Other countries' FOI promotion in China – inspiration for Sweden

Shanghai

Research and innovation (FOI) have become strategic and sensitive elements in bilateral and multilateral relations as geopolitical tensions escalate and competitive pressure increases. From being areas of cooperation in the downwind, the promotion of FOI has found itself in a headwind. Despite the new conditions, it is of the utmost importance that the countries of the world cooperate and strive for greater trust in each other in order to face global challenges, especially climate change. Large countries mean a lot for research and innovations that can solve global challenges to have an international impact. These countries also have substantial resources needed for the transition.

The world situation therefore places new eligibility requirements on strategic path choices, perhaps unproven working methods and that countries develop new structures for cooperation. Research and innovation promotion faces a delicate balancing act. The Chinese markets are significant and attractive for business. Some Swedish companies now have larger research and development facilities in China than they have in Europe. But the companies also see risks with the complex relations they have with the country. They are faced with difficult trade-offs; should they continue on the beaten path, decrease or disappear from its markets? The challenges are also significant for countries with long experience and well-established operations in China.

However, there are countries that already have experiences that can be of support to others in this new situation. Denmark, Finland and the Netherlands have set out their respective directions early on. The unique and pragmatic approach of these countries can constitute important frames of reference and sources of inspiration for Sweden. The countries, like Sweden, are small innovative and open economies with a high ambition to contribute to the global transition. They have also been forerunners in green transition with both academic actors and small and medium-sized enterprises as the main target groups in China. For more than a decade, they have established long-term organizational platforms, and have had high ambitions to drive results-oriented promotion work. These countries have sought to create a mutually supportive approach to more closely integrate innovation and business promotion.

New approaches are required for balance and action

The global challenges require that Sweden also adopts new methods to balance the need for cooperation on the one hand and risks on the other. It is then important to form clear policy signals for a balanced and pragmatic approach to cooperation and competition. Such a view can mean that companies and organizations develop both principles and approaches to cooperate with their competitors, so-called co-opetition, instead of traditionally choosing between either competing or cooperating. This is what Denmark, Finland and the Netherlands strive for in their FOI promotion. For example, Finland and the Netherlands have drawn up strategies and policy documents on relations with China that provide the necessary guidelines for cooperation. Risks and obstacles are highlighted, while needs and benefits are made clear, especially when it comes to common and global challenges. The three countries' strategies enable a balance between business promotion and the long-term development of innovation capabilities and platform building. It is considered important at the moment, for example, that research and business together develop solutions and influence policy and market development in areas such as standardization and regulatory frameworks.

The countries also emphasize that formalized bilateral agreements and dialogues are underutilized and need further development. It is crucial to strengthen international cooperation. In order to meet the rapid development and create exchanges with continuity and deeper cooperation, new financing and networking tools are also required. These do not necessarily have to be costly, but should preferably be flexible and adapted based on the needs of specific target groups.

Examples of methods in the three countries

In recent years, Denmark, Finland and the Netherlands have strengthened their development work in China. For example, Finland is further developing its operational activities through a new model for small and medium-sized companies that want to grow in the country. An integrated innovation-export foresight model is used to bridge the short-term eligibility requirements placed on business operations for its survival, with the long-term need to develop the ability to innovate for the future.

A Danish initiative, in turn, aims to bring together Danish companies that have an interest in entering the Chinese market with needs that China has to deal with specific challenges. It may be about Danish companies with developed solutions to various environmental or energy problems that China has not yet been able to overcome. The initiative identifies concrete cooperation opportunities that can continuously and long-term engage the innovation ecosystems from both sides.

Another example of an innovative method is the Netherlands. The country has developed a mapping method based on data from scientific publications, patent applications and public funding of research and innovation. By combining the data in this, it is possible to identify technologies where China and the Netherlands have the same policy priorities, or where one of the countries has higher priorities than the other. The method provides evidence-based and strategic insights and advice on, among other things, future trends. With the help of the method, the Netherlands can specify and justify what the country should focus on in cooperation with China.

Lessons learned from the countries

Future international research and innovation promotion needs to be further developed both on the policy and the practical level. Denmark, Finland and the Netherlands' experiences and insights into their respective countries' development needs and future opportunities point out several important aspects to bear in mind.

First, FOI cooperation needs to be seen from a deeper plane and in the light of the strategic and economic interests that exist between countries and continents that are closely connected through trade, industrial development and investments. To be able to handle more complex challenges and explore new opportunities, one therefore needs to develop new skills and a more cross-sectoral approach.

Secondly, it is not only Nordic small and medium-sized companies in the global markets that face a rapidly changing reality. So do FOI-intensive multinationals. With their long experience and established networks in both research and innovation on site in, for example, China, they are a strategically valuable asset. A new and tactical task should be how publicly funded interventions can be designed and used to promote and engage multinational companies. This is so that we can bring about in-depth bilateral and multilateral collaborations and partnerships within FOI.

Thirdly, it is becoming increasingly important for the further development of policies and practice, to specify and concretize which FOI activities a country should focus on. All the more important is how this should be done so that real results can be achieved. More systematic methods need to be developed and institutionalized in future FOI promotion, for example by combining evidence-based analysis, such as data-driven mapping and foresight-based analysis.

Finally, challenges concerning both ethics and security are increasing. But awareness of the risks associated with these values is also increasing. An increasingly important element in future research- and innovation promotion will therefore be risk prevention and risk management. This means that concrete and tangible methods as well as long-term measures need to be developed. These are important for identifying, preventing and managing the multifaceted risks associated with ethics and safety as well as economics, i.e. a responsible internationalization.

Missions as a basis for long-term cooperation

In order for the Nordic countries and the EU to arrive at common positions and to be able to mobilize a collection of forces for China cooperation, it is becoming increasingly important to create a strategic framework or platform at the policy level. Missions can be described as strategically directed research and innovation initiatives that aim to focus human and financial resources around a few societal challenges that require innovative solutions.

Mission-oriented innovation - a new way to meet societal challanges

Using a mission-oriented way of working at home is also important for a strategic and long-term cooperation with China, precisely in order to better solve the global challenges. In the three countries studied, development work is underway with how missions can be identified and implemented both nationally and through the countries actively participating in the European framework program for research and innovation Horisont Europa. Both climate change and digital transformation have, in different ways, been seen as priorities in the development work with missions and in international cooperation in research and innovation. More specifically, the implementation of missions can move us away from today's short-term, fragmented ways of working that are often characterized by one-off events. Instead, missions can contribute to long-term perspectives and clarify the national orientation towards more forward-looking and system-oriented activities and partnerships.

Sweden, like other EU countries, has common interests in both a green and digital transformation, so-called twin transition. The increased international competitive pressure in these areas can be a reason to seek and test new cooperation methods, which have the character of co-opetition. It provides the conditions for countries to gather strength around the global challenges, while at the same time risks and uncertainties within collaborations are identified and managed.

Policy brief 6 strategic strategic analysis in PDF format