RESEARCH AND INNOVATION IN SWEDEN - AN INTERNATIONAL COMPARISON

Transcription

1 RESEARCH AND INNOVATION IN SWEDEN - AN INTERNATIONAL COMPARISON

2 CONTENTS Foreword 4 Summary 5 ROYAL SWEDISH ACADEMY OF ENGINEERING SCIENCES, IVA is an independent academy whose mission is to promote the engineering and economic sciences and the development of business and industry. In cooperation with the business world and academia, IVA initiates and proposes measures to strengthen s industrial competence and competitiveness. For more information about IVA and IVA s projects, visit IVA s website: Published by: The Royal Swedish Academy of Engineering Sciences (IVA), 28 Box 573, SE Stockholm, Tel.: IVA-M 382 ISSN: ISBN: 13: Introduction 7 2. R&D and innovation investments 1 3. Competence resources R&D and innovation collaboration Scientific competitiveness Innovative competitiveness Research and innovation policy 65 Cover: AMGD Production: King Studio This report can be downloaded as a pdf file at the project s website The project was supported by VINNOVA (Swedish Governmental Agency for Innovation Systems) VINNOVA s particular area of responsibility comprises innovations linked to research and development i.e. innovative, successful products, services or processes with a scientific foundation. VINNOVA s mission is to fund the needs-driven research required by a competitive business and industrial sector and a prosperous society, and to strengthen the networks that are an essential aspect of this work. VINNOVA is a government agency under the Ministry of Enterprise, Energy and Communications. The agency has around 18 employees and an annual budget of SEK 1.7 billion. 3

3 FOREWORD SUMMARY If is to be able to exploit the opportunities and master the challenges brought by globalisation, the country needs innovation and renewal. This requires significant and strategic investment in research and development. To gain a better picture of s current status and level of competitiveness, an international comparison of research and innovation has been made in this report. The comparisons are based on available data and place in a global context. The report highlights elements that are crucial for achieving sustain able growth. The purpose of the report is gather and present information to increase awareness and understanding of the challenges and opportunities that exist. Hopefully, it will also provide stimulus for a broad discussion on what should be done and which priorities need to be made in order for, now and in the long term, to be one of globalisation s winners. The report was compiled by Göran Marklund, Rolf Nilsson and Patrik Sandgren at VINNOVA s Strategic Development Department and is a component of the Research and Innovation Foresight project. Jan-Eric Sundgren Chairman of the Steering Committee for the Research & Innovation Foresight project has a good starting point from which to achieve long-term, sustainable growth and innovative power. Most indicators show that, relative to its size, is ranked among the leading nations or is above average. There are, however, a number causes for concern. Corporate R&D investment in has declined in recent years as a percentage of GNP. s public investment in R&D has also declined in relation to GNP. Government R&D funding for industry and enterprise is declining, mainly due to cuts in defence-related R&D investment. On the issue of combined research, development and innovation investments, is one of the countries investing the most in relation to the country s total resources. The absolute majority of Swedish investments are, however, financed by the private sector. It is also worth noting that R&D activity in is dominated by a handful of multinational corporations. Since 21, however, R&D investment has declined as a percentage of GNP, in both public funding and in certain leading sectors of industry. s total public investment in R&D is small compared to other countries. Also, unlike in many other countries, lacks tax incentives for R&D activity to supplement direct R&D subsidies. The nature of Swedish research financing has also changed and there is now a greater emphasis on the competitive aspect. Universities and other institutions of higher education are now forced to seek more external funding, both nationally and internationally. This means that they must maintain and develop their appeal and competitiveness through more clearly-defined profiling. Interest and investment in strong research and innovation environments has also increased. The institute sector, which in other countries accounts for a considerable portion of more close-to-market research, is a small sector in. Institutes linked to specific industries are, however, currently undergoing a process of restructuring which may improve the Swedish institute sector s international competitiveness and thus support industry. Competence resources in have been gradually increasing. The number of highly educated people has increased and, in an international comparison, is currently in a relatively strong position. Also, a relatively large number of Swedish researchers are young. In an international comparison, a relatively large percentage of businesses in are involved in innovation activities. is also strong in generating innovation through collaboration. Although this percentage has increased over time, the existing statistics indicate that exchange between those conducting research within the business world and in academia is not as extensive as in many other countries. The level of corporate research funding at Swedish universities is low in an international comparison and instances of shared positions is limited. There should be strong potential for increased exchange because most of the companies conducting R&D are located close to universities. In general the scientific quality of Swedish research is high and Swedish researchers are productive. The results are particularly strong in life sciences, and in particular in biomedicine and clinical medicine. Viewed over time, however, there are tendencies towards a weakening of research quality. In terms of competitiveness in technology, holds a relatively stable position. Measured by the number of international patents, ranks among the ten leading nations. The Swedish patents are, however, like R&D investment, owned by a handful of R&D intensive large corporations. Globally, we are seeing a strong increase in patent applications within IT and telecoms, although is experiencing a downward trend in this field which may be a 4 5

4 1. INTRODUCTION sign that competitiveness has declined within one of s most important areas. One important factor for the renewal of industry is the emergence of new enterprises, although the data available on new enterprise is somewhat ambiguous. On the one hand, ranks among the countries with a relatively low and declining number of individuals that have started or intend to start a business. On the other hand, there is a trend in towards an increase in the number of new enterprises. We should also add that access to venture capital in, which is often considered a critical factor for new enterprise, is relatively good compared to other countries. Most of this investment is, however, only forthcoming in the later stages. The purpose of this study is to provide background for discussion and reflection within the framework of the Research and Innovation Foresight project, which was carried out in 27 as a collaboration between numerous players in the Swedish research and innovation system. The project is intended to provide substance and background for the Government s 28 research policy bill. IVA and VINNOVA are the project s main sponsors. This study covers indicator-based interna tional comparisons of investments in research, development and innovation and the results of such investments in science and innovation. The study also contains international comparisons of public investment and incentives for research, development and innovation. 1.1 GLOBALISATION S CHALLENGES AND OPPORTUNITIES Globalisation is changing the conditions for research, innovation and growth. The world s nations, peoples and organisations are more and more integrated with each other. One important effect of this is growth in opportunities for value creation, knowledge generation and societal development. The poten tial for growth and development thus increases as globalisation spreads. Global growth has also increased significantly over the past decade. Another effect of critical importance for future global development is the significant increase in pressure on the earth s resources and ecosystems that comes with globalisation. Increased growth in more and more parts of the world is increasing the ecological burden. Notably improved envi - ronmental performance in products, production processes and society will be critical for global development. A third important impact of globalisation is the fact that the competition between organisations, individuals and countries is increasing since more and more players are participating in the same markets. For nations, the competition mainly involves creating the best conditions in an international context for competence development, science, innovation and business development. In other words, policies are increasingly exposed to competition. Long-term sustainable economic growth is the basis for national prosperity. Innovation and renewal in industry and society are prerequisites for sustainable growth. Research and development are critical investments for innovation and renewal. A country s ability to compete is crucial for its ability to generate sustainable growth. Competitiveness can be analysed in several dimensions. In this report we analyse s international competitiveness with a focus on research, innovation and growth. The material is based on quantitative indicators. Globalisation involves both challenges and opportunities for Swedish growth and prosperity. Competitiveness is intensified as a result of goods and services being sold on a global scale and falling price trends over time. The conditions leading to globalisation include an increase in the mobility of production factors resulting from international trade deregulation and the emergence of low-cost nations in Eastern Europe and Asia, as well as pressure to constantly improve the yield on financial capital. The consequences of globalisation are numerous. One important factor is that competition is increasing, which increases the pressure to constantly renew business and enterprises. In the short term there is increased pressure to make businesses more efficient. In the longer term, innovation is a prerequisite if companies, sectors and nations are to be able to compete in the international arena. 6 7

