Archive for the ‘Sweden’ Category

Sweden has a huge fan Downunder

May 13, 2012

Sweden doubtlessly has its problems but as far as I could see, it is a good example of how the world would be if the world was a much, much better place.

It seems a deeply civilised country, which cares about its people and its land.

There’s little graffiti or rubbish; it feels safe.

If you are under 18, you don’t get a fine if your library book is late.

The members of parliament overlook a massive tapestry of the archipelago done in restful blues and greys and green, so they feel calm and peaceful when they make important decisions. It’s that sort of country.

I love and revere Sweden.

Sonya Hartnett, Sydney Morning Herald

Entrepreneurship Policy in the Nordic Countries

January 15, 2009

Most Nordic countries have been pursuing aggressive policies to promote entrepreneurship – a new report from Norway’s Nordisk Innovations Center assesses how they’ve performed.


The report recognizes that Nordic nations are making major investments, especially in areas related to R&D spending. It also notes an increasing convergence between entrepreneurship and innovation policies.


Yet the report criticizes the absence of effective program evaluations. There are poor linkages between researcher and policy makers, and most policies are developed in a top-down manner. Policymakers must do a better job of reaching out to entrepreneurs, and designing programs that meet their real needs and demands.


Go to Entrepreneurship Policy in the Nordic Countries; Perspectives of the Development Since 2003.


Ronneby (Sweden) is now on the map

April 11, 2008



Here’s another instructive little story from our archives.


Until recently, there was no university in Ronneby (Blekinge region), 6 hours drive south of Stockholm. But a major transformation has occurred, as Anders Nilsson, the Chairman of the Soft Center, explained at a function hosted by Ballarat Advantage and the University of Ballarat. 


In 1985, Ronneby (population 13,000, with 35,000 in the hinterland) was a centre for raw material processing.


However there was little R&D, no tradition of higher education, high unemployment – and the Volvo steel mill was closing with a loss of 400 jobs.


A carefully-selected group of local officials worked out a number of concrete projects. As Anders explained ‘the most far-reaching and daring project was the establishment of a centre for education, R&D and business related to software – the Soft Center’.


After in-principle support was received by the Swedish government, the core elements were agreed – a critical mass of companies, education and training at different levels, and R&D projects – and an emphasis on combining these elements. It was to be a ‘creative environment’, starting from local conditions rather than theoretical constructs or what has been done in other places, and mobilising support from industry and public organisations. People played different roles – the visionary, the resourcer, the manager, the salesman, the cultivator and the critic.


There are some very interesting features of the Soft Center:

§ it was a boutique operation (1500-1700 students) specialising in ICT software.

§ the initial anchor tenant was a local flooring company with a strong IT capability.

§ several futuristic buildings.

§ very strong emphasis on linking the Center to outside agencies.


The key tenants of the Soft Center are now Ericsson, France Telecom, Deutsche Telecom. A milieu of activity is created. Companies within the Center are forbidden the have their own coffee rooms – Anders says that outcomes evolve ‘just by rubbing shoulders’. Students doing projects with companies is mandatory, as a means of building connections and driving employment outcomes.


One of the success factors was that the bulk of the university personnel, companies and students came from other regions – a different mindset was thus created to that prevailing in 1985.


Anders cautioned that this type of project must be seen in a 15 year timeframe. Also while the ICT industry is currently going through downturn, the cycle will turn. He also observed that unemployment is still stuck at 8 percent (presumably because of the structural shift in the regional employment market). Ronneby local government authorities provided around $A70 million towards the project over 15 years – apart from placing a strain on ratepayers, they had to deal with the understandable disquiet of the unemployed steelworkers.


The Soft Center people are keen to share experiences and build international alliances. See or contact Anders direct at






US expert predicted Mitsubishi’s exit in Australia

March 8, 2008

Professor Oded Shenkar was the Ford Foundation Professor of Global Business Strategy at Ohio State University in 2001. From our archives, we have idenitifed some very prescient comments he made at a series of talks in Australia as part of the Smartlink project .

