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ASCI Journal of Management 41(1): 1–20 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; 1995–2002, 2003–2007, 2008–2009 and reports the results. Introduction Every nation seeks prosperity and well being. Contemporary literature on the topic suggests that 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: bagchinirmalya@gmail.com

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ASCI Journal of Management 41(1) September 2011

This paper is an attempt at analyzing some of the critical factors that help in fostering innovation in BRICS countries. Following introduction in section 1, a brief review of literature is presented in section 2. Section 3 deals with research methodology adopted and datasets on which the analysis of the paper is based and a brief overview of innovations in BRICS is presented in section 4. A critical analysis of the various factors necessary for innovation in BRICS countries is elaborated in section 5. Discussion and conclusions are presented in section 6. A brief review of literature The study of economics has always focused on income growth even during the early days of capitalism. Production of surplus and its reinvestment in the economy for accelerating the growth rate of surplus had intuitively been considered as the basic issue for income growth that brings about material well being, right from the time of the Physiocrats1. However, recent studies2 have given rise to a body of literature, which are sometimes clubbed together as the new growth theories (Romer, 1990; Lucas 1988). These studies indicate that human capital and technological progress3 (and innovations thereof) should be given adequate importance. Moreover, technological progress should also yield more innovations in a country for better growth or else the technical edge developed by one country may be used by another for its commercial exploitation. In his seminal works, Schumpeter (1938, 1939) has laid the foundation4 for the important role of innovation for economic growth and development.

1 The classical tradition developed from Adam Smith through Ricardo and John Stuart Mill, as also Karl Marx to some extent, had a deeper insight into the problem. In some way or other they dealt upon the relation between consumption, savings and investments while analyzing the sources of surplus and it’s recycling in the production process so that income growth leading to material prosperity is attained. Technological progress and the constraint of diminishing return on land coupled with the consumption behavior of the society has also been discussed at length while deliberating upon the issues related to growth and stagnation or the stationary state. The absence of balance between savings and investment, in as much as the forces of savings are independent of the forces behind investment decisions, has been pointed out as the problem in the short run by John Maynard Keynes and a plethora of literature in the area of macroeconomic theory has been developed out of it. The growth theory following the Keynesian reasoning as developed by Harrod and an alternative theory mainly based on (non Keynesian) argument as proposed by Solow then ruled the world of growth theory for a considerable time. Some other practitioners in the field had added the issue of technological progress that might cause a parametric shift in the production function to these theories. 2 The received wisdom in the theory of growth faced a serious challenge during 1970s and 1980s when it was proved by the growth experience of some of the newly industrialized countries that the basic assumption that capital and labor constitute the only building blocks of such theories should be reconsidered. Growth, as the experience suggested, does depend on savings and investments translated in terms of capital and labor; but there is an added factor, which has a powerful contribution to income growth. The conventional theories would hardly account for this factor and therefore they marginalized it as ‘residual’. 3

Gerschenkron (1962) was the first to study the linkage between growth, development and technological progress. He pointed out the difficulties and challenges of developing countries trying to catch up with developed countries, technologically.

Schumpeter (1938) identified a list of 5 types of innovation and his 2 volume thesis (Schumpeter, 1939) identified the positive role played by innovation in an economy.

