Investeringar, FoU och tillväxt
Publikation/Tidskrift/Serie: ITPS report no. A:2006:03
Sweden’s investment level has recently been the subject of keen debate. One fact that is often brought up is the fall in Swedish investment as a proportion of GDP (investment ratio) and that the current level of Swedish investment is below that of other countries. In the long run, low investment can weaken a country’s potential for growth. Although Swedish investment is comparatively low, Sweden invests more in research and development (R&D) in relation to GDP than any other country in the OECD, a top position it has held for 10 years. Consequently, there appears to be a paradox in Swedish development with high R&D investment and modest investment in the expansion of the productive apparatus in the form of fixed capital investment. All in all, the empirical review provides a somewhat more balanced picture of the Swedish investment climate than has emerged from the recent debate. Even though the Swedish investment ratio has fallen to a historically low level for the post-war period, a similar reduction has also taken place throughout the Western world. It also appears that the downward trend may be about to break, as Statistics Sweden (SCB) predicts a massive increase in private investment in 2005. Sweden’s position at the bottom of the European investment league can also be explained by record-low investment in Swedish housing since the start of the 1990s. Despite these extenuating circumstances, however, the empirical review points out a number of ill-boding circumstances for Sweden’s future as a growth nation. Above all, it is hard to find evidence for the hypothesis that Swedish industry as a whole has undergone a structural transformation towards more knowledge-intensive production and that this could explain the low level of investment in fixed capital. Instead, it appears that Swedish investment is low for all trades. Furthermore, Swedish development does not show any signs of a strong existence of complementarity at trade level between investing in R&D and in fixed capital over time. The lack of complementarity between investment in R&D and fixed capital is evidence of the thesis that Swedish R&D is not commercialised in R&D-intensive production and exports. Moreover, only a very small proportion of all companies within industry invested in R&D at all in 2002. The fact that there is such a split in the Swedish company structure between those that invest in R&D and those that invest in fixed capital could be an indication that companies that have specialised in manufacturing find it difficult to utilise positive spillover effects of R&D from big companies. From a policy perspective, past development therefore points to the importance of encouraging Swedish and foreign investment by creating a good business climate in Sweden. Special emphasis should be placed on supporting knowledge-intensive companies as Sweden has previously shown comparative advantages of such production through strong growth in productivity and exports, while knowledge-intensive activity has the potential of great spillover effects in society.
- Business and Economics