International Organisation for Knowledge Economy and Enterprise Development
IKED - International Organisation for Knowledge Economy and Enterprise Development

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..:: IKED projects related to FDI
Over the years, IKED engaged in various projects and studies on the effects of Foreign Direct Investment (FDI), and its linkages to domestic innovation capacity. There is an inherent challenge in this field because the ability of a country to attract FDI in the first place will diminish if the country is anticipated to damage the interests of the foreign investor down the road, e.g., through unproductive performance requirements in relation to transfer of technologies and know-how. Yet, emerging economies must work out ways to attract those investments that carry great potential for generating substantive benefits. In order to succeed in this regard, it is important for host countries to develop the capacity to communicate, and establish mutual trust, with the most relevant investors, on terms that allow win-win for both the investor and the country where the investment takes place.

To contribute to this agenda, IKED has undertaken a number of studies to build an increased understanding of the interplay between national institutions, competencies and resources, and the role played by Multinational Enterprises (MNEs) and global investment flows.

In 2015, IKED carried out related work on Public-private partnerships in the context of conferences arranged by UNCTAD, and it started to review these issues in regard to the Islamic Republic of Iran. In 2014, IKED examined suitable ways forward in some Central Asian countries. In 2013, IKED contributed to deliberations on these subjects for UNIDO in Costa Rica.

The impact of FDI and the advance of MNEs is partially interrelated with the rise of more internationalised Small and Medium-Sized Enterprises (SMEs) and improved conditions for start-up of potential high-growth firms. Following extensive organisational change, in turn reflecting rapid technical progress and the importance of innovation, established companies are led to focus intensively on core business in-house, and to sharpen their capabilities in regard to outsourcing and/or off-shoring of various operations. Enhanced ability to establish complementary but separate units for various operations brings the potential for much increased productivity but also economic expansion into new areas, which is critical for economic diversification and job creation.

In the past, IKED's work in this area included studies of trends and issues in the internationalisation of Swedish industry. Sweden is one of the most internationalised countries in the world, both in terms of inward and outward FDI, and has among the best data on FDI and MNE-behavior. Sweden further displays a combination of great industrial and technological strengths coupled with an apparent inability to grasp its full potential for economic growth. In project's for the national Invest-in-Sweden Agency (ISA) IKED analysed a range of issues impacting on the conditions for attracting favorable FDI and developed new data examining the connection to conditions facing the development of SMEs.

In related projects, IKED has undertaken similar work on other Nordic countries, and compared experiences with other regions, including for the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) in Latin America.

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