Shenkar has a longstanding expertise re engagement with China, globalisation, multinationals, SME development, innovation and auto industry adjustment. Comments included:

  • Globalisation is on everyone’s mind – and the Conference Board (the key think tank in the US) has identified globalisation and alliances as the two critical issues.
  • Australia feels threatened by takeovers and, while MNEs might provide jobs, they may not be a ‘thinking’ workforce.
  • In Australia, there will not be four auto manufacturers within five years (i.e. currently Ford, GM, Mitsubishi, Toyota). The future of Mitsubishi will hinge on how well Chrysler does in the US – where it is losing $US500m per quarter at present – people in SA should be praying for Chrysler)
  •  Virtually all nations want foreign investment, and there is tremendous competition. But 85% of FDI is via mergers and acquisitions, and global M&A is now greater than domestic M&A. MNEs are trying to consolidate and not replicate – countries looking to maximise the contributions of MNEs should concentrate on knowledge-based activities – not capital for its own sake – go for back-office activities, education and training, design and tooling etc. that can build value chains. The need is to leverage off MNEs’ requirements.
  • One-third of global trade is internal transfer between the affiliates of the one company – and 60% of MNEs do not pay a cent in corporate tax.
  • SMEs are flourishing despite the growth of globalisation – they drive innovation. MNEs need them to capture innovation – this is why Cisco has bought 70 companies in the last two years. The share of US exports represented by SMEs has grown from 20 to 30% in recent years.
  • How should SMEs respond? – take opportunities as they arise, piggy-back off MNEs, push on exports because ‘if you don’t venture out, someone else will come and eat your lunch’ (i.e. off-shore competitors will encroach in  your domestic market).
  • Re US investor perceptions of Australia – while at pains to emphasise this was his first trip, Prof. Shenkar indicated that from his perspective, Australia is not on the screen – the leisure image works against Australia, and Hawaii suffers the same problem. Australia is seen as downunder and far away – Americans do not realise that Sydney is closer than Hong Kong in flying time. Australia really doesn’t have identifiable brands or specialisation like Sweden – furniture, Germany – cars. Interestingly, Subaru uses Paul Hogan and kangaroos in its 4WD ads in the US, and a fair proportion of Americans probably think the vehicles are made in Australia (and not Thailand etc.)
  • Alliances could help Australia overcome its lack of scale – bilateral alliances are one possibility whereby different aspects of a supply chain could be coordinated – but it requires a different perception of things and a creative government on both sides – need to see it as a value chain.
  • Sometimes we need to be physically close – it is important, and part of human nature. Governments need to recognise this. 

Nobel Prize – game theory & collaboration

October 16, 2007

Why do some groups of individuals, organisations and countries succeed in promoting cooperation while others suffer from conflict?

This is a key question embedded in many cluster programs. Well, Robert Aumann and Thomas Schelling have just won the Nobel Prize for work in this field. It’s based on game theory – or interactive decision theory – as the dominant approach to this age-old question.

The title of their work is ‘Conflict and cooperation through the lens of game theory’. Schelling’s work began against the backdrop of the nuclear arms race in the late 1950s. His book The Strategy of Conflict set forth his vision of game theory as a unifying framework for the social sciences. Schelling showed that a party can strengthen its position by overtly worsening its own options, that the capability to retaliate can be more useful than the ability to resist an attack, and that uncertain retaliation is more credible and more efficient than certain retaliation. These insights have proven to be of great relevance for conflict resolution and efforts to avoid war.

His work prompted new developments in game theory and accelerated its use and application throughout the social sciences. Notably, his analysis of strategic commitments has explained a wide range of phenomena, from the competitive strategies of firms to the delegation of political decision power.

Robert Aumann’s angle is that in many real-world situations, cooperation may be easier to sustain in a long-term relationship than in a single encounter. Analyses of short-run games are, thus, often too restrictive. He was the first to conduct a full-fledged formal analysis of so-called infinitely repeated games. His research identified exactly what outcomes can be upheld over time in long-run relations. The theory of repeated games enhances our understanding of the prerequisites for cooperation – why it’s more difficult when there are many participants, when they interact infrequently, when interaction is likely to be broken off, when the time horizon is short, or when other’s actions cannot be clearly observed.

Insights into these issues help explain price wars and trade wars, why some communities are more successful than others in managing common-pool resources etc. The ‘repeated games’ approach clarifies the raison d’être of many institutions e.g. merchant guilds, organised crime, wage negotiations, trade agreements. 

Go to The Royal Swedish Academy of Sciences

Swedish analysis of R&D internationalization (RECOMMENDED READING)

October 16, 2007

The National Dialogue on Entrepreneurship has kindly forwarded us details of some quite extraordinary Swedish analysis, ‘The Internationalization of Corporate R&D – Leveraging the changing geography of R&D’. It is from the Swedish Institute for Growth Policy Studies.

Very thorough, readable and timely. 300+ pages. Canvasses the driving forces of R&D and why MNEs are distributing their innovative activities and creating global R&D networks. Explains why strategic decisions to locate R&D close to production, markets and knowledge centers are becoming so important. Includes country studies – China, India, Japan, US, Sweden – and studies of different sectors and approaches.

