The Rise of Global R&D
Embracing global R&D for Innovation
Leadership
CQDM June 2013
Tomasz Mroczkowski
Professor, Kogod School of Business, American University
Washington DC
The 2005 turning point: during the
First decade of the 21st Century several
trends converged:
• Key emerging economies increase R&D
spending and commit to develop knowledge
based economies and respect IP.
• Global R&D investment and offshoring take off
• New players from EE compete and collaborate
• Emerging Markets drive growth
• Open innovation replaces the closed model
• Location still important
The new Realities of Global R&D
today …but Flat funding in West
• Expanded international co-publishing, copatenting –knowledge explosions
• New alliances for discovery not just
development in EE
• New innovation clusters and science parks
• Rise of international science consortia
• Science become multipolar: US one of
several players along EU and Asia
• New funding sources
R&D performed in the United States by U.S. affiliates of foreign companies, by investing
region, and R&D performed abroad
by foreign affiliates of U.S. multinational corporations,
by host region: 1998 and 2008
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“Innovation in the
West has simply
become unaffordable”
Kiran Mazumdar-Shaw
CEO,Biocon India
Year of Adoption of Biotech Strategies
and TRIPS by Country
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Some myths about emerging economy
innovation potential
• It’s a flash in the pan
• Their science is bad: they will never catch up
• They should focus on technology absorption and leave
innovation to developed nations
• Their education is based on rote learning not critical thinking
• Their culture does not support creativity
• Great location for development but forget about research
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Top 25 Emerging Economy Universities
Academic Ranking of World Universities (ARWU) 2012
University
Country
Overall
Rank
University
Country
Overall
Rank
1
National Taiwan University Taiwan
113
14 Fudan University
China
211
2
National University of
Singapore
Singapore
114
15 King Saud University
Saudi Arabia
212
3
Seoul National University
South Korea
116
16 Korea Advanced Institute
South Korea
213
4
National Autonomous
University of Mexico
Mexico
159
17 Nanjing University
China
219
5
Peking University
China
163
18 Nanyang Technological
Singapore
220
6
Shanghai Jiao Tong
University
The Chinese University of
Hong Kong
The University of Hong
Kong
China
164
Taiwan
221
Hong Kong
167
Taiwan
222
Hong Kong
170
Brazil
234
China
173
22 Sungkyunkwan University
South Korea
236
10 University of Buenos Aires
Argentina
176
23 The Hong Kong
Hong Kong
239
11 Zhejiang University
China
200
12 Charles University in
Czech Republic
203
25 University of Cape Town
Hong Kong
204
Source: Center for World Class Universities, Shanghai Jiao Tong
University, http://www.shanghairanking.com/ARWU2012.html
7
8
9
Tsinghua University
Prague
13 City University of Hong
Kong
of Science and Technology
University
19 National Cheng Kung
University
20 National Tsing Hua
University
21 State University of
Campinas
Polytechnic University
24 The Hong Kong University Hong Kong
of Science and Technology
South Africa
240
257
Bioindustry Park Distribution in
China’s Provinces (Number of Parks)
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India: Biotech Parks, Operational,
Planned and SEZ
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Gwanggyo Techno Valley
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Some global best practices by high
performing innovators
• Much more likely to take long term bets to
capitalize on growth opportunities, experience
matters for success (Novartis)
• Greater tolerance for risk (Merck)
• Greater collaboration with outside R&D groups
• 100% conduct some R&D in emerging economies
• Maintain strong pro-innovation culture (3M,
Sweden, IBM, Samsung)
• US companies more aggressive than European
• Overcome resistance to open innovation model
Sanofi-Aventis Collaborations and
M&A with Developed and Emerging
Economies
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Novartis Global Footprint
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New Players from Asia
• Spin-offs from large wealthy conglomerates
• Diversified players that combine profitable
production/services with some R&D
• Move from fee for service providers to
integrated, collaborative strategic partners (eg
Syngene)
Biocon Integrated Research Strategy
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Biocon Global Alliance: Research,
Co-development
© Copyright Tomasz Mroczkowski
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Biocon Personnel Profile
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WuXiAppTec Business Model
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WuXI AppTec Overview
“We are well positioned to capitalize on the global trend
of R&D outsourcing by emphasizing our experience,
capabilities, quality, responsiveness, protection of
customer intellectual property and reliability”
• Largest contract research organization in China
• More than 1600 customers, most in the United States,
with the top 10 representing 48% of all revenue
• 6,817 employees, including 4,779 science professionals
(55% with Master’s degree or above and 92% based in
China)
WuXI AppTec
Research Facilities
The Innovation Pyramid
Consumers
Sources of
Investment
Tech Firms,
Entrepreneurs, and
Industry
State Policies
Academic and Scientific Systems
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Germany as a scientific and innovation superpower
Physics, Chemistry, Physiology & Medicine Nobel Prize Totals, 1901 - 1932
Others, 29
Germany, 30
United
Kingdom, 17
United States, 5
Netherlands, 7
France, 15
Source: Nobelprize.org; Wikipedia,
http://en.wikipedia.org/wiki/List_of_Nobel_laureates_by_country
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From China… to China by 2040?
A brief world history of innovation
• History lessons China, Britain, Germany (1900-1933),
America 1945-2005
• Colonel Liu Mingfu’s book: “China Dream, Great Power
Thinking in the Post American Era”
• China 2040 THE NEW INNOVATION SUPERPOWER?
• OTHER OPTIONS: Multipolar world, India+ West?
• Geopolitics of Innovation will not go away
The Old "Western" Universe of R&D
Collaboration
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The New Expanded Universe of Global
R&D
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Financial Times Press
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