The Emerging New Global Geography of Innovation
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1 China and India as New Locations of Multinational Research and Development: The Emerging New Global Geography of Dr. Gert Bruche Professor of International Management China Tag, Berlin School of Economics and Law, May 2010 Mail:
2 Sources / Reading Bruche (2009): The Emergence of China and India as New Competitors in MNCs Networks. Competition & Change, Vol. 13, No. 3 Bruche (2009): A New Geography of China and India Rising. Columbia FDI Perspectives No. 4, April 29, 2009 Bruche (2010): Akademischer Fachkräftemangel in Deutschland und der Bildungsaufstieg Chinas und Indiens Implikationen und Zusammenhänge. In: Meyer/Pfeiffer (Hrsg.): Die gute Hochschule: Ideen, Konzepte und Perspektiven. Festschrift für Franz Herbert Rieger. Berlin Edition Sigma See: 5/23/2010 Gert Bruche
3 Core Propositions China as the 'factory of the world' and India as the new 'back-office of the world' are just transitory stages to a much more profound change A historic shift of business R&D towards China and India has begun to change the global innovation landscape This shift will eventually lead to a 'new geography of innovation' with 'Chindia' as its new gravity centre and will have far-reaching consequences for the European (and German) position in the global division of wealth and labour 5/23/2010 Gert Bruche
4 Agenda 6 Conclusion: scenarios 1 Leap in 'intellectual infrastructure' 5 shift # 3: the new multinationals New geography of innovation 2 Globalisation of innovation 4 shift # 2: offshore outsourcing 3 shift # 1: R&D centers 5/23/2010 Gert Bruche
5 China's Leap in 'Intellectual Infrastructure' Government: 15-Year-Plan for Science & Technology R&D: accelerating growth in input and output Universities: 'Great Leap Forward' High Skill Diaspora: China's U.S. talent base and 'brain circulation' 5/23/2010 Gert Bruche
6 India's Leap in 'Intellectual Infrastructure' Government: Early committment to elite S&T sectors R&D: input & output gaining speed Universities: Expansion & commitment to much more High skill diaspora: India's U.S. talent base and 'brain circulation' 5/23/2010 Gert Bruche
7 Agenda 6 Conclusion: scenarios 1 Leap in 'intellectual infrastructure' 5 shift # 3: the new multinationals New geography of innovation 2 Globalisation of innovation 4 shift # 2: offshore outsourcing 3 shift # 1: R&D centers 5/23/2010 Gert Bruche
8 From home-centered to global innovation The 'old' model of business R&D and innovation The unleashing through the 'death of distance' The 'unbundling' of the R&D value chain The new globally distributed innovation process 5/23/2010 Gert Bruche
9 Agenda 6 Conclusion: scenarios 1 Leap in 'intellectual infrastructure' 5 shift # 3: the new multinationals New geography of innovation 2 Globalisation of innovation 4 shift # 2: offshore outsourcing 3 shift # 1: R&D centers 5/23/2010 Gert Bruche
10 The Shift of to China and India Shift # 1: take-off of multinationals' R&D centers in 'Chindia' 5/23/2010 Gert Bruche Source: Zinnov 2009
11 Learning & Evolutionary Upgrading Integration in the R&D value chain 2020 Innovativeness Adaptive R & D R&D Offshoring /23/2010 Gert Bruche
12 Learning & Evolutionary Upgrading Integration in the R&D value chain 2020 Global Center of Excellence Innovativeness Product development for local market Mandate for selected technologies Adaptive R & D R&D Offshoring /23/2010 Gert Bruche
13 Learning & Upgrading: Shifting the Core? Integration within the R&D value chain 2020 Global Center of Excellence Innovativeness Product development for local market market Mandate for Selected technologies Adaptive R & D R&D Offshoring /23/2010 Gert Bruche
14 Agenda 6 Conclusion: scenarios 1 Leap in 'intellectual infrastructure' 5 shift # 3: the new multinationals New geography of innovation 2 Globalisation of innovation 4 shift # 2: offshore outsourcing 3 shift # 1: R&D centers 5/23/2010 Gert Bruche
15 The Shift of to China and India Shift # 2: take-off of R&D offshoring (mainly to 'Chindia') 5/23/2010 Gert Bruche Source: Duke University/Archstone Consulting Offshoring Research Network 2004 and 2005 U.S. Surveys and Duke University/Booz Allen Hamilton; Offshoring Research Network 2006 U.S. Survey.
16 Agenda 6 Conclusion: scenarios 1 Leap in 'intellectual infrastructure' 5 shift # 3: the new multinationals New geography of innovation 2 Globalisation of innovation 4 shift # 2: offshore outsourcing 3 shift # 1: R&D centers 5/23/2010 Gert Bruche
17 The Shift of to China and India Shift # 3: The New Multinationals Examples: Tata Motors JLR Geely Volvo BAIC SAAB technology Huawei series of technology acquisitions Dr. Reddys series of technology acquisitions Suzlon Repower Lenovo PC division of IBM BYD coop. BMW, Mercedes Commercial Aircraft Corporation of China Comac C 919 5/23/2010 Gert Bruche
18 Agenda 6 Conclusion: scenarios 1 Leap in 'intellectual infrastructure' 5 shift # 3: the new multinationals New geography of innovation 2 Globalisation of innovation 4 shift # 2: offshore outsourcing 3 shift # 1: R&D centers 5/23/2010 Gert Bruche
19 Potential Outcomes in the Long Run: Scenarios Win-Lose Scenario Majority of innovation shifts to Chindia Europe [US?] looses competitiveness Win-Win Scenario Partial shift and specialisation Both Europe and Chindia gain Chaos Scenario Inequality and environmental degradation Chindia's growth models fail 5/23/2010 Gert Bruche
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