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foreign technology acquisition for achieving high growth through technological progress. 2003. 1980. 1997) and Japan (Johnson. the increasing importance of both India and China in the field of R&D (King. (Intarakumnerd . financial strength. was a moving target and a country needs to continuously keep up efforts to remain at the cutting edge. 2011. Technological capability. one needs to continuously measure and monitor the effects of such interventions. innovation is a non linear process. Many countries have a formal policy towards their national innovation system and make continuous efforts in improving the innovation capacity. A more comprehensive approach of a national innovation system was first conceptualized by Freeman (1987) and later the concept has been refined (Freeman. Kim (1997) after analyzing the South Korean experience posited that technological progress. The problems of measuring innovation capacity and assessing national innovation systems have been dealt with by many scholars (Kravchenko. is not attained just by achieving an edge in R&D but in the application of R&D and its commercial exploitation. It requires sustained and focused efforts from government and non government entities. Ayyagari. 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 achieved it. Understandably. though with a few exceptions. Even when all stakeholders are making efforts to improve the technological and innovative capacity of countries. some of the BRICS countries perform well. Tiwari. 1992. Aubert (2006) developed a set of 17 indicators for measuring the effectiveness of a country’s innovation capacity. Choi. 2005). there is a lot of interest in innovations in emerging markets. Freeman 2009) and there is no unanimity on a single set of metrics for measuring innovation capacity. The New York Times. WIPO 2011) give an interesting account of innovations happening in emerging markets. 1997). 2011. The key to understanding the effectiveness of innovation improving interventions is in identifying what to measure.Bagchi Innovation in BRICS Countries 3 However. 1988. 2010. 1982) point to the conscious efforts made in those countries by various entities towards developing technology and innovation capability and thereby attaining high growth. Griliches 1990. Trajtenberg. However. Moreover. Zhu. Even though some models and measures are available for developed countries. he opines. Comparative performance of BRICS countries both in terms of input and output factors of innovation is long overdue. higher education. The evidence from the East Asian economies (Wade. Tseng 2009). but not much has been done in analyzing it. 2006. In terms of FDI in R&D (UNCTAD. and the innovation thereof. OECD (2005. 2008. 2007) and a plethora of evidence based analysis and reports (Baskaran 2010. Lundvall. Finding direct relationships between input factors and output factors for innovation is a delicate task. Even less is known about the innovations from BRICS countries and their comparative performance in building innovation capacity. Lundvall. Articles in popular global press (The Economist. Kim. 1995. This paper is an attempt to understand the performance of BRICS countries in building innovation capacity. Nelson. 1990). UNESCO 2010. 1993. and Edquist. attaining technological progress for a developing country is not easy. 1990. managerial capability. Hu. they are prone to errors when measuring innovation in developing countries. (SuarezVilla. 2006) also lays down the broad criteria for measuring the innovation maturity of a country. 2011. 2007. . 2004) is acknowledged in many circles. 1990. Lall (1992) stresses the need for national technological capability.

4. 4. This period is being referred to as ‘pre – high growth phase’. WIPO Statistics 3.unctad. trends in the two years after the crisis. 9. The factors that are critically analyzed are the following: 1. from climate change to WTO. Together they accounted for about 17 percent of the world’s GDP in 2010 (see figure 1) BRICS as a block has also been active in international negotiations at different fora. which represents the post financial crisis period. 7 and 8) as out put factors. High-Tech exports. FDI/TNC database (www. The factors of innovation in a (BRICS) country are each analyzed after aggregating data into three time period. NASDAQ database (www.org/fdistatistics). Business expenditure on R&D. 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. The second period is from 2003 to 2007. Number of patent applications filed for residents and non residents. 3.4 ASCI Journal of Management 41(1) September 2011 Methodology The objective of this paper is to analyze (inter country comparison) some of the factors for improving innovation in BRICS countries. Factors 1. and have acquired clout with other developing countries through trade ties. We are keen to understand the influence of the recent financial crisis on factors of innovation in BRICS. The last period is 2008–2009. Scientific Articles (Scientific articles published by origin of author). 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. Total public expenditure on education per capita. Dataset The entire dataset for the paper has been drawn from the following sources. This despite the fact that we can only get possible early. 2. 2. This is defined as the ‘high growth phase’ in this paper and represents the most fruitful period in terms of the indicators for innovation in BRICS countries. 5 and 9 may be considered as input factors and the rest (3. 6.com) Innovation in BRICS BRICS countries represent high growth economies which are showing similar trend of progress despite spreading across four different continents. 4. which represents a period before the financial crisis in which the BRICS countries show an almost exponential growth in many variables that influence innovation. UNCTAD. 6. Number of patents granted to residents. Total R&D personnel in business enterprise Total R&D personnel nationwide.nasdaq. 7. 8. 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 . Total expenditure on R&D. 5. 1. The first period is from 1995 to 2002. IMD Competitiveness Online (1995–2010) 2.

