oecd reviews of innovation policy: norway overall … · 13/06/2017 · oecd reviews of innovation...

OECD REVIEWS OF INNOVATION POLICY: NORWAY

OVERALL ASSESSMENTDirk PilatDeputy DirectorDirectorate for Science,Technology and [email protected]

Launch of the OECD review of Innovation Policy: Norway 2017, Oslo, 13 June 2017

mailto:[email protected]

A wide-ranging science and technology revolution is underway

Productivity growth has declined since the 1990sAnnualised growth of labour productivity (output per hour worked)

Source: OECD estimations using OECD National Accounts database; OECD Productivity database; International Labour Organisation database. Statlink: http://dx.doi.org/10.1787/888933367500

The productivity benefits of innovation and new technologies are urgently needed ...

http://dx.doi.org/10.1787/888933367500

4

… and science and technology can also help in addressing global and social challenges

+60% food to feed 9.7 billion people

by 2050

+55% water demand by 2050

Norway is around the OECD averageon investment in R&D

USAJPN

DEU

KOR

FRAGBR

ITA

CANAUS

ESP

NLD

SWE

TUR

CHE

AUT

ISR

BEL

MEX

POL

DNKFIN

CZE

NOR

PRT

IRL

HUN

GRC NZL

SVN

CHL

SVKEST LUX

ISL

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000

Researchers, per thousand employment

Gross domestic expenditures onR&D per capita population (current PPP $)

R&D in OECD and key partner countries, 2014 or latest year available

Researchers per thousand employment

Gross domestic expenditures onR&D as a percentage of population

Source: Main Science and Technology Indicators Database; Scoreboard 2015

… and is among the countries wherepublic investment has grown …

Government budget appropriations and outlays for R&Das a % of total government expenditures, 2000 and 2015

Source: OECD R&D Statistics (RDS) Database, April 2016, www.oecd.org/sti/rds; OECD National Accounts Database.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0 %

2015 2000Increased spending on R&D Decreased spending on R&D 2015 2000

http://www.oecd.org/sti/rds

… although not as much as in somepeer countries

Government budget appropriations and outlays for R&Das a % of GDP, 1981-2013

Source: OECD R&D Statistics (RDS) Database, April 2016, www.oecd.org/sti/rds.

France

United Kingdom

Germany

Unites States

Sweden

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1981 1985 1989 1993 1997 2001 2005 2009 2013

Chinese Taipei

EU28

Mexico

Norway

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1981 1985 1989 1993 1997 2001 2005 2009 2013

Denmark

Korea

Austria

Finland Iceland

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1981 1985 1989 1993 1997 2001 2005 2009 2013

http://www.oecd.org/sti/rds

On R&D inputs, Norway is around the average, but trailing other Nordic countries

Gap 1st and 3rd quartiles Norway Sweden Denmark Finland

R&D funding OECD and selected countries2015 or latest available data

Source: MSTI (2017); OECD Historical Population Data and Projections Database; STI Scoreboard 2015

0 20 40 60 80 100 120 140 160 180 200

GERD, % of GDP

GERDBERDHERD

GOVERD

by industryby government

by industryby government

Per capita

GERD financed

BERD financed

On R&D outputs, Norway has someareas of strength

0 20 40 60 80 100 120 140 160 180 200

Number of publications% publications among 10% most

cited

Top 500 universities per habitant

International co-authoriship

Higher Education

Government

Health

Private sector

Gap 1st and 3rd quartiles Norway Sweden Denmark Finland

Scientific outputs OECD and selected countries2016 or latest available data

OECD Innovation Policy Reviews:Coverage of the Nordic countries

• Requested by the Ministry of Education and Research (MER) to inform the revision of the LTP in 2018

• 3 fact-finding missions (>180 people interviewed)

• 2 case studies (‘seas and oceans’; health and healthcare R&D)

• A stakeholder workshop held at the the Research Council of Norway in March 2017

• 3 international experts

• A dedicated team of analysts at OECD/STI

Process and methodology of the review

Norway is among the richest and most advanced economies but is still vulnerable

• A remarkable transformation into one of the leading national systems of innovation

• Several success stories, with a prominent role of strong and interlinked research and innovation capabilities

• Norway is now facing a “triple transition” imperative1. away from oil and gas toward a more diversified and robust

economy2. towards a research and innovation system that produces

excellent and relevant knowledge …3. …including for addressing mounting societal challenges

• This transition imperative calls for strong coordination and agenda setting

The triple transition imperative

The Long-Term Plan for Research and Higher Education 2015-2024 is a unique initiative to

respond to these challenges

Objective 1

Objective 2

Objective 3

The triple transition imperative

Improved agenda setting and coordinationObjective 4

The Long-Term Plan for Research and Higher Education 2015-2024 is a unique initiative to

respond to these challenges

AUSAUT

BEL

CAN

CHL

CZE

DNK

ESTFIN

FRADEU

GRCHUN

ISL

IRLISRITA

JPN

KOR

LUX

MEX

NLD

NZL

NOR

POL

PRT

SVK

SVNESP

SWE

CHE

TUR

GBRUSA

0 5 10 15 20 25 30 35 400,6

0,8

1

1,2

1,4

1,6

1,8

Publications per capita

Relative citation impact

Publications per capita and relative citation impact 2003–2012

Norway’s insufficient average research quality …

Objective 1 Developing

research communities of

outstanding quality



outstanding quality

0

1

2

3

4

5

6

0

100

200

300

400

500

600

Netherlands Switzerland Israel Sweden Austria Finland Denmark Norway

Number of ERC grants ERC grants/100 k inhabitants

Number of ERC grants and ERC grants/100 k inhabitants

Source: ERC (2016), European Research Council Statistics (database)

