"Companies such as GE, Texas Instruments, and Intel recognize that they need to innovate or do product development that's more suited to these markets," he said. What many of them have done is set up innovation and product development centers in India, China and the rest of the Asian market. "What they've come to see is that the incredible talent there may have started off developing products for the Asian market but suddenly these companies recognize that they can service the U.S. and European markets with the same talent," Vashistha explained.
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For example, he said Google recognized 10 years ago that while search engine access in the U.S. was happening on laptops, it was taking place in Asia largely through mobile devices. Google therefore set up their R&D centers in India and China to address this difference. As Internet access on mobile devices increased in the U.S., Vashistha said Google was able to tap into the wealth of experience and talent it had developed in Asia to better serve the U.S. market.
The health and strength of the U.S. economy is closely tied to its investment in R&D. In 2014, U.S. R&D spending is projected to reach $465 billion, or 2.8 percent of GDP, according to the Battelle/R&D Magazine report.
While America still leads the world in R&D investment, countries around the world are working hard to catch up. As Witzeman of Eastman Chemical points out, the U.S. is not the only place where top R&D talent exists. "It's a big world out there," he said, "and if a company is going to compete in it, then it has to look outside its home market for that talent."
—By Susan Caminiti, special to CNBC.com