5 In the case of, competition from low-wage nations in Eastern Europe and Asia has resulted in a situation where companies in labour-intensive industries are increasingly moving their standardised production and routine services out of the country. But knowledge-intensive jobs and research are also being shipped abroad. To become more competitive, companies are looking for a workforce with a high level of expertise and are therefore tending to locate their operations in environments where advanced R&D is being conducted. 1 To gain a competitive edge in global markets, companies are tending to specialise in fewer lines of business in order to strengthen their innovative power and renewal in core areas. Companies can, and must in the long term, meet global competition with product innovation. This means developing new goods and services and qualities that are improved, more in-demand and that cannot be quickly copied. Companies that fail to produce new, internationally competitive products will eventually be forced into a price war. The business segments within product areas where other companies have higher quality and better efficiency are being divested and acquired by others. This includes both support functions for operations and product components. This type of restructuring process is often called outsourcing. Outsourcing to foreign suppliers, so-called offshoring, may cause the Swedish economy to shrink. 2 Cost pressure resulting from international competition is also forcing companies to constantly rationalise operations to lower their costs. Cost-cutting efforts are also making it necessary to find faster and more effective transport solutions, reduce or get rid of stock, develop new production techniques and make product development more effective. At the same time, suppliers are pressured into producing more cheaply. Globalisation is thus driving increased rationalisation in increasingly specialised enterprises and business networks. 1.2 R&D AND INNOVATION FOR SUSTAINABLE GROWTH IInnovation involves developing and commercialising goods and services or production and distribution processes. It is therefore important to stress that for innovations to be made, some degree of development work is always needed. With incremental innovation, the amount of development work being carried out is often limited. For more radical innovation, significant development work is usually required and often research as well. Innovation thus requires development work or research often both. 3 The products that Swedish enterprises make a living by selling today are the result of past investments. Tomorrow, others will have learnt to make similar products better or more cheaply often both. A business s ability to create inno va tions new or better products or processes is crucial if it is to be competitive in the international arena. This requires, among other things, investment in research and development (R&D). Most innovations arise from a combination of need and knowledge. Companies invest most of their R&D resources in improving existing goods, services and processes based on knowledge of customer demand. Generally, a smaller percentage of R&D resources is invested in products that meet a demand that has not yet been articulated. Companies are very seldom self-sufficient in the knowledge and expertise needed to develop innovations. They use other companies, customers and suppliers as well as universities and research institutes, and the research they conduct can contribute to the company s innovations in a number of ways. It can help generate new knowledge-based and techno logical solutions or contribute knowledge to solve specific technical and organisational problems. Research also provides a foundation of knowledge and expertise that companies can use in their recruitment process. The research conducted at universities and research institutes is mainly financed with public funds. Research has shown that at the sector level, there is a positive link between a sector s R&D intensity and growth in exports; the greater the R&D intensity, the higher the export growth. The explanation for this is that R&D generates internationally competitive innovations that can be exported. 4 A general conclusion from research into the economic effects of R&D investment is that it, on average, generates an economic value that clearly exceeds the cost of the investment. The main reason for this is that such investment in general generates large multiplier effects in the form of learning and imitation investment that arises as a result of the innovations the investment brings about. 5 Certain empirical studies indicate that the average multiplier effect through so-called spillover effects may be higher than 1. 6 It is also clear from the research that the societal return on R&D investment in general is many times higher than the private return. 7 An overview of studies at the corporate level shows that the total societal return on R&D investment lies between 9 and 1 per cent, whereas the private return is between 7 and 69 per cent. 8 The relatively large discrepancy between the private and societal return justifies public support for R&D investment. This is particularly significant since public demand can stimulate risky R&D initiatives with positive effects on the environment and people. For more radical innovations that spread throughout society, the growth effect can be particularly significant. If public policy can contribute to growth of radical innovations, there is a very strong argument for the profitability of such activity. There is also support in the research for the argument that large-scale technology shifts seldom materialise without government involvement. 9 The ability of publicly funded research to generate new scientific and technological results usually exceeds the private sector s ability and interest in utilising these. Effective mechanisms, structures and organisations are needed for internationally competitive innovation systems that generate the effective utilisation of public knowledge investments. The research shows at the same time that positive growth effects from public R&D investment require carefully planned structures for R&D subsidies OUTLINE OF THE STUDY I n chapter 2 R&D and innovation investment, we study how holds up in an international comparison of investment in R&D and innovation. The emphasis is on investment made by enterprise and industry. We also study the internationalisation of R&D activity and the development of the venture capital supply. In chapter 3, Competence resources, we make international comparisons of the percentage of university educated individuals. Chapter 4, R&D and innovation collaboration, deals with the willingness to collaborate to develop innovations. Special emphasis is placed in this chapter on collaboration between universities and the business world. In chapter 5, Scientific competitiveness, we study scientific production in terms of scientific publications. The power of technological development is studied in chapter 6, Innovative competitiveness where both patenting, turnover generated by new products and new enterprise are used as indicators. In chapter 7, Research and innovation policy, government investment in R&D is studied with respect to volume and focus. 1 Isaksson, P.26, Har Sverige en chans? Globaliseringen och vi (Does have a chance? Globalisation and us). 2 VINNOVA VP 26:1. 3 We should point out that the official R&D statistics, both in and internationally, underestimate the total development work in the private and public sector. There are several reasons for this. The most important one is that R&D is an activity that mainly generates intangible assets in the form of knowledge and expertise. For this reason it is usually difficult to quantify. Therefore it is the R&D that is formalised in organisational terms such as special R&D units or R&D processes that are included in the statistics. 4 Andersson, Martin. & Ohmansson, Sara, 26. Innovationer och svensk export (Innovations and Swedish exports), CESIS. 5 Baumol, W. The Free-Market Innovation Machine Analyzing the growth miracle of capitalism, 22, Princeton University Press, New Jersey. 6 Coe and Helpman. International R&D Spillovers, European Economic Review, 1995, 39(5), pp , Guellec, D, and Van Pottelsberghe de la Potterie, B. R&D and productivity growth panel data analysis of 16 OECD countries, OECD, 21, STI Working Papers, no. 21/3, Paris, OECD, Links between policy and growth, cross-country evidence, OECD Economic Outlook, no. 68, 2, pp , Bassanini, A, Scarpetta, S and Hemmings, P, Economic Growth: The role of policies and institutions. Panel data evidence from OECD countries, OECD, Economic Department Working Papers, no. 283, 211, Paris. 7 Baumol, W. The Free-Market Innovation Machine Analyzing the growth miracle of capitalism, 22, Princeton University Press, New Jersey. 8 Ejermo, Olof, Kerstin Enflo and Astrid Kander, Offentlig forskning och utveckling och tillväxt (Public research and development and research), CIRCLE, Ejermo, Olof, Kerstin Enflo and Astrid Kander, Offentlig forskning och utveckling och tillväxt (Public research and development and research), CIRCLE, Ejermo, Olof, Kerstin Enflo and Astrid Kander, Offentlig forskning och utveckling och tillväxt (Public research and development and research), CIRCLE,

6 2. R&D AND INNOVATION INVESTMENT Research and innovation (R&D) are the most important investments in innovations with high value-added. Research means systematically and methodically seeking new knowledge and new ideas. Development work is systematically and methodically utilising research results, scientific knowledge and new ideas to create new pro ducts, processes and new systems or significantly improve existing ones. In an international comparison, as men tio ned before, is investing considerable resources in research and development in relation to the size of the country s economy. According to Statistics (SCB), R&D investment in in 25 amounted to just under SEK 14 billion, which is equivalent to 3.9 per cent of GNP 11. Only in, where the total R&D activity amounted to 4.5 per cent of GNP, is R&D investment greater in relation to the size of the economy. The equivalent figure for the US was 2.6 per cent of GNP (figure 2.1). Comparisons of R&D activity in large and small countries may fail to reveal some important information. R&D activity varies, for example, significantly in the US from state to state. Several states in the US carry out more R&D than, relative to the size of their economy. The most R&D in relation to a state s gross national product is carried out in New Mexico, 8 per cent, i.e. more than twice as much as in. Other states that rank ahead of are Maryland, Massachusetts, Michigan, Rhode Island, Connecticut and Washington. 12 In, in comparison to most other countries, R&D is carried out in a structure that has two parts, dominated by companies and universities. In 25 around 74 per cent of R&D activity was carried out by companies and 21 per cent by universities. Companies finance a large proportion of their own R&D, 89 per cent in 25. Around 4 per cent of corporate R&D initiatives are funded in by public funding bodies. Most of this consists of defence research commissioned by the Swedish Defence Material Administration (FMV). Funding for research at universities comes mainly from public funding bodies, just under 6 per cent in Private funds and foundations financed around 1 per cent in 25 and companies around 5 per cent. ranks at the very top in the world in Figure 2.2 R&D investment in 25 in OECD countries (Billion PPP US dollars). Source OECD, MSTI 27. Billion PPP USD Miljarder PPP$ 35, , , 3. 25, 25. 2, 2. 15, , , terms of R&D investment in relation to the size of its economy. In absolute terms, however, it is relatively small in a global context. Translated into purchasing power parity (PPP) US dollars, s R&D investment is in fourteenth place (figure 2.2). The US invested almost 29 times more in R&D, 12 times more, China 1 times more and almost 6 times more. Of the OECD nations total R&D investments, the Swedish portion is around 1.5 per cent. Between the years of 1993 and 1999, was the country which, in relation to GNP, invested the most resources in R&D. In 21 passed. In R&D investments increased throughout the 199s before peaking in 21. Then R&D investment as a percentage of GNP declined and, as mentioned above, was at around 3.9 per cent of GNP in 25. 1, 1. 63, Figure 2.1 R&D as a percent age of GNP and catego rised by who is conducting research, 25. Source: Statistics for and OECD for other countries. Sverige Schweiz (24) Tyskland Danmark Österrike Austria Frankrike Belgien (24) 824) Företagssektorn Corporate sector Universitet Universities och and högskolor other institutions of higher education Statliga Public institutes och and myndigheter authorities 5, 5.,. China 4, , , , , , , , , , , 1. 8, , , , , , , , , , ,1 3.1 Kina Tyskland Kanada Italien Taiwan Frankrike Ryssland Spanien Sverige Russia Schweiz (24) Australien (24) Belgien Mexiko Turkiet Norge Österrike Sydafrika Danmark Singapore Taiwan Australia (24) (24) Austria Mexico South Africa Turkey Singapore Norge Övriga Other organisations organsationer (inkl. kommuner (incl. municipalities och landsting) counties) Irland Spanien Italien ,,5 1, 1,5 2, 2,5 3, 3,5 4, 4,5 5, Percentage Procent of av GNP BNP 11 Statistics for R&D activity 26, partly based on estimates, show that the total Swedish R&D investments increased by SEK 4 billion to SEK 18 billion between 25 and 26. As a percentage of GNP, R&D investment has decreased to 3.83 per cent of GNP. 12 Marklund, Göran, 27, Globaliseringen och konkurrensen om kunskapsintensiva jobb (Globalisation and competition for knowledge-intensive jobs). Background report no. 2 for the Globalisation Council. 13 This funding includes grants from the seven research foundations which were formed in the mid-199s, based on the employee funds existing at that time. 1 11