.. that is missing ‘peaks of excellence’

• Government’s effort to enhance competitive mechanisms have had mixed results– among HEIs– within HEIs

• The new wave of mergers – too recent to be evaluated– the objectives are not clear (raising the average quality or

creating ‘champions’?)– the dual university system should be preserved

Enhancing HEI competitive mechanisms & critical mass to improve research quality



outstanding quality

Low business R&D, partly related to structure of the economy

0

20

40

60

80

100Industry

High-techmanufacturing

High-knowledgemarket services

Primary andresource-based

industries

Large firms

Foreign affiliates

Services

Medium to low-tech

manufacturing

Low-knowledgeservices

Non-resource-based

manufacturing…

SMEs

Domestic firms

OECD Norway Norway (2007)

Structural composition of business enterprise R&DAs a % of total BERD performed by sector, 2013

Objective 2 Enhanced

competitiveness and innovation

Source: OECD (2016), OECD Science, Technology and Innovation Outlook 2016, http://dx.doi.org/10.1787/sti_scoreboard-2013-en.

http://dx.doi.org/10.1787/sti_scoreboard-2013-en

Norway as a moderate innovator but with strengths in some areas

Top/Bottom 5 OECD values Middle range of OECD values OECD median Norway

Skills for innovation

R&D and innovation in firms

Innovative entrepreneurship

Top half OECD

Bottom half

OECD 100

0

200

150

50



• No major gap, diverse portfolio of financial support schemes and technical services

• Better suited to support existing strengths rather than new sectors and new areas for diversification?

• A shift towards neutral instruments

A comprehensive policy mix Objective 2 Enhanced


• A strengthened knowledge transfer infrastructure, but incentives are missing– no third-stream policy and funding

– no commercialisation indicators in the performance-based funding system

• A strong research institute sector, but with a questionable contribution to the transition required– heterogeneous and fragmented– limited block funding– limited capacity of RCN’ to steer the institutes towards specific

policy goals

A diversified and effective policy infrastructure to support business

innovation



• A strong tradition of investing in research to tackle societal challenges

• Strong but not top scientific performance in related fields

Norway has taken up the societal challenges

Objective 3 Tackling major

social challenges

0

0.5

1

1.5

2

2.5

3

3.5

4

2008 2009 2010 2011 2012 2013 2014 2015

Denmark FinlandNetherlands NorwaySweden Switzerland

0

0.5

1

1.5

2

2.5

3

2008 2009 2010 2011 2012 2013 2014 2015


0

0.5

1

1.5

2

2.5

3

3.5

4

2008 2009 2010 2011 2012 2013 2014 2015


0.8

1

1.2

1.4

1.6

1.8

2

2008 2009 2010 2011 2012 2013 2014 2015


Renewable energy, sustainability and the environment

Water science and technology

Global and planetary change

Health (social science)

• Focus on the development of the basic knowledge base underpinning societal challenges… – … in ‘traditional’ societal challenge areas (climate, energy,

medicine, biotech,…) – …at the detriment of the development of the framework

conditions for systemic change

• Deficit of horizontal coordination• ‘21 Forum’ processes complement the LTP but do not

take systemic change far enough

But suffers from a rather traditional and linear approach, not conducive to

systemic change

Objective 3Tackling major

social challenges

• A stable and functional policy framework, highly sectorised and consensus-based

• Effective to support incremental innovation rather thanlong term (system) transition

• Several agenda setting / coordination mechanisms exist, but do not fully compensates for the absence of a dedicated institution

• The LTP did not fully achieve its initial expectations, but it is a significant first step in this direction and is expected to advance further in its 2018 revision

The STI governance has improved but new challenges ask for priority setting

and coordination

Objective 4Improving agenda

setting and coordination

Main areas for recommendation

Developing research

communities of outstanding

quality

Continue to focus on excellence and critical mass in the higher education sector (performance based funding

system, research careers, CoEs, etc.)

Enhanced competitiveness and innovation

Tackling major social

challenges

Improving agenda setting

and coordination

Provide innovation actors with the appropriate conditions and incentives to contribute the

transition (targeting of instruments, funding of PRIs, “third mission” in universities, etc.)

Implement a holistic, comprehensive and ambitious approach towards societal challenges (broad integrated programmes, coordination TVET-HE,

policy experimentation, etc.)

Use the LTP process and its regular revisions to gradually enhance the level of multiannual financial

commitment and STI priority-setting

Takk for oppmerksomheten!

Contact: [email protected]

Twitter: @OECDinnovation and @PilatSTI

OECD Going Digital website: http://oe.cd/goingdigital

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RECOMMENDATIONS TO IMPROVESYSTEM GOVERNANCEPhilippe Larrue, OECDPolicy Analyst

Michael Stampfer, WWTF (Vienna Science and Technology Fund) Director

Oslo, 6 March 2017

Launch of the OECD review of Innovation Policy: Norway 2017

• The highly sectorised and consensus-based policy making has strongly shaped STI policy in the past– allowed constant improvements relying upon incremental

innovation– ensured actor mobilisation once consensus has been achieved

• Risk of missing out on radical innovation prerequisites– cross-sectorial coordination – bold, longer term, strategy and corresponding prioritisation

• Two key questions– When and where is agenda setting and coordination taking place?– To what extent has the LTP improved agenda setting and

coordination ?

Basic features of research and innovation policy making in Norway

When and where is agenda setting and coordination taking place?