during and after the global financial crisis. In short. All the BRICS countries are showing a robust upward trend in their GDP and given that the rest of the world is reeling from the aftershocks of the global financial crisis. It is evident that all the BRICS countries show an upward yoy trend in their GDP values. and are not dependent only on commodity cycles for growth. they may blossom into developed countries in a few decades if the trends continue. shows the pattern of the movement of GDP from 1995 to 2010. follow policies that promote liberalization. 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). They have big domestic markets. have a fairly developed domestic R&D sector with sufficient technical manpower. to get a real picture of the resilience of these economies. attract huge amounts of FDI.BRICS and Rest of the World Source: IMD World Competitiveness Online 1995–2011 Figure 2. Figure 1: Percentage share of world GDP in market prices in 2010 .Bagchi Innovation in BRICS Countries 5 these economies. Brazil is also showing a similar trend. Figure 2: GDP in US Dollar Billions of BRICS countries from 1995–2010 Source: IMD Competitiveness Online (1995–2010) . For example. Even the GDP (PPP) also show a significant upward trend. both China and India keptup nearly double digits growth rates.

China). India. Russia). Mahindra Satyam. 2010). military aircraft companies in Russia like Mikoyan (formerly Mikoyan-and-Gurevich Design Bureau). and automobiles (China. Russia. In fact. ICT (India). telecom electronics devices from the telecom companies like Huawei and ZTE in China. the BRICS countries together have 214 listed companies in NASDAQ with a combined market capitalization US $ 237 billion. 2011). As figure 3 depicts. These countries have been successful in a lot of high technology and innovation driven industries like commercial aviation (Brazil). Ilyushin Design Bureau. generic drug companies in India who implement process innovation. which. notably Infosys. Yakovlev Design Bureau JSC). sustainable technologies (Brazil). two were from BRICS (WIPO. This clearly indicates that not only are the BRICS countries growing fast but they are growing on the strength of their technological prowess. the ICT service companies of India. Yak Aircraft Corporation (formerly A. Of the top 50 PCT applicants in the business organizations category. The BRICS countries also have a large number of companies listed in global stock markets like NASDAQ which mostly lists new economy companies. Brazil. . composites (India. Huawei and ZTE. in the case of China is very high. Figure 3: High technology exports as a percentage of total exports Source: IMD Competitiveness Online (1995–2010) BRICS countries are also showing early signs of innovation driven growth (UNESCO. most of the BRICS countries have a healthy high technology export as a percentage of total manufactured goods exports. India). South Africa). Sukhoi Company (JSC). Some of the notable innovations from the BRICS countries are automobiles (like the small passenger car Nano) from Tata Motors in India. IT companies like Baidu in China and speciality chemical companies in China. India.6 ASCI Journal of Management 41(1) September 2011 BRICS countries are not only growing fast but are also growing on the strength of their technological and innovation prowess. speciality chemicals (China. electronics and semiconductor devices (China).S. Tata Consultancy Services. Embraer ERJ 190 a commercial jet aircraft from Embraer-Empresa Brasileira de Aeronautica. fighter aircraft (China. touching the 30% mark. Wipro.

