r&d in slovakia – discover the potential information and knowledge society requires value...

R&D in Slovakia – Discover the Potential

Information and Knowledge Society Requires Value Added Investments

International Conference Košice Invest 2010 19th October, 2010


ContentsContents

Foreign Direct Investment Trends

Foreign Direct Investments in R&D

Slovakia - R&D Country

New Types of Investments

SARIO Promotion Activities

Recommendations


"The most important factor behind location decisions are always people and networks of

people"

Prof. Ricardo Baeza-Yates,

Universitat Pompeu Fabra, Barcelona

IntroductionIntroduction


"R&D in Slovakia – Discover the Potential"

Our SLOGANOur SLOGAN


Foreign Direct Investment Trends Foreign Direct Investment Trends FDI Inflows, Globally and by Groups of Economies, 1980-2009

Source: World Invetsment Report 2010

The changing world - the global financial and economic crisis accelerated the majority of processes in business (e.g. time

reduction in innovation cycles)

Expected global FDI flows:

1.2 trillion USD in 2010

1.3 – 1.5 trillion USD in 2011

1.6 – 2.0 trillion USD in 2012

16%

37%

Decline

In bln.USD


Foreign Direct Investment Trends Foreign Direct Investment Trends Key World Drivers of FDI in R&DKey World Drivers of FDI in R&D

New specific customer demands

Growing global competitiveness

Progress in ICT

Specialization of national strategies

Access to new technologies and talents

More motivating investment incentives

Growth of emerging markets

Search for cost-efficiency

Innovation and R&D networks

Growth of urbanization

Climate Change

New forms of FDI (greentech,

meditech, centres of excellence)

Key world drivers of FDI in R&D


Foreign Direct Investment Trends Foreign Direct Investment Trends R&D Expenditure Global 1000

Source: Department for Business, Innovation & Skills., THE 2009 R&D SCOREBOARD, 2010


Foreign Direct Investment Trends Foreign Direct Investment Trends Top 15 Global Companies by R&D Expenditure per Year 2009

Source: Department for Business, Innovation & Skills., THE 2009 R&D SCOREBOARD, 2010; # - accounts not prepared using IFRS


Foreign Direct Investment Trends Foreign Direct Investment Trends Terms

The same meaning of terms:

"Globalization of corporate R&D"

"Internationalization of R&D"

"FDI in R&D"

"R&D-intensive FDI"

Globalization of corporate R&D is an opportunity not just for the host countries but also for corporate subsidiaries, since the latter are more involved in the corporate group's innovation activities.

What it means?

Corporate subsidiaries are very important element in attracting FDI in R&D


Foreign Direct Investments in R&D Foreign Direct Investments in R&D Motivations

FDI in R&D - evolution or expansion of established subsidiaries

- greenfield investments

FDI in R&D has 2 different motivations:

1. Doing "adaptive R&D" modifies products, processes and technologies according to local needs and supports foreign production facilities, process improvement. (Demand driven FDI in R&D)

2. Getting access to "state-of-the-art knowledge" means that companies invest in foreign countries with an expectation to benefit from excellent, local research and researchers, new technology sources of knowledge and specialized clusters. (Supply driven FDI in R&D)


Foreign Direct Investments in R&D Foreign Direct Investments in R&D Types of Factors Arguments to Attract R&D Investments

Source: Guimón, J.: Government Strategies to Attract R&D-Intensive FDI. OECD Global Forum on International Investment. March 2008.

1. Parent company strategies related factors

Understanding Company Strategies

Seek Linkage between: Companies National Innovation Systems

2. Subsidiaries Capabilities related factors

Possibility of: Expansion

Production Process Improvement

3. Host Country related factors

Availability of: World Class Research Talents Researchers

R&D Infrastructure Universities World Companies

Way for SLOVAKIA


Foreign Direct Investments in R&DForeign Direct Investments in R&DKey Drivers and Forms of FDI in R&DKey Drivers and Forms of FDI in R&D

Source: Here or There? A Survey on the Factors of Multinational R&D Location, 2006, www.nap.edu Jerry Thursby, Emory University and Marie Thursby, Georgia Institute of Technology, 250 respondents from various industries

Emerging countries

Developed countries

Home countries

Drivers

Forms


Foreign Direct Investments in R&D Foreign Direct Investments in R&D R&D Location DriversR&D Location Drivers

The availability of highly educated people (scientists, engineers...)

