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ASCI Journal of Management41(1): 120
Copyright 2011 Administrative Staff College of India
Nirmalya Bagchi*
A Comparative Analysis of the Factors for Fostering
Innovation in BRICS Countries from 1995 to 2009
Abstract
Recent studies have proved that innovation in a country improves its growth potential. The
experience of Japan, Taiwan and other East Asian economies show that given the right
interventions and availability of a suitable eco system, developing countries can catch up on
technology and innovation. The BRICS countries are often regarded as the next set of emerging
economies that are likely to tread a innovation driven high growth trajectory. The paper
analyzes the input and output factors for fostering innovation in BRICS countries in 3 time
periods; 19952002, 20032007, 20082009 and reports the results.
Introduction
Every nation seeks prosperity and well being. Contemporary literature on the topic suggeststhat though there is no unanimity on the choice of measure, more or less everyone agrees that
the income, is an important indicator of material well being. Natural quest then is to identify
the factors causing income growth. Recent studies have reopened this issue and have
acknowledged that income growth cannot be explained only in terms of growth in capital and
labour and that adequate emphasis should be placed on enriching human capital, innovation
and technological progress. However, it is not easy for a developing country to catch up on
technology and innovation with advanced countries. Sustained efforts and suitable interventions
are often required. The experience of East Asian economies (particularly South Korea and
Singapore) show that given the right interventions and availability of a suitable eco system,
developing countries can catch up on technology and innovation.
It is widely believed that the next set of countries, after the East Asian economies, that have
potential to report a sustained high growth, coupled with high rate of technological progress
and innovation are the fast growing countries - Brazil, Russia, India, China and South Africa
(BRICS). These countries have indeed shown early signs of successfully leveraging technology.
Together they accounted for about 17% of the global GDP in 2010. The high growth rate and
the progress made by these countries in such high technology areas as ICT, pharmaceuticals,
automobiles, and aerospace calls for a critical examination of the innovations and its structure
in these countries.
*Associate Professor, Administrative Staff College of India, Bella Vista, Raj Bhavan Road,
Hyderabad 500082. Email: [email protected]
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Bagchi Innovation in BRICS Countries 3
However, attaining technological progress for a developing country is not easy. It requires
sustained and focused efforts from government and non government entities. The East Asian
economies and Japan are probably the only examples of countries that have focused on attaining
high growth through technological progress and innovation and have successfully achievedit. The evidence from the East Asian economies (Wade, 1990; Kim, 1980, 1997) and Japan
(Johnson, 1982) point to the conscious efforts made in those countries by various entities
towards developing technology and innovation capability and thereby attaining high growth.
Kim (1997) after analyzing the South Korean experience posited that technological progress,
and the innovation thereof, was a moving target and a country needs to continuously keep up
efforts to remain at the cutting edge. Technological capability, he opines, is not attained just
by achieving an edge in R&D but in the application of R&D and its commercial exploitation.
Lall (1992) stresses the need for national technological capability, financial strength, higher
education, managerial capability, foreign technology acquisition for achieving high growth
through technological progress.
A more comprehensive approach of a national innovation system was first conceptualized by
Freeman (1987) and later the concept has been refined (Freeman, 1995; Lundvall, 1988, 1992;
Nelson, 1993; and Edquist, 1997). Many countries have a formal policy towards their national
innovation system and make continuous efforts in improving the innovation capacity. (Suarez-
Villa, 1990; Griliches 1990; Trajtenberg, 1990).
Even when all stakeholders are making efforts to improve the technological and innovative
capacity of countries, one needs to continuously measure and monitor the effects of such
interventions. The key to understanding the effectiveness of innovation improving interventions
is in identifying what to measure. The problems of measuring innovation capacity and assessingnational innovation systems have been dealt with by many scholars (Kravchenko, 2011; Lundvall,
2007; Zhu, 2003; Freeman 2009) and there is no unanimity on a single set of metrics for
measuring innovation capacity. Aubert (2006) developed a set of 17 indicators for measuring
the effectiveness of a countrys innovation capacity. OECD (2005, 2006) also lays down the
broad criteria for measuring the innovation maturity of a country. Even though some models
and measures are available for developed countries, they are prone to errors when measuring
innovation in developing countries. Moreover, innovation is a non linear process. Finding
direct relationships between input factors and output factors for innovation is a delicate task.
