Globalization of Technology
Dr Henry Loewendahl
VP North America, fDi Intelligence, Financial Times Ltd
Managing Director, WAVTEQ Ltd
INSME Annual Meeting
“The Governance of Innovation"
9:50-11:00
23 May 2013, Izmir, Turkey
No part of this material may be copied, distributed or used without the prior written permission of Henry Loewendahl
Contents
1. Trends in R&D investment
2. Corporate strategies and competitiveness factors
3. Policy implications
Foreign Direct Investment Trends in R&D
Date range: 2003-2013
Definition: Job-creating greenfield FDI projects in R&D
Source: fDi Markets database, fDi Intelligence, Financial Times Ltd
Global trends in R&D FDI
• Over 7,600 R&D projects creating >1m direct jobs tracked
• R&D more resilient to global conditions
• Increased its share of global FDI to a record 6.2% 2013 YTD
Global market shares of R&D
ORIGIN
LOCATION
Top Regions
Top Regions
1.
2.
3.
4.
1.
2.
3.
4.
North America (46%)
Western Europe (35%)
Asia Pacific (16%)
Other Regions (3%)
Asia Pacific (47%)
Europe (33%)
North America (11%)
Latin America (5%)
Top Countries
Top Countries
1.
2.
3.
4.
1.
2.
3.
4.
USA (44%)
Germany (9%)
Japan (7%)
France (5%)
India (17%)
China (15%)
USA (8%)
UK (6%)
Top States
Top Cities
1.
2.
3.
4.
1.
2.
3.
4.
California (13%)
New York (5%)
Kanto (5%)
South East UK (5%)
Bangalore (6%)
Shanghai (5%)
Singapore (4%)
Beijing (3%)
Industries and Companies
CLUSTERS
COMPANIES 2003-12
Top Clusters
Top Companies
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
ICT & Electronics (43%)
Life Sciences (14%)
Transport Equipment (11%)
Industrial (6%)
Creative Industries (5%)
IBM
Microsoft
Intel
Siemens / HP / GE
Du Pont
COMPANIES 2012
SUB-SECTORS
Top Sub-Sectors
Top Companies
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
Software Publishers (15%)
Custom Programming (9%)
Semiconductors (7%)
Pharma Preparations (6%)
Telecom Equipment (4%)
Microsoft
Henkel
Du Pont
IBM / Samsung / Blackberry
Tata / Intel / Honeywell
Two-thirds of investing companies had turnover >$1 bn. 10% had turnover <$25m
Corporate Strategies & Competitiveness
Factors
Date range: 2003-2012
Definition: Job-creating greenfield FDI projects in R&D
Source: fDi Markets & fDi Benchmark, fDi Intelligence, Financial Times Ltd
Globalization or Regionalization?
•
•
•
•
Companies primarily establish regional R&D centres
Nearly ¼ of centres are for domestic markets
Especially R&D in China and USA
Nearly one-fifth are global centres
Source: fDi Markets database, fDi Intelligence, from Financial Times Ltd, based on information on 2516 projects
Location determinants
•
•
•
•
Search for skills
Meeting market and customer needs
Accessing specialist industry clusters
University/researcher knowledge and talent pool
Source: fDi Markets database, fDi Intelligence, from Financial Times Ltd, based on 1,648 projects with motives specified
FDI #1 location determinant
Size of R&D labour force
Source: Dr Henry Loewendahl analysis based on fDi Markets and fDi Benchmark databases for Canada cities
FDI #2/3 location determinants
Markets
Source: Dr Henry Loewendahl analysis based on fDi Markets and fDi Benchmark databases for Canada cities
FDI #3 location determinant
Size of R&D cluster
Source: Dr Henry Loewendahl analysis based on fDi Markets and fDi Benchmark databases for Canada cities
FDI #4 location determinant
Size of talent pool and research
Source: Dr Henry Loewendahl analysis based on fDi Markets and fDi Benchmark databases for Canada cities
FDI #9 location determinant
Costs are negatively correlated!!
Source: Dr Henry Loewendahl analysis based on fDi Markets and fDi Benchmark databases for Canada cities
Policy Implications
Implications
• R&D projects account for over 6% of global FDI so have
become a very important source of investment – especially
for emerging markets
• Companies typically have a regional R&D strategy, so
understanding your competitive position regionally is key
• Innovation-driven investors can have a major impact on the
economy. Microsoft estimates 1 job it creates leads to 30
spin-off jobs compared to a 1:3 ratio typical in manufacturing
• To attract R&D investors requires a combination of available
skills, markets, clusters, and universities
• Most investment still comes from the developed economies,
although major EM companies are playing a bigger role
• Major corporations dominate R&D investment, but still 1 in 10
R&D projects come from SMEs often linked to new VC
Contacts
Dr Henry Loewendahl
VP North America, Representing fDi Intelligence, Financial Times Ltd
Managing Director, WAVTEQ Ltd
E-mail: henry.loewendahl@wavteq.com
Skype/MSN: hloewendahl
Linkedin: Henry Loewendahl
Twitter: @hloewendahl
Skype: +44 (0) 203 239 3224 (redirects to my current phone)
W: www.fdiintelligence.com / www.wavteq.com