In recent decades. Banking Software. Automobile. Figure 4: Percentage of total first university degrees in science and engineering in BRICS from 1997–2008 % Source: IMD Competitiveness Online (1995–2010) .Bagchi Innovation in BRICS Countries 7 Table 1: Number. Pharmaceuticals. Oil and Gas. Telecom. Country Number of NASDAQ listed companies 21 — 11 173 Market capitalization of the NASDAQ listed companies in August 2011 (in US $ billion) 104 — 40 78 Listed companies mainly from the industry sector Brazil Russia India China Oil and Gas. Banking. market capitalization and major industry sectors of NASDAQ listed companies from BRICS countries. Banking — Telecom. Telecom. Oil and Gas South Africa 9 17 Source: NASDAQ database http://www. EDP. The figure 4 below shows the percentage of total first university degrees in science and engineering in BRICS countries from 1997 to 2008. India has consistently been a major contributor in science papers from the early 70’s. Pharmaceuticals. Semiconductor. Construction Precious Metals. while Russia is well known and recognized for its quality of technical education.nasdaq. Aerospace. Aerospace. Brazil is also well recognized as a country that produces good quality science professionals.com Level and quality of education in BRICS countries is also fairly good. Business Services. EDP. 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.

which will work to its advantage in the years to come. BRICS do not post uniform results and there is some inter country differences. . 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. The values for Brazil and India are just above 10% in the last few years. Also the median age of Indian population is 25. BRICS countries fare well (figure 6 and figure 7). In per capita measures like total R&D personnel in business per capita or patent applications per capita.8 ASCI Journal of Management 41(1) September 2011 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).5 years. Figure 5: Percentage of population that has attained at least tertiary education (25-34 years age group) in BRICS countries. the pace at which each BRICS country will attain innovation driven development and growth will be different. India. Source: IMD Competitiveness Online (1995–2010) Thus. However. 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. However. This points to a large pool of qualified and trained manpower who can be then moulded for innovation. it can be safely said that these countries are already showing signs of attaining that goal. Russia on the other hand is an aging population. China is much ahead of the rest of the pack and South Africa seems to be lagging behind.

business expenditure on R&D.000 inhabitants Analysis Now let us analyze some of the factors for fostering innovation in any country. We shall analyze the data in aggregate form in three time periods for total expenditure on R&D. total R&D personnel in business enterprise (in . high-technology exports.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.

From US $ 1823.97 662.83 Expenditure on R&D Two indicators fall in this category.98 10415. 14%.02 81. China.4368 15. Table 2: Means of indicators that foster innovation in the pre high growth phase Mean of Mean of Total Business Expenditure Expenditure on R&D on R&D (in US Dollar (in US Dollar Millions) Millions) From from 1995–2002 1995–2002 Mean of Scientific articles published by origin of author from 1995–2002 Mean of Number of patents granted to residents from 1997–2002 Mean of Mean of Mean of Number of High Tech Total R&D applications Exports personnel in filed for (in US Dollar business residents Millions) enterprises and non from (in FTE residents 2000–2002 thousands) from from 2000–2002 1995–2002 16867.183 513.54853 66.36507 198. 45%.84 1041. In the case of business expenditure on R&D.40 8. Data is available for both indicators from 1995 to 2002 and the mean values are calculated for this period for both the indicators. In 2002 however.15 3469. Russia and South Africa to the total of BRICS for this indicator has been 22%. India. China was much ahead (more than four times) at US $ 84932. 05% respectively. while Brazil.63 2292.33 143.84 6155.64 million in 1995. while the increase for Brazil and India is only 77% and 56% respectively. This phase is characterized by stable values for most indicators.43 3177. total expenditure on R&D and business expenditure on R&D. China.26 72. During this period (on an average) the share of Brazil. In this phase China and India show an upward trend for total expenditure on R&D.10 ASCI Journal of Management 41(1) September 2011 full-time equivalent thousands). 22%.42 1498.35 499.4933 Brazil China Mainland India Russia South Africa 6167.34 42111. and South Africa show a marginal decline and Russia shows a recovery after a decline in the late 90’s.49 416.76 8626.70 931. China shows a much greater rate of increase as it had head start ahead of others in 1995 (4175.60 million while Brazil was at US $ 19531. total R&D personnel nationwide.01 4677.67 33245 4211.87 2265.125 3259. and total public expenditure on education per capita (in US Dollar per capita). 04% respectively. .58 million. an increase of 421%.75 859.40).98 21. scientific articles published by origin of author.34 US $ million) with a value lower than Brazil (US $ million 6285.82 913.48 Mean of Mean of Total R&D Total public personnel expenditure nationwide on education (in FTE per capita thousands) in US Dollar from per capita 1995–2002 from 1995–2002 121.3112 26.12 3230. while China already shows an exponential increase.33 65196 10186. The table 2 given below lists the mean values (of each BRICS country) for each indicator in this phase.69 278.23 652. Russia and South Africa to the total of BRICS for this indicator has been 28%. China increases business expenditure on R&D to US $ 9517. Brazil is showing an upward movement while Russia decline.77 16854. the BRICS countries show a stable rate of GDP growth. in the late 90’s and then recovers in the early 2000’s. 06%. Pre High Growth Phase (1995–2002) In this phase. India.94 million in 2002.283 17424. number of patents granted to residents. number of patent applications filed for residents and non residents. India and South Africa fare very badly during this period and show a very marginal increase. 15%.5 4638.4444 18895. 39%.333 539. During this period (on an average) the share of Brazil.67 2238.

