Larger markets, both in size and wealth, increase the incentive to invest in R&D. […] As India and China become richer, they are investing more in R&D and investing more in educating the scientists and engineers who produce new ideas, new ideas that benefit everyone.
His post is primarily about pharmaceuticals, but he’s also generalizing a bit (above). It’s a valid question regarding mobile devices: how soon might we see Chinese mobile device firms doing more intense R&D, and bringing better technology to smartphones? The current generation of players focuses on scale and reach. But as market shares stabilize (eventually), how long before a player plots out a different vector? If Xiaomi emerges the winner of the current generation, it’s well positioned to invest in technology development. It’s not as simple as that, though. It’s not clear if taking on R&D risk would ever be part Xiaomi’s identity. At this point, there’s just this fuzzy certainty: as they grow, more Chinese and Indian firms will do deeper R&D.