7 Figure 2.3 Total R&D expenditure as a percentage of GNP Source: OECD, MSTI 27. Procent Percentage av of BNP GNP 5, 5. 4, , 4. 3, , 3. 2, , 2. 1,5 1.5 Tyskland Österrike Austria Kanada Norge Sverige Danmark Frankrike Belgien Irland 2.1 RESEARCH AT UNIVERSITIES The research volume at Swedish universities amounted to around SEK 21 billion in 25, which is equivalent to around.8 per cent of GNP. This is the highest percentage in an international comparison. is followed by,,, and. The fact that ranks the highest is partly due to the long-established political prioritisation processes in whereby most of the public research resources go to universities. This means that institute research in is limited compared to other countries. In absolute terms the Swedish universities ranked fourteenth in research volume in 25. In the US the research volume at universities was just over 19 times the size of research volume in, while in it was 7 times greater (figure 2.5). Broken down by discipline, around 7 per cent of all research in is conducted within medicine, natural sciences and engineering (figure 2.6). 1, 1.,5.5,. It should be noted that R&D investment in companies with fewer than 5 employees is included for the first time in the 25 Swedish R&D study. For 25 R&D activity within municipalities and county councils not previously studied was also included. Thus the figures for 25 cannot be fully compared to the ones for previous years. 14 If data for enterprises with fewer than 5 employees and R&D activity within municipalities and county councils are excluded from the 25 statistics, the total R&D investment in amounts to around 3.6 per cent The decline in s R&D investments has reduced s lead on other countries (figure 2.3). The majority of all R&D activity in is carried out in the corporate sector. It is also here that R&D investment increased in the 199s. The decline in R&D investment, in relation to GNP since 21 is mainly explained by stagnating R&D investment in the corporate sector, mainly among the large multinational corporations. R&D activity outside the private sector has, in relation to GNP, been more or less consistent over the past 15 years (figure 2.4). Figure 2.5 Research volume at universities in 25 in OECD countries (billion PPP US dollars). Source: OECD, MSTI Billion Miljarder PPP PPP$ USD 45, , Kina 11, , , 9. 7, ,6 7.6 China Tyskland 5,5 5.5 Italien Kanada Frankrike 3,9 3.9 Spanien 3, , , , , , , , , , , , , , 1. Australien (24) (23) Turkiet Sverige Taiwan Österrike Australia (24) (23) Turkey Taiwan Austria (24) Mexico Schweiz (24) Mexiko Belgien Norge Danmark Figure 2.4 R&D expenditure in by sector conducting it as a percentage of GNP. Source: SCB, 27, Research and development (R&D) in 25. Procent Percentage av of BNP GNP 4, , 4. 3, , 3. 2, , 2. 1, , 1. Totalt Corporate Företagssektorn sector Universities Universitet & högskolor Government Statliga myndigheter agencies and & institutes Municipalities Kommuner och and landsting county councils Other Övriga organisations organisationer Figure 2.6 Research volume by discipline at Swedish universities in 25, percentage. Source, SCB, 26, Research and development in the university sector 25. Medicine, odontology and pharmaceutics Engineering sciences Natural sciences Social sciences and law Humanities and religious studies Agricultural and forest sciences and veterinary medicine,5.5, Other disciplines Per cent 14 Since most of the countries in their R&D surveys study the R&D activity of small enterprises, comparability is better for 25 than previous years

8 Although there are many universities in, research at these institutions is relatively concentrated. The research is mainly conducted at the large universities and universities of technology. The ten largest seats of learning accounted for around SEK 18 billion in 25 or 86 per cent of the total research volume in. The same year, the universities in Lund, Uppsala, Stockholm and Gothenburg as well as Karolinska Institutet accounted for just over half of all research manyears. An increasing portion of both research and postgraduate studies at universities is funded with external means. At the beginning of the 199s around two thirds of grants came directly from the state budget; the figure was less than 5 per cent in 25. However, the percentage of public research funding which, without competition, is distributed directly to universities is high in an international comparison. In the universities basic grants for research (i.e. faculty grants) amounted to around 4 per cent. The equivalent figure in is around 25 per cent. In the US almost no such basic grants are provided. Most of the external financing consists of public funds that are distributed in a competitive process, mainly by the Swedish Research Council, the Swedish Research Council for Environment, Agricultural Sciences and Spatial Planning (Formas), Swedish Council for Working Life and Figure 2.7 The research institute sector s portion of total R&D in a number of countries in 21. Source: Det Konglige Utdannings- og Forskningsdepartement (Royal Ministry for Education and Research), Vilje till forskning, (The will to research),, P r oc e nt Social Research (FAS), VINNOVA, the Swedish Energy Agency and by the research foundations that were formed in the 199s from employee investment funds. In 25 public funds accounted for just under 8 per cent of R&D financing at universities. 15 The equivalent figure in 1993 was 85 per cent. 2.2 RESEARCH AND DEVELOPMENT AT RESEARCH INSTITUTES I n R&D activity at independent industry research institutes is being studied within the framework of the private sector research activity. In many other countries the same activity is carried out by government agencies, as a result of which their R&D falls under the public sector. It is not therefore possible, using public OECD statistics, to compare the institute sector s size in different countries, since the way in which the research institutes are classified varies greatly. A comparison of the research institute sector in a smaller number of countries in 21 shows, however, that the Swedish institute sector is significantly smaller than in other countries (figure 2.7). 16 Norge Danmark Tyskland Österrike Austria Sverige Källa: Det kongelige Utdannings- og Forskningsdepartement, "Vilje til forskning", Norge, SCB, 26, Forskning och utveckling inom universitets- och högsolesektorn 25 (Research and development in the university sector 25). 16 Det Konglige Utdannings. Og Forskningsdepartementet. Vilje till Forskning., 25. The strong political prioritisation of universities as society s primary research resource has had an impact on the size of the institute sector in. The Swedish system of collective research institutes has it roots in the Malmska study from the beginning of the 194s 17 and in the common research needs of the various sectors. Institutes that were formed later on do not have the same strong sector affiliation; instead the institutes activities focus on research in different areas of expertise or technologies. In there are around 3 research institutes. Sixteen of them are under IRECO which was created in 1997 to administer the industry research institutes and which used to be under the Ministry of Enterprise, Energy and Communications. 18 Both the public and private sector are behind the IRECO institutes and funds their activities. The Government s basic funding is justified by the need to maintain a high and attractive level of research competence and the need for public funding for long-term projects with a high level of risk. 19 The industry research institutes primary mission is to support technological development in Swedish industry by refining and passing on research results that can generate commercial products and processes. The research institutes have three roles in the R&D system. They are research partners, technology suppliers and recruitment sources for others conducting research and for enterprises. 2 The industry research institutes fulfil these roles by, among other things, offering customers various services such as: Joint research projects: Research open to all interested parties and jointly funded (basic funding, service fees etc.). Multi-customer projects: Companies, international or Swedish, are offered the opportunity to participate in projects with co-funded research and development based on splitting costs. Commissioned projects: Projects are commissioned by individual companies. Here the individual company is solely responsible for financing the project. Services/Information: Industry research institutes offer certain information free-ofcharge, while other information and services are paid for by individual companies. In the 21/2 research bill R&D and collaboration in the innovation system, the Government proposed the following: the state will assist in the restructuring of industry research institutes with the objective of creating a flexible and effective structure with fewer but stronger institutes that are internationally competitive and have a strong industrial base. 21 In connection with this restructuring process, the industry research institutes formed four institute groups focusing on several technologies and sectors. 22 Fibre, paper, packaging and printing technology Material science and engineering mechanics Information and communication technology Biotech, environmental science and structural engineering The first group, STFI- Packforsk AB (fibre, paper, packaging and printing technology) was formed through the merger of STFI and Packforsk. Subsequently, parts of Framkom were added. The purpose of the group is to more effectively serve customers throughout the value chain from raw material to packaging and printing graphic products. Swerea AB (materials science and engineering mechanics) includes the six institutes IFP Research AB, IVF Industriforskning and Utveckling AB, KIMAB, Mefos Metallurgical Research Institute AB, SICOMP AB and SweCast AB. The Swerea Group creates, refines and passes on research results within the areas of material science and process, product and production engineering. The objective is to generate commercial benefits for members and customers and to strengthen the competitiveness and innovative capacity of Swedish industry. Swedish ICT Research AB (information and communication technology) consists of SICS AB, Interactive Institute AB, IT-forskningsinstitutet 17 Sörlin, S. 26, A new institute sector. 18 Many of the industry research institutes have been formed into four strong groups that can meet the standards required of an efficient and competitive institute system. The restructuring of the institutes resulted in groups focusing on the following sectors, materials and technologies: Fibre, paper, packaging and printing technology (STFI-Packforsk AB); Material science and engineering mechanics (Swerea AB); information and communication technology (Swedish ICT Research AB); and biotech, environmental science and structural engineering (SP Sveriges Provnings- och Forskningsinstitut AB). 19 The IRECO institute s funding for R&D is as follows: Competence development funds aimed at long-term knowledge and competence development and necessary for renewal and development of the institute s expertise. Project funding for activity that is often co-financed by the corporate sector and with public funds. The public funds may be channelled through government agencies and other authorities, primarily VINNOVA. Project activity is the institutes main activity. Assignment funding for assignments that are 1 per cent financed by the customer (usually a company) and are conducted with full confidentiality. 2 INNO R&D and collaboration in the innovation system. Bill 22/

