There is a strong belief in Sweden that a country’s investment in R&D promotes its economic growth. As a result of its heavy research expenditure, Sweden is one of the few small countries with an export surplus in high-tech products. Telecommunications equipment and pharmaceuticals are, for example, among Sweden’s foremost exports.

The Swedish business sector R&D totalled 3.32% of GDP or SEK 75 billion in 2001. The bulk of the R&D took place in the areas of transportation equipment, telecom products and pharmaceuticals. The largest current increases in R&D volume are in the pharmaceutical industry, in which Sweden has been highly successful. In recent years, R&D work has also intensified in the service sector.

In the sectors that spend the most on R&D, spending is highly concentrated in a few major companies. The 20 largest companies in Sweden account for roughly two-thirds of the business sector’s total R&D expenditure.

Most business sector R&D consists of development work; less than one fifth goes on basic and applied research. The research being undertaken is mainly in technology, and to some extent natural sciences and medicine.

The State and the business sector collaborate through “industrial research institutes”, which they fund jointly. These institutes are independent of the higher education system but often work closely with universities and other higher education institutions. Other forms of public-private partnership in or near institutions of higher education are technology parks and “centres of excellence”.