Articles in popular global press (The Economist, 2010; The New York Times, 2007) and a
plethora of evidence based analysis and reports (Baskaran 2010; Ayyagari, 2006; Hu, 2008;
UNESCO 2010, WIPO 2011) give an interesting account of innovations happening in emerging
markets. Understandably, there is a lot of interest in innovations in emerging markets, but not
much has been done in analyzing it, though with a few exceptions. (Intarakumnerd ; Choi,
2011; Tiwari, 2011; Tseng 2009). Even less is known about the innovations from BRICS countries
and their comparative performance in building innovation capacity. However, the increasing
importance of both India and China in the field of R&D (King, 2004) is acknowledged in many
circles. In terms of FDI in R&D (UNCTAD, 2005), some of the BRICS countries perform well.
Comparative performance of BRICS countries both in terms of input and output factors of
innovation is long overdue. This paper is an attempt to understand the performance of BRICScountries in building innovation capacity.
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Methodology
The objective of this paper is to analyze (inter country comparison) some of the factors for
improving innovation in BRICS countries. The factors that are critically analyzed are the
following:
1. Total expenditure on R&D,
2. Business expenditure on R&D,
3. High-Tech exports,
4. Total R&D personnel in business enterprise
5. Total R&D personnel nationwide,
6. Scientific Articles (Scientific articles published by origin of author),
7. Number of patent applications filed for residents and non residents,
8. Number of patents granted to residents,
9. Total public expenditure on education per capita.
Factors 1, 2, 4, 5 and 9 may be considered as input factors and the rest (3, 6, 7 and 8) as out
put factors.
The factors of innovation in a (BRICS) country are each analyzed after aggregating data into
three time period. The first period is from 1995 to 2002, which represents a period of stability
and low fluctuations for BRICS countries in which there is not much inter country difference
in either the GDP or in other variables that influence innovation. This period is being referred
to as pre high growth phase. The second period is from 2003 to 2007, which represents a
period before the financial crisis in which the BRICS countries show an almost exponential
growth in many variables that influence innovation. This is defined as the high growth phasein this paper and represents the most fruitful period in terms of the indicators for innovation in
BRICS countries. The last period is 20082009, which represents the post financial crisis period.
We are keen to understand the influence of the recent financial crisis on factors of innovation
in BRICS. This despite the fact that we can only get possible early, trends in the two years
after the crisis.
Each factor is analyzed in aggregate form for the three time periods with inter BRICS country
comparisons so that we may get some insight into the innovation trajectories of these countries.
Dataset
The entire dataset for the paper has been drawn from the following sources;
1. IMD Competitiveness Online (19952010)
2. WIPO Statistics
3. UNCTAD, FDI/TNC database (www.unctad.org/fdistatistics).
4. NASDAQ database (www.nasdaq.com)
Innovation in BRICS
BRICS countries represent high growth economies which are showing similar trend of progress
despite spreading across four different continents. Together they accounted for about 17 percent
of the worlds GDP in 2010 (see figure 1) BRICS as a block has also been active in international
negotiations at different fora, from climate change to WTO, and have acquired clout with other
developing countries through trade ties. High growth of these countries even when the rest of
the world is reeling in the global financial crisis is also a pointer to the inherent strengths of
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Bagchi Innovation in BRICS Countries 5
these economies. For example, during and after the global financial crisis, both China and
India keptup nearly double digits growth rates. Brazil is also showing a similar trend.
