1. Policies to attract and benefit from globalization of R&D Prasada Reddy Research Policy Institute Lund University Sweden

2. Category of R&D units Technology transfer units (TTUs) - to facilitate transfer of parent’s 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 R&D - prior to the 1960s Home Country-based R&D - need for coordination between manufacturing, R&D, finance & marketing, - R&D scale economies. - sophisticated and advanced home markets, - technologically advanced home economies.

4. Evolution of Globalization of R&D - 1960s The beginnings of internationalization of R&D - first wave TTUs (adaptation R&D) - - 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 R&D - 1970s The growth of internationalization of R&D - 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 R&D - 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 R&D - 1980s (2) From internationalization to globalization of R&D - 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 & R&D, - comparative advantages of host countries. Category of Industries - microelectronics, pharmaceuticals, biotechnology and new materials.

8. Evolution of Globalization of R&D - 1990s Evolving patterns globalization of R&D - fourth wave (location of R&D outside the industrialized world) - shortage of R&D personnel in industrialized world, - increasing R&D costs. - availability of R&D personnel at lower costs in some developing countries, - divisibility of R&D 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 R&D 1 General Agreement on Trade in Services (GATS) - R&D as a service (trade affiliate to parent) R&D as a Performance Requirement - International framework, TRIMs, PTIAs & BITs - Incentives vs. subsidies (SCM Agreement)

10. National Policies for attracting global R&D 2 Performance requirements - implications for type of R&D. Standards & Regulations (depends on the size of the market). - technology monitoring units Supply-side: Strengthen national innovation system (domestic R&D, start- ups) Driving force - access to skills Access to national research programs

11. Regional Policies for global R&D 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