The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DHighly Developed Production Structures (B2)R&D and production are closely interlinked in several industries. The dynamics ofinnovative clusters often include specialized production that requires the proximity ofR&D facilities. Close interaction and co-location of manufacturing and R&D is importantin high-tech manufacturing industries (Bengtsson et al. 2005).Creating a highly developed production structure and excellent conditions for productionin a country might help attract and retain certain types of production and relatedR&D activities. By promoting excellent conditions and linkages between R&D andproduction in specific sectors or niches, politicians can capture a larger share of thevalue resulting from R&D activities.In Sweden, the importance of developing leading-edge production technologies and productionsystems has been pointed out. Policies should be implemented to supportSwedish companies in developing better manufacturing practices, such as lean production,in order to further increase productivity and competitiveness. According to analysts,it is also necessary to decrease the impact of labor cost and at the same time increase thedemand for customization, flexibility and delivery time (Bengtsson et al. 2005).Furthermore, the resources of universities and research institutes in production-relatedresearch should be developed and better coordinated to secure collaboration betweenindustry, academia and government. Establishing a production council within the governmentto develop a national production strategy, has also been suggested (IVA 2005).Attractive Leading Markets (B3)Companies are searching for leading, future-oriented markets, with large groups ofadvanced users eager to try out new products and services. Leading markets arealso used by companies to interact with users and customers during the developmentprocess (co-creation) and as a source of knowledge and ideas. Besides expandinginternationally in large emerging markets such as China and India, companiestake an interest in smaller, specialized markets, for example in Scandinaviaand Northern Europe.Policymakers can stimulate the development of leading markets by procurement ofadvanced goods and services. Technical requirements can be critical for stimulatingR&D investments both by domestic and foreign companies. By encouragingthe establishment of integrated process chains (world-class R&D, specialized production,advanced and demanding consumers and buyers), even more value fromR&D can be captured nationally.42