Figure 1: Percentage share of world GDP in market prices
in 2010 - BRICS and Rest of the World
Source: IMD World Competitiveness Online 19952011
Figure 2, shows the pattern of the movement of GDP from 1995 to 2010. It is evident that all
the BRICS countries show an upward yoy trend in their GDP values. Even the GDP (PPP) also
show a significant upward trend. All the BRICS countries are showing a robust upward trendin their GDP and given that the rest of the world is reeling from the aftershocks of the global
financial crisis. The growth of the BRICS countries should be juxtaposed with the crisis that is
still affecting large parts of the developed world (like the Euro zone crisis), to get a real picture
of the resilience of these economies. They have big domestic markets; follow policies that
promote liberalization; attract huge amounts of FDI; have a fairly developed domestic R&D
sector with sufficient technical manpower; and are not dependent only on commodity cycles
for growth. In short, they may blossom into developed countries in a few decades if the trends
continue.
Figure 2: GDP in US Dollar Billions of BRICS countries from 19952010
Source: IMD Competitiveness Online (19952010)
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BRICS countries are not only growing fast but are also growing on the strength of their
technological and innovation prowess. As figure 3 depicts, most of the BRICS countries have
a healthy high technology export as a percentage of total manufactured goods exports, which,
in the case of China is very high, touching the 30% mark. This clearly indicates that not onlyare the BRICS countries growing fast but they are growing on the strength of their technological
prowess.
Figure 3: High technology exports as a percentage of total exports
Source: IMD Competitiveness Online (19952010)
BRICS countries are also showing early signs of innovation driven growth (UNESCO, 2010).
These countries have been successful in a lot of high technology and innovation driven industries
like commercial aviation (Brazil), fighter aircraft (China, India, Russia), ICT (India), composites
(India, Russia, China), sustainable technologies (Brazil), electronics and semiconductor devices
(China), speciality chemicals (China, India), and automobiles (China, India, South Africa). Of
the top 50 PCT applicants in the business organizations category, two were from BRICS
(WIPO, 2011); Huawei and ZTE.
Some of the notable innovations from the BRICS countries are automobiles (like the smallpassenger car Nano) from Tata Motors in India, Embraer ERJ 190 a commercial jet aircraft from
Embraer-Empresa Brasileira de Aeronautica, Brazil, the ICT service companies of India, notably
Infosys, Tata Consultancy Services, Wipro, Mahindra Satyam, generic drug companies in India
who implement process innovation, military aircraft companies in Russia like Mikoyan (formerly
Mikoyan-and-Gurevich Design Bureau), Sukhoi Company (JSC), Yak Aircraft Corporation (formerly
A.S. Yakovlev Design Bureau JSC), Ilyushin Design Bureau, telecom electronics devices from
the telecom companies like Huawei and ZTE in China, IT companies like Baidu in China and
speciality chemical companies in China.
The BRICS countries also have a large number of companies listed in global stock markets like
NASDAQ which mostly lists new economy companies. In fact, the BRICS countries together
have 214 listed companies in NASDAQ with a combined market capitalization US $ 237
billion.
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Bagchi Innovation in BRICS Countries 7
Table 1: Number, market capitalization and major industry sectors
of NASDAQ listed companies from BRICS countries.
Country Number of Market capitalization of Listed companies mainly
NASDAQ the NASDAQ listed from the industry sector
listed companies in August 2011
companies (in US $ billion)
Brazil 21 104 Oil and Gas, Telecom, Aerospace,
Banking
Russia
India 11 40 Telecom, Pharmaceuticals, EDP,
Banking
China 173 78 Software, Pharmaceuticals, Telecom,
Semiconductor, Business Services,
Aerospace, Automobile, EDP,
Banking, Oil and Gas, Construction
South Africa 9 17 Precious Metals, Oil and Gas
Source: NASDAQ database http://www.nasdaq.com
Level and quality of education in BRICS countries is also fairly good. India has consistently
been a major contributor in science papers from the early 70s, while Russia is well known and
recognized for its quality of technical education. Brazil is also well recognized as a country
that produces good quality science professionals. In recent decades, China has made special
efforts to improve its standing in developing high quality scientific and technical talent in the
country and the output factors like scientific papers and patents indicate that it has been
successful in its endeavor. The figure 4 below shows the percentage of total first university
degrees in science and engineering in BRICS countries from 1997 to 2008.
