The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&Ddifficult to interpret, and only available after considerable time lag. Policy-relevantanalysis must not only be current but also forward-looking as well as identifytrends, challenges and possible implications in a long-term perspective (Johansson& Lööf, Karlsson).12.2 The Dynamics of Internationalization and FutureChallengesAs mentioned in the introduction to this report, the reason for analyzing the internationalizationof corporate R&D is to investigate how these processes will influencenational economic performance, both in the short- and long-term. The globalization ofR&D and innovation is making the relationship between the R&D activities of companiesand national competitiveness and economic growth more complex. Its analysis andunderstanding is also becoming more important for policymakers. What are the possiblefuture developments for Sweden in the next five to ten years?Sweden will benefit from the internationalization of R&D...It is important to point out that Sweden has, so far, largely benefited from the internationalizationof corporate R&D. For example, an increasing knowledge flow intocompanies based in Sweden can be an important explanation for the recent productivitygrowth (Lööf 2005). Based on a number of indicators, Sweden seems to be in bettershape than many comparable countries when it comes to R&D internationalization. It isalso possible that things will stay that way in the near future (see for example ITPS2004 and NIFU 2005).On the one hand, increased competition and the emergence of a global R&D market willforce companies and countries to try even harder to capture a reasonable part of the createdvalue. On the other hand, global markets are expanding dramatically (adding, for example,consumers and workers in India and China) which means increased opportunities for multinationalcompanies. Since everything is growing, there might be a place for everyone; thisis not a zero-sum game. Even if emerging economies capture more of the R&D value chain,it does not mean that Sweden must lose. An expanding world economy will present possibilitiesfor Sweden to strengthen its national innovation systems and provide for industrialrenewal and economic growth (see Kenney & Dossani 2005)....but needs to proactively consider challenges.However, with increasing global value flows, small countries especially may bequickly “hollowed out” when flows shift to more favorable destinations (see for exampleNorgren 1995).313