China. 44% respectively. The rest of the BRICS countries post results with neither an increase nor decrease. 33%. For this indicator. The total R&D personnel in business enterprises in Full-Time equivalents (in FTE ‘000) for the period 1995–2002 shows that China posts a rapid increase in this period and Russia posts a rapid decline. number of patents granted to residents (data available from 1997–2002) and number of applications filed for residents and non residents (data available from 2000–2002). 02%. During this period (on an average) the share of Brazil. 04% respectively. while South Africa posts a marginal increase. and Russia comes down from 25616 in 1997 to 14454. China. 03% respectively. 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.3. China and India also show modest increase. Mean is calculated for both indicators for the period that data is available. 50%. During this period (on an average) the share of Brazil. 15%. China goes up from 1531 in 1997 to 5813 in 2002. China is at a much higher level than the rest. Scientific Articles All BRICS countries with the exception of Russia show an increasing trend in terms of scientific articles published by origin of author.Bagchi Innovation in BRICS Countries 11 R&D Personnel Two indicators fall in this category. but shows a decline. India and South Africa are showing a stable rate of modest growth in the number of articles. India. Brazil and India post similar results. During this period (on an average) the share of Brazil. A big gap exists between the groups Brazil-South Africa-Russia and India-China. 26%. 14%. 08%. Again the growth posted by China in this indictor mirrors the other indicators for the country. China in this indicator does not show an exponential increase in spending. while China shows an increasing trend. With regard to number of patents granted to residents.5 (in FTE thousands) total R&D personnel in business enterprises and in 2002 that number goes up to 601. In fact. Russia posts values that are mush higher than the rest of the BRICS countries.33 in 2002. Russia and South Africa to the total of BRICS for this indicator has been 02%. Russia and South Africa to the total of BRICS for this indicator has been 13%. China. 03%. India. During this period (on an average) the share of Brazil. total R&D personnel in business enterprises (‘000 FTE) and total R&D personnel nationwide (FTE ‘000). 32%. Russia and South Africa to the total of BRICS for this indicator has been 32%. Russia and South Africa to the total of BRICS for this indicator has been 12%. 81%. Number of applications filed for residents and non residents show an upward trend for China. Also. China. 0% respectively. Brazil post similar values and remain almost flat for the entire period. Patents Two indicators fall in this category. India. Data is available for both indicators from 1995 to 2002 and the mean is calculated for this period for both the indicators. India. 20%. in 1995 China had 317. 06%. India. China is of course showing a rapid growth in this indicator while Brazil. .

So China is several times ahead of the others on this indicator. Figure 8: Share (Ratio of means) of the BRICS countries as per the 9 indicators in the pre high growth phase High Growth Phase (2003–2007) This period is characterized by high growth in GDP in the BRICS countries and in high growth of the indicators that foster innovation. However. China’s share amongst BRICS increases in this period enormously.62. This is also the period immediately before the global financial crisis.79 in 2002. China posts values of 24195. Most emerging markets including BRICS countries performed very well in this period. . we must also admit that not all high technology exports maybe innovative.22 and 5350. The nearest BRICS country to China in 1998 is Brazil which posts a value of 2544.12 ASCI Journal of Management 41(1) September 2011 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.41 in 1998 for this indicator and in 2002 posts a value of 68181.

