 percent), RTUs (75.0 percent), ITUs (55.6 percent) and TTUs (44.4 percent), indicating the relative integration of these different functions within the corporate R&D structure. However, when viewed from the perspective of commercialization of R&D results within the host country, all the conventional industries were linked to manufacturing facilities in the host country, whereas only 50 percent of the new technologies units were (Reddy 1997, p. 1830).

In terms of external linkages, across all types of R&D units and technologies, only a few linkages with the local industry were reported. A partial explanation of this might be that MNCs’ R&D activities tend to be in high-tech areas in which it might have been difficult to find domestic firms that could complement those activities in a developing host country, particularly in the 1990s.

On the other hand, linkages with the local university system were reported to have been stronger. The conventional industries tended to rely more on the local academic system than did the new technologies firms. 62.5 percent of the conventional industries reported having linkages with the local universities, whereas this only applied to 43.8 percent of the new technologies firms. 44.4 percent of the TTUs and ITUs also established linkages with local universities, a figure almost equivalent to 50 percent of the GTUs. This appears contradictory to conventional views. Part of the explanation for this may lie in the fact that TTUs and ITUs are not confined to their specific activities alone. It is possible that they had these linkages in the course of performing other types of R&D activities. Another explanation could be that TTUs and ITUs, which were mostly in the conventional technologies, were established several years ago, prior to the liberalization of the Indian economy. At the time, due to import restrictions, these units had to carry out material substitution in products and therefore new processes as well. These activities perhaps involved more than just tinkering with the parent’s technologies and had to rely on the local university system for support (Reddy 1997, pp.

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