The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DThe telecommunications sector is especially interesting, not only because the companiesin this sector are the largest R&D performers, but also because the sector had acrisis in 2001 that forced companies to reduce costs, including R&D. Between 2001and 2003, R&D expenditures in the Swedish telecommunications sector were reducedby about 15 percent. This reduction is also seen in the overall R&D expenditure patternshowed in Figure 4-2. The rise and fall of R&D expenditures between 1999 and 2003can largely be attributed to the changes in R&D investments by the telecommunicationscompany Ericsson. This demonstrates the magnitude of impact a single multinationalcompany has upon overall R&D activity in Sweden.4.4 The Internationalization of Swedish Corporate R&DIn this section, R&D is considered “international” if it represents either:• Inward R&D investments. Foreign-owned companies performing R&D in Sweden.• Outward R&D investments. Swedish-owned multinational companies performingR&D outside of Sweden.Foreign-owned R&D increased dramatically during the late 1990s due to ownershipchanges. Many large, Swedish-owned multinational companies (including their R&Dfacilities) were acquired by foreign companies from Europe and the U.S. during thisperiod. This is the main reason foreign-owned R&D expenditures (inward) increasedby almost 60 percent between 1999 and 2003 (see Figure 4-4).Figure 4-4 R&D expenditures by Swedish multinational companies abroad and by foreignownedcompanies in Sweden,1999 and 2003.Inward (million dollars)Outward (million dollars)R&D expenditure 1999 2003 1999 2003EU-15 8 excl. Nordic countries 1,400 2,100 900 1,200United States 800 1,400 700 700Nordic countries 100 200 200 200Rest of the world 300 400 500 700Total 2,600 4,100 2,400 2,600Note: Outward refers to 20 Swedish-controlled enterprise groups’ R&D expenditure abroad. Inward refers to foreigncontrolledcompanies’ R&D expenditure in Sweden.Source: ITPS 2005a and calculations performed for this study.8 The EU-15 countries are: Austria, Belgium, France, Germany, Greece, Ireland, Italy, Luxembourg,Netherlands, Portugal, Spain, United Kingdom, Denmark, Finland and Sweden.111