World Investment Report 2005

Transnational Corporations and the Internationalization of R&D (Includes CD-ROM)

image of World Investment Report 2005

The World Investment report focuses on trends in foreign direct investment (FDI) worldwide and at the regional and country levels, as well as emerging measures to improve FDI’s contribution to development. This year’s Report presents recent trends in FDI flows and explores the emerging internationalization of R&D (Research and Development) by transnational corporations, highlighting its driving forces and implications especially in developing countries, as well as the need for active and coherent government policies to enhance development benefits. The Report includes a statistical annex, which is also available on CD-ROM.



Drivers and determinants

The expansion of R&D by TNCs in some developing countries reflects changes in the drivers and determinants of R&D internationalization. In view of increased competitive pressures, shorter product life cycles and the need to innovate more at lower costs, firms are compelled to search for new ways of organizing their R&D. At the same time, some developing-country governments have been able to vastly improve the supply of relevant skills – often costing much less than comparative human resources elsewhere. R&D internationalization is not confined to TNCs from developed countries; developing-country firms are also setting up R&D activities abroad to access these foreign markets and centres of excellence.


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