Figure 4: Percentage of total first university degrees in
science and engineering in BRICS from 19972008
Source: IMD Competitiveness Online (19952010)
%
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At least two of the BRICS countries have a very impressive 25% of the population that has
attained at least tertiary education (for people between 24 and 35 years of age). The values for
Brazil and India are just above 10% in the last few years. This points to a large pool of qualified
and trained manpower who can be then moulded for innovation.
Figure 5: Percentage of population that has attained at least
tertiary education (25-34 years age group) in BRICS countries.
Source: IMD Competitiveness Online (19952010)
Thus, we can see that BRICS countries have all the right ingredients for innovation driven
growth. Even though there may be intra BRICS differences within factors of innovation, it can
be safely said that these countries are already showing signs of attaining that goal. However,
the pace at which each BRICS country will attain innovation driven development and growth
will be different. China is much ahead of the rest of the pack and South Africa seems to be
lagging behind. India, Russia and Brazil seem to be in the same orbit and are likely to show
similar progress even though the domains in which they excel would different. Also the
median age of Indian population is 25.5 years, which will work to its advantage in the years to
come. Russia on the other hand is an aging population.
In per capita measures like total R&D personnel in business per capita or patent applicationsper capita, BRICS countries fare well (figure 6 and figure 7). However, BRICS do not post
uniform results and there is some inter country differences.
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Bagchi Innovation in BRICS Countries 9
Figure 6: Total R&D personnel in business per capita in FTE per 100 people
Figure 7: Patent applications per capita
Number of applications filed per 100,000 inhabitants
Analysis
Now let us analyze some of the factors for fostering innovation in any country. We shallanalyze the data in aggregate form in three time periods for total expenditure on R&D, business
expenditure on R&D, high-technology exports, total R&D personnel in business enterprise (in
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full-time equivalent thousands), total R&D personnel nationwide, scientific articles published
by origin of author, number of patent applications filed for residents and non residents,
number of patents granted to residents, and total public expenditure on education per capita
(in US Dollar per capita).
Pre High Growth Phase (19952002)
In this phase, the BRICS countries show a stable rate of GDP growth. The table 2 given below
lists the mean values (of each BRICS country) for each indicator in this phase. This phase is
characterized by stable values for most indicators.
Table 2: Means of indicators that foster
innovation in the pre high growth phase
Mean of Mean of Mean of Mean of Mean of Mean of Mean of Mean of Mean of
Total Business Scientific Number of Number of High Tech Total R&D Total R&D Total public
Expenditure Expenditure articles patents applications Exports personnel in personnel expenditure
on R&D on R&D published granted filed for (in US Dollar business nationwide on education
(in US Dollar (in US Dollar by origin to residents Millions) enterprises (in FTE per capita
Millions) Millions) of author residents and non from (in FTE thousands) in US Dollar
From from from from residents 20002002 thousands) from per capita
19952002 19952002 19952002 19972002 from from 19952002 from
20002002 19952002 19952002
Brazil 6167.76 2238.01 6155.283 513.125 16867.33 4638.34 81.49 121.75 143.3112
China 8626.43 4677.97 17424.98 3259.333 65196 42111.42 416.26 859.69 26.4368
Mainland
India 3177.12 662.63 10415.77 539.4444 10186.67 1498.15 72.23 278.84 15.54853
Russia 3230.70 2292.35 16854.87 18895.83 33245 3469.82 652.40 1041.98 66.36507
South Africa 931.67 499.84 2265.183 4211.5 913.02 8.48 21.33 198.4933
Expenditure on R&D
Two indicators fall in this category, total expenditure on R&D and business expenditure on
R&D. Data is available for both indicators from 1995 to 2002 and the mean values are calculated
for this period for both the indicators. In this phase China and India show an upward trend for
total expenditure on R&D, while Brazil, and South Africa show a marginal decline and Russia
