World Investment Report 2005

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

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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.




Bridging the technology gap between countries is necessary to foster sustainable economic development. Technology is advancing faster than ever before. Developing countries that fail to build capabilities enabling them to participate in the evolving global networks of knowledge creation risk falling further behind in terms of competitiveness as well as economic and social development. While international technology transfer can bring important knowledge to an economy, that alone is not enough. Using new technologies efficiently requires creating additional absorptive capacity, while a continuous effort has to be made to keep up with technical change. This is particularly true given the fact that wages tend to rise as a country develops, facilitating the entry of lower cost competitors in the market. While actions of both domestic enterprises and the government are essential to build technology capabilities in developing countries, TNCs can also play a role.


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