Knowledge Economy Forum V, Prague, March 2830, 2006

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Knowledge Economy Forum V,Prague, March 28-30,
2006

• Ossi V. Lindqvist,
• Chair, Finnish Higher Education Evaluation
  Council (FINHEEC)

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RD for Innovation

• This is a short description of the case of
  Finland (pop. 5.2 million), its universities and
  innovation policies, that have contributed to its
  competitiveness in the world forum, so far.
• 20 universities and 30 polytechnics, and ca. 60
  of the age class enters HE. (Over 300,000
  students in all HEIs.)
  
• All universities are public, no private
  institutions.

3
In Finland, the universities and HEIs at large
are considered as core elements in the building
of modern innovation society this sets, however
, new requirements for their strategies, functio
ns and even structures. In Europe, firms and co
mpanies are often seen as key players in nationa
l innovation policies. - A bottom-up approach!
Another approach, relatively more top-down, has
been successful, at least in Finland, but also i
n other Nordic countries.
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This approach involves a close cooperation
between the public sector, including all pertine
nt ministries, several buffer organizations serv
ing as liaison in technology transfer and financ
ing, the industry and other public and private o
rganizations, and the universities and polytechn
ics, as well as the national research institutes
. So the innovation system works rather as a
network than as a one-way street from innovat
ion to production.
5
It is important also to build a system that
provides for financial and administrative
continuity and incentives in the process from
basic research to applied research and
innovations, and then further on to risk
financing and business generation.
6
Regional development as supported by RD has
gained special weight in recent years, which is
also reflected in the respective amendments in
the laws directing higher education institutions
(HEIs), both the universities and the polytechni
cs.
7
Technology policy in Finland is the
responsibility of the Ministry of Trade and Indu
stry. The most important tool in executing an
d financing technological RD is the National Te
chnology Agency (TEKES) (www.tekes.fi). TEK
ES is an important support agency for applied
research in both universities, polytechnics and
research institutes, towards enhancement of
technology-based enterprises and in creating new
business opportunities. It also supports RD a
ctivities in companies directly.
8
In most cases the universities collaboration
with business enterprises goes with TEKES serving
as buffer organisation that is, both the compan
y and TEKES provide the RD financing needed,
but TEKES also assumes good part of the risk.
The TEKES money may be in the form of grant or
loan to the company. This again should
encourage and allow even for small and medium-siz
ed companies (SMEs) to be engaged in RD. In
2005, ca. 180 million was paid by TEKES through
the universities, polytechnics and research inst
itutes for RD work with companies or towards cr
eating new companies.
9
The current investment in RD in Finland is
ca. 3.6 of GNP, which percentage is second
only to Sweden this way only Sweden and
Finland in Europe meet the so-called Lisbon
target of 3.0 of GNP. About 70 of the total
RD expenditure in Finland is by private compan
ies, and the rest is public money. The total na
tional RD expenditure annually is thus in excess
of 5 billion.
10
Science policy is the responsibility of the
Ministry of Education, and its principal research
financing organisation is the Academy of Finland
(www.aka.fi). The universities and research
institutes are the key players in publicly fund
ed research. The Academy of Finland provides an
nually over 200 million for (basic) research in
universities and research institutes.
11
During the last two decades, funding for research
(incl. basic research) has been substantially
increased, also towards support of researcher
training and research infrastructure, as well as
career development of young scientists. Spec
ial measures have also been undertaken to
engage more women in research careers.
(Nearly 50 of the new PhDs are women!)
12
In the universities, some 30-50 of the total
expenditure consists of outside money, a good
part of which is competitive research money,
coming from the Academy of Finland, Tekes and
industry, the European Union, the foundations,
etc. For the universities this requires a ti
ght contract system, with technology transfer of
fices and IPR services available, also in collab
oration with local Technology Parks, etc.
13
The Science and Technology Policy Council of
Finland is the main coordinating body in nationa
l science and technology policy. The Counci
l is chaired by the Prime Minister, and the
members include several other key ministers,
representatives from industry, public sector,
the universities, etc. The Council works towards
strategic development and coordination of the
national science and technology policy, and of
the national innovation system at large.
14
As a national target of development, emphasis is
on the production of technological and social
innovations, with an aim also into expansion of
internationally successful businesses built on