The quality of universities and R&D infrastructure

Level of university and industry collaboration in R&D

Fiscal and financial incentives to corporate R&D

Cost-efficiency in R&D

Attractiveness of National Innovation System

The presence of lead markets and companies in key technology areas

A clear and enforceable intellectual property rights regime

Quality of pre-investment, investment and after-investment services

Local availability of research and training services

Engagement in world research projects (e.g.: FP7)

Source: Adapted according to Guimón, J.: Policies to benefit from the globalization of corporate R&D: An exploratory study for European Union countries


Foreign Direct Investments in R&D Foreign Direct Investments in R&D Impacts of FDI in R&DImpacts of FDI in R&D

1. National and regional innovation systems are becoming:

more internationalised

more linked to global production networks

more dependant on foreign decision-makers

2. Business R&D is shaping the evolution of goverment´s policies:

emergence of new policy strategies

more proactive role of government

policies ("attractive policies")

closer connection between innovation policies and FDI promotion policies

cities/regional development

Important ROLE:Harmonisation of the national/regional

innovation systems with corporate R&D strategies

Production Networking (1995-2005)

OEMs – Suppliers Nets (2000-2010)

Clusterisation (1995-2010)

Clusters Networking (2010-2015)

R&D Institutions Networks (2015-...)


Foreign Direct Investments in R&D Foreign Direct Investments in R&D Policy Objectives and InstrumentsPolicy Objectives and Instruments

Source: Guimón, J.: Policies to benefit from the globalization of corporate R&D: Anexploratory study for European Union countries

Enhance R&D investment climate

Promote inward FDI in R&D

Absorb benefits from foreign presence

Absorb benefits from outward FDI in R&D

International promotion of national R&D capacities, preinvestment and AC services, integration to global

networks

Improve UNIs and R&D infrastructure; talent development and attracting talents; collaboration with

foreign subs., improving IPR regime

AfterCare services, technology linkage programmes, promote collaboration

Support international expansion of domestic R&D centres and UNIs, set up overseas technology units

Policy Objectives Instruments


Slovakia - R&D Country Slovakia - R&D Country Basic Advantages of SlovakiaBasic Advantages of Slovakia

Natural and technical sciences universities

Availability of scientists and engineers

Domestic R&D infrastruture

Success stories in R&D

High-Tech and Medium High-Tech

R&D Incentives

Competitive R&D costs in EU

Quality of engineers

Presence of clusters

Strategic Geographic location


6,35,9

5,4 5,2 5,1

0

1

2

3

4

5

6

7

Ireland (1) Slovakia (4) CzechRepublic (14)

Hungary (26) Poland (35)

Slovakia - R&D CountrySlovakia - R&D CountryR&D Environment in SlovakiaR&D Environment in Slovakia

6,4

4,4 4,13,4 3,2

0

1

2

3

4

5

6

7

Japan (1) Slovakia (37) Poland (45) Romania (74) Bulgaria (92)

Source: The Global Competitivenes Report 2009-2010, World Economic Forum, 2010

To what extent does foreign direct investment (FDI) bring new technology into your country? (1 = not at all; 7 = FDI is a key source of new technology)

In your country, how sophisticated are production processes? (1 = not at all—labor-intensive methods or previous generations of process technology prevail; 7 = highly—the world’s best and most efficient process technology prevails)

Very good base for FDI in

R&D

Production process sophistication (Rank out

133 countries)

FDI and technology transfer (Rank out 133

countries)


Slovakia - R&D Country Slovakia - R&D Country R&D OrganizationsR&D Organizations


Slovakia - R&D Country Slovakia - R&D Country National R&D CapacitiesNational R&D Capacities

I Building up 45 Centres of Excellence in Slovakia

I Almost 60 research institutes of the SAS

I More than 30 foreign R&D centres in Slovakia

I Wide range of university centres and laboratories

I More than 20 domestic R&D organizations

I Building up 8 regional innovation centres


Slovakia - R&D Country Slovakia - R&D Country Highly Highly PPerspective erspective OOpportunities for pportunities for DDoing oing BBusinessusiness

Automotive Industry & Supplier Sector

ICT& Software Development

Energetics& Renewables

Electrotechnics Electronics

Medical Technologies Welfare & Care

New and Lightweight Materials

R&D


Slovakia - R&D Country Slovakia - R&D Country Success Stories in R&DSuccess Stories in R&D

Johnson Controls Engineering Centre

Trenčín

ON Semiconductor Bratislava

Development Centre

R&D LEONI Autokabel

Slowakia Trenčín

Technology Lab Siemens

Žilina

R&D Center Alcatel-Lucent

Bratislava

Continental Automotive Systems R&D Centre

Zvolen


MARTINJC-Seat Covers

TRNAVAPSA

BRATISLAVA JC

Business Centre

ŽILINAKIA and

JC-JIT

LUČENEC JC-Foam

TRENČÍNJC-Engineering

NÁMESTOVO

JC-Interior

Slovakia - R&D Country Slovakia - R&D Country Established US Foreign Investor in Slovakia: Johnson ControlsEstablished US Foreign Investor in Slovakia: Johnson Controls