shows a recovery after a decline in the late 90s. China shows a much greater rate of increaseas it had head start ahead of others in 1995 (4175.34 US $ million) with a value lower than
Brazil (US $ million 6285.40). In 2002 however, China was much ahead (more than four times)
at US $ 84932.60 million while Brazil was at US $ 19531.58 million. During this period (on an
average) the share of Brazil, China, India, Russia and South Africa to the total of BRICS for this
indicator has been 28%, 39%, 14%, 15%, 04% respectively. In the case of business expenditure
on R&D, India and South Africa fare very badly during this period and show a very marginal
increase, while China already shows an exponential increase. Brazil is showing an upward
movement while Russia decline, in the late 90s and then recovers in the early 2000s. During
this period (on an average) the share of Brazil, China, India, Russia and South Africa to the
total of BRICS for this indicator has been 22%, 45%, 06%, 22%, 05% respectively. From
US $ 1823.64 million in 1995, China increases business expenditure on R&D to US $ 9517.94
million in 2002; an increase of 421%, while the increase for Brazil and India is only 77% and
56% respectively.
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Bagchi Innovation in BRICS Countries 11
R&D Personnel
Two indicators fall in this category, total R&D personnel in business enterprises (000 FTE) and
total R&D personnel nationwide (FTE 000). Data is available for both indicators from 1995 to2002 and the mean is calculated for this period for both the indicators. The total R&D personnel
in business enterprises in Full-Time equivalents (in FTE 000) for the period 19952002 shows
that China posts a rapid increase in this period and Russia posts a rapid decline. India, Brazil
post similar values and remain almost flat for the entire period, while South Africa posts a
marginal increase. Again the growth posted by China in this indictor mirrors the other indicators
for the country. In fact, in 1995 China had 317.5 (in FTE thousands) total R&D personnel in
business enterprises and in 2002 that number goes up to 601.3.
Expenditure on Education per capita
The expenditure on education per capita from 1995 to 2002 shows a decline for Brazil and
South Africa and a robust increase by Russia. China and India also show modest increase. A
big gap exists between the groups Brazil-South Africa-Russia and India-China. China in this
indicator does not show an exponential increase in spending. During this period (on an average)
the share of Brazil, China, India, Russia and South Africa to the total of BRICS for this indicator
has been 32%, 06%, 03%, 15%, 44% respectively.
Patents
Two indicators fall in this category, number of patents granted to residents (data available
from 19972002) and number of applications filed for residents and non residents (data availablefrom 20002002). Mean is calculated for both indicators for the period that data is available.
Number of applications filed for residents and non residents show an upward trend for China.
The rest of the BRICS countries post results with neither an increase nor decrease. Also, China
is at a much higher level than the rest. During this period (on an average) the share of Brazil,
China, India, Russia and South Africa to the total of BRICS for this indicator has been 13%,
50%, 08%, 26%, 03% respectively. With regard to number of patents granted to residents,
Russia posts values that are mush higher than the rest of the BRICS countries, but shows a
decline, while China shows an increasing trend. Brazil and India post similar results. For this
indicator, China goes up from 1531 in 1997 to 5813 in 2002, and Russia comes down from
25616 in 1997 to 14454.33 in 2002. During this period (on an average) the share of Brazil, China,
India, Russia and South Africa to the total of BRICS for this indicator has been 02%, 14%, 02%,
81%, 0% respectively.
Scientific Articles
All BRICS countries with the exception of Russia show an increasing trend in terms of scientific
articles published by origin of author. China is of course showing a rapid growth in this
indicator while Brazil, India and South Africa are showing a stable rate of modest growth in
the number of articles. During this period (on an average) the share of Brazil, China, India,
Russia and South Africa to the total of BRICS for this indicator has been 12%, 33%, 20%, 32%,04% respectively.
