R&D

Multinational companies should be spending 30 per cent of their global research and development budget in India – or so says Zinnov, a management consultancy. It’s a bold claim that throws up several questions about India’s talent pool and potential.

In a new report, Zinnov studies the 500 global companies that spend the most on R&D – a group that together invests some $577bn on R&D worldwide. 

Take a hint from me

Poland has been one of ex-Communist Europe economic stars over the last two decades – but there are growing concerns over the future because of the country’s longstanding lack of innovation.

The Polish economy is currently in the midst of a sharper slowdown than was foreseen even a few months ago, but most economists expect a return to more robust growth by the end of 2013. A bigger worry is what happens a decade from now. 

Russia has talked a lot about economic diversification over the past two decades but it has made little progress in weaning itself off revenues from natural resources. A new report by the European Bank for Reconstruction and Development sets out recommendations that might stimulate industrial modernization and tries to make sense of Russia’s abiding addiction to oil. 

By Zoltán Cséfalvay of Hungary’s economy ministry

Over the past fortnight, Budapest has been abuzz with talk about research and innovation.

The second annual international, high-level Conference on Cyberspace took place in the Hungarian capital at the beginning of October, focusing on the increasingly critical issue of digital security. From the host country, Viktor Orbán, the Hungarian prime minister, stressed the value of cyberspace as a ‘world without walls’, where freedom could flourish. 

General Motors has opened China’s largest vehicle-testing ground at a cost of Rmb1.6bn ($253m),in the latest sign of the growing readiness of multinational companies to invest in research and development in emerging markets, above all in China.

The weekend opening coincides with a report from the Economist Intelligence Unit which forecasts that Asia’s share of global R&D spending will continue to grow as companies rush to get closer to their markets. As with GM’s testing ground, the aim is to be in a position to respond to the customers’ needs as fast as possible. 

It is all well and good to cut interest rates, but Beijing mandarins know better than anyone else that what China needs is not a stimulated economy, it needs a more innovative one.

Now there is some surprisingly good news on that front from Booz & Co, the management consulting firm in Beijing. They asked multinational and leading Chinese companies with mainland operations whether China was catching up with the world in terms of ability to create rather than fake – and found that 45 per cent of multinationals said some of their mainland competitors were just as innovative – or more so – than the multinationals themselves. 

China’s move up the international value chain creates opportunities for the likes of Vietnam and Bangladesh which are fast developing their low-tech export industries in items such as clothes and shoes.

But for those just above China in the value chain, the technological advance of the Middle Kingdom is anything but good news. As a report from Capital Economics pointed out on Thursday, Malaysia and Thailand, among others, will face greater competition in global trade. 

Tata Nano

Once, global innovation was a one-way street with multinationals developing ideas in rich countries and pushing them out into the rest of the world.

Not any more. In the past 20 years, emerging countries have become a growing source of commercial innovation in products, services and business processes, as Stefan Wagstyl reports on ft.com.

Multinationals which miss out on the process do so at their peril. Companies doing development work in EMs benefit not only from lower costs but from access to a wider diversity of talent and experience. They are building global as well as local competitive advantages. 

Artist's impression of Qatar-1b, by David A. Aguilar (CfA)

Artist's impression of Qatar-1b by David A. Aguilar (CfA)

Gas-rich Qatar has been snapping up prime real estate across the world for several years now, most notably Harrods in London and the Raffles hotel in Singapore. Now it’s grasping further afield – in outer space.

In collaboration with western universities, the Gulf emirate claims to have discovered a “new alien world” that has fittingly been named Qatar-1b. The ‘hot-Jupiter’ type planet was discovered through photos taken by Qatar-funded wide-angle cameras located in New Mexico. 

By Ralph Jennings in Taipei

China’s best-known maker of mobile phones needs brains. TCL Communication currently has the expertise to crank out simple handsets, but not high-end smartphones and tablet PCs. So, instead of beefing up its in-house talent – it employs 1,500 staff in research and development – it’s looking for help from Taiwan.

“One company can’t do everything,” TCL’s chief Guo Aiping told reporters on Friday, during a trip to meet potential R&D partners. TCL has made previous missions before, although it has declined to name potential partners or production targets for smartphones and tablet PCs. 

By Girija Shivakumar in New Delhi

As competition hots up, multinationals operating in emerging markets are making ever bigger efforts to tailor their products to local tastes.

Nestle, the Swiss food and beverages group, has become the latest to establish a research and development centre in India to  adapt its offerings for consumers in India – and in other markets.