The Expert Meeting on the Impact of FDI on Development discussed the globalization of research and development (R&D) by transnational corporations (TNCs) and its implications for developing countries. The topic reflected a growing recognition in developing countries of the role played by innovation and R&D in development. Innovation and R&D are essential for upgrading technologies, moving up the development ladder, and catching up with developed countries. In technology generation, transfer and diffusion, developing countries are involving TNCs that are major players in global R&D.

In his opening address, the Chairperson of the Expert Meeting stressed the timeliness of linking the topics of R&D and TNCs. He noted not only that selected developing countries now receive more FDI in R&D but also that the nature of this FDI is changing in that it is no longer intended only for local market adaptation. The critical question is whether this phenomenon will spread in the future to a larger number of countries and, if so, under what conditions. (None of this is to deny that there are other key actors in many countries engaged in R&D, namely the public sector and the local private sector). The related practical question is what countries can do to harness the activities of TNCs to their own development objectives.

Related to that point, he asked if R&D is a luxury only to be enjoyed by relatively rich societies, and suggested that its relevance to developing countries in general depends on their aspirations and policies.