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High Tech Exports
High Tech Exports (in US $ Million) is one indicator in which the difference between China
and the rest of the BRICS countries is very evident. China posts values of 24195.41 in 1998 forthis indicator and in 2002 posts a value of 68181.62. The nearest BRICS country to China in
1998 is Brazil which posts a value of 2544.22 and 5350.79 in 2002. So China is several times
ahead of the others on this indicator. However, we must also admit that not all high technology
exports maybe innovative.
Figure 8: Share (Ratio of means) of the BRICS countries as per the
9 indicators in the pre high growth phase
High Growth Phase (20032007)
This period is characterized by high growth in GDP in the BRICS countries and in high
growth of the indicators that foster innovation. Chinas share amongst BRICS increases in this
period enormously. This is also the period immediately before the global financial crisis. Most
emerging markets including BRICS countries performed very well in this period.
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Table 3: Means of indicators that foster innovation
in the high growth phase
Mean of Mean of Mean of Mean of Mean of Mean of Mean of Mean of Mean of
Total Business 19972002 Number of Number of High Tech Total R&D Total R&D Total public
Expenditure Expenditure Scientific patent patents Exports personnel in personnel expenditure
on R&D on R&D articles applications granted (in US Dollar business nationwide on education
(in US Dollar (in US Dollar published filed for to resident Millions) enterprises (in FTE per capita
Millions) Millions) by residents and 2003 from (in FTE thousands) in US Dollar
(2003 (2003 origin of non residents 2007 (2003 thousands) (2003 per capita
2007) 2007) author 2003-2007 2007) (20032007) 2007) 20032007
Brazil 9078.94 4360.009 10096.82 20576 245 7212.43 77.07 244.16 226.8233
(0.16) (0.12) (0.12) (0.08) (0.01) (0.03) (0.05) (0.08) (0.29)
China 31737.87 21985.52 42319.5 172938 16685.33 2 18313.67 882.13 1370.17 45.65232
Mainland (0.54) (0.62) (0.50) (0.67) (0.46) (0.93) (0.55) (0.46) (0.06)
India 6388.52 1740.437 15080.04 23748.4 905.3333 3445.35 87.25 391.15 22.28471
(0.11) (0.05) (0.18) (0.09) (0.02) (0.01) (0.05) (0.13) (0.03)
Russia 9125.02 6086.296 14400.96 34888.6 18555.93 4529.54 541.52 934.69 216.768
(0.16) (0.17) (0.17) (0.13) (0.51) (0.02) (0.34) (0.31) (0.27)
South Africa 2100.60 1076.314 2473.4 7450.4 1516.73 11.54 29.13 280.4863
(0.04) (0.03) (0.03) (0.03) (0.01) (0.01) (0.01) (0.35)
Expenditure on R&D
The total expenditure on R&D indicator shows an exponential increase in the case of China
and a rapid pace of increase for Brazil and Russia with India close behind. South Africa alsoshows an upward trend. During this period (on an average) the share of Brazil, China, India,
Russia and South Africa to the total of BRICS for this indicator has been 16%, 54%, 11%, 16%,
04% respectively. Business expenditure on R&D also shows robust growth for all BRICS countries,
but China shows an exponential growth followed by Russia, Brazil, India and South Africa.
During this period (on an average) the share of Brazil, China, India, Russia and South Africa to
the total of BRICS for this indicator has been 12%, 62%, 05%, 17%, 03% respectively.
R&D Personnel
Total R&D personnel in business enterprise for China is growing exponentially in this period
but for Russia, the trend is downward, Brazil, India and South Africa show no growth inexpenditure. Chinas increase in expenditure is very high. It rises from 656.1 FTE thousands in
2003 to 1186.75 FTE thousands in 2007, while for Russia, it reduces from 592.63 in 2003 to
507.42 in 2007. During this period (on an average) the share of Brazil, China, India, Russia and
South Africa to the total of BRICS for this indicator has been 05%, 55%, 05%, 34%, 01%
respectively. Total R&D personnel nationwide tell a similar tale. China posts exponential growth
in this indicator while Russia shows a decline. Brazil, India and South Africa show marginal
increase. During this period (on an average) the share of Brazil, China, India, Russia and South
Africa to the total of BRICS for this indicator has been 08%, 46%, 13%, 31%, 01% respectively.
