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Internationalization of R&D in China and India: Conventional wisdom versus reality

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Abstract

In spite of a growing trend of foreign research and development (R&D) investment in China and India, academic research in this field has not kept pace. To what extent are opportunities and challenges of managing R&D different in these countries from those in the West? By drawing on academic literature as well as press articles on this topic, we compare and contrast what the conventional wisdom suggests and what the realities are in China and India. We suggest that multinational corporations (MNCs) should not forget the conventional wisdom of managing their innovative R&D policies but should also learn from the unique challenges and capabilities in China and India.

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Notes

  1. The special issues of IEEE Transactions on Engineering Management 43(1) in 1996 and of Research Policy 29 in 1999 are among the most visible ones.

  2. The Special Issues of R&D Management 34(4) in 2004 and Asia Pacific Business Review 13(3) in 2007 focus on this topic in depth.

  3. For example, Dow Chemical’s presence in China includes 10 manufacturing sites, business centers in five cities, and more that 1,200 employees (Dow will establish a center in China. China Chemical Reporter, February 2005, 16/26: 5). And its Chinese center will be as important as six other R&D centers in the world (US Dow Chemical, establishing R&D facililties in China, operating within three years, including information-processing tasks. Nikkei Sangyo 2005, Jan 26: 2). Nokia has five units, four manufacturing sites, with the total number of employees in China over 4300 (Nokia expands R&D in China. Worldwide Telecom July 2004, 16(7): 1–3).

  4. It took 20–30 years for the Western firms to reach the stage of internationalizing basic research (Mitsubishi Research Institute, 1987).

  5. Korean, Japanese and Chinese languages “require 16 bits of data – two bytes – per character instead of the single byte required for letters in most alphabet-based languages.” (EIU, 2004: 11).

  6. Jinmei, F. 2005. Henkel cooperates with top Chinese universities, China Chemical Reporter, Jan 6: 4.

  7. Rotman, D. 1995. Western firms look to tap into China’s R&D, Chemical Week, 157(8): S10.

  8. “Kenkyu Kaihatsu Kyoten no Setsuritsu Rush” (Rush in setting up R&D facilities). In Japanese. D&M Nikkei Mechanical 2002.8 no.575: 85.

  9. World Markets Analysis, August 9, 2004.

  10. “Kenkyu Kaihatsu Kyoten no Setsuritsu Rush” (Rush in setting up R&D facilities), in Japanese. D&M Nikkei Mechanical 2002.8 no.575: 87.

  11. “Regional: Company News Analysis” South Asia Monitor, 10(1): 8.

  12. Hof, R. and M. Kripalani. 2003. “India and Silicon Valley: Now the R&D flows both ways.” Business Week, 3861:74.

  13. Gao, W (2004). “Sekai Hyojun ha Chugoku kara” (Global standard from China), in Japanese. Nikkei Electronics, 7(19): 226–228.

  14. Rao, U.B. (1996). “The right attitude to R&D in India” Chemical Business, 9(8):13.

  15. “Kenkyu Kaihatsu Kyoten no Setsuritsu Rush” (Rush in setting up R&D facilities), in Japanese. D&M Nikkei Mechanical, 8(575): 87.

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Authors and Affiliations

  1. Graduate School of Business Administration, Keio University, 2-1-1 Hiyoshi-honcho, Kohoku-ku, Yokohama, 223-8523, Japan

    Kazuhiro Asakawa

  2. Management Area, ESSEC Business School, Paris, Avenue Bernard Hirsch, B.P. 105, 95021, Cergy-Pontoise Cedex, France

    Ashok Som

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  1. Kazuhiro Asakawa
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Correspondence to Kazuhiro Asakawa.

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We would like to thank the APJM Editor-in-Chief Mike Peng and Guest Editors Yuan Lu and Eric Tsang for their invaluable suggestions for revising the manuscript. We appreciate Jennifer Spencer and Elisabetta Marafioti for their comments on the earlier version of our paper at the Academy of Management Annual Meetings in Atlanta, 2006. The first author would like to thank Professors Atsushi Sunami and Yoshihiko Nakatani for their insights on the topic, as well as Yunjin Rhee for her research assistance.

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Asakawa, K., Som, A. Internationalization of R&D in China and India: Conventional wisdom versus reality. Asia Pac J Manage 25, 375–394 (2008). https://doi.org/10.1007/s10490-007-9082-z

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