04 (0.5 (0.28471 (0. During this period (on an average) the share of Brazil.54 (0. Brazil. Total R&D personnel nationwide tell a similar tale. the trend is downward.03) 20576 (0.03) 218313.12) 42319.62) 1740.8233 (0.82 (0.01) 16685. South Africa. Brazil and Russia post exponential growth on .03) Mean of Number of patents granted to resident 2003– 2007 Mean of Mean of High Tech Total R&D Exports personnel in (in US Dollar business Millions) enterprises from (in FTE (2003– thousands) 2007) (2003–2007) 7212. 55%. 54%.4 (0. China posts exponential growth in this indicator while Russia shows a decline. Russia and South Africa to the total of BRICS for this indicator has been 16%.02 (0.16 (0. India.17) 2473. 16%.29) 45. India.01) Mean of Mean of Total R&D Total public personnel expenditure nationwide on education (in FTE per capita thousands) in US Dollar (2003– per capita 2007) 2003–2007 244. Russia and South Africa to the total of BRICS for this indicator has been 05%. China. 05%.314 (0. Russia and South Africa to the total of BRICS for this indicator has been 08%.73 (0.87 (0.3333 (0.02) 18555. During this period (on an average) the share of Brazil.4 (0.67 (0.768 (0. India and South Africa show no growth in expenditure.15 (0.65232 (0.06) 22.04) 4360.75 FTE thousands in 2007.08) 1370.03) Mean of Mean of 1997–2002 Number of Scientific patent articles applications published filed for by residents and origin of non residents author 2003-2007 10096.54) 6388. During this period (on an average) the share of Brazil. China.69 (0.52 (0.96 (0.60 (0.11) 9125. 46%.46) 905. 05%.Bagchi Innovation in BRICS Countries 13 Table 3: Means of indicators that foster innovation in the high growth phase Mean of Mean of Total Business Expenditure Expenditure on R&D on R&D (in US Dollar (in US Dollar Millions) Millions) (2003– (2003– 2007) 2007) Brazil 9078.31) 29.18) 14400.6 (0. 34%.42 in 2007.25 (0.296 (0.93) 3445.17 (0.09) 34888.08) 172938 (0. China.13 (0.05) 6086.03) 216.35) 245 (0.51) China Mainland India Russia South Africa 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. During this period (on an average) the share of Brazil. 04% respectively.52 (0.27) 280.1 FTE thousands in 2003 to 1186. 01% respectively.54 (0. but China shows an exponential growth followed by Russia.01) 226. India and South Africa. 62%. Russia and South Africa to the total of BRICS for this indicator has been 12%.43 (0. Business expenditure on R&D also shows robust growth for all BRICS countries. India.13 (0.01) 77.12) 21985.34) 11.50) 15080.437 (0. 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.94 (0. while for Russia.01) 4529. It rises from 656.33 (0.02) 1516. 01% respectively.93 (0.05) 541. 31%. R&D Personnel Total R&D personnel in business enterprise for China is growing exponentially in this period but for Russia. 13%. it reduces from 592.009 (0. 03% respectively. India.35 (0. 11%.05) 882.13) 7450.63 in 2003 to 507.16) 31737.55) 87.46) 391. India and South Africa show marginal increase.13) 934.17) 1076. Brazil. China.67) 23748.4 (0.16) 2100.4863 (0. Brazil. South Africa also shows an upward trend.07 (0. China’s increase in expenditure is very high. 17%.52 (0.