LozornoVW and JC-JIT

Source: Johnson Controls Engineering Centre, Trenčín


GERMANY

New Types of Investments New Types of Investments Example from Germany (1)Example from Germany (1)

I Perspective industries of new type of investments

Source: www.gtai.com


Source: www.gtai.com

Germany invests

more than EUR 500 million -

Objective: 1 million electric vehicles on German roads by 2020

I National Electromobility Development Plan for Germany

Can we consider this to be an inspiration for Slovakia?

Investments into electromobility infrastructure

development

New Types of Investments New Types of Investments Example from Germany (2)Example from Germany (2)


New Types of Investments New Types of Investments IDA Ireland ExampleIDA Ireland Example

Source: IDA Ireland Strategy – Horizon 2020

Focus on Greentech & Services Innovation

Industrial sectors: Life sciences (Pharma&biotech, medical devices)

ICT

Financial services – global services

High-end manufacturing

Diversified industries and engineering

R&D and Innovation (centres of excellence, testing labs)

Cleantech


Investing in Low-Carbon Economy

3 Key Low-Carbon Business Areas and Industries

Alternative/Renewable electricity generation

Low-carbon technology manufacturing (wind turbines,

solar panels, biofuels)

Recycling

TNCs are key actors in contributing to the establishment of climate-friendly economies

Low-carbon foreign investments – can be defined as transfer of technologies, practices or products by TNCs to host countries, through equity (FDI) an non-equity TNC participation, generating significantly lower GHG emissions than would otherwise be the case. (WIR 2010)

Source: World Investment Report 2010GHG – green house gas emissions, TNC – Transnational Corporation

New Types of Investments New Types of Investments Low-Carbon Economy (1)Low-Carbon Economy (1)


Source: World Investment Report 2010GHG – green house gas emissions

2 types of Low-carbon Foreign Investments

Introduction of low-carbon processes reducing GHG emissions related to

how products are made (upgrade of existing TNC operations as

well as new investments)

Creation of low-carbon products and services lowering GHG

emissions in how they are used

(e-cars, "power saving" electronics and light bulbs, RES equipment, integrated transport systems)

The main sectors (areas of emissions): power and industry (inc. manufacturing as well as oil and gas) transport, building and waste management agriculture and forestry

Governments should to identify opportunities for such investment in their countries and formulate strategies to promote it.

New Types of Investments New Types of Investments Low-Carbon Economy (2)Low-Carbon Economy (2)


SARIO Promotion Activities SARIO Promotion Activities Creation of InfomaterialsCreation of Infomaterials

Publication of Informative Promotion Materials

SARIO = Associated partner in cluster´s projects

Communication & Networking with UNIs & other R&D institutions

Increasing of awareness about R&D (conferences, seminars...)

Investment Seminars Abroad


SARIO Promotion Activities SARIO Promotion Activities Cooperation with Renowned Domestic OrganizationsCooperation with Renowned Domestic Organizations

PANASONIC CENTER, TOKYO (R&D Investment Seminar in Japan-2009)

SARIO-TUKE

Projects:AUTOCLUSTERS

AutoNet


RecommendationsRecommendations

Improving the FDI attracticion and promotion policy

Preparing tailored FDI Project Proposals

More visible to the investment community (marketing campaigns, missions, etc.)

Marketing of Slovak R&D infrastructure (UNIs, SAS,...)

Focus on Slovak talent development programmes, "special talent university learning classrooms"

Focus on Suppliers Development Programmes – Aftercare services

SARIO Advisory Board consisting of established investors – close collaboration

Prepare strategy for building electromobility infrastructure

Prepare strategy for attracting FDI in green tech R&D and cleaner production

Project Networking (SARIO as a partner in EU projects)

Updating of National Innovation System


R&D in Slovakia – Discover the PotentialR&D in Slovakia – Discover the Potential

"Our TREASURE is in our highly educated PEOPLE!"

"...Discover the Potential"


Thank you for your attentionThank you for your attention

Ing. Vladimír Švač, PhD.

Address: SARIOMartinčekova 17 821 01 BratislavaSlovakia

Tel.: +421 2 58 260 343 Email: [email protected]

r&d in slovakia – discover the potential information and knowledge society requires value...

Documents

potential rd

rd slide

rd scoreboard

rd evolution

adaptive rd

rd foreign direct investments

rd motivations fdi

potential information