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Finnish Research and Innovation
Policy Tomorrow
INNOVATION DYNAMICS
CHALLENGED BY
RECESSION
Research and Innovation Policy Council of Finland
RIC
RESEARCH AND INNOVATION
COUNCIL OF FINLAND
Mr. Kai Husso, Chief Planning Officer
Main topics of the presentation
- Performance of the Finnish innovation system:
high quality environment in turbulence
- Financing issues
- Structure of the Innovation System
- R&I policy programmes by Gov. and RIC
- What next, where to?
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RESEARCH AND INNOVATION
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Recent developments in the Finnish economy
Various challenges taking effect at the same time
…and 2015 could
be the fourth
consecutive
year in Finland
when GDP is
shrinking.
+ EU-Russia
export
sanctions
+ Refugee
crisis
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RESEARCH AND INNOVATION
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Exports of Finnish goods have decreased with poor recovery
as a result of the global crisis
2005=100
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Exports of goods by country
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Value index, US Dollars, seasonal adjusted, quarterly.
Source: OECD Main Economic Indicators 2015
What’s the story we believe in?
Why to inject public funds to R&D?
As a knowledge-based economy, there is no chance for Finland to compete in the
global market on the basis of:
- mass production (instead, find market niches, more narrow comparative edges)
- mature fields of industry or technology (instead, being a frontrunner, use of KETs)
- levels of wage, taxation, and price of the factors of production (instead,
specialise in high added value products, intangibles, cutting-edge skills)
Reasons for increasing public funding:
1) Direct public R&D support for enterprises is effective; it supplements the
enterprises’ own funding and increases their investment in research.
2) Intensification of PPPs in R&D requires mutual commitment to funding.
3) Publicly funded R&D have significant economic and social impacts,
externalities. Impacts are biggest in the early stage of innovation
process (e.g. basic research) and in fields where the market mechanisms
does not fully work (e.g. education, defence, social care).
4) Short supply of patient money for knowledge- and research-intensive young
companies
easy to get small amount, difficult to get large inv.).
RESEARCH(i.e.
AND INNOVATION
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COUNCIL OF FINLAND
Impacts of public R&D funding
 Public innovation support has a positive impact on the growth of
employment in companies.
 Public R&D funding increases companies’ own investment in R&D.
 1 € of public R&D funding increases private R&D investment by
€0.40-1.00. Thus, the overall additionality of public funding
is €1.40-2.00.
 Public R&D funding has a positive impact on:
- the risk level and technological level of the project
- networking, co-operation and diffusion of knowledge
- commercialisation prospects.
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RESEARCH AND INNOVATION
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Strengths of innovation system
 Political stability; a safe environment for people and enterprises
 Reliable public sector, good governance; a well-functioning regulatory
environment
 Effective educational system, lifelong learning, plenty of R&D personnel
 Equality in education and working life
 High volume of R&D investments
 Public-private partnerships
 High quality research; international patenting
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RESEARCH AND INNOVATION
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Scientific impact in FIN and selected OECD countries
Highly cited publications (top 10 index)
in selected OECD countries in 2000-2012
Citation impact (field normalised)
in selected OECD countries in 2000-2012
1.4
1.6
1.5
Switzerland
Netherlands
Netherlands
1.4
United States
Denmark
1.2
United States
Sweden
1.3
1.0
Germany
Sweden
Germany
1.1
1.0
Finland
Austria
0.9
0.8
Source: Thomson Reuters Web of Science based custom data, Bibliometric computing
CSC, 2014.
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Ireland
Austria
Norway
World average
0.8
Denmark
1.2
Ireland
Norway
Switzerland
Finland
World average
Finland is the leading country regarding innovation cooperation
between companies and academia
Innovation cooperation between companies, universities and R&D institutes
%
Share of all innovating companies 2010–2012
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Source: Eurostat, Community Innovation Survey
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R&I Policy Challenges
 Downward trend in (public) R&D financing and productivity
 Share of high technology in exports has dropped from 23% in the early
2000s to some 6% today
 Need of growth-oriented innovative firms
 Volume of inward FDIs and numbers of foreign experts, researchers and
students are low
 More efficient exploitation of R&D results
 Lack of vision, fail to notice opportunities for growth
 Fragmented activities: resources allocated to a large number of
small units -> prioritised pooling of limited resources is needed
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RESEARCH AND INNOVATION
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Higher education & research landscape – institutions
Higher education institution and research
institution network covers the populated
parts of the country
– 14 universities
• 168 000 student enrolments
• of which 18 000 doctoral students
– 24 polytechnics/
Universities of Applied Sciences
• 148 000 student enrolments
– 14 government research institutes
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RESEARCH AND INNOVATION
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R&D expenditure by sector in 2007-2014*
Continuous growth of the volume
since 1971 until 2009…
Since 2011, R&D
volume has
declined by 16%
(in real terms).