9 Viktoria AB and ACREO. The purpose of this merger is to make use of the synergies that arise by bringing together hardware and software research and to bring more research funding into. SP Sveriges Tekniska Forskningsinstitutet AB (biotech, environmental and structural engineering) consists of four subsidiaries, SIK Institutet för Livsmedel och Bioteknik. YKI Kemiska Institutet AB, SMP Svensk Maskinprovning and SITAC Swedish institute for Technical Approval in Construction. The reason for this merger is so that the institutes can support each other, which improves their ability to operate in a market exposed to global competition. 2.3 R&D AND OTHER INNOVATION INVESTMENT IN THE CORPORATE SECTOR Economic value-creating innovations are generated both in private enterprise and the public sector. Innovations generated by enterprises have, however, a particularly important role in promoting economic growth and job creation, since the goods and services produced in the private sector are sold in different markets in competition with other companies and, increasingly, in a climate of international competition. The innovative capacity of enterprises is therefore crucial for their long-term competitiveness and long-term value creation. R&D investments account for the main portion of a business s innovation investments and are therefore among the most important investments for the future competi tiveness of industry and commerce. In this section we describe the volume and development of R&D and other innovation investments within Swedish enterprise and industry TOTAL INNOVATION INVESTMENTS BY ENTERPRISE AND INDUSTRY All in all, Swedish enterprises are estimated to have invested SEK 117 billion in innovation activity in 24, which is the latest year for which there is internationally comparable data from innovation surveys conducted on a regular basis within the EU. The innovation investments include expenditure associated with innovation processes for in-house research and development activity, as well as purchasing of research and development, machinery, equipment and software and other external expertise. In the total innovation investments made by enterprises in 24 was 4.3 per cent of GNP. In relation to GNP, of the countries studied, only increased its investments (figure 2.8). With respect to both in-house and contracted R&D, ranks the highest in relation to the size of its economy., and, among others, are investing more in relation to GNP than to acquire machinery, equipment and software, as well as to purchase other external expertise. In 24 the cost for companies of in-house R&D activity amounted to around SEK 73 billion and the cost of purchased R&D to around SEK 19 billion. Altogether, R&D investment thus accounted for around 78 per cent of the total innovation investments within existing companies. 23 Expenditure for the acquisition of machinery, equipment and software the same year amounted to around SEK 22 billion. SEK 3 billion was spent on purchasing other external expertise, such as patents. Of the total innovation investments in Swedish industry of SEK 117 billion in 24, manufacturing companies accounted for around SEK 91 billion and service producers for around SEK 21 billion. Enterprises in the energy sector accounted for around SEK 5 billion. Of all enterprises in the Swedish corporate sector, almost half, 49 per cent, conducted innovation activities in the period, i.e. they introduced more or significantly improved products or processes. Usually enterprises conduct both product and process innovation activity (table 2.1). With respect to the percentage of enterprises conducting innovation activity, ranks the highest in an international comparison, ahead of countries like, the and the., where 65 per cent of enterprises conducted innovation activity in 22 24, ranked in first place (figure 2.9). Figure 2.8 Innovation expenditure as a percentage of GNP in a number of countries in 24. Source: Eurostat, 27. NB: There is no data for and the etc. In the case of, the data on total innovation investment is greater than the sum of the parts and accordingly the information for should be interpreted with caution. Table 2.1 The number and percentage of enterprises with or without innovation activities in 22 24, all companies. Source: SCB, 26, Innovation activity within Swedish enterprises No. of companies % of companies Total 18,266 1 Enterprises that conducted innovation activity 8, Enterprises that introduced product or process innovations 8, Enterprises that only introduced product innovations 2, Enterprises that only introduced process innovations 1,874 1 Enterprises that introduced both product and process innovations 3,732 2 Enterprises with ongoing or discontinued innovation activity Enterprises that did not conduct innovation activity 9,37 51 Figure 2.9 Percentage of enterprises that conducted innovation activity in Source: Eurostat, 27. Percentage Procent av of BNP GNP , , , , , Tyskland Sverige Percentage Procent företag of enterprises med with innovationsverksamhet activity Irland Belgien Frankrike Danmark Italien Spanien Norge Austria Tyskland Österrike Danmark Irland Belgien Sverige Italien Spanien Frankrike 23 There is a risk of some duplication in this data on R&D investments. When companies purchase R&D from other companies, the other company may sometimes report this expenditure as R&D. It is therefore necessary to exercise caution when interpreting the exact volume of R&D expenditure

10 Figure 2.1 Investments in R&D in 25 by enterprises in OECD countries (in billion PPP US dollars) Source: OECD, MSTI 27. Figure 2.11 R&D expenditure in 25 for enterprises by product group. Source: SCB, 26, Research and development in the corporate sector, Billion Miljarder PPP PPP$ USD 226, , 1. 8,2 8.2 Kina 43, China Tyskland Frankrike Electrical and El- optical och optikprodukter products Transportation Transportm edel Pharmaceutical Läkem edelsindustri industry Machinery M askiner Petroleum Petroleum and chemicals och kemisk industry industri Massa Pulp and och papper paper MetalsM etaller Metal Mproducts etallvaror LivsmFood edel Rubber and Gummi- plastic och plastvaror products Agriculture Jord- och and skogsbruk forestry Other manufacturing Övrig tillverkning Mining Gruvindustri industry Non-metallic Icke-metalliska mineraliska products prod. Wood and wood Trä och products trävaror Textile products Textilvaror Data Databehandling processing Research Forskning and development och utveckling Education, Utbild, care vård Post Post- and telecommunications och telekommunikation Energy, water Energi, and vatten construction och bygg Finansiell verksam Financial het Transport- and och warehousing magasinering Other Andra business företagstjänster services Wholesale Parti- and och detaljhandel retail trade 25, , , , , , , , , , , , , , , , 4. 3, , , , 2. 1, ,8 1.8 Russia Kanada Ryssland Taiwan Taiwan Italien Sverige Australien Australia Spanien (24) Schweiz (24) Austria South Afrika Mexico Singapore Belgien Mexiko Österrike Danmark Sydafrika Tjeckien Norge Singapore Czech Republic 5, 5 1, 1 15, 15 2, 2 25, Miljoner kronor 25 SEK millions As a percentage of net sales for companies that carried out innovation activities, total innovation expenditure was around 5 per cent. The percentage was higher for manufacturing companies than service companies conducting innovation activities, 7.1 per cent compared to 2.3 per cent. A somewhat higher percentage of manufacturing companies also conducted innovation activity during the period, 55 compared to 45 per cent. 24 Information on R&D activity carried out by enterprises is also compiled by SCB in special R&D surveys carried out every other year. This surveys cover a larger population of companies. The statistics in the R&D survey are not therefore entirely comparable to the R&D data from the innovation survey and it is therefore reasonable to assume that the data in the R&D survey is also of better quality. In the most recent R&D survey, enterprises operating in invested around SEK 77 billion in 25 in R&D. The number of R&D man-hours amounted to just over 56,. Two years previously R&D investment amounted to just under SEK 72 billion and, measured in R&D man-hours, was equivalent to over 48,. 25 One contributing factor in the increased R&D activity in the corporate sector between the years 23 and 25 is that the SCB increased the size of the survey population in the 25 survey. In 25 R&D activity carried by enterprises with between 1 and 49 employees was also studied. If we exclude the R&D activity of small enterprises (SEK 6.5 billion) from the 25 survey, the R&D activity in the corporate sector would amount to around SEK 1.5 billion less than in 23. R&D investment by enterprises in 25 amounted to around 2.9 per cent of GNP, which can be compared the EU average of 1.2 per cent of GNP in 25. In the US the investment level reached 1.8 per cent of GNP the same year. In absolute terms, however, Swedish R&D investment within the private sector was not as impressive (figure 2.1). R&D activity with a connection to manufacturing industry was responsible in 25 for around 85 per cent of all corporate R&D investment. Corporate R&D investment is focused on the following product groups: electronic and optical products, transportation, pharmaceuticals and machinery. Close to 75 per cent of all R&D investment can be related to these sectors (figure 2.11). The sector-based statistics do not, however, successfully reflect the expansion of the service economy. Manufacturing of goods requires and usually includes considerable service-related activity. Similarly, most services require the use of products. In many cases, therefore, the production of goods and the production of services are closely integrated and interdependent within the framework of various value-creating systems. R&D activity in the corporate sector is carried out in by a few multinational corporations. The 2 largest ones were responsible in 25 for just over 6 per cent of the private sector s total R&D expenditure, and the same year, 67 per cent of corporate R&D was conducted by companies with more than 1, employees. Companies with at least 25 employees accounted for 79 per cent of corporate R&D in. 26 The Swedish R&D initiatives are largely focused on high tech and medium high tech manufacturing. R&D carried out in high tech and medium high tech operations makes up 9 per cent of R&D in the manufacturing sector, which ranks highest in an international comparison. 27 The multinational corporations that dominate corporate R&D investment in have become more and more internationalised. As a result, their R&D activity has also become more internationalised. Outsourcing production and jobs from to new markets is not a new phenomenon. It has been done for a long time and even been an important aspect in the structural transformation where low-processing operations have been replaced by more high-processing operations. There are, however, indications, especially from the US, that the nature of outsourcing of production over the past few years has changed and that it now also includes knowledge-intensive operations, including development activity. 24 It should, however, be noted that not the whole of the service sector was looked at in the study for the period. The hotel and restaurant services, certain business services, some wholesale and retail and property services were, for example, not studied. 25 SCP 24 and 26, Research and development in the corporate sector 23 and 25 respectively. 26 SCB, 26 Research and development in the corporate sector European Innovation Scoreboard 26 Comparative analysis of innovation performance

