The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&D6.6 Conclusion and Implications for SwedenThe leading research-based pharmaceutical and biotechnology companies in the UnitedStates spend an overwhelming percentage of R&D dollars in the U.S. At the same time,we find the number of R&D laboratories that these companies locate outside the U.S.to be increasing, along with their overall spending on R&D. The increased complexityof the science being used to develop today’s medicines drives more pharmaceuticalcompanies to establish laboratories close to research hotbeds around the world.While acknowledging the need for an open-innovation strategy and the belief that thisstrategy will grow increasingly prevalent within the pharmaceutical industry, involvedactors also point out that costs and coordination difficulties create constraints in implementingthe strategy. Moreover, the time required getting a new laboratory up andrunning is considerable. There are therefore reasons to expect the process of establishingR&D facilities in new places to move slowly and to depend on the financialsituation of the companies.Pharmaceutical companies are often approached by actors (e.g. economic developers)promoting certain geographic regions of the world as prime choices for R&D localization.Based on this exploratory study regarding the R&D activities of pharmaceuticalcompanies, human capital emerges as the key factor for the localization of laboratories.Companies cannot afford to locate in places other than where the best research is beingperformed. There are reasons to expect pharmaceutical companies to continue to locateresearch laboratories close to the strongest research clusters around the world. Clustersthat manage to combine front-line research and clinical expertise are particularly attractive,as quality and speed in clinical trials are paramount.Sweden is well-known for high-quality research. The research community, however,expresses concerns that the resources dedicated to research are lagging behind thosethat are implemented by other countries (Regeringskansliet 2005). If Sweden’s aim isto continue to be an attractive country for life-science companies, resources to ensurecontinued research excellence must be secured. This is also a question of makingSweden an attractive work/life choice for the researchers themselves, by offering betterworking conditions than other countries and a high quality of life.Regarding quality and speed in clinical trials, the system in Sweden has worked very well.Today, the interaction between hospitals and companies is challenged, in part due to thefocus on cost containment on the part of the actors responsible for hospitals (Landstingen).A strategic document brought forward by policymakers, industry representatives and otherinvolved actors highlights the need to implement a broader perspective regarding efficiencyand value of new medical products (Regeringskansliet 2005). A smoother clinical-trialinfrastructure will enhance Sweden’s attractiveness to pharmaceutical companies. Anadvantage for Sweden is its number of highly qualified clinical researchers; because164