For manufacturing
industry, the figure
is -27%,
for ICT field -36%,
but for the service
sector +14%!
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* Figures for 2014 are estimates by Statistics Finland
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RESEARCH AND INNOVATION
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Structure and funding of the Finnish public innovation system
Research and
Innovation Policy
Council
GOVERNMENT
R&D funding 2015: €2.003bn -10% *
Ministry of
Education and
Culture
€1090m +7%
Academy
of Finland
€416m +10%
Universities:
€578m -3%
RIC
Ministry of Employment
and the Economy
€618m -23%
Technology and
Innovation Funding
Agency TEKES
€488m -24%
Polytecnics:
€>60m
+6%
RESEARCH AND
INNOVATION
COUNCIL OF FINLAND
Other ministries
€295m -26%
VTT
SITRA
€87m
-6%
Other government R&D labs:
€169m -26%
University
hospitals:
€22 m -50%
* Volume of government R&D funding in 2015 and the development of funding in 2011-2015 in real terms
Finnish Research and Innovation Policy Review
2015–2020 (November 5, 2014)
New government-level policy outlines
adopted by the RIC
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Research and Innovation Policy Council
CHAIRMAN:
Prime Minister
DEPUTY CHAIRMEN:
Minister of Education and Science
Minister of Economic Affairs
OTHER MINISTERS:
Minister of Finance
0-6 other ministers
10 OTHER MEMBERS:
Academy of Finland
Tekes (the Finnish Funding Agency for Innovation)
Business and Industry
Employees’ organisations
Universities
Polytechnics
+ other qualified members
PERMANENT EXPERTS:
COUNCIL SECRETARIAT:
(5)
(2-3)
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The Council is a forum for
creating and enhancing partnerships between:
- decision-makers and experts
- basic research, development work and innovation
communities
- universities, polytechnics, government R&D labs and
enterprises
- Ministry of Education, Ministry of Employment and the
Economy, and other ministries
- employers and employees
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The RIC is responsible for the strategic development and coordination of the Finnish STI policy and the NIS as a whole.
The RIC is not only a classical independent advisory body, but
also a strategy-shaping multi-stakeholder institution, where
political decision-makers, administration, academics and
industrial experts jointly design and formulate major
development lines and actions for national STI policy.
Finland has now a new government and a new government
programme –> many impacts on the organisation and the
rules of procedure of government and its ministeries.
Reasoning about the renewal of the RIC is also under way.
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RESEARCH AND INNOVATION
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The main challenges and objectives for R&I policy
1. Raising the quality of research
2. Renew the structures and functions of the public research
system
3. Diversify the economic structure and support the continuous
regeneration of the enterprise base
The document introduces major policy guidelines and the national R&I
policy reform programme of 50 recommendations.
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RESEARCH AND INNOVATION
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Extensive reform programme
R&I policy reform programme is focused on 6 topics. Key areas are:
1) a radical reform of the higher education system
2) promoting the exploitation and impact of R&I results
3) strengthening new sources of growth, intangible assets and
entrepreneurship.
Other key targets for development are:
4) improvement of the overall knowledge-base of the population and
selective support for cutting-edge skills
5) reform of the public sector and closer cross-administrative cooperation
6) adequacy and targeting of R&D funding.
The document introduces major policy guidelines and the national R&I policy
reform programme of 50 recommendations.
