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Microsoft PowerPoint - atlas_LanXue

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Microsoft PowerPoint - atlas_LanXue

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									Is Multinational R&D Heading East? -The Case of China
Lan Xue, Professor and Executive Dean School of Public Policy and Management Tsinghua University

January 18, 2007

Outline
Background General Findings-nationwide Special case-Beijing Discussions

Background-the trend
• The trend of R&D globalization and MNC R&D Centers in China:
• • • • Our study in 1999 found over 30 MNC R&D centers by major MNCs; Ministry of Commerce’s data for 2001 was less than 200; In 2005, government reported that there are over 750 MNC R&D centers in China; The most recent estimates put the number of MNC R&D centers at 980 by 2006 (Denis Simon’s presentation).
3

Background-issues
• Debates and concerns:
• In developing countries such as China, there is a debate about the impact of MNC R&D activities:
• spill-over vs. “suck-in” effects;

• In developed countries such as the US, there is also some concern:
• First manufacturing. now R&D, are they going too far (Business Week, March 2005)?

Background-objectives of our study
• A follow up study of our 1999 study when we surveyed several hundreds of MNCs in China and found over 30 major MNC R&D centers in China (Xue etc.2000,2001,2002); Our objectives are:
• • improving our understanding of the change in MNCs R&D activities in China and the reasons behind it; Improving our understanding of the impact of MNC activities on China’s innovation system.

•

Background-Research methods
• The sample:
• 335 MNCs in China out of 483 eligible companies from Business Week Global 1000; Phone interviews with 289 of these companies; Questionnaires sent to MNC directors in Beijing and Shanghai; In depth interviews were conducted with over a dozen directors of these R&D centers.

• Research methods:
• • •

6

General Findings
• Out of the 289 companies we phoned, 117 companies have set up R&D facilities in China; • 215 R&D centers were set up by them;
• 107 are autonomous R&D labs; • 59 are R&D units in the local subsidiaries; • 49 joint centers (with universities and so on)

• Comparison of autonomous labs:
• 1999=32; 2004=107

General findings: industrial distribution
Figure 1 The industrial distribution of autonomous R&D labs settled by Business Week 1000 MNCs in China( 2004) 1% 3% 2% 5% 4% 6% 6% 23%

7% 7% 18% 5% 13%

Software Semiconductors Automobiles Biotechnology&Drags Other IT Products Food and beverages Others

Telecommunications Industrial Equipments and components Commodity Chemicals Household Electronics Chemicals Industrial Conglomerates
8

General findings: industrial distribution (1999)
图1-6 《商业周刊》1000强在华设立独立研发中心的产业分布(1999)

6% 9%

3% 3% 35%

19% 25%

软件 通讯技术 半导体设备和产品 汽车 日化 生物医药 工业集团(跨行业)

9

General findings-country distribution
Figure 2 The country distribution of autonomous R&D labs settled by Business Week 1000 MNCs in China( 2004) ( ) 5% 1%

6% 11%

54% 23%

North America North Europe

Japan Other European Countries

UK, France and German Other Countries
10

General findings-country distribution(1999)
图1-8《商业周刊》1000强在华设立独立研发中心的国别分布 (1999) 9% 16% 0%

16%

59%

北美 日本 英法德 北欧国家 其他欧洲国家 其他国家

11

General findings-location choice
Figure 3 The regional distribution of autonomous R&D labs settled by BusinessWeek 1000 MNCs in China(2004) 7% 2% 5% 6% 47%

33% Beijing Guangdong Shanghai Jiangsu Tianjin Other regions
12

General findings-location choice (1999)
图1-10 《商业周刊》1000强在华设立独立研发中心的地区分布 (1999) 3% 36% 58% 3% 0%

北京市

上海市

天津市

广东省

江苏省

其他城市

13

General findings-patenting activities
•Patenting activities of the MNCs have been very active in China. 16934 invention patents were granted to them in 2005; •Most of the patents filed in China did not originate from China. There is a time lag between when it is first granted overseas and when it is granted in China. The Time lag is 27.95 months on average; it varies for different industries, notably, biotechnology and pharmaceuticals are long. •only 924 patents granted to these MNCs in 2005 were filed initially in China.

Special case-Beijing
The growth of MNC in Beijing

The growth of these centers (R&D people)
250 22 0 200 Scale of R&D Employee

150

14 0

10 0 10 0 10 1 100 70 60 50 5 0 7 14 13 35 20 31 1 30 28 10 2 9 11 25 33 34 8 17 21 Sam ple Num ber Th e S cale of R&D Em plo yee (In itia l) Th e S cale of R&D Em plo yee( Til l Se p. 200 4) 8 15 10 10 11 24 26 41 44 45 50

Positioning of the R&D Centers
Figure 5 The positioning of MNCs' R&D centers in Beijing Global R&D Centers 20% 40% Asia-Pacific Region R&D Centers China R&D Centers 29% 11%
17

Supporting Organizations

Figure 4 The importance of different objectives of the R&D centers' work(2004) 3.90 3.74 3.61 3.58 3.48 3.39 3.06
Explore new products for Chinese market Modify exsiting products for Chinese Market Explore new products for world market Trace the frontier of Chinese technology development Trace the frontier of international technology development Explore the unknown science and technology fields Support the production and operation in China

4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00

Mean

What attracts these R&D centers to Beijing?
Figure 6 The importance of different factors which have impacts on MNCs' R&D investing decision in China
3.85 3.76 3.56 3.38 3.3 3.21 3.06 2.87 2.74 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
Acquirement of high quality human resources Level of Chinese economy development, market scale and chances Level of science and education development of China Status of protection of knowledge right of China Level and resources of technology of Chinese related industries Chinese favorable policies attracting R&D investment Level of infrastructures of China Working efficiency of government departments Extent of being a native the R&D organization enjoys

Mean

Importance of sources of knowledge of MNCs’ R&D Centers in Beijing (importance from 1-5)
Number of Samples

Sources
R&D Headquarter Literature Brother R&D Centers Chinese Uni. Or Inst. Other R&D Centers Local brother factories

Mean
3.77 2.17 2.17 1.93 1.20 1.17

30 30 30 30 30 30

14 12 10 8 6 4 2 0

Figure 7 The frequence of communications between MNCs' R&D centers and Chinese university/science research institute(the number of correspondent R&D centers) 13

7 4 4

3

None

Seldom

Some

Frequent

Very Frequent

12 10

Figure 8 The frequence of communications between MNCs' R&D centers and Chinese enterprises(the number of correspondent centers)
10 8 10 9 10

8 6 4 2 0 0 With Chinese related enterprises With Chinese other enterprises 5 5 4 3

None

Seldom

Some

Frequent

Very Frequent

Discussion
The number of MNC R&D centers in China has been increasing rapidly over the last few years; a high percentage of these R&D centers are still at the initial stage of their development process;
In the next few years, the growth in numbers may slow down, but the scale may go up; some early entrants are beginning to consolidate;

High quality S&T human resources and market opportunities are the most important factors drawing MNC R&D centers to China;
Local market orientation Human resource orientation-for the global R&D activities

Many of these centers behave more like enclaves in China, interacting mostly within the company’s own network; the linkages with local companies are very weak.
Normal process? These centers are just part of the companies’ internal global R&D network;

Research output of these R&D centers measured by patents are limited. intangible benefits are difficult to measure; suck-in effects are limited.
integrated at the headquarter? IPR protection?

Thank you!


								
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