11 The number of employees in large Swedish corporations the core of corporate R&D investment has fallen by around 258, over the past 2 years (figure 2.12). Cuts have been made across the board, affecting both blue and white collar employees, including R&D personnel. The exception is the pharmaceutical company AstraZeneca where both R&D investment and investment in new production has resulted in there being more employees in than in the 198s and 199s. At the beginning of 27, however, AstraZeneca announced its intention to scale back operations in. This will result in the loss of around 1,8 jobs from the company s production facilities in Södetälje. The company also intends to gradually reduce its own R&D activity and instead make strategic acquisitions of innovative biotech companies. 28 Not all of the jobs that disappeared following restructuring of large corporations were lost from the Swedish economy. In most cases the cuts were linked to outsourcing of operations in, which helped to generate new jobs in other, often smaller, companies. Some subcontractor systems have grown in scale as a result. The new jobs that were generated in this way mean, however, that small and medium sized enterprises (SMEs) to a greater extent must conduct their own innovation activities, including R&D, in order to remain competitive. The need for knowledge, like the need for partners to support innovation processes, has also increased. The R&D investments described above relate to activities carried out by companies in their respective countries. Many companies, especially the big, multinational corporations, conduct some of their R&D in other countries. Between 1995 and 25 the 2 largest Swedishowned multinational corporations increased their R&D investments in and abroad from SEK 36 billion to just over SEK 55 billion. R&D investment in increased from just over 28 billion to just under 31 billion. This means that almost the entire global R&D increase between 1995 and 25 in the 2 largest Swedish-owned multinational corporations took place outside. In 1995 the foreign portion amounted to 22 per cent. Ten years later in 25, it had increased to 44 per cent. The most common means of increasing the foreign portion was through acquisitions of companies in other countries and not by moving operations directly from one country to another (figure 2.13). 29 The Swedish-owned groups of companies mainly conducted their overseas R&D activity within the EU15 area where less than 5 per cent of the foreign R&D investments went in per cent of R&D investment went to the US, while India and China received around 3 per cent each. Just as some Swedish-owned companies locate parts of their R&D operations in other countries, some foreign-owned companies conduct a portion of their R&D in. In 25, 46 per cent or SEK 35.1 billion of corporate R&D investments were made in by foreign companies. The same statistic for 1995 was 21 per cent (figure 2.14). Most of the R&D invested in by foreign-owned companies was by companies with their principal owners in the and the US, 36 and 34 per cent respectively. Companies based in both of these countries that were also responsible for the bulk of the increase in foreign R&D investments between 1995 and 25. Most of the increase in the percentage of R&D conducted by foreign-owned companies is attributable to the acquisition of Swedish-owned enterprises. 3 Figure 2.12 Staff cuts in large Swedish corporations, Source: SvD, Ny Teknik & Affärsvärlden Number of employees Figure 2.13 Percentage of global R&D investments in other countries by the 2 largest Swedish-owned multinational corporations (per cent). Source: ITPS Research and development in international companies 25. Figure 2.14 Percentage of corporate R&D in conducted by foreign-owned companies (per cent). Source: OECD, MSTI 27 and ITPS, 27, Research and development in international companies Antalet anställda TeliaSonera Electrolux SJ Electrolux TeliaSonera SJ ABB ABB S v D, N y T e k n ik & A f f ä rs v ä rld e n Per Procent Procent Per A J Gruppen Posten A J Gruppen Posten KF KF Staff cuts 25 Staff cuts Volvo Volvo N e d d ra g n in g a v a n t a le t a n s t ä lld a 2 5 Ericsson Ericsson N e d d ra g n in g a r a v a n t a le t a n s t ä lld a Saab & Scania SKF SKF Saab & Scania SSAB SSAB Skanska Skanska SCA SCA SumTotal: ma : 258, - employees anställda Sandvik Sandvik 1 28 Reuk, M. Nu måste Astra öka trycket (Now Astra needs to raise the pressure. [http//:wwwnyteknik.se/art/49395] 7 March ITPS, 27, Forskning och utveckling i internationella företag 25 (Research and development in international companies). 3 The location of R&D operations is determined by certain needs. Three important such needs are market adjustment of products, support for production units and access to research and innovation environments

12 Figure 2.15 R&D expenditure by product group 21 and 25, current prices (SEK m). Source SCB, 26, Research and development within the corporate sector 25. Figure 2.16 R&D expenditure by product group 21 and 25, percentage of GNP. Source: SCB, 26, Research and development within the corporate sector The R&D intensive Swedish-based multinational corporations are crucial for the competitiveness of the Swedish R&D system. There are several reasons for this. The Swedish-based large corporations themselves make up a large part of the knowledge-intensive production, employment and value creation in. Also, these large corporations are often significant customers for subcontractors, not least within the service-producing segment of the economy. If the large corporations do not consider to be as attractive to invest in, the risk is that this will affect both directly and indirectly because the smaller companies in risk losing some of their most important customers. MSEK m Maskiner Metaller, vård etc Läkemedel Metallvaror Övriga varor Transportmedel Övriga tjänster Massa och papper El- och optikprodukter Övriga kemiska prod Utbildning Energi, vatten och bygg Forskning och utveckling Databehandling & telekom Electrical and optical products Transportation 1, ,8.8,6.6,4.4,2.2. Pharmaceuticals Machinery Other chemical products Percentage Procent av of BNP GNP 1,4 1.4 Pulp and paper Metals Metal products Energy, water and construction Other products Research and development Data processing and telecoms Education, care etc. Other services Maskiner Metaller, vård etc Läkemedel Metallvaror Övriga varor Transportmedel Övriga tjänster Massa och papper El- och optikprodukter Övriga kemiska prod Utbildning Energi, vatten och bygg Forskning och utveckling Databehandling & telekom Electrical and optical products Transportation Pharmaceuticals Machinery Other chemical products Pulp and paper Metals Metal products Energy, water and construction Other products Research and development Data processing and telecoms Education, care etc. Other services R&D expenditure relating to electrical and optical products, which includes telephony products, has fallen in current prices from SEK 27 billion to SEK 21 billion between 21 and 25. R&D expenditure relating to transportation increased between 21 and 25 by just over SEK 1 billion to SEK 15.5 billion. The R&D expenditure relating to pharmaceuticals amounted to around SEK 13.5 billion in both 21 and 25. In data processing and telecommunications, R&D expenditure between 21 and 25 in current prices increased by just under SEK 2 billion to SEK 6.5 billion (figure 2.15). If we instead look at the trend as a percentage of GNP, R&D expenditure between 21 and 25 has fallen for many product groups. This is particularly true for electrical and optical products where R&D expenditure fell from just under 1.2 per cent of GNP in 21 to just under.8 per cent of GNP in 25. In both the transportation and pharmaceutical sectors, a slight decline can be identified. Taking into account the fact that the 25 study includes companies with 1 49 employees, the reduction is greater than the statistics appear to indicate (figure 2.16). These stagnation tendencies are probably mainly linked to the multinational groups of companies that strongly dominate R&D investment that the private sector is responsible for in. This trend may be a sign of a decline in the appeal, relatively speaking, for corporate R&D investment in the climate of growing competition for such investment, which is generated by globalisation R&D IN SMALL AND MEDIUM-SIZED ENTERPRISES Globalisation and international competition will put greater pressure on SMEs to conduct their own R&D and innovation activities. They need to do this to strengthen their innovative capacity and ability to receive new knowledge, and to remain attractive as partners to other Swedish and foreign companies. Internationally competitive subcontractors may also impact the investments and location decisions made by larger companies. Strong international competitiveness is especially important for the subcontractors that are dependent on a single large customer s orders. This dependence makes them vulnerable to changes in their customer s operations and where they are located. At the same time, the latest innovation surveys, for the period 22 24, show that a smaller percentage of small enterprises are engaged in innovation activities, 44 per cent compared to 64 per cent for medium-sized enterprises and 77 per cent compared to the large companies. 31 The international statistics of the OECD and Eurostat 32 regarding R&D conducted by SMEs have significant limitations, which makes international comparisons problematic. One source of error is that the national statistics agencies use different threshold values to determine which companies are to be included in the R&D surveys. In the 25 R&D survey of corporate R&D activity, the SCB has, as previously mentioned, increased that the survey population to include the R&D activities of small enterprises (1 49 employees). This made international comparability better than for the studies from previous years. R&D WITHIN SMEs IN AN INTERNATIONAL COMPARISON In an international comparison of the percentage of SMEs total R&D investment in the corporate sector, ranks in the bottom half with countries like and the. In these countries SMEs account for around 2 per cent of the total R&D expenditure in the corporate sector. This can be compared with and where SMEs are responsible for 7 and 5 per cent respectively of total corporate R&D expenditure. In a large percentage (44 per cent) of the corporate R&D is carried out by SMEs (figure 2.17). The Swedish corporate R&D expenditure, more than in most other countries, is conducted by large corporations. This means, as stated earlier, that the Swedish national innovation system is greatly dependent on decisions made by large corporations on where they will conduct their R&D activity and production in the future. Since in relation to the size of the country s economy is among the countries that invest the most resources in R&D by enterprises, is in a significantly better position in a comparison of R&D activities within SMEs in relation to GNP (figure 2.18). 31 SCB, 26, Innovationsaktiviteten i svenska företag (Innovation activity within Swedish enterprises) See for example, OECD, Small and Medium Enterprise Outlook 22; OECD SME and Entrepreneurship Outlook and Eurostat, The Third Edition of the European Report on Science and Technology Indicators

