Foreign research and development in Swedish multinationals

Abstract

In 1987, Sweden's 20 largest multinationals together operated some 170 foreign R&D units, employing 8100 people, 23% of their total R&D personnel. About 60% of the units were added after 1980, the majority through acquisitions of foreign companies. Four major motives for the operation of foreign R&D units are identified: (1) support to local production (5% of foreign R&D employment); (2) 'market proximity', i.e. adaptation of centrally developed products (and processes) to local market conditions (32%); (3) exploitation of foreign R&D results and resources (8%); (4) 'political factors', i.e. environmental factors more or less directly influenced by government action (34%). The remaining 20% of employment seemed to be motivated by a combination of factors. The primary aim of the first three types of foreign R&D units is to enhance a company's competitive position in ways not possible from a domestic location. Hence, they should be little cause of concern for Swedish policy makers.