Foreign enterprises with 30 percent of R&D activity

An enterprise is defined as foreign controlled if more than 50 per cent of the enterprise is directly or indirectly owned by an actor abroad. 12 per cent of the enterprises in branches covered by the R&D survey for 2007 were controlled from abroad. This means that foreign controlled enterprises on average have more R&D activity per enterprise than nationally controlled enterprises. This is a result of the low share of foreign controlled enterprises among small enterprises, and among small enterprises the R&D activity is rather low.

The foreign controlled enterprises had 26 per cent of the total number of employees and 32 per cent of total turnover in the business enterprise sector in 2007; at the same level as the R&D expenditure. This situation has remained stabile since 2004. This means that there is no larger dominance of foreign controlled enterprises in R&D activity than in ordinary production activity.

Highest dominance of Swedish controlled enterprises

Most foreign controlled enterprises are owned by European countries¹. Close to 30 per cent of the foreign controlled enterprises are owned from Sweden. These Swedish controlled enterprises represent 29 per cent of the R&D expenditures among foreign controlled enterprises, or 8 per cent of the businesses’ total R&D expenditure in Norway.

Danish owned enterprises have R&D activity representing 12 per cent of the total R&D expenditure among foreign controlled enterprises. Enterprises owned from the Netherlands and US contribute also. The share of US controlled enterprises is only 4 per cent, but represents 11 per cent of the R&D expenditure.

Smaller variation by size among foreign controlled enterprises

In figure 3 is shown the distribution of R&D expenditure by size class for foreign and national controlled enterprises in 2007. Among national enterprises the R&D expenditures are very high for enterprises with more than 500 employees, while the R&D activity for foreign controlled enterprises are more evenly distributed for enterprises with more than 100 employees.

Among enterprises with 100-199 employees the foreign controlled units performed more R&D than the Norwegian enterprises; 58 percent of the total R&D expenditure in this size class. For comparison the share of foreign controlled enterprises was 33 per cent and their share of turnover was 42 pe rcent.

In the manufacturing sector the R&D activity of the foreign controlled enterprises made up 28 percent of the total R&D expenditure, but represented only 11 percent of the number of enterprises. In the service sector 20 percent of the enterprises were foreign owned and made up 36 percent of the R&D expenditure.

The foreign controlled enterprises’ share of total R&D man-years is at the same level as their share of R&D expenditure in 2007. The share by R&D man-years has increased somewhat the last years, from 21 per cent in 2003 to 29 per cent in 2007. On average foreign controlled enterprises spend a little more on R&D per R&D man-year than Norwegian enterprises.

Foreign controlled enterprises acquire R&D from mother companies abroad

In addition to intramural R&D, the business enterprises spent NOK 4.8 billion in 2007 on R&D services performed by others. Of this, 30 per cent was spent by foreign controlled enterprises. Their share of purchased R&D services is thus the same as their share of own performed R&D.

Foreign controlled enterprises purchase more R&D services from abroad than Norwegian enterprises, also in absolute terms, mainly from their mother companies abroad. Their acquisition of R&D services from Norwegian enterprises and institution is quite low.

The trend in extramural R&D has been somewhat different for foreign controlled and Norwegian enterprises. While the Norwegian enterprises increased their extramural R&D from 2003 till 2005 and then dropped in 2006, the trend for foreign controlled enterprises has been opposite. Both Norwegian and foreign controlled enterprises increased their purchase of R&D services in 2007.

¹ The ultimate owner of an enterprise (last link of owners) belongs to a European country.

Tables:

• Table 1 Intramural R&D expenditure in foreign controlled enterprises and the total business enterprise sector, by main activity and size class. 2003-2007. NOK million
• Table 2 Extramural R&D expenditure in foreign controlled enterprises and the total business enterprise sector, by main activity and size class. 2003-2007. NOK million