13 The R&D expenditure of SMEs amounted to around.6 per cent of GNP in 25. Of this amount, just under half (.25 per cent of GNP) was conducted by enterprises with fewer than 5 employees, while R&D activity within mediumsized enterprises amounted to just over half (.35 per cent of GNP). ranks the highest, with.76 per cent of GNP, before with.69 per cent of GNP. R&D WITHIN SMEs IN SWEDEN Corporate R&D activity in amounted to around SEK 77 billion in 25. R&D activities conducted by small enterprises (1 49 employees) amounted to SEK 6.4 billion, while R&D activity within medium-sized enterprises (5 249 Figure 2.17 Percentage of Corporate R&D conducted by enterprises in different size categories in 25 or the last year. Source: OECD, Science, Technology and Industry Scoreboard 25 and SCB, 26, Research and development within the private sector, 25. Figure 2.18 Corporate R&D expenditure by enterprise size for 25 or the last year. Source: OECD, Science, Technology and Industry Scoreboard 25 & SCB, 26, Research and development within the private sector 25. Norge Irland Danm (22) Australien Australia (22) Belgien (21) Kanada (22) 22) Schweiz (2) (22) (22)) (21) Österrike Austria (22)) F Sverige (25) Italien (22) (22) (22) (22) F rankrike (22) Tyskland (22) Danmark (22) Norge Schweiz (2) Sverige (25) (21) Belgien (21) Kanada (22) Irland Australien Australia (22) Österrike Austria (22) (22) (22) Frankrike (22) Tyskland (22) Italien (22) employees) amounted to around SEK 8.9 billion. The percentage of R&D conducted by enterprises with fewer than 5 employees was thus 8.3 per cent, which the percentage conducted by companies with between 5 and 25 employees amounted to 11.6 per cent of the corporate sector s total R&D. The R&D conducted by SMEs in is, as is the case for large companies, concentrated to a few sectors and products. R&D activity carried out by SMEs relates to three product groups: data processing (SEK 4.1 billion), electrical and optical products (SEK 3. billion) and research and development (SEK 2.3 billion). This constituted around 6 per cent of the total R&D activity of SMEs in 25 (see figure 2.19). Enterprises Företag m ed with färre fewer än than 5 5 anställda employees Enterprises Företag m ed with employees anställda Enterprises Företag m ed with 25 eller or more fler anställda employees % % 2% 2% 4% 4% 6% 6% 8% 8% 1% 1% Företag Enterprises med with färre fewer än than 5 5 anställda employees Företag Enterprises med with anställda employees Företag Enterprises med with 25 eller or more fler anställda employees.,..5,5 1. 1, 1, , ,5 3, 3. 3,5 3.5 Procent Percentage av BNPof GNP Figure 2.19 Corporate R&D conducted by enterprises in different size categories by product group 25 (SEK m). Source: SCB, 26, Research and development within the private sector 25. Figure 2.2 Corporate R&D conducted within different size categories by county 25 (SEK m) Source: SCB, 26, Research and development within the private sector 25. MSEK m % % av of FoU R&D i SMF in 25 or eller more fler employees anställda anställda employees anställda employees Maskiner Metaller Utbild, vård Metallvaror Livsmedel Textilvaror Gruvindustri Databehandling Transportmedel Övrig tillverkning Företagstjänster Trä och trävaror Läkemedelsindustri Massa och papper Jord- och skogsbruk El- och optikprodukter Gummi- och plastvaror Finansiell verksamhet Forskning och utveckling Energi, vatten och bygg Parti- och detaljhandel Petroleum och kemisk industri Transport- Post- och magasinering telekommunikation Icke-metalliska mineraliska prod. Not Ej allocated fördelat Gävleborg Västmanland Örebro Värmland Kronoberg Halland Blekinge Västerbotten Södermanland Dalarna Kalmar Jönköping Norrbotten Västernorrland Uppsala Östergötland Västra Götaland Skåne Stockholm SMEs REGIONAL BREAKDOWN OF CORPORATE R&D Corporate R&D activity is also concentrated in a few regions in. This applies both to the total R&D activity and the portion of corporate R&D conducted by SMEs. Just over 8 per cent of total corporate R&D activity is conducted in Stockholm, Västra Götaland, Skåne and Östergötland. If we look at the R&D carried out by SMEs, around 75 per cent is conducted in these four counties. 45 per cent of all SME R&D activity is Data processing Electrical and optical products Research and development Petroleum and chemical industry Machinery Pharmaceuticals industry Transportation Education, care Rubber and plastic products Metals Agriculture and forestry Pulp and paper Other manufacturing Metal products Food Financial Energy, water and construction Non-metallic mineral products 1-49 anställda employees anställda employees 25 or eller more fler employees anställda Business services Freight and storage Post and telecommunications Textile products Wood and wood products Wholesale and retail industry Mining industry 5, 5 1, 1 15, , 25 25, 3 3, MSEK m carried out in Stockholm County (figure 2.2). The regional differences in R&D intensity can be partly explained by the fact that the industry structure is different in different regions. The metropolitan areas have more knowledge-intensive and high-tech companies and sectors. For these companies, proximity to research environments, advanced support services and transport infrastructure to facilitate international contacts are often important considerations in location decisions

14 Figure 2.21 Number of research man-years and percentage of total R&D man-hours within enterprises Source: SCB, 25, Research and development within the private sector 23. Number Antal forskningsårsverken of research man-years Per Procent 8 8. Forskningsårsverken Research man-years Procent Percentage av of FoU R&D -årsverken man-hours Figure 2.22 Number of research manyears in 23 in different sectors of industry. Source: SCB, 25, Research and development in the private sector, 23. Pharmaceuticals Läk em edel Fors Research k nings insinstitutions titutioner Electrical El- och and optikind. optical Trans portm Transportation edels ind. MMachinery as k inind. Data Databehandl. processing, post t & and telek telecoms. Steel and materials S tål & m etallfram production s t Petroleum och and övrig other kemisk chemicals ind Utb. vård, Education personliga and och care, kulturella personal tjäns and ter cultural services Business Företags tjäns services ter Papper Paper & massaind. and pulp ÖOther vrigt RESEARCH IS A SMALL PORTION OF CORPORATE R&D ACTIVITY Although there is no distinct line drawn between what is considered research and what is considered development, the R&D statistics indicate that only a small portion of corporate R&D investment can be considered research investment. Furthermore, the research portion of corporate R&D activity has declined over time. In in 23 research accounted for just under 12 per cent of corporate R&D activity (figure 2.21). This can be compared with the years 1997 and 1999 when the research portion amounted to 17 per cent of R&D activity. There is no data for 25 of the research portion of corporate R&D investment in since this information is not included in SCB s most recent R&D survey. 33 Research conducted by manufacturing companies usually involves seeking new technological knowledge that is not directly linked to new or improved products and processes. Research leads mainly to technological solutions, but also instruments and methods. The technological solutions may in turn be used to develop new or improved products and manufacturing processes or to generate ideas for these. The results many also be put on the shelf for future use. Ideas for research projects have several sources; for example, past internal research projects (research resulting in new research problems), monitoring external research activity (published scientific articles, partnership projects etc.) and internal development projects (arising problems). 34 Development activity carried out by companies is aimed at producing new or improved products and processes. Development projects generally originate from market or production needs. Access to in-house research is an important prerequisite for cooperation with researchers at universities. If there is no in-house research, the ability to receive external research is generally low. The size of research projects varies significantly between different sectors with pharmaceutical and research institutions 35 at the top of the list (figure 2.22). 2.4 VENTURE CAPITAL INVESTMENT Start-up companies find it difficult to finance their operations. It is particularly hard to secure financing in the very first stages before a company has its first customers. These enterprises rarely have access to financing through external shareholders equity, which means that they need to look for other ways to finance their operations. In certain cases, bank financing may be a solution to the problem, but due to the high risk factor and considerable uncertainty, this is often difficult to secure. This is a problem in particular for high-tech start-ups for which there is Figure 2.23 Venture capital investment in seed/ start-up capital as a percentage of GNP Source: Eurostat, 27.,35.35,3.3,25.25,2.2,15.15,1.1,5.5 Procent Percentage av of BNP GNP Sverige often great uncertainty about development. For this type of enterprise, venture capital financing is often a necessity. Venture capitalists, however, rarely look for ventures in the pre-commercial stages where the commercial risk is still hard to assess. In the pre-commercial stages the government therefore has an important role to play, for example, as a financial backer to share the risk Frankrike Spanien Danmark Irland Norge Belgien Antal forskningsårsverken Austria TysklandÖsterrike Italien The Swedish venture capital market expanded in the second half of the 199s. In relation to GNP the volume of venture capital in is high compared to other countries. The increase was mainly in the later stages, expansion and replacement investments, while the increase in the early stages, 36 seed/start-up, was smaller. In the years following 2 the amount of seed/start-up venture capital has declined as a percentage of 33 One reason for the question being removed from the R&D survey in 25 is that companies find it difficult to estimate the breakdown between research and development. 34 NUTEK, R 2: The category research institutions SNI73) consists partly of industry research institutes that have become independent entities and partly companies that have research and development as their main activity. 36 Early stages refers to the seed and start-up phases. According to Nutek and the Swedish Venture Capital Association, seed is defined as: Funding for enterprises for experimental development and to enable the evaluation and development of an initial concept before the venture has reached the start-up phase. At this stage the company has been launched and the first actual interaction with the potential market has been initiated. This is the phase in which earliest venture capital companies get involved. Source: Nutek, Venture capital company activity and other early stage financing, fourth quarter

15 Figure 2.24 Venture capital investment in expansion/ replacement capital as a percentage of GNP Source: Eurostat, 27. Percentage Procent av of BNP GNP,9.9,8.8,7.7,6.6,5.5, COMPETENCE RESOURCES,3.3,2.2,1.1 Sverige Belgien Spanien GNP. The decrease has been greater in many other countries than in and as a result, improved its position in relation to some other countries during this period (figure 2.23 and figure 2.24). 2.5 COMMENT s investments in R&D have fallen since 21 as a percentage of GNP. The research volume at Swedish universities is very high in an international comparison, amounting to around SEK 21 billion in 25. The Swedish emphasis on universities as the primary conductors of research has, however, meant that industry research institutes have been given lower priority. This has also meant that the universities have been given more clearly defined responsibility to exchange knowledge with industry and the rest of society. Thus they have a broader responsibility than universities in many other countries. We can also note that in an international comparison has a relatively good supply of venture capital. It is highly likely that venture capital, including professionalism in corporate governance offered by the venture Frankrike Italien Norge Danmark Irland TysklandÖsterrike Austria capital companies, will grow in importance for the universities mission to exploit research results. The financing of research at universities in has also changed in recent years and has become increasingly competition-based. In order to retain and improve their ability to attract expertise, Swedish universities need to be more clearly profiled. If such profiling is to be successful, universities need to work in closer cooperation with other players, especially companies and industry research institutes. Here, the development of strong research and innovation environments will gain significance. Cooperation between academia and industry is of particular importance, especially when bearing in mind the stagnation tendencies in recent years and in some sectors, a decline corporate R&D investment in. Although the total innovation investments made by businesses in are still considerable compared to other countries, these stagnation tendencies are a cause for concern. The big R&D intensive corporations operations have and for the foreseeable future will continue to have great significance for the research and innovation system in. For this reason it is vital that continues to be an attractive nation for R&D investment by big corporations. Human knowledge and expertise are the most important innovation resources. Thus access to competent individuals has a major impact on a company s innovative capacity. Individual competencies are crucial for creativity and the efficiency of a company s internal processes associated with innovation. They are also crucial for a company s capacity to work with expert resources in other organisations. Against this background, the volume, distribution and mobility of human capital is vital for the effects and effectiveness of different innovation systems. Research expertise is particularly important in this context. Access to postgraduate scientists and engineers is generally critical for technological innovation, while research expertise is also important for advanced marketing, service and organisational innovations. The knowledge and skills of individuals are basically impossible to measure accurately. Although the formal educational background of the individual is not a direct measure of competence, it is still an indicator of the individual s ability to acquire a certain form of expertise. Data on educational background and levels can therefore be used as an indicator of competence distribution and competence mobility between different countries. Mobility is particularly important. When people move between sectors, the knowledge base of society is able to grow. Mobility creates, for example, opportunities to use existing knowledge in new ways and within new application areas. 37 Unfortunately, there is no good comparable data today on mobility among researchers and other highly educated individuals. Within the OECD a sophisticated effort is under way to develop methods to be able to identify mobility and indicators for knowledge transfer. In this chapter we compare the number of postgraduates and other highly educated individuals in different countries as indicators of the volume of critical competence resources for research and innovation in different countries. International comparisons of the number of people with a higher education in different countries is associated with considerable methodology problems, since the education systems in different countries differ in both structure and content. Therefore, international comparisons of volume and distribution of people with a higher education should be interpreted with caution. In this context it is important to point out that ranks lower in an international comparison based on the data from 25 compared to data from 24. This is because the statistics have been reclassified. Starting from 25, for example, individuals with a licentiate qualifi ca tion are excluded from the number of postgraduates in the international statistics. Also, the number of graduates from shorter university programs, often with a more vocational focus, has dropped due to reclassification in between 24 and INTERNATIONAL COMPARISON OF THE NUMBER OF INDIVIDUALS WITH A HIGHER EDUCATION The number of individuals with a higher education, i.e. tertiary education, according to the International Standard for Classification of Education (ISCED) as a percentage of the population is a general indicator of the level of qualified competence in a popu la tion. In an OECD comparison, the percentage of people with a higher education in research 37 Cohen, Wesley & Levinthal, Daniel Absorption capacity: A new perspective on learning and innovation, Administrative Science Quarterly, #35,

