Emerging market countries have very good prospects. There are many gaps to fill, such as know-how, increased investment in research and development and equalizing the standard of living of the population. Not for nothing has the nickname "country of contrasts" stuck to India. However, it should be noted that in recent years there has been an improvement and the country is developing very dynamically. This can be seen, for example, in the value of the flow of foreign direct investment in India. It is estimated that in 2021 foreign companies will invest 50% more capital in India than in 2014. The example of this country clearly demonstrates the significant impact of foreign direct investment on the development and innovation of incoming economies.Emerging economies have a very specific structure, very different from that of developed countries. In India, there is a great need to equalize the standard of living of the population and one of the ways to do this is through innovation. Moreover, India, thanks to its location, interacts significan belgium business email list tly with neighboring countries. India's position in terms of international competitiveness has improved in recent years. An improvement in quantitative indicators relating to human capital has been noted, but at the same time the relatively low quality of education at various educational levels and the resulting shortage, relative to needs, of talent on the market have been highlighted.
Interestingly, India spends a small percentage of GDP on R&D (less than 1%). This contrasts with China's 2.4% in 2020 and the OECD average of 2.6%.
On the positive side, a gradual change in the structure of actors in R&D funding is observed, i.e. an increasing number of companies. India has very few patent applications, while the country's strengths include the number of scientific articles and their number of citations. The country is specialized in disciplines such as:
organic chemistry,
pharmaceutical and biotechnology,
medical equipment,
computer techniques.
This is where foreign entrepreneurs are most likely to place their capital due to the low labour costs. Almost 50% of all investments were in the manufacturing sector. Investors are also increasingly willing to invest in research, testing and technical services, where the added value is much higher than in other sectors. If a foreign entrepreneur chooses India as a destination country to expand his business, there may be three reasons why he does so:
First of all because of the cost,
Secondly, these investments can be linked to meeting local market demand, and the Indian market is huge.
The last option is to look for local talent, something extremely important in the R&D sector.
As for the overseas expansion of Indian companies, it is important to note that it is modest compared to companies in other emerging economies, such as China. They mainly look to other markets for know-how, new production lines, a global portfolio of intangible assets and highly skilled employees, and the industries of greatest interest are those involving advanced techniques, namely pharmaceuticals, transportation equipment, electronics, IT and telecommunication services. Capital is mainly located in highly developed countries, which have a more mature market due to more demanding and educated consumers.