The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DSecond, it is likely that an increasing share of the large R&D investments made bythese industrial groups in Sweden, in general and particularly in the ICT industry, hasnot been transferred into innovations, since they decreasingly fit into narrower corebusinesses. However, considering the sharp reductions in Ericsson’s R&D in Swedenand the associated, increased focus on development rather than research, this trend mayweaken in coming years.Third, production volume associated with corporate R&D in the ICT industry maydecrease in Sweden, while expanding in countries with rapidly growing ICT industries,such as China, India and the Baltic countries. If so, R&D activities performed abroadand in Sweden that result in innovation and production may generate less and less economicvalue and employment in Sweden.Fourth, the increasing mobility of multinational companies’ production and technologicalactivities increases the general pressure on industrial renewal through, for example,startups and small business growth. As younger, smaller companies generallydemonstrate stronger ties to their original locations than larger, long-established ones,these dynamic elements of innovation systems should be of vital importance for theoverall innovation performance.Fifth, huge worldwide public investments in education and research, intended to improvethe science and technology competence base of nations, are rapidly altering conditionsfor competence competition. A consequence of this global competence “upgrading”is that the field of opportunity to compete with an “abundance” of competentresearchers and engineers (even within narrow niches) is rapidly narrowing. Accordingto Thomas Friedman, this represents a leveling of the competitiveness conditions betweencountries (Friedman 2005). Therefore, attracting competence will increasinglyrequire different kinds of “spikiness” or “uniqueness” (Florida 2005).5.4.2 The Swedish ICT Innovation SystemThe beginning of the most recent wave of globalization could be dated around 1980,parallel with the strong growth of the Swedish ICT industry and its rapidly increasinginternational competitiveness. As Swedish industry in general, and the ICT industry inparticular, have been highly dependent on international markets for value added, globalizationhas been of great importance for the Swedish ICT industry. The acceleratingglobal demand for ICT goods has strongly fuelled the volume and value of SwedishICT exports. In turn, the growth in global ICT demand has generated necessary capitalfor strong growth in technological investments. These developments have been of keyimportance for the growth of knowledge-intensive services such as R&D and ICT consultancyand telecommunication services. Thus far, globalization has been a majorpositive force behind the development of a highly competitive Swedish ICT industry.142