16 Figure 3.1 Percentage of population years who in 25 had reached the tertiary education level of type A, i.e. theoretical education. Source: OECD, Education at a glance 27. Procent Per Figure 3.3 Percentage of the population in the age group that in 25 had reached the tertiary education level type A. Source: OECD, Education at a glance Per Procent cent 5 5 Norge Island Danmark Australien Kanada SverigeSpanien Irland Schweiz Tyskland Frankrike Belgien Iceland Australia Norge Iceland Island Danmark Australia Australien Kanada Sverige Spanien Irland Frankrike SchweizBelgien Tyskland Figure 3.2 Percentage of the population, age 25 64, who in 25 had reached the tertiary education level type A or B, i.e. theoretical or practical. Source: OECD, Education at a glance Per cent Procent Tertiary Tertiär type BB Tertiary Tertiär typ Type AA Figure 3.4 Percentage of the population in the age group that have reached the tertiary education level type A 1998 and 25. Source: OECD Education at a glance 2 and OECD Education at a glance Per Procent Kanada Danmark Norge Island Australien Australia Iceland SverigeBelgien Irland SpanienSchweiz Tyskland Frankrike Norge Island Danmark Australien Kanada Sverige Spanien Irland Frankrike SchweizBelgien Tyskland Iceland Australia preparatory/theoretical programmes, is in eleventh place (figure 3.1). If to the researcher preparatory theoretical programmes we add the shorter university programmes, often with a more practical/vocational focus, tertiary education (type B), is ranked in twelfth place, (figure 3.2). has thus dropped several places compared to 24. The reason is that the percentage of the population that have reached tertiary education (type B) has dropped from 15 per cent in 24 to 9 per cent in 25, which in turn is explained by the changes in reporting to the OECD. 38 Using the same classification as for 24 would place in fifth place. In terms of individuals with tertiary education type A, ranks slightly higher in an international comparison of younger cohorts than among older individuals with a higher education. This indicates that is improving its competence resources faster than other countries, (figure 3.3 and figure 3.4). As mentioned before, the statistics are affected not only by actual changes in the education system, but also by reclassification SCIENTISTS AND ENGINEERS IN THE ECONOMY As a percentage of tertiary educated (type A) individuals, just over 25 per cent in in 25 had an education within life sciences, natural sciences and engineering. In an international comparison, the Swedish higher education system is somewhat more focused on these programmes than is the case in many other countries., and have an even greater emphasis on these programmes (figure 3.5). With respect to the number of graduate scientists and engineers in the workforce, shows lower levels than many comparable countries. s relatively high ratio of women in the workforce, as well as a tendency in to enter higher education later in life than in many other countries, are contributing factors to the relatively low Swedish level in an international comparison (figure 3.6). 38 Reporting in 24 includes ISCED 4 (post-secondary level but not university level) in the class ISCED 5B. Through changes in the SCB s manpower study (AKU) it was possible to distinguish this group up to

17 Figure 3.5 Percentage of people with tertiary education (type A) in natural sciences and engineering as a percentage of the total number of people with tertiary education in 25. Source: OECD. Education at a glance 27. Per cent Procent Tyskland Schweiz Frankrike Spanien SverigeBelgien Manufacturing Tillverkning och and konstruktion construction Mathematics, Matematik, statistik statistics och and data Life Livsvetenskaper sciences and physics och fysik Irland Kanada Australien Danmark Storbriitannien NB: There is no data For on percentages within mathematics, statistics and data Australia Norge Figure 3.7 Number of individuals that had completed postgraduate education in 25 per million inhabitants. Source: OECD, Education database 27 and OECD, MSTI 27. Number of postgraduates per million people Antal forskarutbildade per en miljon i befolkningen Schweiz Tyskland Sverige Irland Norge Italien Danmark Spanien Belgien Kanada Frankrike Other Övriga disciplines ämnen Natural Naturvetenskap/teknik sciences/engineering Figure 3.6 Percentage of people with tertiary education in natural sciences and engineering in the age group as a percentage of the total employed population 25. Source: OECD, Education at a glance 27. Percentage of natural scientists/engineers per 1, of employed population Antal naturvetare/tekniker per 1 sysselsatta Irland Frankrike Australien Australia POSTGRADUATES IN THE ECONOMY With respect to the total number of people with a postgraduate degree in the Swedish economy, is relatively competitive in an international comparison and is even more competitive Storbriitannien Schweiz Sverige Danmark SpanienTyskland Belgien Norge with respect to the number of people with a postgraduate degree in engineering and natural sciences as a percentage of the population (figure 3.7). is also a leader in the OECD with respect to people in the younger cohorts COMMENTS With respect to human capital, the Swedish innovation system is relatively competitive in an international comparison. Viewed over time, has gradually increased the number individuals with a higher education in relation to the population. is also a leader within the OECD with respect to younger postgraduates, which guaran tees a steady stream of research competence. Of the people in the population with a higher education, about one quarter are scientists and engineers. Even if the level is currently on a par with other countries, the supply is very likely to be less than what is needed to meet future needs. In particular, we can expect that many SMEs will see an increased need for highly educated personnel as global competition increases. As mentioned earlier, the pressure of competition will mean that SMEs will have an increasingly important role in conducting their own innovation work. By recruiting researchers, a company will likely have access to both new and valuable expertise and academic networks. Awareness of the extent of postgraduate recruitment and how important this is for a company s innovation work is, unfortunately, limited since no comprehensive studies have been conducted and statistics on this area are limited. Natural sciences and engineering expertise are particularly important for Swedish industry. Since is a high-cost country it needs to constantly use technological advances to compensate for cost disadvantages, e.g. by improving productivity and delivering innovations. The manufacturing industry still accounts for the lion s share of export revenues despite the service sector s growth. In other words, industry is one of the primary sources of value creation for and is even classed as one of the leading industry nations in the OECD. Altogether this indicates that advanced manufacturing and production deve lopment should continue to play an impor tant role for in the future. Knowledge, however, is not static; it requires constant maintenance to be nurtured and developed. At the same time as the importance of R&D and innovation as a source of com petitiveness has increased, so has the pressure to continuously upgrade the com petence base within industry and enterprise. The need for exchange and interaction with research institutes may be expected to increase significantly in the future for Swedish companies that are focusing on technology. This should lead to an increase in mobility. From this perspective it is important to carefully observe existing mobility patterns and to support initiatives to bring about greater exchange between companies, industry research institutes and universities. 39 We should point out that starting from 25 graduate licentiates are no longer included as postgraduates in the international statistics

18 4. R&D AND INNOVATION COLLABORATION Figure 4.1 The main developers of innovations Source: SCP, 26, Innovation activity within Swedish enterprises Per Procent In-house Egna företaget With Tillsammans other companies med andra företag Other Andra companies företag 3 2 Many studies of innovation and innovation processes show that a large percentage of innovations are generated in collaboration between two or more players. Mutual learning is a crucial success factor for innovation processes. Above all the relationship between users and producers is key. The need and demand for innovative solutions and the relationships between, on the one hand, customers, professional users and end consumers, and on the other hand, producers of goods and services, is therefore critical for impact and effectiveness in the innovation system. Also, the relationships between innovative companies and other organisations and between these and producers of knowledge and expertise such as universities and R&D institutes are critical for the success of innovation processes. 4.1 PARTNERSHIP STRUCTURES IN INNOVATION PROCESSES The most recent innovation survey, Community Innovation Survey (CIS) 4, in which we have access to internationally comparable statistics, was conducted in 25 and the reference period was Some statistics are available from the CIS survey for the reference period regarding, but since there are not yet any harmonised international statistics from this survey, we have chosen to mainly use the statistics from the study with the reference period. According to this study, production innovations were mainly developed by the company that was responsible for the innovation. Around 71 per cent of companies involved in innovation work developed the innovations themselves, 23 per cent developed them in cooperation with other organisations and 6 per cent contracted out all of their development work to other companies or organisations. Process innovations were developed to a greater extent in cooperation with other companies, even if a majority, 52 per cent, were mainly developed by the enterprise conducting innovation activity. Of the process innovations, 36 per cent were developed in cooperation with other companies and 12 per cent were mainly contracted out to other companies and organisations (figure 4.1). The differences are small between manufacturing and service companies. Compared to the innovation study with 2 22 as the reference years, the percentage of enterprises conducting innovation activity in that also worked in collaboration with others to develop their innovations 41 increased by 1 percentage points, from 32 to 42 per cent. The percentage of enterprises that collaborated to develop innovations was higher among industrial enterprises (47 per cent) than service companies (38 per cent). It is also more common for larger corporations to conduct innovation activity in cooperation with other organisations compared to smaller enterprises. In the period, 66 per cent of the large corporations collaborated with other players. The figure for smaller enterprises was 38 per cent. The most common partners during the period were suppliers, 75 per cent, customers 66 per cent, and consultants 47 per cent (table 4.1). Among the enterprises which in the period conducted innovation activity in 1 Produktinnovationer Production innovations Table 4.1 Percentage of enterprises involved in innovation collaboration, by partner, Source: SCB, 26, Innovation activity within Swedish enterprises Partner All enterprises (%) Industry (%) Service sector (%) Total Other companies within the group Suppliers Customers Competitors Consultants Universities State/public research institutions NB: It is possible for enterprises to indicate several response options, which is why the columns do not add up to 1 per cent. cooperation with other organisations, almost all, 94 per cent, worked with a Swedish partner. This is equivalent to around 4 per cent of the enterprises conducting innovation activity in this period. The percentage of enterprises conducting innovation activity with partners located in other European countries amounted to around 21 per cent, while 7 per cent of the enterprises with innovation activity collaborated with players outside Europe. The pattern is similar for both industrial and service companies. Processinnovationer innovations There are, however, considerable differences with respect to the size of enterprises and where their partners are located. It is more common for larger enterprises to work with partners in the rest of Europe and the rest of the world than is the case for medium-sized and especially small enterprises. 4 See chapter 6.2 for a more detailed description of the CIS surveys. 41 Collaboration here means an active participation in innovation activity with other companies and institutions, both within and outside s borders

