How tech should work
Some creative switching of IC costs can drastically reduce the cost of doing research without necessarily having every nation with MBT's by 1939 due to minimum timespans. Yet, this will really only improve the case of the major nations. However, would it be accurate to get the minor nations to research at higher levels?
The problem with HoI is that it assumes that every single weapon used by any individual country was independently and domestically designed (unless tech was shared between Allies).
In fact, that was rarely the case.
Czechoslovakia designed the supurb 20mm and 40mm AA Guns whose rights were bought or stolen by both the Axis and the Allies who domestically produced their own. Japan's domestically produced 25mm and 13mm AA Guns were of a French Hotchkiss design.
Most of the Low Countries used purchased Bofors 40mm AT Guns that were domestically produced. The German 37mm PAK 36 formed the basis of AT guns of this calibur (and greater) for the US, Japan and Russia (who developed a 45mm AT gun which was then captured and copied by Japan).
Tanks: Looking at tank development, you can see an entire line of tanks developed from one American prototype (the Christie suspension). This suspension was found in Russian Tanks (BT seris) British Tanks (Cruiser series), and even German tanks (Captured Czech LTM-38's). Realistically, the Russians and British didn't have to research 'Basic Gear' in order to get their BT and Crusader tank gear, but mearely purchsed the rights to use an existing prototype. Polish (7TP based off of Vickers 6 ton), Swedish (Landsvark series based off of LTM-35) and Hungarian (Turin, I believe, based off of the LTM-35) tanks were based off of purchased British and Czech vehicles. They didn't have to research Gear, Engine, Suspension or even the prototype since they purchased all of these. All they had to do was to figure out how to mass produce and customize them. Very few nations built tanks from scratch. Both Canada and Australia (each with fairly high IC, yet still not enough) based their domestically designed tanks off of British and American parts (they used the M3 chasis, suspension/gear/engine, and British armaments in 40mm and 57mm). Technically they didn't research any of these, but were able to put these tanks into domestic production.
SMG: The most common SMG in Europe was the Bergmann SMG in the 1930's. A Swiss design, it found its way into the hands of the Japanese, Belgians, Dutch, Germans and even British, along with countless other nations. While many of these nations later developed their own SMG's, others just used the Bergmann design and produced it themselves, until they purchased and used improved designs.
Aircraft: Until 1945 I think that every aircraft in the Finnish inventory was purchased (same with Sweden). Many nations bought aircraft outright (notable sellers were Poland, Germany, France, Russia, England), or bought the rights to construct them (Belgium bought the rights to build Hurricane fighters). Very few nations had to develop their own aircraft.
So, basically you can see the dilemma in HoI is that minor nations never really had the ability to independently develop their weapons of war, because their industry and R&D was never at the same level as the major beligerants. HoI got this aspect correct. The problem is, is that currently the only way for these nations to get this tech is if they either join the Axis or Allies. By the time they eventually get the trickle down of tech, (if any at all), they are usually in the heat of battle still fighting with Great War era tanks and biplanes. There must be a way for neutral nations to get the tech they got without joining a military alliance.
It might not be a popular idea, but instead of giving these minor nations unrealistic IC, which may or may not add to their technology (possibly will just create more resource problems and increae the number of military units they produce), we should create a series of tech sharing/selling events where minor nations are able to get the basics that they did have by the time of war.
I say, we make tech affordable for the Major Nations, and add tech selling events for minor nations, to give them a leg up when it comes to technology. Unless we skew the system so much, that research costs next to nothing (making it trivial since everyone will always be on the same footing), there is no way to get minor nations to basic tech levels without this.
The main suppliers of weapons technology were: (pre-war)
Czechoslovakia: Small Arms, Artillery and Medium Tanks
United States: Leading in Tank Gears and Suspension, Aircraft, small arms
Britain: Light Tanks/Tankettes, limited aircraft
France: Artillery, Light Tanks
Germany: Small Arms, Aircraft, Artillery
Switzerland: Small Arms
Russia: Small Arms, Tanks, Aircraft
Italy: Small Arms, Torpedo Boats, Aircraft, Artillery
Poland: Aircraft
Among others...
These nations led the devleopment of military technology, and supplied it to the other nations of the world. These other nations either used purchased goods, or based their equipment off of examples and rites purchased from these nations. This above list of nations should be the ones who are ahead in technology, while the others survive through technology trickling down.