Ministry Ministry Ministry

minister minister minister

Prime minister

Cabinet meetings

memos

White Papers

The Storting

Strategic level



Prime minister

Cabinet meetings

memos The Storting


Prime minister

Annual budget conference

Minister of finance

Strategic level

Budgeting level



Prime minister

Cabinet meetings

memos The Storting


Prime minister


Minister of finance

Strategic level

Budgeting level

‘STI common pot’



Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance

Research Council of Norway

programme

programme

programmeprogramme

programme

Strategic level

Budgeting level

Programme implementation level

Annual allocation letters

Higher education institutions and Public research institutesProject implementation level

Call for proposals

Project proposals




Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance


programme

programme

programmeprogramme

programme

Strategic level

Budgeting level



Higher education institutions and Public research institutes

Strategic advises

Strategic advises

Strategic advises

Project implementation level

Call for proposals

Project proposals


• Several agenda setting / coordination mechanisms but these do not fully compensates for the absence of a central referee at the top

– Little foresight– Operational coordination rather than coordination on long

term STI strategy– Costly research policy co-ordination model at ‘ground-floor’

level

When and where is agenda setting and coordination taking place?

Has the LTP improved agenda setting and coordination ?



Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance


programme

programme

programmeprogramme

programme

Strategic level

Budgeting level




Strategic advises

Strategic advises

Strategic advises


Call for proposals

Project proposals




Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance


programme

programme

programmeprogramme

programme

Strategic level

Budgeting level




Strategic advises

Strategic advises

Strategic advises


Call for proposals

Project proposals


LTPInter departmental groups’ meetings



Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance


programme

programme

programmeprogramme

programme

Strategic level

Budgeting level




Strategic advises

Strategic advises

Strategic advises


Call for proposals

Project proposals


Inter departmental groups’ meetings

Ad hoc high level meetings

LTP



Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance


programme

programme

programmeprogramme

programme

Strategic level

Budgeting level




Strategic advises

Strategic advises

Strategic advises


Call for proposals

Project proposals




Influence of LTP priorities

LTP



Prime minister

Cabinet meetings

memos

White Papers

The Storting


Prime minister


Minister of finance


programme

programme

programmeprogramme

programme

Strategic level

Budgeting level




Strategic advises

Strategic advises

Strategic advises


Call for proposals

Project proposals




Influence of LTP priorities


LTP

+ -

Time horizon • Ten year perspective • Commitment for four years

Scope • A Government document

• Research and Higher education

• Concrete financial commitments mainly in areas pertaining to MER

• Higher education overlooked

Status • Authoritative status • Not a binding multiannual bill

Agenda setting • Six priorities • Side-ranging priority areas, weakly selective

• The revolving nature of the LTP allows for a gradual approach to build on first accomplishments and solve issues

Has the LTP improved agenda setting and coordination ?

RECOMMENDATIONS

17

• Rationales and expected impact – The LTP process is now trusted and well established– The 4 years rolling basis is well-suited to align sectorial interests

periodically and to reach consensus on the next wave of STI priorities at government level.

Commit to additional and bolder policy actions, programmes and initiatives from other ministries, as well as MER, in the 2018

Support the implementation of the LTP, including in the thematic priorities

• Main challenges– Current budgeting process not easily amenable to multiannual

financial commitment– Need to leave rooms for flexibility and adjustment

(R1) Use the LTP regular revisions to gradually enhance the level of multiannual financial commitment and priority setting

• Rationales / impact– research policy guided as the ex post result of the balance

between the different elements of the system (rather than ex ante by strategic decision making)

– needs strategic advising and coordination capacities on a top level to help develop long-term agenda setting

– its strategic advising function puts RCN in a difficult position a specific adapted instrument / body could to be set up, possibly

serviced by a permanent inter-ministerial group monitoring the LTP progress

• Main challenges– ensure linkages with strategic discussions in Cabinet– use the 21-processes as complement

(R2) Build upon the LTP process to improve agenda-setting and inter-ministerial

coordination

• Rationales / impact– little long-term foresight, even in the run up to the LTP– optimising the existing sectors dominates policy discourse– foresight is particularly important to support transition proper foresight activities should inform the revision of the

LTP

• Main challenges– link between foresight and strategic decision making– where to position the foresight capacity? – one off initiative every 4 years?

(R3) Prepare the ground for long-term foresight activity

• Rationales / impact– Costly/time consuming research policy co-ordination

model at the ground floor – complex annual budgeting process (15 principals)– the absence of RCN central budget and the earmarking of

funds leaves little room for reallocation of resources between different programmes/measures

• Main challenges– where should the central budget come from?– how to conciliate this central budget with the sectorial

principle?

(R4) ·Provide RCN with a more “independent” budget

• Rationales / impact– despite reduction, RCN still runs a large number of

programmes relatively to the size of the research system

– compartmentalisation makes it more difficult to• discuss over-arching strategic questions• develop cross-cutting activities

• Main challenges– negotiations with the principals and various interest

groups supporting ‘their’ respective programmes– requires inter-ministerial coordination

(R5) ·Incentivise RCN to further reduce the number of funding programmes


DEVELOPING RESEARCH COMMUNITIES OF OUTSTANDING PERFORMANCE

Michael Stampfer, WWTF (Vienna Science and Technology Fund) Director

Oslo, 13 June 2017


• LTP sets the tune: “outstanding quality” as core objective – LTP quite critical of current status in Norway

• A number of Norwegian and global challenges call for it– “Transition” imperative– Increasing global competition for markets, ideas and talent – Next waves of innovations not predictable … often science based – Increasing returns (outputs, companies, FDI …) in top strata

• Other smaller European countries are very successful …

• … and Norway can have (+ afford) it, too

Why “outstanding”?