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RESEARCH AND INNOVATION
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Some concrete recommendations for action
(1/2)
 Radical reform of HE system and its structures
 Prioritization of fields of strength in each university
 (Inter)national mobility and recruitment of the R&D personnel
 Exploitation of new knowledge and expertise embedded
in the HEI system
 Use of public procurement in RDI, open innovation competitions
 Opening of public data reserves and archives
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RESEARCH AND INNOVATION
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Some concrete recommendations for action
(2/2)
 Strengthening new sources of growth, intangibility and
entrepreneurship
 New funds for transferring R&D results into start-ups
 Capital market for seed, start-up and growth companies will be
fortified
 Reform of the public sector, closer cross-administrative cooperation
 Creation of experimentation culture − enabled by legislative
renewals
 More intense dialogue between the government and business
sector
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RESEARCH AND INNOVATION
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The Government Programme
of the New Finnish Government
(May 27, 2015)
Emerging issues for R&I policy
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The Government Programme (GP):
Five strategic objectives
* Enhancing growth and competitiveness
* Fortifying education and expertise
* Accelerating bio/green economy and clean solutions
* Promoting health and wellbeing
* New operational models through digitalisation, reducing
regulatory burden, experimentation, less bureaucracy
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GP’s Spearhead Initiatives and R&I policy
(1/3)
GP includes 26 Spearhead Initiatives, some 10 are relevant for R&I
policy.
Essential R&I policy items include:
a) deeper co-operation and more clear division of work between
HEIs and government R&D labs
b) increasing the economic and social impact of R&D
c) decrease of public R&D funding by some 5-10% compared to the
level of 2015
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GP’s Spearhead Initiatives and R&I policy
(2/3)
- The quality and the economic and social relevance of R&D.
- Co-operation between HEIs and business life.
- Exploitation of new knowledge and expertise will be included as
a funding criteria of HEIs. The profile building, division of
work and co-op between HEIs and gov. R&D labs will be
supported. Impact of results derived from public research
(incl. commercialisation) will be amplified.
- Multilateral collaborative platforms will be significantly reformed
- Special actions for the bioeconomy, digitalisation, cleantech and
healthcare and for the issues such as arctic expertise and
intangible value creation.
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GP’s Spearhead Initiatives and R&I policy
(3/3)
- Work-based immigration policy will be updated
- Significant budget cutbacks to universities and Tekes
- The GDP share of government R&D funding is now 0.97%, but it
will decline below the level of 0.90% within the next two
years.
- Finland's R&D intensity today is 3.11%, but it will sink below the
level of 3% in the coming years (cf. 3.75% in 2009).
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RESEARCH AND INNOVATION
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Redirections in R&D and Innovation:
innovation policy expanding into new territory
From...
more
towards
Competence-based policy
Demand-based policy;
user-driven innovation
Knowledge push
Demand pull
traditional (scientific)
research (done in public
R&D orgs), and support of
R&D and technology
programmes
* public procurements
* working life developments
* user communities
* innovative public services
* regulatory framework
* PPP platforms
Exploitation of knowledge
Creation of knowledge
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RESEARCH AND INNOVATION
COUNCIL OF FINLAND
Redirections in R&D and Innovation
 More emphasis on quality and impact issues, not that much on growing
volumes and numbers
 Reallocating public resources from R&D to innovation
 From creation of knowledge towards exploitation of knowledge
 More public resources made available to young innovative firms and
growth companies
 Looking for higher leverage effects and additionalities for public RDI
investments e.g. through new modes of financing (incl. public
procurement, venture capital) and new policy measures (e.g. regulation,
standardisation)
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RESEARCH AND INNOVATION
COUNCIL OF FINLAND
RIC
RESEARCH AND INNOVATION
COUNCIL OF FINLAND
For more information
Research and Innovation Policy Council
http://www.minedu.fi/OPM/Tiede/tutkimus-_ja_innovaationeuvosto/?lang=en
Strategic Programme of Prime Minister Juha Sipilä’s Government,
29.5.2015
http://valtioneuvosto.fi/documents/10184/1427398/Ratkaisujen+Suomi_EN_YHDISTETTY_netti.pdf/8d2e1a66-e24a-4073-8303-ee3127fbfcac
Research.fi − a gateway to Finnish R&I activities
www.research.fi
RIC
RESEARCH AND INNOVATION
COUNCIL OF FINLAND
Thank you