MNCs In China And India
Organizational Dynamics, Vol. 37, No. 2, pp. 190–202, 2008 ß 2008 Elsevier Inc. All rights reserved. www.organizational-dynamics.com ISSN 0090-2616/$ – see frontmatter doi:10.1016/j.orgdyn.2008.02.008 Knowledge Sharing Among High-Tech
MNCs in China and India:
Invisible Barriers, Best
Practices and Next Steps
MARY B. TEAGARDEN
INTRODUCTION
The convergence of size, talent and ambition is creating a dynamic playing field for knowledge creation and sharing in the Asia-Pacific
Region. The importance of China and India is old news. Combined, the two countries account for over 38% of the world’s population, and both have declared innovation to be a strategic national priority. In 2006, China announced plans to become an innovationoriented society by 2010 and a global leader in science and technology by 2050. India proclaimed itself ‘‘The world’s knowledge hub of the future’’ at a 2006 national research and development exposition. The investment in building the human infrastructure to realize these aspirations is extraordinary according to many popular sources—India graduates over half a million scientists and engineers each year. Even more are graduated each year in
China! Collectively, India and China graduate about 12 times more scientists and engineers each year than the United States. But aspirations and sheer talent are only part of the story.
Foreign Direct Investment (FDI) into
China and India and its impact on the development of the technology sector has been remarkable. According to the Financial Times, more than 220 multinationals and 120 Indian
JOAB MEYER
DUPRE JONES
domestic companies are currently engaged in advanced research and development
(R&D) work in India. China’s net inflow of
FDI has increased from $1.65 billion in 1985 to nearly $55 billion in 2004. India’s net inflows have jumped from $106 million to
$5.3 billion in this same period. This investment has been driven by the competitive advantages found in each market: China in manufacturing and
MNCs in China and India:
Invisible Barriers, Best
Practices and Next Steps
MARY B. TEAGARDEN
INTRODUCTION
The convergence of size, talent and ambition is creating a dynamic playing field for knowledge creation and sharing in the Asia-Pacific
Region. The importance of China and India is old news. Combined, the two countries account for over 38% of the world’s population, and both have declared innovation to be a strategic national priority. In 2006, China announced plans to become an innovationoriented society by 2010 and a global leader in science and technology by 2050. India proclaimed itself ‘‘The world’s knowledge hub of the future’’ at a 2006 national research and development exposition. The investment in building the human infrastructure to realize these aspirations is extraordinary according to many popular sources—India graduates over half a million scientists and engineers each year. Even more are graduated each year in
China! Collectively, India and China graduate about 12 times more scientists and engineers each year than the United States. But aspirations and sheer talent are only part of the story.
Foreign Direct Investment (FDI) into
China and India and its impact on the development of the technology sector has been remarkable. According to the Financial Times, more than 220 multinationals and 120 Indian
JOAB MEYER
DUPRE JONES
domestic companies are currently engaged in advanced research and development
(R&D) work in India. China’s net inflow of
FDI has increased from $1.65 billion in 1985 to nearly $55 billion in 2004. India’s net inflows have jumped from $106 million to
$5.3 billion in this same period. This investment has been driven by the competitive advantages found in each market: China in manufacturing and
Bibliography: appeared in Issues in Science and Technology (Spring, 2007, 45–53) offers an excellent historical perspective on knowledge flows and Opportunities and Threats for the Global Software Industry (Oxford: Chandos Publishing, 2007) and Giroux, New York, 2005) provides a more casual overview of the dynamics and drivers UTStarcom. She can be contacted at mary.teagarden@thunderbird.edu (Tel.: +1 602 978 7392; fax: +1 602 978 7419).