2

• Sizeable sector with high but not top performance– Several academic strongholds– Issues with critical mass and drive towards excellence

• HEI expenditures lower than in top countries

• Rather conservative and non-strategic approaches to hiring and academic careers

• High number of tertiary student dropouts and overly long academic studies

• Constant step-wise HE / research policy reform steps …– … are pointing in the right direction, but …– … often cannot / are not taken up by the HEIs

Synthesis of main conclusions

3

• One funding system both for universities and university colleges (UCs) – Both subsectors are regulated by the same law

– Few differences in system; most UCs can grant PhDs

• Research and education funding come in one stream

• No tuition fees, generous financial support for students• Access managed by a national student allocation system

• Share of block funding is comparatively high in Norway

• Block grants include performance-based (PBF) component• Performance agreements (PAs) introduced in the HE system

System for governance and funding of Norwegian HEIs

4

• How does the current set-up translate into performance? – Publications / citations: Good but not outstanding position

Share of top 10% most frequently cited articles in their respective fields by the top publishing universities, selected countries, 2006-14 (all sciences, fractional count); Source: CWTS

– ERC record: to be strongly improved– HE rankings %

Quality and relative positioning

5

9

10

11

12

13

14

15

16

2006-09 2007-10 2008-11 2009-12 2010-13 2011-14

%

Denmark Sweden Finland Switzerland Netherlands United Kingdom Norway

6

Placement in HE rankings

Each point marks a university; in total 92 universities are included; Data: THE World University Rankings 2016-2017

7



8



You mightend up here

What happens between government and HEIs:• Rather generous block funding, moderate pressure

• PBF element only in part effective?

• Performance agreements: a step in the right direction

• Mergers, HEI ambitions and unified law: All HEIs to become similar?

What happens within HEIs:• Slow take up of tenure track / strategic recruitment and career

development options

• Still leadership issues around

• External incentives to build critical mass not complemented by internal strategies and actions

• A complacent sector?

“You might end up here”: Two sets of dynamics; interacting?

9

RECOMMENDATIONS

OVERALL: CONTINUE TO FOCUS ON EXCELLENCE AND CRITICAL MASS

IN THE HE SECTOR

10

• Rationales – Next step with Performance Based Funding (PBF) formulae for

incentivizing better outputs and profiles• Research and teaching

– Introduction of Performance Agreements (PAs) for clearer individual profiles

• Main challenges – PBF and PAs: definitely no silver bullets– PBFs can have also distorting effects

• Difficult to establish clear causal chains

– PAs need to be short, clear + include KPIs• Austria: Every 3 years 1.300 pages to the ministry …• … and another 1.700 pages development plans … … but no KPIs

– Alternatives even more ambivalent • Case of the UK REF evaluations

(R1) Develop incentives for high quality research and education in the funding system

11

• Small federal system: two ETHs and four PRIs (most HEIs cantonal)– ETH Zurich and EPFL Lausanne among best HEIs globally

– Strong presidents; focus on structure and recruitment

– High level of organisational autonomy

• Simple governance model:– Federal law “Bundesbotschaft”: budgets and priorities for the next four years

– (Abundant) money comes with strategic goals / standards for ETH domain

– Basis for ETH councils’ overall mid-term plans: governance for ETH domain

– Plans are basis for individual PAs, negotiated between each ETH and council

– PA for ETH Zurich 2013-16: 24 pages, lists of goals and monitoring indicators

– No PBF funding element

• Other good practice models for (selective) PAs: NL, LUX, Bavaria

Example: The Swiss ETH sector agreements

12

Global rank 2016 THE ranking

ERC success 2007-16 / Rank European HEIs

ETHZ rank 9 110 grants / rank 5EPFL rank 30 116 grants / rank 4

• Rationales – Bring in top people perhaps most effective way to renew and boost HEIs

– Link to increased outputs: attract and keep the best

– Legal provisions in Norway allow for tenure track

• Main challenges – Does Norway recruit enough top class people?

• Issues from labour laws to internal structures and habits

• Few attractive and long term positions available

• Often unambitious recruitment policies

• Slow take up of tenure track, extra govt. incentives?

– Meet Wolfgang Herrmann, President TU Munich• 100 tenure track positions, forerunner in Germany

• … similar, Patrick Aebischer in Lausanne …

• … a top leadership task

(R2+R5) Prioritise top-class recruiting and career models Tenure Track

13

Patterns differ:

(R2+R5) Rapidly install a fully-fledged tenure-track system in the HE sector

14

0

0,5

1

1,5

2

Outflows New inflows Returnees StayersMedian journal rank, SJR2013

Impact of scientific authors by type of mobility, Median ScimagoJournal Rank (SJR) scores for 2013

• Norway

• Rationales – Build up critical mass and more “research communities of outstanding

quality” (LTP) • Positive impact of a few strong research universities in a small country

• Dynamics: compare to Swiss, Dutch, Danish trajectories

– The transition imperative calls for action • More top quality / transformative research is needed

• Allow for a next phase in Norwegian output/impact catch-up process

– Keep the binary system alive ( see R6)

• Main challenges – Legal framework mainly in place but slow uptake

• Consensus principle within and across organisations

– Trend towards “more similar actors”

(R3+R4) Increase capacity of HE leadership and develop a few European players

15

• Not richer than a top Norwegian university– and educating 57.000 students

• Approx. No. 40 in global THE ranking• Stands for …

– > 90 ERC grants since 2007

– Approx. 100 spin offs over 3 decades

– Extra: IMEC, 3.500 research staff

– 1.4 billion € IPR income in 10 years

• An example of many in Europe

16

Example KU Leuven: Excellence andrelevance can go hand in hand

Greetings fromLeuven

• Rationales – Many mergers in last decades, a few more could be done

– Merger issues and development ambitions of UCs should not inadvertently lead to an increase in the number of universities

• Main challenges– Local and institutional ambitions and resistance

– Maintain functional stratification ( R4)• Fewer but more similar HEIs: Detrimental to quality and to differentiation?