Download The Internationalization of Corporate R&D: Leveraging the Changing Geography of Innovation.

MNEs and innovation systems – Swedish findings

October 16, 2007


IKED has been engaged in a number of projects addressing the internationalisation of economies and impacts of globalisation, notably as regards the connection between flows of foreign direct investment (FDI) and innovative capabilities.

This includes a study commissioned by the Swedish Investment Agency (ISA) which, in collaboration with UNCTAD and WAIPA, recently published the anthology “What’s Next”.  

The work makes it clear that the impacts of FDI cannot be taken for granted, but depend on circumstances, including a range of institutions and policies. The same insights are now making an impact on a range of countries. It is striking that governments in some of the poorest countries want not merely the advice how to attract FDI, but require that emphasis is placed on how to create a sensible link between FDI and domestic capacity-building.

IKED has been engaged in several such discussions over the past months (1996), including in Africa (Ethiopia, Morocco), Asia (in the context of ASEM) and the Middle East (Dubai, Saudi Arabia). 

The insight that new technologies represent a critical part of the agenda for development has not yet “sunk in” with regard to most development work. International organisations as well as bilateral donor agencies have a lot more to do to raise their own awareness of the opportunities at hand.

It was interesting to read a recent Bangladeshi report criticising a Poverty Reduction Strategy Paper by the World Bank, which was deemed thoroughly unhelpful due to the lack of inclusion of such perspectives. Developed countries remain much interested in these agendas as well.

A recently completed Nordic project (Nordic Innovation Centre, NIFU-STEP in Oslo with IKED) addressed the significance of Domestic Multinationals. It explored the how the role of domestic multinationals is changing in the Nordic economies, and the policy implications, the determinants of entrepreneurship and innovation, and the implications in terms of significance of national ownership or policy strategies adapted to globalization.  

Read more at the Domus website. 

Vestas takes the bait in Singapore

October 15, 2007

Hard on the heels of Heinz’ decision to base its regional headquarters in Singapore, Vestas Wind Systems, the world’s largest manufacturer of wind turbines, located its R&D team of 150 engineers there in 2005. It included a reported investment of $US319 million over the next 10 years.

The Danish company has installed more than 30,000 wind turbines in more than 50 countries, and has 35% of the world wind energy market. It has new plants in China, Denmark, Germany, Italy, Scotland, England, Spain, Sweden, Norway, India and Australia.  

Vestas’ efforts in Australia are instructive. Although Vestas windfarms have sprung up, and the company established an assembly plant at Wynyard (Tasmania), no serious value-adding occurred by way of a blade plant or R&D. There was the prospect of SA and Tasmania combining their purchasing power to spark something, but no one could connect the dots. But now Vestas announced the closure of the Wynyard plant at end 2006, with the loss of 65 jobs. This is a real surprise given that the plant was only commissioned a couple of years previously.

BusinessWeek reported in 2005 that the clincher for Vestas in Singapore was the chance to collaborate with local universities, which would team up with the Singapore EDB covering almost all of Vestas’ research costs. “The EDB offered us almost everything we wanted and more,” says Vestas Asia President Thorbjorn Rasmussen.

‘Clusters are ecosystems’ – TCI Conference wrap-up

February 24, 2004

Elisabeth Waelbroek-Rocha from Belgium provided the wrap-up at the TCI cluster conference in Gotenborg, Sweden in September 2003 She is very clued-up on clusters, and her take on the key points have a long shelf life:

§          Many clusters start off as a network, sharing know-how and access to information.
§          Boundaries of the cluster need to be defined by the members themselves.
§          Need an organisation to sustain it, and a cluster leader who will ensure the ecosystem evolves.
§          Need to continuously challenge the cluster’s organisation and structure.
§          Clusters that fail to undertake brand building are more likely to fail.
§          Clusters are ecosystems, living organisms relying on interest-based cooperation, and are spawned over time. They are different to hard and soft networks.
§          Among the new themes emerging at Gotenborg – greater attention to innovation as a factor of competitiveness, increasing reference to HR development and skill training, renewed focus on ‘local’ cluster issues (as opposed to virtual clusters), short term focus of companies v. long term focus of government.
§          Successful clusters have a life cycle of their own – need to create the set-up conditions to attract second generation firms – they have different motives than 1st generation firms. Need to identify and then take advantage of cluster externalities.     

Congratulations to Vinnova et al for an excellent conference.