The Internationalization of Corporate R&D

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THE INTERNATIONALIZATION OF CORPORATE R&DPotential areas for expanded commercial relations between Sweden and India, as identifiedby those interviewed for this study, include:• Infrastructure: power generation and transmission, road and rail transport, airports,seaports, inland waterways, ship yards, water and sanitation systems• ICT: telecommunications, IT and software services, software and hardware productdevelopment, E-commerce, Internet banking and E-security• Life sciences: biotechnology, bio-informatics, pharmaceuticals, heath care productsand services• Social sciences: financial, insurance, education, and other BPO-KPO services• Environment technology: hazardous waste, air pollution management and other• Mining, steel and other metal industry• Forestry, pulp, paper and packaging industry• Agriculture and food industry• Automotive parts, components and design• Housing and other constructions• Interior design products, sports goods, outdoor equipment• Defense, aviation and space industry.The interest in strengthening S&T collaboration between Sweden and India has graduallybecome more pronounced in several of the areas listed above. The Swedish and Indiangovernments signed a bilateral S&T agreement in December 2005 which is envisaged toresult in high-level commitment to cooperate through joint-research, greater academic exchangesand to facilitate industrial R&D (Government of Sweden 2005).While the number of Indian students and researchers in Sweden is small, it has grown.Indian nationals undertake higher education in Sweden, especially in IT and engineering.Some remain in Sweden after graduation but many reallocate to other European countries,North America, or back to India. Compared to the U.S., it appears that Swedish companiesand research institutions find it hard to retain highly-qualified Indian graduate students andprofessionals. Reasons for this include: language and other cultural issues, migration barriersand tax incentives. Nevertheless, several persons of Indian origin have made significantcontribution to Swedish academic institutions, held high-level positions in Swedishcompanies, both in Sweden and India, and have – in some instances – been central to developingeconomic and technology relationships between the two countries.292
THE INTERNATIONALIZATION OF CORPORATE R&DAll major Swedish universities have India-related R&D activity. Examples include theRoyal Institute of Technology (KTH) in Stockholm which has established closer collaborationwith the Indian government and universities. Karolinska Institutet Medical Universityin Stockholm signed a MoU with Indian parties in 2006 to further develop collaboration inresearch and education. The Swedish South Asian Studies Network was launched in 2001 atLund University (SASNET 2006). The aim is to encourage and promote an open and dynamicnetworking process in which Swedish researchers co-operate with researchers inSouth Asia and globally.11.5.2 Swedish and Indian Corporate OperationsThe Swedish manufacturing industry has a long tradition of exporting to andproducing goods locally in India. The scale and scope of these activities havegradually expanded and now often include production as well as sales directed atboth the Indian and other markets (Mitra 1986). Furthermore, since around 2003there has been significant expansion of R&D activities by Swedish companies inIndia. Several multinational Swedish-related companies now have both adaptiveR&D to serve local market requirements and innovative R&D that is mostly aimedat global markets.The following companies have established and expanded significant R&Doperations in India in the 2000s: ABB, AstraZeneca, Ericsson, Sandvik, SKF,Telelogic AB and Volvo. Alfa Laval and Atlas Copco are well-established playersin the Indian market but do not conduct significant R&D in the country. SvenskaHandelsbanken decided to open a representative office in India in 2006 and therebybecome the first bank from a Nordic country to do so (Nyhetsbrev Indien 2006).Swedish banks, accounting and management consulting firms and other servicesproviders have no or little BPO-KPO operations in India.Large companies, such as Ericsson and ABB, dominate R&D activities in India.Major multinational companies are often well-placed in establishing R&Doperations as they already have significant sales and production operations inIndia. The situation is different for SMEs or newcomers. Swedish SMEs typicallydo not have significant production or R&D activities in the country. They tend toprefer to operate in North America or neighboring European countries, includingthe Nordic countries and Eastern Europe. They often lack the financial recoursesand country knowledge required to set up in-house R&D centers in Asian locations.In some cases, they have encountered intellectual property rights issues associatedwith outsourcing arrangements. There are however, signs that SMEs are looking atIndia more seriously.Indian private and public sector companies have a long history of buyingtechnology from Sweden in a wide range of areas. In first half of the 2000s there293
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The Internationalization of Corporate R&D

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