• Binary element (I): Again Dutch, Danish, Swiss examples, small number oftop class HEIs (see also Germany, UK)

• Binary element (II): Norwegian economy and society will in the future still need a „real“ UC sector (see also Swiss, German, Austrian examples)

(R6) Further promote HE mergers without abandoning a functionally binary system

17

• Rationales / impact– Bring change into HEIs and public research sector in general: Critical mass,

excellence, research management, interdisciplinary research

– Use external funding instruments as drivers, where internal reform proves difficult. SFF / SFI et al. follow international good practices

– Evaluations show highly positive impact

• Main challenges– CoEs cannot substitute for internal priority setting and structural reforms, but

can play a strong supportive and enabling role

– External incentives to build critical mass not always complemented by internal strategies

– Existence of “sunset” transfer issues

(R7) Continue funding centres of excellence

18

19

Final slide:Norwegians can do everything!

ENHANCING COMPETITIVENESS AND INNOVATION: THE NORWEGIAN RESEARCH INSTITUTE, RESEARCH COMMERCIALISATION AND BUSINESS SECTORS Elvira Uyarra

Elvira UyarraAssociate Professor, Manchester Institute of Innovation Research, Alliance Manchester Business School Oslo, 13 June 2017


• Research institutes are an integral part of the Norwegian research system.– Around 23% of the total GERD

– Significant contribution to high quality scientific production

– Undertakes applied research of relevance to industry, the public sector and society esp in engineering & technology and natural sciences.

• Dual role in the Norwegian system, in supporting industry needs and as key intermediaries between firms and universities– Significant impact on firm performance and strong user satisfaction

– Indirect impact through licensing, patenting and spin-off activities

– Strong contribution towards doctoral training in STEM subjects.

• Strong contribution to internationalization of research.

• …But is it well equipped for the transition imperative?

Strong research institute sectorI. Norwegian PRI

sector

Rationales

• PRIs are important contributors to value creation and innovation in Norway. They are also well placed to contribute to Norways’ economic transition

• However low levels of basic funding limits long term capacity to undertake forward looking and risky research to support industrial renewal

• Short termism and systemic co-dependency between PRIs and industry and between PRI and RCN.

• Lack of strategic funding. In some arenas SIS complement the basic allocation and provide space to undertake strategic research

Challenges

• Operationalisation e.g. how to measure contribution to innovation

• Coordination across funding arenas

(R1) Additional block funding to institutes that can make demonstrable contribution to innovation/ transition

I. Norwegian PRI sector

Rationales• By international standards, the Norwegian PRI sector is large, also

more fragmented and heterogeneous• Fragmentation a constraint in terms of competing in international

areas and developing quality and competence• In addition to formal mergers of institutes, there is scope for

generating greater synergies between them and between PRIs and with HEIs

Challenges• RCN funding systems do not encourage collaboration between PRIs• Need to maintain clearly defined roles and responsibilities between

the HEI and institute sectors • Maintain diversity and autonomy of institutes

(R2) Advance structural reform of the sector via mergers but also encourage

synergies between PRIs as well as with HEIs


Rationales:- Institutes play a key role in innovation. - A more active role may be constrained by a lack of

infrastructure for innovation and lack of/ potential mismatch of incentives to engage in innovation.

- New plans for the development of multi-user facilities for testing, piloting, visualisation and simulation.

Challenges- Excellence vs relevance- Heterogeneity of the sector in terms of their potential

contribution to innovation. One size does not fit all

(R3) Clearer incentives for innovation and knowledge transfer activities of

institutes


• Norwegian universities are increasingly expected to play a strong third-mission role.

– Legislative changes and funding (e.g. Forny) to support commercialization

– Changes in governance structures of universities to strengthen the links between universities, industry and the broader society

– Some incentives for third mission engagement in PBFS

– Many funding instruments encouraging collaborative research links between universities and industry

• There is a fairly well functioning system of commercialization, supported by more professionalized TTOs and a more effective system of project selection.

• Good practice examples of active regional and industrial engagement, e.g. NTNU, Tromsö, also in the context of the pilot institutional performance agreements (PAs)

Active efforts to support research commercialisation

II. Commercialisation

Rationale

• Successful funding mechanisms such as FORNY

• However insufficient incentives for staff to engage in research commercialization and other forms of external engagement

• Commercialization activities not always well integrated within HEIs broader activities and institutional strategies

• Insufficient attention to:

– Other forms of engagement e.g. around continuing education

– The differentiated role that university colleges play in commercialization and knowledge exchange

Challenges

• Inclusion of third mission in the funding conditions of HEIs needs to be done carefully danger of distorting effects

• Avoid a too narrow commercialisation view

• University level strategies/leadership

• Improved system of reporting of third mission activities

(R4) Provide more holistic support to the ‘third mission” in Universities

II. Commercialisation

A comprehensive policy mix

• Comprehensive portfolio of financial support schemes and technical services to support innovation by RCN and IN

• Policy mix for business R&D is dominantly generic (R&D tax reduction scheme and open arenas for user driven innovation)

• It is also dominantly supply side but leading towards a more balanced mix

• Improved coherence and consistency (implementation) of policy mix

• Evaluations have suggested positive outcomes and strong additionality of the schemes

• Policy mix effective to support R&D… But is it sufficiently supportive to the economic transition? it is sufficiently stimulating productive linkages between research and public funding and the more distributed landscape of innovation capabilities?

