WORKING PAPER 35/2008
India and China are important players in an evolving process of globalization of research and development (R&D). Focusing on pharmaceuticals and biotechnology industries, this paper analyses the challenges and prospects facing the two countries in global innovation. Large supplies of highly skilled professionals and well-established science and technology infrastructures are important assets for India and China in the era of globalization of R&D. At the same time, however, there is a concern that as globalization of R&D gathers steam, the poor in India, China and other developing countries are likely to be left out of the new innovations. A good example is the case of Indias pharmaceuticals industry. The leading Indian pharmaceutical firms have responded well to the challenge of a strict intellectual property rights (IPR) regime by increasing their R&D spending and, simultaneously, targeting their sales to the generic drugs markets in North America and Europe. But even as Indias top drug firms have been growing in technological capabilities and taking part in the globalization of pharmaceuticals R&D, they have also been shifting their focus away from the market for medicines for poor patients.