In the new form of Globalization of R&D, Multinational (MNEs) firms have established their R&D units in emerging Asian countries, particularly in India and China. In the 1980s MNEs located their R&D units in their country of origin and were very reluctant to go offshore beyond triad (USA, Western Europe and Japan). However, in the last decade there is a growing trend of MNEs going emerging markets such as India and China. Beside this, sourcing knowledge from globally dispersed knowledge hubs is also one of the major motives of this emerging trend. These foreign R&D centers have developed linkages with the other actors of the host economy to build their assets. This study has investigated the linkage patterns of foreign firms in India from an in-house developed database. The ICT sector is considered as a test case to investigate the linkages of foreign firms with the Indian entities. The study observed that most of the foreign firms are collaborating with the other foreign firms located in India. Next to the foreign firms, Indian firms are preferable compared to university or government research institutes. It shows that industry-academia linkages are quite weak in India. Foreign firms' embededness with the local innovation system is only by linking with the local firms. Although, India has very strong government research laboratories, these are not playing important role in collaborating with the foreign firms. From the policy perspective, industry -academia linkages needs to be strengthened. MNEs enter markets such as India not only for potential markets and 'cheap' skilled human resources but also for knowledge and technology base emerging in the knowledge hubs of these countries. Also, most of the collaboration happens in peripheral (joint development) rather than core domain (joint R&D). Many of the firms are going for 'Open Innovation' mode to build up their assets in India.
Till the end of 1980s, offshoring of R&D (Research and Development) by TNCs (Trans National Corporations) were mainly confined to industrially advanced countries, particularly among the 'Triad' (US, Europe and Japan). Even if TNCs moved to the developing countries, during the early to mid-1990s, their R&D activities were mainly restricted to 'one way technology transfer' or oriented towards 'adaptive R&D' rather than 'creative R&D'. This study finds that during the last two decades, this paradigm has changed significantly. India has emerged as an important destination for about 471 TNCs with about 649 R&D units. Indian R&D and innovation threshold has moved up quite dramatically in the last decade to transform from 'one way' to two-way knowledge transfer. Now many foreign R&D units are developing products from India for their global product mandate. The exploration of TNCs and their impact in the Indian context advances the view that India is emerging as an important partner in the globalization of innovation. Another important trend of globalization and the global nature of innovation emerging is the rise of the Indian firms that expand business and link up with the global production networks.
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