III. Policy mix for business R&D

A comprehensive policy mix III. Policy mix for business R&D

Strong public investment in business R&D, esp. grants and tax incentives

0

1

2

3

4

5

6

7

8

9

10

Competitivegrants

Debt financingand risk-sharing

mechanisms

Repayableadvances

Technologyconsulting

Innovationvouchers

Equity financing Publicprocurement

Tax incentivesfor business

R&D

Tax incentivesfor IP revenuesand other profits

Other tax base

Norway OECD median

Direct funding Indirect funding

Source: OECD STI outlook 2016

Most relevant instruments of public funding of business R&D, 2016


Funding of R&D from Skattefunn has increased dramatically

Funding of R&D from Skattefunn and other sources of public funding

0

200

400

600

800

1 000

1 200

1 400

All (10 persons employed and more) 10-49 persons employed 50-199 persons employed >200 persons employedAll (10 persons employed and more)

Public funding Tax reduction system (SkatteFUNN)


Rationale

• Recently increasing selectivity and strategic thinking in funding mechanisms– Joint calls aimed at cross-sectoral knowledge transfer and

diversification

– Crossover cluster initiatives and collaborative projects to exploit competences and technologies from the oil and gas industry to address challenges in other sectors such as aquaculture

Challenges

• Need to address systemic challenges hindering the efficient delivery of co-ordinated policies

• Need to better leverage regional structures for the purposes of diversification and renewal

(R5) Increase the targeting and reorientation of innovation support

funding


More efforts needed to open up opportunities for diversification

Source: http://www.gcesubsea.no/

Example: GCE Subsea



RECOMMENDATIONS TO TACKLESOCIETAL CHALLENGESSylvia Schwaag SergerVinnova and Lund University

Oslo, 6 March 2017


• Tend to be ’wicked problems’ – Multistakeholder problems that span several disciplines and

policy areas– No ’track record’ or well-established best practice to fall back on– Characterized by uncertainty, unpredictability and rapidly

changing conditions (eg refugee crisis)– Mismatch between organizational structures and problem

structures (OECD 2017)• Often located in or strongly linked to the public sector (and/or

provision of public goods)– Often involves systems that cannot be ’turned off’ (requirement

for continuous service provision)– Risk aversion, weak mechanisms for (resistance to) innovation,

change, experimentation and scaling of successful solutions; hard to appropriate the gains

The ’challenge’ with societal challenges

• Need to balance evidence and action (OECD 2017)• Need for ’stewardship’ (agile leadership)• Re-balance research vs. ’translation’ and innovation• Will require much more ’learning by doing’ (incl

reflexivity) i.e. linear approach particularly unsuitable• Debate over what drives quality of science (productivity

commission vs. Sarewitz 2016)

The ’challenge’ with tackling societal challenges

• Increasing focus on tackling societal challenges• Increasing pressure to maintain and improve

provision of public services (part. health and care)

Finland, Norway, Sweden

• Mature systems (education, research, governance, public services)…

• …create aversity to disruption and risk-taking?

• Silos (and lack of mobility or diversity) in education, research, policymaking…

• … hamper cross-sectoral, multidisciplinary approaches and policymaking

• Universities: slow pace of change and focus on degree programs

• National orientation of research, governance, policies and funding systems…

• … create a bias against globally embedded initiatives

5

System biases that hamper tackling societal challenges (not only in Norway)

• A rapidly changing world…

• ...with increasingly urgent challenges that require interdisciplinary and international approaches…

• …risk-taking, experimentation…

• …and continuous education (lifelong learning)

• Need for policy coordination

• Increasing international competition and need for cooperation

RECOMMENDATIONS

6

• based on inclusive processes beyond experts and users (artists? Immigrants?)

• examine regulatory issues and framework conditions• promote interdisciplinary and multidisciplinary research • access a wide range of instruments, from specific research

and innovation projects (including social innovation) to experimentation and public procurement

• include foresight exercises and agree on strategies/visions that transcend sectoral boundaries and include education, innovation and upscaling.

(R1) Devise broad integrated programmesaiming in priority at addressing societal

challenges

• Rationale / Impact– Societal challenges require a different approach– Programs that follow problems not sectors– Access a broader spectrum of instruments (framework

conditions, innovation, education)– Stewardship

• Main challenges– Coordination– Unchartered territory (but examples from Finland, Sweden)– Requires reflexivity, agility, space for experimentation– The global dimension


challenges

• Agenda 2030 as driver of…– Tackling societal challenges (social, economic,

environmental sustainability)– Governance– Policy coordination– Innovation– Global cooperation


challenges

• Tackling societal or grand challenges…– … is not the same as mission-driven R&D programs!– requires combining bottom-up initiatives with some

top-down policy direction


challenges

• The biggest innovations are happening at the interface of different sectors, disciplines and industries

• The importance of ’tricksters’ (Arie Rip)


challenges

• Examples– Challenge driven innovation (Sweden)– Strategic Research Council (Finland)– Experimentation and pooling of analytical

resources at PM Office (Finland)– Green Deals (Netherlands)

(R1) Devise broad integrated programmes aiming in priority at

addressing societal challenges

• Rationale / Impact– Importance of lifelong learning and continuous upgrading of

skills– Breaking down educational silos– 21st century skills

• Main challenges– Uncertainty– Specialization vs. generic skills– Rapidly changing workplace vs. rigid academic structures– Autonomy vs societal needs

(R2) Align the higher education and Technical and Vocational and Educational Training (TVET)

system to the skill base needed for societal challenges

(R2) Align the higher education and Technical and Vocational and Educational Training (TVET) system to the skill base needed for societal challenges

• Rationale / Impact– Unique character of societal challenges– Bring research closer to needs– Unique character of public sector (and public goods)

creates bias against change and risk-taking and results in absence of scaling mechanisms

– Lack of innovation culture• Main challenges

– Accountability (fear of failure)– Lack of platform and instruments for learning and

scaling

(R3) : Invest in translational activities and establish structures for experimentation (including radical/ disruptive innovations) as well as for learning and upscaling solutions.

