Business – 9.1 Location and scale – Location | e-Consult

Analysis:

• When tariffs rise, the cost of importing specialised components for R&D increases, prompting firms to consider locations within free‑trade zones or closer to suppliers to minimise expenses.
• A new free‑trade agreement reduces customs delays and costs, making it financially and strategically sensible to move R&D to a partner country to exploit smoother knowledge transfer and market access.
• Strong IP protection reduces the risk of technology leakage, which is a critical concern for high‑value R&D activities; therefore, firms are more likely to relocate to jurisdictions offering robust legal safeguards.

Overall, global trade policies shape the risk‑reward calculation for R&D relocation, influencing decisions on cost, collaboration potential and protection of intellectual assets.