one must point out that the per capita value for India and China are low due to their huge population and in absolute terms the difference may not be as glaring. China. India. China. and India show only very marginal growth in numbers. Scientific Articles In scientific articles published by origin of author. During this period (on an average) the share of Brazil. again China is far ahead of the rest of the BRICS countries. 09%. Even though the rest of the BRICS countries also post modest growth figures. China. While in 2007. 35% respectively. High Tech Exports High technology exports show exponential growth for China. 01%. 01% respectively. Russia and South Africa to the total of BRICS for this indicator has been 08%. 27%. number of patent applications filed for residents and non residents. 17%. China. 06%. India. 51%. During this period (on an average) the share of Brazil. they pale in comparison to China. 50%. 67%. India. India. 03% respectively. Russia and South Africa to the total of BRICS for this indicator has been 01%. During this period (on an average) the share of Brazil. Russia and South Africa to the total of BRICS for this indicator has been 29%. 18%. 03% respectively. Patents Number of patents granted to residents in this period is showing exponential growth for China and is showing a decline for Russia. 13%. Brazil. In the indicator. China show a number of 245161. 93%. while China and India fall far behind. 0% respectively. However. The share of China amongst other BRICS countries is about 93%. Russia and South Africa to the total of BRICS for this indicator has been 03%. . 02%. China. Russia shows a decline and South Africa shows no growth. 46%. During this period (on an average) the share of Brazil. Russia and South Africa to the total of BRICS for this indicator has been 12%. Brazil reports only 21825. 03%. During this period (on an average) the share of Brazil. 02%. China shows an upward trend along with India and Brazil. India.14 ASCI Journal of Management 41(1) September 2011 this indicator.

Developed countries like the US and most parts of Europe show signs of recession and the tremors of this crisis continue to rattle the emerging markets.Bagchi Innovation in BRICS Countries 15 Figure 9: Share (Ratio of means) of the BRICS countries as per the 9 indicators in the high growth phase Post Financial Crisis Period (2008–2009) This represents the post global financial crisis period. BRICS no exception. in which several economies have been though a downturn. .

10) 10191 (0. 0%. total R&D personnel in business enterprises (in FTE thousands) and total R&D personnel nationwide (in FTE thousands).16 ASCI Journal of Management 41(1) September 2011 Table 4: Means of different indicators that foster innovation in the post financial crisis period Mean of Mean of Total Business Expenditure Expenditure on R&D on R&D (in US Dollar (in US Dollar Millions) Millions) (2008– (2008– 2009) 2009) Brazil China Mainland India Russia South Africa 19013.4136 (0.03) Expenditure on R&D Two indicators fall in this category.1652 (0. Data is available for both indicators from 2008 to 2009 and the mean is calculated for this period for both the indicators.888 (0. and Brazil show a dip in this indicator for this period which may be attributed to the financial crisis. The signs of any effect of the financial crisis are not evident from the expenditures of the BRICS countries. 0%.03) 441.36 (0.61) 10136.35 (0.04) 10230.357 (0. 46%.24) — 302205. The case of total R&D personnel nationwide is similar with China showing increasing trend and the rest showing a dip. 08%.13) 2546.31) 116. Data is available for both indicators from 2008 to 2009 and the mean is calculated for this period for both the indicators.02) 9038.74 (0.76 (0.14 (0. 13%. India. 13%. India.08) 16325. During this period (on an average) the share of Brazil.01) Mean of Mean of Total R&D Total public personnel expenditure nationwide on education (in FTE per capita thousands) in US Dollar (2008– per capita 2009) 2008–2009 397. During this period (on an average) the share of Brazil. 01% respectively. India.2912 (0. China. R&D Personnel Two indicators fall in this category.44 (0. Russia and South Africa to the total of BRICS for this indicator has been 11%. Russia.33 (0.53 (0.78) 36812 (0. 04%.13) 1377.5 (0. During this period (on an average) the share of Brazil.00) Mean of Total R&D personnel in business enterprise (in FTE thousands) (2008–2009) 79. During this period (on an average) the share of Brazil.02) 21135.33) 326.94) 8320.04) 1521. Russia.02) 364819.50 (0.8772 (0. China.09) 37.569 (0.2807 (0. Business expenditure on R&D is increasing for China in this period but shows a dip in the case of Brazil and Russia. .61 (0. Some dip is noticed in this indicator that may be attributed to the global financial crisis.23) 859.02) 4841.72 (0.659) Mean of Number of applications filed for residents and non residents 2008–2009 Mean of High Tech Exports (in US Dollar Millions) (2008– 2009) 9443.09) 40206.96 (0.36 (0.15) 75681. 02% respectively.077 (0.004) 41256.70) 3040. 23%.31) 31. 0% respectively. China shows no sign any slowdown and continues to post upward trend in total R&D personnel in business enterprise.5 (0.08) 2128. Total expenditure on R&D for China continues to increase exponentially flowed by Brazil.50 (0. 02% respectively.46) 410. Russia and South Africa to the total of BRICS for this indicator has been 15%.29 (0. 74%. China.11) 55429.45 (0.67 (0.01) 1714. India and South Africa. total expenditure on R&D (in US Dollar Millions) and business expenditure on R&D (in US Dollar Millions). Russia and South Africa to the total of BRICS for this indicator has been 04%.272 (0.337) Mean of Scientific articles published by origin of author 2008–2009 Mean of Number of patents granted to residents 2008– 2009 233.13 (0. India.2 (0.74) — 466.42 (0. 31%. Russia and South Africa to the total of BRICS for this indicator has been 08%. 61%. 70%. China.