• Rationale / Impact– Importance of public sector as demanding customer

and market creator– Focus innovation (and research?) on pressing needs

• Main challenges– Formulating needs, not solutions– Lack of competencies– Identifying appropriate level of govt and

dissemination– State aid rules?

(R4) Strengthen public procurement for innovation, aiming to address societal challenges and considering other forms of support to demand relevant solutions

• Rationale / Impact– Important issues fall between the cracks of different

ministries and policy domains– Need for a holistic approach, speedy delivery and

reflexivity

• Main challenges– 19th century institutions for 21st century problems?– Little mobility between ministries?– Power balance between central government and

municipalities

(R5) Address governance issues to improve co-ordination across ministries and policy domains of efforts towards solving societal challenges (for example in healthcare innovation)

Building blocks for system innovation and tackling societal challenges

Transformative / highrisk research

Systematicexperimentation

Reforming educationResearch for better policy-making

Better policy coordination

Promoting challenge-driven innovation

Better governance of innovation policy

Policy evaluation and learning

International dimension Innovation in and for the public

sector• Capacity-building• Procurement• Experimentation and scaling

Multi/interdisciplinaryresearch

• Norway’s assets…– High trust in government / public sector (Low

corruption, high transparency)– Large research investments in areas relevant

to societal challenges– Consensus culture and user orientation

• … provide a unique (but as yetunderexploited) opportunity to be morebold in trying to tackle societal challenges

Summary

• Join development aid and research and innovation in initiatives to tackle global societal challenges with business opportunities for Norwegian firms (Nilsson & Sörlin 2017)

• PANORAMA initiative• Focus also on innovation side

Tackling societal challenges: International dimension

THANK YOU!

[email protected]

• Invest in translational activities and establish structures for experimentation (including radical/ disruptive innovations) as well as for learning and upscaling solutions. This could take the form of policy labs, experimental regulation-free zones, and also assigning selected actors (agencies, ministries, commissions) the responsibility for broader implementation

• Strengthen public procurement for innovation, aiming to address societal challenges and considering other forms of support to demand relevant solutions

• Address governance challenges (eg innovation in health can be argued to be the responsibility of many or no ministries, there is a need for better orchestration)

Areas for improvement – tackling major societal challenges contd

• Society / govt:– Provide investment/funding and focus– Demanding customer (market creating)– DoD ‘brought all of the players in the innovation game together, disciplined them by

providing strategic, long-term focus for their activities, and shielded them from the market rationality that would have doomed almost every crazy, over-expensive idea that today makes the world go round. The great accomplishments of the military-industrial complex did not result from allowing scientists to pursue “subjects of their own choice, in the manner dictated by their curiosity,” but by channeling that curiosity toward the solution of problems that DOD wanted to solve’.

• ‘In the future, the most valuable science institutions will be closely linked to the people and places whose urgent problems need to be solved; they will cultivate strong lines of accountability to those for whom solutions are important; they will incentivize scientists to care about the problems more than the production of knowledge. They will link research agendas to the quest for improved solutions — often technological ones — rather than to understanding for its own sake. The science they produce will be of higher quality, because it will have to be.’

Sarewitz 2016

1. ‘scientific knowledge advances most rapidly, and is of most value to society, not when its course is determined by the “free play of free intellects” but when it is steered to solve problems — especially those related to technologicalinnovation’.

2. ‘when science is not steered to solve such problems, it tends to go off half-cocked in ways that can be highly detrimental to science itself.’

3. ‘science will be made more reliable and more valuable for society today not by being protected from societal influences but instead by being brought, carefully and appropriately, into a direct, open, and intimate relationship with those influences.’

Sarewitz (2016)

R&D budgets earmarked to societal challenges

CanadaMexicoAustraliaUnited KingdomChinese TaipeiUnited StatesLatviaLuxembourgNorwayPolandSpainOECDNew ZealandArgentinaKoreaDenmarkEstoniaFrancePortugalSloveniaJapanItalyEU28HungaryChileCzech RepublicGermanyFinlandGreeceSlovak RepublicLithuaniaIcelandIrelandAustriaSwedenNetherlandsBelgiumTurkeyIsraelSwitzerland

051015202530

Health Environment Energy

Source: OECD

Example health and care

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

Humanities

Social Sciences

Medicine and health

TechnologyMathematics and Natural Sciences

Agriculture, Fisheries and Veterinary Medicine

Expenditure for R&D to higher education and institute sector according to field of science, 2015 prices, million NOK

• Rapid increase in R&D spending• Largest thematic area in terms of R&D spending (one fourth

of total for HEIs and institutes; 37% of all R&D personnel at HEIs)

• A typical area of ’societal challenges’ and highlighted in LTP

• Significant increase in research (part. in hospitals) and effortsto strengthen knowledge resources in municipalities

• Flora of innovation projects in municipalities, healthcare etc• Some ambitious experimentation (pilot welfare technologies)• Attempts to reform education in health services• No shortage of strategies, analyses, processes, reforms• Increasing focus on stakeholder und user involvement• LTP made an important contribution by making societal

challenges a priority, and by linking health, welfare and modernization

Example health and care: lots going on…

• Strong focus on ’bottom-up’ projects and awareness-raising

• Lack of ’stewardship’ of systemic change• Innovation in healthcare is influenced by

several ministries and policy domains• Lack of systemic experimentation and of

mechanisms for system learning, dissemination and scaling

…but

• Emphasis has been on research, less on ’translation’ / innovation• Lack of innovation culture, weak tradition of industry cooperation• Barriers to cooperation within the healthcare system• No overarching structure / architecture for supporting research

and innovation in primary healthcare and for municipalities• Paradox: research is ‘applied’ but not necessarily challenge-driven

(from a societal perspective)• Weaknesses in lifelong learning and skills upgrading• Innovation and primary care fall ‘between the cracks’ of

ministries’ responsibilities and coordination. “The Ministry of Industry and Fisheries has all the instruments for commercialization”

Example health and care: challenges

Challenge driven innovation – some experiences from a Vinnova-programme

Jonas Brändström, head of department,

Kunnskapsdepartementets konferanse 13. juni 2017

About VINNOVA• 200 employees• Stockholm, Brussels and Silicon Valley• Government agency under the Ministry of

Enterprise and Innovation

Three roles

Investment in research and

innovationNational EU node Expert agency

2010:Do we need to radically change our funding instruments to solve societal challenges?

