Finnish STI Policy 29-211 211 Continuous development of innovation dynamics through the recession INNO-Grips Workshop: Innovation policy in an anti-cyclical conjuncture 3.9.21, Köln Mr. Kai HUSSO Chief Planning Officer STI investments contribute positively to - Growth of GDP; promotion of welfare - Diversification of structure of the economy - Productivity growth, employment - Returns of public and private sector R&D - Additionality impact of public sector actions incl. leverage effect on other policies and policy measures with a focus on knowledge, expertise and innovation - Creating critical mass; excellence and relevance esp. in the fields that intensively create & apply new knowledge & expertise
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.4-1.. Thus, the overall additionality of public funding is 1.4-2.. Public R&D funding has a positive impact on: -the risk level and technological level of the project - networking, co-operation operation and diffusion of knowledge - commercialisation prospects. FINNISH EXPORTS BY INDUSTRIES 196-28 % of total exports 1 % 8 % 6 % 4 % 2 % % 16 15 8 5 4 27 24 14 31 3 22 4 16 42 24 18 24 31 17 4 7 11 13 15 2 6 11 8 9 1 4 7 9 5 15 15 15 9 12 16 196 197 198 199 2 28 Mechanical wood industries Pulp, paper and graphic industries Machine and transport equipment industries Electronic and electrical industries Basic metal industries Chemicals Other industries What next, after recession?
Finnish performance: some strengths - R&D intensity high (3. in the World: strong contributions from both public & private sector) - 4. largest producer of scientific articles (in OECD group) - High share of competitive R&D funding - High number of researchers and PhDs (in relative terms) - Volume of brain-drain comparatively low - Effectiveness of R&D measured by patents high - Close co-operation operation within NIS R&D expenditure in Finland Total 6.9 billion 4. percent of GDP in 29* Nokia approx. > 45% of all industrial R&D > 8% of telecom R&D Public sector 1.8 billion (27%) Enterprises 5. billion (73%) Competitive public funding 48% of total public R&D funding: * Tekes ~575 M mainly for business RDI * Academy of Finland ~31 M mainly for basic research * Figures for 29 are based on estimates.
STRUCTURE OF PUBLIC STI SYSTEM IN FINLAND RIC GOVERNMENT (R&D Financing 21: 2.55 bn)basic budget bn)basic budget Ministry of of Education (933 m ) ) Ministry of of Employment and and the the Economy (763 m ) ) Other Ministries (359 m ) ) Academy of Finland (384 m ) Finnish Funding Agency for T&I - TEKES (611 m ) VTT (86 m ) SITRA, Finnish Innovation Fund Universities: : 56 m Polytechnics: : >3 m Other Gov.. R&D institutes: : 21 m R&D expenditure 24-29 ( million) 24 25 26 27 28 29 (est.) HE sector 1 4 1 42 1 79 1 165 1 18 1 234 Public sector 53 555 574 564 589 595 BE sector 3 683 3 877 4 18 4 513 5 12* 5 22 TOTAL 5 253 5 474 5 761 6 243 6 871* 6 85 % of GDP 3.45% 3.48% 3.45% 3.47% 3.73%* 4.% Real growth (%) 3.8% 3.9% 5.3% ~7.%* -1.2% * Break in series Government R&D funding 25-21 ( million) 25 26 27 28 29 21 1 614 1 67 1 73 1 798 1 9 2 55 Growth (%), in real terms 2.5%.1% --1.1% 1.6% 6.2%
Government Programme 27-211 (19.4.27) Innovation policy is in the centre - Growth of productivity and employment require a better capacity for innovation, and more efficient policy measures - High-quality tuition-free education: cornerstone of the welfare society - R&D intensity target is set to 4% - Universities will be given the status of a legal person or a foundation in legislation. Gov supports the set-up of a new university: a so-called Aalto University (21) is composed of 3 universities - Entrepreneurial education at all levels of education will be expanded - Public procurement will be developed as a tool incentive for more & better R&D and innovation - The public innovation support system will be streamlined; better availability of venture capital for companies - Government promotes R&D and innovation in the fields of: 1) natural resources 2) transportation 3) renewable energy 4) environmental technology 5) service sector. CHAIRMAN: DEPUTY CHAIRMEN: OTHER MINISTERS: Research and Innovation Council Prime Minister Minister of Education and Science Minister of Economic Affairs Minister of Finance + - 4 other ministers 1 OTHER MEMBERS: Academy of Finland Tekes (Funding Agency for Technology and Innovation) Business and Industry Employees organisations Universities + other qualified members COUNCIL SECRETARIAT (3) Preparatory bodies: Science & Education section Technology & Innovation section
Meets 4-6 times a year Meets monthly Minister of Education & Science Permanent Secretary of MoE + 6 Council members + 3 Experts Council activities Research and Innovation Council Science & Education section Proposed statements initiatives studies Technology & Innovation section Meets monthly Minister of Economic Affairs Permanent Secretary of MEE + 6 Council members + 3 Experts Initiatives Study requests Comments Council Secreteriat SG CPO for S&E policy CPO for T&I policy Initiatives Study requests Comments The RIC is responsible for the strategic development and co-ordination ordination 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 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. Objectives include systemic view in policy developments and cross-ministerial governance. Discussions on the reviews of the rules of procedure of Government are currently under way.
