This paper sums up the debate about the Swedish paradox and provides new evidence. The paradox thought has emerged in different versions, which share the common basics that Swedish R&D expenditures are high, but do not produce sufficient economic results. This empirical paradox is part of a more general debate concerning relations between R&D and growth. We show that the theoretical underpinnings of the paradox are rather weak. There is a long chain of different gears between R&D, high-tech and growth, which should lead to expectations of high variation among countries. Previous evidence suggests that Sweden appears to have problems in two of these gears, the entrepreneurial climate and innovation to high-tech production. We support this conclusion on new empirical results. First, we show that the high persistence in concentration of R&D to a few multinationals remains, which in itself is an indication of weak entrepreneurship. Second, Sweden is still behind the OECD in high-tech and medium-high-tech exports, given her R&D intensity, although she is catching up. Moreover, employment figures in the high-tech sectors point to a more favorable development. Academia has been suggested to be another weak component for interaction with business, but the empirical evidence is here scant and less transparent.
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Paper provided by CIRCLE (Centre for Innovation, Research and Competence in the Learning Economy), Lund University in its series CIRCLE Electronic Working Paper Series with number
2006-01.
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Find related papers by JEL classification: O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy
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