Despite
the trend toward off-shoring R&D operations to Asia,
most companies in the US and Europe prefer keeping their
most cutting-edge research within developed countries
where intellectual property (IP) protection is the strongest.
This
is revealed in a new survey, sponsored by the Ewing Marion
Kauffman Foundation, among over 200 multinational companies
across 15 industries in the US and Western Europe and
conducted by Marie Thursby, professor of strategic management
at Georgia Tech College of Management, and Jerry Thursby,
chairman of the department of economics, Emory University
Contrary
to popular belief, lower cost is not the most important
determining factor driving companies to locate their R&D
operations in foreign countries such as India, but intellectual
capital and university collaboration.
Despite
the costs being higher in the US and other developed countries
only 22 per cent of the R&D effort migrated to developing
countries is for new science because of the high calibre
of scientists in Europe and the US a comparative
advantage that the western world enjoys.
However,
India and China will continue to be major beneficiaries
of research and development expansion over the next few
years as companies seek new market opportunities and access
to top scientific and engineering talent..
More than half of the corporate respondents from the US
say that
they have already or will locate R&D facilities in
China and India instead of other developed countries.
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