Expenditure on Education per capita
The total public expenditure on education per capita for this period shows a somewhat different
pattern than the other indicators. South Africa, Brazil and Russia post exponential growth on
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this indicator, while China and India fall far behind. During this period (on an average) the
share of Brazil, China, India, Russia and South Africa to the total of BRICS for this indicator has
been 29%, 06%, 03%, 27%, 35% respectively. However, one must point out that the per capita
value for India and China are low due to their huge population and in absolute terms thedifference may not be as glaring.
Patents
Number of patents granted to residents in this period is showing exponential growth for China
and is showing a decline for Russia. Brazil, and India show only very marginal growth in
numbers. During this period (on an average) the share of Brazil, China, India, Russia and South
Africa to the total of BRICS for this indicator has been 01%, 46%, 02%, 51%, 0% respectively. In
the indicator, number of patent applications filed for residents and non residents, again China
is far ahead of the rest of the BRICS countries. While in 2007, China show a number of 245161,
Brazil reports only 21825. During this period (on an average) the share of Brazil, China, India,Russia and South Africa to the total of BRICS for this indicator has been 08%, 67%, 09%, 13%,
03% respectively.
Scientific Articles
In scientific articles published by origin of author, China shows an upward trend along with
India and Brazil. Russia shows a decline and South Africa shows no growth. During this
period (on an average) the share of Brazil, China, India, Russia and South Africa to the total of
BRICS for this indicator has been 12%, 50%, 18%, 17%, 03% respectively.
High Tech Exports
High technology exports show exponential growth for China. Even though the rest of the
BRICS countries also post modest growth figures, they pale in comparison to China. The share
of China amongst other BRICS countries is about 93%. During this period (on an average) the
share of Brazil, China, India, Russia and South Africa to the total of BRICS for this indicator has
been 03%, 93%, 01%, 02%, 01% respectively.
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Table 4: Means of different indicators that foster innovation
in the post financial crisis period
Mean of Mean of Mean of Mean of Mean of Mean of Mean of Mean of Mean of
Total Business Scientific Number of Number of High Tech Total R&D Total R&D Total public
Expenditure Expenditure articles patents applications Exports personnel in personnel expenditure
on R&D on R&D published granted filed for (in US business nationwide on education
(in US Dollar (in US Dollar by to residents Dollar enterprise (in FTE per capita
Millions) Millions) origin of residents and non Millions) (in FTE thousands) in US Dollar
(2008 (2008 author 2008 residents (2008 thousands) (2008 per capita
2009) 2009) 20082009 2009 20082009 2009) (20082009) 2009) 20082009
Brazil 19013.42 9038.272 233.50 9443.74 79.35 397.72 410.8772
(0.15) (0.11) (0.004) (0.02) (0.04) (0.08) (0.31)
China 75681.36 55429.53 41256.33 302205.5 364819.61 1521.45 2128.2 116.4136
Mainland (0.61) (0.70) (0.659) (0.78) (0.94) (0.74) (0.46) (0.09)
India 10136.29 3040.888 36812 8320.36 37.1652(0.08) (0.04) (0.09) (0.02) (0.03)
Russia 16325.76 10230.14 21135.67 40206.5 4841.44 466.13 859.357 441.2807
(0.13) (0.13) (0.337) (0.10) (0.01) (0.23) (0.31) (0.33)
South Africa 2546.96 1377.569 10191 1714.50 31.077 326.2912
(0.02) (0.02) (0.03) (0.00) - (0.01) (0.24)
Expenditure on R&D
Two indicators fall in this category, total expenditure on R&D (in US Dollar Millions) and
business expenditure on R&D (in US Dollar Millions). Data is available for both indicators from
2008 to 2009 and the mean is calculated for this period for both the indicators. Total expenditureon R&D for China continues to increase exponentially flowed by Brazil, Russia, India and
South Africa. The signs of any effect of the financial crisis are not evident from the expenditures
of the BRICS countries. During this period (on an average) the share of Brazil, China, India,
Russia and South Africa to the total of BRICS for this indicator has been 15%, 61%, 08%, 13%,
02% respectively. Business expenditure on R&D is increasing for China in this period but
shows a dip in the case of Brazil and Russia. During this period (on an average) the share of
Brazil, China, India, Russia and South Africa to the total of BRICS for this indicator has been
11%, 70%, 04%, 13%, 02% respectively. Some dip is noticed in this indicator that may be
attributed to the global financial crisis.
