Working Paper
National Policies to Attract FDI in R&D

This paper is part of a project based on a broad data collection of policies in selected countries, with a special focus on the attraction of foreign R&D investments. The purpose of the research is to contribute to effective policy-making, capable of fostering multinational corporations’ (MNCs) investments in Brazil. In this context, the paper aims at identifying and examining the main policies to attract MNC technological activities in China, India, Ireland, Israel, Singapore, and Taiwan, in order to illustrate successful experiences and, based on them, to analyse the Brazilian case. The international experiences are analysed bearing in mind that foreign direct investment (FDI) attraction policies are part of industrial and development policies, and should not be assessed or used in isolation. The methodology applied in this work consisted of elaborating country reports, which comprised: (i) economic and technological data; (ii) a brief description of science, technology, and industry (ST&I) policies; (iii) mapping programmes and incentive instruments key to the development of technological activities by MNCs; and (iv) the main MNC R&D activities developed in the country. By analysing the country reports, it becomes evident that for most countries the selectivity, continuity, and coordination of national policies are the key factors in creating a favourable environment for foreign R&D activities, by showing the commitment of national initiatives targeted towards technological activities and other initiatives that improve the competitive structure of a country. In Brazil, despite some recent actions to foster innovation and R&D investments—such as the Innovation Law—it is patent that there is a lack of a strong government policy, committed with continuity and well connected to other policies, as well as an absence of a specific governmental structure targeted to the attraction of such investments.