Comment: ’Internationalisation of R&D - German viewpoint’

Christopher Palmberg, Research Institute of the Finnish Economy (ETLA)

• Empirically rich analysis of topical issue: position of incumbent NIS in ”new global division of labour in R&D”

• Potential limitations: industries/firms are multi-technology, choice of R&D location indicator, exclusion of software almost by default

• Possible interpretations/hypothesis (cf. Mariani 2002): – science-based R&D increasingly detached from production– application-oriented R&D ’stickier’ in this sense

• … compare e.g. with ’chain-linked-model’ (Kline & Rosenberg 1986), which are the possible implications?

Global distribution of industrial production by regions 1750-2003

0

10

20

30

40

50

60

70

1750 1800 1850 1900 1950 2000

%

East Asia

North America

Europe

Source: Bairoch (1982), ETLA

Can incumbent NIS maintain/develop their global position in science-based R&D?

• Small absolute size/scarce resources (is economies of scope enough?) – competition from BRIC countries

• Complementarities between science-based and application-oriented R&D– Schumpeterian ’creative combinations’: science/application

mixtures; high/low-tech mixtures; tangible/intangible mixtures– will advanced lead users of science-based R&D also relocate?

• Internationalisation of science-based R&D – internationalisation of educational and public research system

• Incumbent NIS at a disadvantage in terms of unfavorable age distributions?

…Finnish viewpoint as measured through patents♦

• Inventor team grown in size, mainly entry of US, Germans and Swedes

• Low share of foreign patents but these score higher by ’originality’

• Share highest in ICT, electronics (Nokia); lowest in mechanical

• Ongoing reseach:– inward vs. outward R&D– nature of R&D– M&As vs. alliances– good or bad?

1987-90 1991-95

Belgium 56% 67%

UK 50% 56%

Holland 54% 56%

Switzerland 43% 52%

Canada 40% 44%

Sweden 31% 42%

France 18% 33%

Germany 17% 21%

Finland

1985-89

13%

1990-94

17%

1995-99

21%

Share of foreign patents of MNEs at USPTO*

*Affiliation of first inventor foreign

♦ Palmberg & Pajarinen (2004), ETLA Discussion Paper no. 916