Why?

A traditional, typical, Vinnova-project

• R&D-projects that develop strategic, new, knowledge

• Focus on technological challenges

• Long projects, 3-5 years, hard to adjust for changes

• Few project partners, generally 1-5 actors

• Typically male dominance and reaching the same actors

• Impact often too unclear

Primarily top-down calls: narrow themes or stakeholder oriented

Let’s try….

We changed the process so that the projects...

• depart from societal challenges, not technology

• are set-up bottom-up

• involve all relevant problem owners at an early stage, addresses the whole value chain

• works iteratively, test-driven

Has it been easy? NO

Has it made a difference? YES

Key attributes and principles Must deal with significant demands in society and industry, which can be

associated with clear stakeholders

Shall result in innovations that combine international business potential and public welfare

Builds on collaboration with actors in value networks, which actively involve users and customers

Embodies a systemic approach, taking consideration to the whole innovation system and not only parts or subsystem

The project impact logic must demonstrate desired results and how to reach them

………

Innovation capabilityAction-oriented learning

Mobilization

Innovations

Impact logic: high-level objectives in two dimensions

Results are implementedAttracts investmentsSustainable growthChanging cultures

(journeys)

Three stages stimulating innovative projects and appropriate risk sharing

1 InitiationDevelop idea and

consortium or technical feasibility study

2 CollaborationDevelopment and

integration, restricted tests, user involvement

3 ImplementationFull-scale tests in real

environments, demonstrate, user

involvement

A competitive impact-driven processNo of projects

approvedVinnova’s

contribution (max)Vinnova’s contribution:

share of total costs

A competitive impact-driven processNo of projects

approvedNo of applications

stage 1

33(20%)

10(30%)

6(60%)

The combination of mission, principles and stages made it possible to deal with over-

subscription

Impact and lessons learned

What?

At first the funding scheme might seem like common goods, but it is really different…

Traditional Vinnova-project CDI-project

• One long project 3-5 years

• A few key partners (approx. 3-6)

• Technological challenges

• R&D-projects that develop strategic new knowledge

• The “usual suspects”, typically male researchers

• Top-down calls

• Several shorter projects, three stages

• Much broader consortia (approx. 12)

• Societal challenges

• Change & Innovation projects that focus on both results and effects

• Reaching new groups, good gender balance

• Mix top-down / bottom-up


Mobilization

Innovations

Clear results in two dimensions


(journeys)

Renewed Vinnovas’ portfolio of parties

One of the biggest SME-programs at

Vinnova

One of the biggest public sector programs at

Vinnova

Best in class with respect to gender

equality

Value of the CDI-process (questionnaire)

ValueRejection

Stage 1Stage 1 realized, not

applied to stage 2Stage 1 realized,

rejection to Stage 2Improved networks and relations 47% 44% 80%

Improved the analysis of the problem 39% 44% 70%Identified new

technological/scientific opportunities 17% 38% 40%Improved the level of knowledge

within the technological area 16% 31% 60%No value

25% 6% -

Teknikföretagen highly appreciates the CDI-programme in how it brings companies, academia and public sector together for mutual benefit

Peter JohanssonDirector Research and Innovation

Teknikföretagen*

* Association of Swedish Engineering Industries

SmedpackCounterfeit medicines is growing and a global problem with serious consequences

Increase the security in supply chains of the legal medicines, e.g. security and tamper-evident features of the packages, consumer apps and collaborating with Europe

The Medical Products Agency, pharmaceutical producers, pharmacies, universities, law enforcement, customs, The Swedish Association of Local Authorities and Regions, counties, labelmakers and designers

CHALLENGEFutureHealthcareSTAGE

The Smedpack-project gave a unique opportunity to support Swedish industry and organisations to comply with the EU directive.

Sandra PousetteProject Manager

Smedpack (Stage 3)RISE Bioeconomy (Research institute)


Mobilization

Innovations

Clear results in two dimensions


(journeys)

The world’s most northern passive

house built in stage 2

Research on digital pathology

commercialized in stage 3

A spin-off company signed a long-term contract with a big

regional county after stage 3

The whole portfolio clearly contribute to the

Sustainable Development Goals

All stage 3 and most stage 2

projects test their solutions in real

settings

Insights lead to rearticulated research

questions and 90 MSEK investments from a private fund

School for everyone, from the first day in the new country

Many students with a foreign background are not eligible for higher education and are therefore alienated from societyDevelop and test multi-lingual e-learning solution for immigrant students that yet do not master the Swedish languageTechnology providers, publishers, research institutes, universities, municipalities, schools, authorities

CHALLENGE 2015-2017InformationSocietySTAGE

The link to CDI is what made our work raise from pure product development to radical service innovation.

Carl HamiltonProject Manager

School for everyone, from the first day in the new country (Stage 2)Komplementskolan

CDI has been instrumental in Vinnova’stransformation 2010-2016!!!

Thank you!

oecd reviews of innovation policy: norway overall … · 13/06/2017 · oecd reviews of innovation...

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