The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DThe main objectives behind performing R&D in Sweden were:• R&D related to production in Sweden• Access to research networks such as universities and research institutes in SwedenBoth of these answers are supported by the theories concerning internationalization ofR&D (also see Chapter 3).When the companies discussed above became foreign-owned, the majority wereSwedish multinational companies who merged with, or were acquired by, other largemultinational companies during the 1990s. The Swedish R&D activity is surely onlyone of many driving factors behind these ownership changes. There is not one simpleanswer to how the increase in foreign ownership will affect future R&D investments inSweden. Research studies show that the increase in foreign ownership did not lead to adecrease in total corporate R&D expenditures in Sweden during the 1990s (see ITPS2004b and Bandick & Hanson 2006), but we don’t know how this will affect the R&Dperformed in Sweden in the future.4.4.2 Swedish-Owned Multinational Companies PerformingR&D Outside of SwedenThis section discusses the recent empirical literature concerning outward R&D performanceand presents some outward R&D performance trends.Studies Concerning Outward R&DIn 2005, ITPS presented a survey concerning the internationalization of R&D (ITPS2005a). The study showed that the R&D investments in Sweden were highly connectedto a few, large multinational manufacturing companies. The results from the surveyalso showed that the Swedish-owned multinational companies increased R&D investmentsboth in Sweden and abroad during the late 1990s and early 2000.IUI recently published a paper that documented another survey that was conducted onSwedish multinational companies in 2005 (Hakkala & Zimmermann 2005). The surveywas a follow-up to surveys made by IUI since the 1970s, (Fors & Svensson 1994). Thepaper described the foreign direct investment trends of Swedish multinational companiesin general, including R&D activities. The result of the survey suggested that theshare of R&D conducted in Sweden by these companies declined during the late 1990s.In 2003, only about 60 percent of their R&D was invested in Sweden, a considerabledrop from the 1990s investment levels of between 74 and 87 percent. The study alsoconcluded that to large extent, the expansion of R&D expenditures of Swedish multinationalcompanies during the late 1990s occurred outside of Sweden. IUI also foundthat the geographical distribution of R&D expenditures in foreign affiliates has115