65%. High Tech Exports China again plays a dominant role in this indicator in this time period. Russia and South Africa to the total of BRICS for this indicator has been 0%. 0%. 09%. 03% respectively. 09%. China. 33%. India. but the other 3 countries that were having very high values in this indicator show dips.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. 78%. Thus total public expenditure on education per capita shows some effect of the financial crisis. Number of patent applications filed for residents and non residents in the case of China is showing an increasing trend and China is way ahead of the rest of the BRICS countries. 94%. India. India. Russia and South Africa to the total of BRICS for this indicator has been 31%. 03%. China is way ahead of the others in this indicator and is unaffected by the global financial crisis. During this period (on an average) the share of Brazil. 0% respectively. During this period (on an average) the share of Brazil. During this period (on an average) the share of Brazil. Russia and South Africa to the total of BRICS for this indicator has been 02%. Russia and South Africa to the total of BRICS for this indicator has been 004%. Scientific Articles Sufficient data is not available for this period. 02%. 24% respectively. India. 33%. 10%. 0% respectively. . During this period (on an average) the share of Brazil. Patents Patents granted to residents show increasing trend for China and a decline for Russia. China. China. China. 01%.

Russia on the other hand continues to decline on some key indicators. Ayyagari.worldbank. World Bank. Washington. et al. M. 2006. edited by W.C. Over the three periods under study. (in Measuring Innovation in OECD and non-OECD Countries: Selected Seminar Papers. India and Brazil are slowly and steadily improving their innovation indicators. HSRC Press. China plays a dominant role. D. China is increasing its spending on input indicators of innovation like expenditure on R&D. some dip is noticeable in the case of Brazil. and also pushing for improvements in output indicators of innovation like patent related indicators.org/ INTINVTCLI/Resources/MicroeconomicsofGrowthPAPERbyDemirguc-Kunt. Blankley.A. increasing manpower for R&D. it consistently shows improvements in all indicators.. Available at http://siteresources.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 Ratio of means amongst BRICS for different indicators-post financial cricis Discussion and Conclusion The analysis of the data from 1995 to 2009 shows certain trends. India and China are also not showing any sign of getting affected by the financial crisis. References Aubert.) 21–42. S. J. “Innovation systems in emerging and developing economies”. et al. E. Firm Innovation in Emerging Markets: Role of Governance and Finance. In all the indicators that have been analyzed. where as.pdf . Cape Town. Russia and South Africa. 2006. high tech exports or scientific articles.

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