Developing countries emerge as attractive locations for R&D: UNCTAD

But this internationalisation is not new; what is new, the report finds, is that more R&D is going to developing countries — more than half the world´s top R&D spenders are already conducting research and development in China, India or Singapore.

Developing Asia is the preferred destination; firms based in the US, for example, carried out 10 per cent of their overseas R&D in such countries in 2002, up from three per cent in 1994. The trend is accelerating.

In China, the number of foreign R&D units rose from zero to 700 over the course of a decade. In India, global pharmaceutical companies are engaged in increasingly numerous clinical research activities, while General Electric employs 2,400 people in R&D on products ranging from aircraft engines to consumer durables and medical equipment. Thailand was selected for Toyota´s fourth overseas R&D centre, and more than 100 TNCs have set up research labs in Singapore.

In the past, major corporations used R&D in developing countries largely as a way of adapting products and processes to local markets. But now the trend is increasingly towards technology development for regional or global markets, and towards applied research. For example, from practically nothing in the mid-1990s, the share of South-east and East Asia in global semiconductor design reached almost 30 per cent in 2002.

According to UN Secretary-General Kofi Annan's preface to the report, "Firms now view parts of the developing world as key sources not only of cheap labour, but also of growth, skills and even new technologies."