Changing innovation dynamics in India: the role of foreign direct investment in research and development activities

In India, the foreign Research and Development (R&D) centres are growing in number and these R&D centres are clustering around certain centres of excellence, engineering institutions, universities, etc. Just to cite an example, USA has the maximum number of R&D centres and almost 65% of their total R&D investment in India is towards software development followed by 16% in hardware and product development. These foreign R&D have established linkages with the scientific institutions, universities and also local firms to have continuous access to human resource and Science and Technology (S&T) infrastructure. The paper proposes the need for assessment and monitoring of Foreign Direct Investment (FDI) for their linkages and outcomes and presents a typology of the probable spin-off effect.