The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&Dtific performance of domestic research systems and to their “openness” to two-way interactionswith industry. They are also associated with leading, international centers of excellencein R&D. Such centers may serve as important attractors of foreign and domesticR&D investments, both fundamental and applied. Such R&D environments, or centers,are generally less geographically mobile than industry. As a consequence, there is astrong international trend in innovation policy to develop and sustain centers-ofexcellencein R&D.5.3.2 Swedish Technological CapabilitiesComparing ICT-related business-sector R&D investments between countries reveals considerablenational differences in terms of the evolution of both volume and specialization. Inaddition to the largest world economies, several smaller countries have generated highlycompetitive R&D investments in relation to country size. Four of these countries are northernEuropean: Finland, Sweden, the Netherlands and Ireland. Four are Asian: Korea,Taiwan, Singapore and Hong Kong. Israel and Canada are two other ICT, R&D-intensivecountries. In relation to GDP, most of these smaller countries show considerably higherR&D investments in the ICT industry than do the larger world economies. 7From 1980–2005, R&D investments of the global ICT industry increased considerably. Aremarkable growth in ICT industry R&D investments took place in Finland and Israel duringthe 1990s. Sweden, Taiwan, Korea and Singapore also showed rapid growth in ICTindustry R&D in the 1990s. For Sweden, the ICT crisis in the early 2000s resulted in a rapiddecrease in R&D investments. The decrease was in fact starkest in Sweden; investmentsdropped substantially. This can be almost entirely explained by very large cuts in Ericsson’sR&D budget, as Ericsson was the dominating R&D investor in the Swedish ICT industry,(see Figure 5-3).Due to the considerable reductions, the Swedish ICT industry’s world ranking in R&Dinvestment as a percentage of GPD dropped from second to fifth place. The most recenttrends indicate that Swedish R&D investments in the ICT industry have continued to decreasesince 2003, though at a slower pace (Statistics Sweden 2005). Even if R&D investmentsstabilize at this new level, the decrease raises important questions about the future ofSwedish technological capabilities in the ICT industry. In particular it raises questions abouttheir long-term sustainability, especially when taking into account the increasing challengesof globalization.7 The picture doesn’t change significantly if R&D investments are related to population size instead of GDP.137