Published 18 September 2015

Promotion of International Trade and Innovation

– What can we learn from other countries?

Innovation and international trade are becoming increasingly intertwined. Today the development and production of many products takes place across national borders, often in complex global value chains. Denmark, the Netherlands, Norway, Switzerland and Germany are, like Sweden, striving to adapt their promotion systems to these new and complex global patterns of innovation and trade. These countries have, however, made different strategic choices concerning its organization and priorities.

Effectivecoordination is vital

The Swedish promotion system is complex. A wide variety of programs and services are provided by a number of different publicly funded organisations. Coordinating the system effectively remains a constant challenge. Even in many of the other countries in this study we find that there are a number of organisations involved in promotion. These countries have, however, adopted different methods for coordinating them. Denmark and the Nether­lands work with strategic coordination at the governance level and physically locate opera­tive organisations, with a presence on foreign markets, together. Norway has integrated nearly all types of support to firms into one operative organisation. Firm demand for promotion services determines which services are provided in Germany and Switzerland, although even these countries locate operative organisations together to enhance coordi­nation.

Strategic priorities enhance the precision of promotion activities

Strategies for trade and export in the countries studied can be placed along a scale with focus on the overarching conditions for trade with foreign markets (Switzerland and Germany) on the one end, and focus on selective support to specific firms (Denmark, the Netherlands, Norway and Sweden) on the other. Most of the countries have prioritised specific sectors and selected foreign markets, enabling them to concentrate limited resources and to recruit specialised personnel to promotion organisations. In establishing priorities, it is important to be aware that Sweden is not the only country promoting certain sectors on foreign markets. Environmental technology, health and life science as well as food products are sectors promoted by nearly all the countries in this study.

Promotion – from education, through research and innovation, to increased trade

All of the countries studied have attachés for science and innovation stationed in foreign markets, primarily in emerging economies or countries with strong innovation environ­ments. Several countries have organisations in foreign markets that offer support for inter­nationalisation along the entire chain – from education, through research and innovation to trade. Some see promoting the internationalisation of education and research as a means to attract global talent and thereby increase their competitiveness. However, the Swedish agencies with mandates in this area, with the exception of Growth Analysis, lack a presence in foreign markets.

The role of the state in promotion is ambiguous

Promotion services and programs are motivated by theoretical market failures. Knowledge about foreign markets can be seen as a public good and the internationalisation of firms can generate certain positive externalities. However, it is difficult to determine the actual occurrence and extent of a market failure. There are also diverging views on what measures the state can and should implement to address them. Publicly funded program­mes to promote a country as a whole, such as nation branding, or to provide general information on foreign markets exist in all of the countries studied. Selective support, such as advisory services offered to individual firms, appears to be more of a grey area. In Germany and Switzerland firm demand is the determining factor, and advisory services are generally offered by private consultants rather than public agencies.

Title
Promotion of International Trade and Innovation – What can we learn from other countries?

Serial number
PM 2015:15

Reference number
2015/203

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