it.
15
The entire higher education sector is now facing
global competition and global market for its ser
vices, which makes the entire innovation system
to face totally new challenges. One consequ
ence has been that the universities
now require more autonomy, also financially,
to be competive and successful in the new market
situation.
16
The current Universities Act in Finland is not
very detailed, and it leaves a good amount of au
tonomy to the universities themselves. For inst
ance, there is little reference to the structure
of the university this issue is left to the un
iversities themselves to be decided. The old
academic disciplines are breaking down, and
new ones created, often around some common major
problems in the society or in the industry. The
overall environment of the HEIs is becoming ev
en more dynamic!
17
The Finnish universities are undergoing a process
of restructuring, partly in response to the new
degree structure following the Bologna process,
but also to be able to meet better the new exter
nal demands, e.g. concerning multidisciplinarity
in both teaching and research. The new sit
uation is also a serious challenge for the
leadership and management of the universities,
towards promoting a long-term strategy,
strengthening societal interactions, especially
with industry, enhancing technology transfer, an
d promoting internationalisation, etc.
18
In the Finnish universities, the lump-sum
budgeting started in 1994, and now the basic fin
ancing of the universities is mostly based on th
e annual numbers of Masters degrees and PhDs g
raduated, based on an annual contract between th
e university and the Ministry of Education.
(The contract usually covers a 3-year rolling
plan.) The performance and management of univer
sities is thus based on the results they achieve
and on target-setting an important open source
of monitoring is also the KOTA
database, which is updated semiannually.
19
Thus the universities have been moving towards
an entrepreneurship mode in their overall
activities.
20
As a (minor) example, if a teacher or staff
member of a university wants to be engaged in en
trepreneurial activities, based on his/her resea
rch, there are certain rules as to how much duty
time, etc. he/she is allowed,
but a clear contract with costings is required
for the possible use of universitys premises, i
nstruments, or other services.
This kind of entrepreneurial activity is actual
ly even encouraged, but usually it takes place t
hrough a special technology transfer office on t
he campus, or through the local Science Park, or
through some other comparable measures.
21
The patent rights by the current IPR law
basically belong to the professor/scientist work
ing in the university, but the practice (and law)
is changing towards, for instance,
a multilateral and contract-based arrangement
between the scientist, the university and the co
mpany.
22
The Universities Act requires that the
universities shall evaluate their education, res
earch and artistic activities
and their effectiveness. The universities shall
also take part in external evaluations of their
activities, and all evaluations are mandated to
be public. Currently all universities and pol
ytechnics will be audited for the European Stand
ards and Guidelines in Quality Assurance (QA), b
y the year 2010. The main external evaluation
agency is the Finnish Higher Education Evaluati
on Council, FINHEEC (www.kka.fi)
23
The importance of researcher training in the
universities is being recognised it certainly s
hould be part of the long-term development strat
egy of any university. The European Bologna pro
cess also calls for the new degree
structure in universities, and the so-called
third cycle or PhD training is getting new stren
gth. Traditionally, researcher training was b
ased on apprenticeship whereby a professor produ
ced his/her successor over many years, and that
was all! Last year 2005 in Finland, ca. 1400 ne
w PhDs were graduated.
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Thus the new universities are facing challenges
that differ from the traditions of their past. T
hey are also becoming more and more accountable
to the society and to the people they serve. Th
e share of the age class that enters higher educ
ation is still increasing in most
countries, which calls for a closer attendance to
the needs of the labour market. The spectrum
of activities the universities are engaged has
widened, outside the traditional teaching and
research. There is more pressure towards a resea
rch-based university in contrast to the mostly t
eaching institutions in the past.
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The universities cooperative contacts with the
society have increased dramatically, including R
D services towards the industry and business at
large, life-long learning, and most
importantly, meeting the demands for the build-up
of the national human capital and human skills a
t large. These are all great challenges for t
he entire HE system, which also calls for more p
rofessionalismin in the universities
leadership and management at large their
national and international environment is growin
g more complex, more competitive, and more challe
nging!
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More details of the entire Finnish innovation
system
are available at www.research.fi