R&D Personnel
Two indicators fall in this category, total R&D personnel in business enterprises (in FTE
thousands) and total R&D personnel nationwide (in FTE thousands). Data is available for both
indicators from 2008 to 2009 and the mean is calculated for this period for both the indicators.
China shows no sign any slowdown and continues to post upward trend in total R&D personnel
in business enterprise. Russia, and Brazil show a dip in this indicator for this period which
may be attributed to the financial crisis. During this period (on an average) the share of Brazil,
China, India, Russia and South Africa to the total of BRICS for this indicator has been 04%,
74%, 0%, 23%, 0% respectively. The case of total R&D personnel nationwide is similar with
China showing increasing trend and the rest showing a dip. During this period (on an average)the share of Brazil, China, India, Russia and South Africa to the total of BRICS for this indicator
has been 08%, 46%, 0%, 31%, 01% respectively.
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Bagchi Innovation in BRICS Countries 17
Expenditure on Education per capita
China and India continue to increase their spending on education without any indication of a
dip brought about by the events of the financial crisis, but the other 3 countries that werehaving very high values in this indicator show dips. Thus total public expenditure on education
per capita shows some effect of the financial crisis. During this period (on an average) the
share of Brazil, China, India, Russia and South Africa to the total of BRICS for this indicator has
been 31%, 09%, 03%, 33%, 24% respectively.
Patents
Patents granted to residents show increasing trend for China and a decline for Russia. During
this period (on an average) the share of Brazil, China, India, Russia and South Africa to the
total of BRICS for this indicator has been 004%, 65%, 0%, 33%, 0% respectively. Number of
patent applications filed for residents and non residents in the case of China is showing anincreasing trend and China is way ahead of the rest of the BRICS countries. During this period
(on an average) the share of Brazil, China, India, Russia and South Africa to the total of BRICS
for this indicator has been 0%, 78%, 09%, 10%, 03% respectively.
Scientific Articles
Sufficient data is not available for this period.
High Tech Exports
China again plays a dominant role in this indicator in this time period. During this period (on
an average) the share of Brazil, China, India, Russia and South Africa to the total of BRICS forthis indicator has been 02%, 94%, 02%, 01%, 0% respectively. China is way ahead of the others
in this indicator and is unaffected by the global financial crisis.
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18 ASCI Journal of Management 41(1) September 2011
Figure 10: Share of the BRICS countries as per the 9
indicators in the pre high growth phase
Discussion and Conclusion
The analysis of the data from 1995 to 2009 shows certain trends. China is increasing its
spending on input indicators of innovation like expenditure on R&D, increasing manpower for
R&D, and also pushing for improvements in output indicators of innovation like patent related
indicators, high tech exports or scientific articles. In all the indicators that have been analyzed,
China plays a dominant role. Over the three periods under study, it consistently shows
improvements in all indicators. Russia on the other hand continues to decline on some key
indicators. India and Brazil are slowly and steadily improving their innovation indicators. India
and China are also not showing any sign of getting affected by the financial crisis, where as,
some dip is noticeable in the case of Brazil, Russia and South Africa.
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