A Global Magnet for High-Tech R&D Facilities Sweden's test market reputation has helped it to attract a large number of corporate R&D facilities. The ICT cluster in and around Kista Science Park [5] began to develop when Ericsson and IBM decided in the late 1970s to move their Swedish operations to a deserted military training ground just outside of the city of Stockholm, 15 minutes by car from Stockholm Arlanda International Airport, where land was cheap and the municipal government decided to set up a technology park. A few years later, Ericsson's closest rival, Nokia, placed an R&D center in Kista. The magnetic force exerted by the presence of Ericsson, IBM, and Nokia in Kista quickly attracted more technology-driven companies to the area from different fields of communications and computing. As it became apparent that Sweden and the Stockholm-Kista area had developed as a prime breeding ground for emerging mobile computing markets, many other global high-tech companies decided set up R&D facilities in the region and the Kista phenomenon became a self-fulfilling prophecy . Figure 8-2. Total inward FDI in Sweden, 1985 “1999, in U.S. billions. Source: World Investment Report 2000 , UNCTAD.  Between 1990 and 1999, the number of foreign-owned companies in Sweden increased by 65% from 2,600 to 4,300, accounting for nearly 20% of the private sector R&D expenditure in Sweden, and nearly half of the country's exports. [6] Today, every sixth employee in Swedish private business has a foreign-owned company employer (see Table 8-2). Table 8-2. Recent Investments in Wireless Communication in Sweden | Company | Investment | | Andersen Consulting (U.S.) | Global center for WAP applications and services | | Motorola (U.S.) | Development centers for wireless applications and services | | Cambridge Technology Partners (U.S.) | Global wireless competence center | | Nokia (Finland) | R&D in mobile communication infrastructure | | Cap Gemini Ernst and Young (France/U.S.) | Joint competence center for 3G mobile systems | | Nortel Networks (Canada) | R&D center for datacom, telecoms and wireless communications | | Compaq (U.S.) | Wireless competence center and e-commerce knowledge center | | Hewlett Packard (U.S.) | Wireless research and a joint project with Ericsson and Telia | | Oracle (U.S.) | Center of excellence for wireless product development. Joint-company established with Telia of wireless services, Halebop | | Intel (U.S.) | Wireless competence center and e-business solution center | | RSA Security (U.S.) | Development of secure wireless communications | | IBM (U.S.) | Wireless Internet center | | Siemens (Germany) | R&D center for mobile applications | | Microsoft (U.S.) | Acquired Swedish Sendit, a leading provider of mobile Internet solutions and formed a strategic partnership with Ericsson to develop and market end-to-end solutions for the wireless Internet | | Sun Microsystems (U.S.) | Wireless center of excellence | | Sybase (U.S.) | Test center for mobile business applications and a strategic alliance with Ericsson around mobile banking solutions | | Source: Invest in Sweden Agency, 2001, www.isa.se. | Based on the strong culture of early technology adoption in Sweden and the government's rigorous policies aimed at moving the whole of Swedish society to the information age, it appears that Sweden will remain an attractive test market for emerging ICT applications, and will cause many more high-tech companies to locate their R&D facilities within the region in the coming years. Case Study: Cisco Systems Sweden ” A Market of Focus for Acquisitions Acquisitions constitute an important part of Cisco's growth strategy. Even though 70% of its growth is internal, core company strategy is to aggressively acquire new talent and ideas. During the past decade , a breeding ground for high-tech companies has developed in and around Stockholm, which has attracted Cisco, like so many other global technology firms, to the area. When it comes to scouting the world for the best companies to acquire, two areas have gained the company's special focus: Israel and Sweden. We spoke with Peter Kopelman, managing director of Cisco Systems Sweden, who explained why Cisco has selected Sweden as a key global focus area for the acquisition of companies. He believes that a local focus and a deep understanding of the company's requirements are equally important in order to be able to identify potential acquisition candidates. In order to address the Swedish shortage of networking professionals, Cisco collaborates actively with governmental and educational institutions by installing equipment in schools and households and by teaching teachers how to use it. The first contract for the Cisco "Net Academic Program" in Europe was signed with Mr. Carl Cederschi ld, the mayor of Stockholm. According to Mr. Kopelman, "Stockholm officials are not scared of technology." The shortage of highly skilled personnel in Sweden was recognized by industry and government many years ago. Consequently, the government has come up with a concept that intends to link science parks and university education. | |