19 Figure 4.2 Companies that collaborate, by partner location 22 24, percentage of companies with innovation activity. Source: Eurostat, 27. Figure 4.3 Percentage of companies conducting innovation activity that collaborated with universities, Source: Eurostat, 27. Per Procent Nationally Nationellt Övriga Rest of Europa Europe Övriga Rest of världen world anställda employees employees anställda 25 employees 25- anställda Totalt Sverige Belgien Norge Italien Norge Italien Frankrike Tyskland Österrike Belgien Sverige Norge Italien Frankrike Österrike Tyskland Belgien Sverige Frankrike Österrike Tyskland Per cent Procent Schweiz Sverige Austria Norge Belgien Austria anställda employees anställda employees anställda employees Totalt Frankrike Austria Österrike Austria Tyskland Italien 4.2 R&D PARTNERSHIPS ACADEMIA INDUSTRY There are many channels through which knowledge generated at universities is used for business innovations. 42 Research-generated knowledge can be transferred through: published scientific articles and technology reports public scientific conferences and meetings informal contacts between researchers recruitment of researchers researcher exchanges purchase of patent licences contract research education joint research projects Companies mainly use information contacts between researchers, participation in conferences and scientific literature to acquire knowledge from the academic world. Licensing, contract research and joint research projects are also important channels for this. Recruiting researchers, either directly from universities or from other companies, is one channel that is particularly important when a company is entering a new knowledge or technology field. 43 It should, however, be noted that the knowledge channels are interdependent. Research partnerships have a great chance of succeeding if they are based on past personal contacts, since the participants know each other s abilities, which means their expectations of the partnership are realistic. It is hard to know the exact extent of and significance that each channel for knowledge exchange between companies and universities has for a company s innovation activity, since the statistics in this area are poorly developed. Some statistics are available for research partnerships, contract research, researcher exchanges, researcher recruitment and new enterprise. Thus only part of the overall knowledge flow can be understood with the help of statistics SCIENTIFIC CO-PUBLICATION ACADEMIA INDUSTRY A report from the Swedish Research Council 44 shows that collaborative research between universities and the business world, apart from contributing to innovation in industry and society, also keeps scientific quality high. By studying the field-normalised citation mean 45 we see that the published scientific articles featuring authors from both Swedish companies and Swedish universities are cited more frequently than if the article only had authors from Swedish industry or published articles with authors only from Swedish universities. Since the year 2, field-normalised citation means for published articles resulting from collaboration between the Swedish business world and academia in has been around 1.2. These articles are thus cited 2 per cent more than the global average. The report also highlights the importance of international research collaboration. By copublishing with international researchers, authors have a greater citation frequency than if they only collaborate with researchers from their own country. This applies both for published scientific articles produced at universities and by companies or in cooperation with each other. Published articles with the highest citation frequency are those produced in cooperation between Swedish academia and Swedish industry and which also have an international connection. These articles have had a field-normalised citation mean since 2 of around 2, which means they are cited twice as often as the global average (figure 4.4). In an international comparison a relatively high percentage of Swedish enterprises conducting innovation activity work in cooperation with a national partner. This is the case for companies in all size categories. With respect to collaboration with players in other parts of Europe, Swedish companies rank high in an international comparison. If we look at connections with players in the rest of the world, Swedish enterprises, with the exception of the large corporations, are ranked significantly lower (figure 4.2). With respect to collaboration with universities, there are also differences depending on the size of the enterprise. A higher percentage of large corporations are conducting innovation activity in cooperation with universities than SMEs. Among the large corporation conducting innovation activity, almost half collaborate with universities. The equivalent figure for small enterprises is 14 per cent. In an international comparison, ranks after and (figure 4.3). 42 NUTEK, 1995: NUTEK, Swedish Research Council (Vetenskapsrådet), 27, Vetenskapligt publiceringssamarbete mellan svenska företag och högskolor (Scientific publication collaboration between Swedish enterprises and universities). 45 Field normalised citation involves calculating a global citation mean value for every year and research field and type of published article. The number of citations a published article gets is divided by this global citation mean value. A value of 1 means that the article is cited to the same extent as the global average, while a value of 1.5 means that the article is cited 5 per cent above the global average

20 Figure 4.4 Field-normalised citation mean of articles and summary articles produced by universities, enterprises or both in cooperation. Source: Swedish Research Council 27, Scientific publication collaboration between Swedish enterprises and universities. Field-normalised citation mean A) A) Only Enbart Swedish svenska addresses adresser B) International Internationellt collaboration samarbete Only Enbart universities högskolot 1.6 Enterprises Företag och and högskolor universities 1.8 Only Enbart enterprises företag Figure 4.5 Percentage of universities R&D financed by industry 25. Source: OECD, MSTI, Per Procent (24) (23) Belgien (23) Tyskland (24) ) KanadaSpanien ( 23 (23) Sverige Norge (24) (24) Danmark (24) Frankrike (24) Irland In addition to the fact that collaborative research between universities has a positive impact on scientific quality, universities also have much to gain from contacts and cooperation with enterprises in the form of increased research funding. Also, enterprises often bring industrial problems into research environments at universities, which can enrich the research carried out there. In several situations, scientific renewal and progress has been dependant upon cooperation with industry. In areas such as information technology and biotech, collaboration between academia and industry has become a crucial factor in bringing about vital research CONTRACT RESEARCH One knowledge channel used by companies to exploit the expertise at universities is contract research projects. In 25 revenues at universities from the corporate sector for contract research amounted to just over SEK 81 million. Companies in accounted for just over 75 per cent of this amount. 46 Funding from enterprises in of just over SEK 6 million represented just under 1 per cent of corporate R&D investment in The direct corporate funding of research at universities must therefore be considered remarkably low, both as a percentage of the total corporate R&D investment and as a percentage of the universities external financing. Corporate financing of research and development at universities as a percentage of the institutions total R&D volume is also relatively low in an international comparison. In 25, companies funded around 5 per cent of the research activity at universities, which ranked at about the same level as the US, and the, but significantly lower than, for example, (figure 4.5). Among the universities, Karolinska Institutet generated the most income from contract research in 25 (figure 4.6). Chalmers University of Technology, Uppsala University, Lund University, Göteborg University and the Royal Institute of Technology also have comparatively high revenues from contract research. The ten largest universities accounted for just over 9 per cent of the total volume of contract research. Almost 5 per cent of revenue from foreign companies went to Karolinska Institutet. Figure 4.6 Revenue for contract research from the corporate sector by university 25 Source: HSV, NU database, SEK Miljoner millions kronor Utländska Foreign enterprises företag Svenska Swedish enterprises företag Lunds universitet Umeå universitet Malmö högskola Högskolan Väst Karolinska Uppsala institutetuniversitet Örebro universitet Växjö universitetmittuniversitetet Högskolan i Gävle Göteborgs universitet Linköpings Stockholms universitet Mälardalens universitet högskola Karlstads universitet Högskolan Högskolan i Kalmar Högskolan Dalarna i Borås Högskolan i Jönköping Högskolan i Halmstad Södertörns högskola Högskolan Kristianstad Luleå tekniska universitet Chalmers tekniska högskola Kungl. Tekniska högskolan Sveriges lantbruksuniversitet Lärarhögskolan i Stockholm Handelshögskolan i Stockholm Karolinska Institutet Chalmers University of Technology Uppsala University Lund University Göteborg University Royal Institute of Technology (KTH) Luleå University of Technology Swedish Univ. of Agricultural Sciences Linköping University Stockholm University Umeå University Mälardalen University Stockholm School of Economics Jönköping University Malmö University Örebro University Karlstad University University of Gävle Halmstad University University West University of Kalmar Högskolan Dalarna Växjö University University College of Borås Stockholm Institute of Education Mid University Södertorn University College Kristianstad University College The main research funded by companies, both in terms of millions of kronor and as a percentage of the total research funding for various fields, is engineering science and medical research. (figure 4.7). One difference between companies in and in other countries is that those in mainly fund contract research in engineering science fields, while those in other countries mainly fund medical research. In most of the funding goes to Karolinska Institutet. As noted earlier, contract research makes up a small portion of the total research funding received by universities. Only within engineering sciences and medicine does it reach around 1 per cent. 46 HSV, NU database, 26, Contract research is defined in the SCB s statistics as fee-financed research for which the seat of learning in return provides the customer with certain services. Companies in are defined in this context as companies that have a Swedish corporate registration number. 47 For information about corporate R&D investment, see chapter