The Council has been a useful forum for creating and enhancing partnerships between: - decision-makers and experts - basic research, development work and innovation communities - universities and enterprises - Ministry of Education, Ministry of Employment and the Economy, and other ministeries - employers and employees PERMANENT MAJOR TASKS OF THE COUNCIL: 1. Direction and steering of STI policies (incl. compatibility and governance issues) 2. Development of STI financing, its impacts and effectiveness 3. Development of sectoral research (i.e. gov. R&D institutes) and inter-sectoral co- operation 4. International STI co-operation operation 5. Other issues: Human resources in STI, PhD education, evaluation
STI policy principles and challenges 29-211 211 STI policy: Basic principles and objectives - Prioritisation of STI activities: strategic choices, better focus on resources, objectives, measures, and impacts - Specialisation in the fields of strength: sharper profiles for R&D organisations - Selective decision-making based on intelligent use of evaluation and foresight - More intense industry-academia co-operation operation (PPPs) - Front-runner runner policy practices: experimentation, risk-taking, incentives (for growth, commercialisation of R&D etc.)
STI Challenges - Further increase in (public) financing of STI - Productivity of both service sector and public sector is low (growth potential through use of ICT) - Number of growth-oriented oriented entrepreneurs and innovative firms is low (by international standards) - Volume of inward FDIs and numbers of foreign experts, researchers and students are low - Fragmented activities: resources allocated to a large number of small units -> prioritised pooling of limited resources is needed - More efficient exploitation of R&D results The entire innovation environment is on the move - Status of universities will be changed (21) - Structural development of HEIs is in progress - Implementation of the national innovation policy - Internationalisation of education, research and innovation - Other issues: development of a genuine researcher career system; graduate schools; ; R&D infrastructures,, streamlining of the public innovation support system; ; Strategic Centres of Excellence in STI (SHOK( SHOK); ); the Centres of Expertise Programme (OSKE( OSKE).
New RIC initiative: Strategic Centres of Excellence in STI A new approach to: strengthen strategic areas of S&T development stimulate cross-disciplinarily in R&D and innovation focus resources and increase international visibility Industry-academia joint venture: Cluster Ltd Medium term focus (applications in markets within the next 5-1 yrs) Strong support by public R&D funders (Tekes, Academy of Finland) 1. Forest cluster (started in 27) 2. Energy and environment (28) 3. Metal products and mechanical engineering (28) 4. Health and well-being (29) 5. Information and communication industry and services (28) 6. Built environment (29) Number and type of shareholders of SHOKs Universities Polytechnics Gov. R&D institutes Enterprises others total FimECC Ltd 1 2 1 16 1 3 RYM-SHOK Ltd 3 2 2 37 5 49 CLEEN Ltd 1 5 28 43 TIVIT Ltd 1 4 1 22 3 4 Forest Cluster Ltd 4 2 9 15 Health and well-being 8 4 16 28 total 45 8 15 128 9 25
Innovation policy expanding into new territory from Competence-based policy Knowledge push traditional (scientific) research (done in public R&D orgs), and promotion of R&D and technology programmes more towards Demand-based policy Demand pull * public procurements * working life developments * user communities * innovative public services * regulatory framework Demand driven driven innovation policy Improves the ability to adopt innovations Facilitates demand for innovative products, services and solutions Enhances the capability to interpret market needs and demand potential Demanding and innovation friendly regulation Awareness and knowledge development Standardisation supporting innovativeness Innovative public procurement Innovation friendly markets Demand, competition and innovation culture as drivers of innovation User driven innovation activities More systematic collaboration with users Utilisation of advanced methods in analysis of user needs and trends Developing innovation policy and measures for promoting user driven innovations User driven innovation policy