The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DA number of other countries already have innovation strategies designed to deal withstagnating R&D expenditures and capabilities for renewal (for example EC 2005cand Regeringskansliet 2004).The internationalization of corporate R&D is likely to continue, perhaps interrupted byperiods of consolidation, and will create a global market of innovation resources. Onthe basis of current trends, the new dynamic may be characterized as follows (see forexample ETAN 1998):• Knowledge and technology generated in one country will be utilized more andmore internationally.• International science and technology collaboration between government, industryand academia in different countries will continue to increase.• Many companies will source knowledge and innovations globally, and many willlocate their innovation activities wherever it is most advantageous.• An international division of labor in R&D will emerge. Both public and corporateR&D efforts will continue to specialize. Particular areas of technological activitymay become concentrated in relatively few locations across the world.• New world centers of technological activity will emerge. Especially countries indeveloping Asia will grow stronger as global players.• Intensified global competition will heighten the importance of maintaining nationalconditions for attracting R&D, absorbing knowledge and technologies developedelsewhere, and creating opportunities for production of innovative productsand services.1.1.3 Countries Will Win, Lose and TransformTechnological change and innovation driven by R&D have been important (if not themost important) sources of productivity growth, competitiveness and increased welfare(see for example Edquist & McKelvey 2000). The globalization of R&D andinnovation is making this relationship more complex and more important for policymakers to analyze and understand.Increased international investment, trade and exchange related to R&D will most certainlyhave both positive and negative effects. However, outcomes are uncertain andmight not be observable without a considerable time lag since the dynamics of theinternational R&D system is expected to have significant inertia. Analysis is evenmore difficult because available systematic data is a few years old and informationabout the most recent developments is incomplete and anecdotal.29