The Internationalization of Corporate R&D

THE INTERNATIONALIZATION OF CORPORATE R&DIn Sweden, the old regime of public procurement and development partnerships withindustry has largely disappeared with deregulation of several industry sectors. Newapproaches to develop public sector procurement capabilities, for example in healthcare and education, have been suggested (NUTEK 2002, Eliasson & Eliasson 2005).The Swedish government strategy is to use the public sector as an engine for sustainablegrowth and to ensure that publicly financed activities contribute to creating productsand services for export (Regeringskansliet 2004). A government inquiry waslaunched in April 2006 to further study how public procurement can be a driving forcefor innovation and renewal in Sweden (Regeringskansliet 2006).1.2.3 Stimulate Internationalization and Mobility (C)A strong national science and technology base, conditions for excellent R&D, developedproduction structures, and attractive leading markets constitute the foundation fora country to become an attractive player in the game of R&D internationalization. Atthe next level, countries design policy measures to stimulate internationalization byimplementing measures to (C1) attract foreign R&D activities, (C2) internationalizedomestic companies, and (C3) attract foreign talent and increase mobility (see for exampleTIP 2005 for an overview).It is important to note that there is a variety of policy measures that influence the internationalizationof corporate R&D even if the policies were not specifically designed todo so. These indirect measures have grown in importance and include general tax incentives– personal and corporate tax rates and policies to attract foreign direct investmentin general. According to OECD, only a few countries have policies specificallytargeting R&D internationalization, and only a few countries have developed a moreintegrated policy response to deal with this specific issue (OECD 2005c).Attract Foreign R&D Activities (C1)With the purpose to attract and benefit from foreign direct investments, including R&Dactivities, different countries create incentive packages and information kits outliningtheir specific differentiating features (“nation branding”) to prospective investors.Many OECD countries have dedicated investment promotion agencies like: Invest inSweden Agency (ISA), Investment Partnerships Canada (IPC), Invest Australia andEnterprise Ireland.Most of the agencies also actively promote R&D investments both in OECD economiesand in developing Asia. Of 46 agencies targeting R&D investment, more than halfused tax incentives and the promotion of linkages between foreign affiliates and universitiesas policy tools. Seven countries used R&D requirements as a condition formarket entry, most of them in developing Asia (UNCTAD 2005). Other incentives43