1. Knowledge Economy Forum V, Prague, March 28-30, 2006
Ossi V. Lindqvist,
Chair, Finnish Higher Education Evaluation Council (FINHEEC)

2. R&D 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.
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3. In Finland, the universities and HEI’s at large are
considered as core elements in the building of modern
innovation society; this sets, however, new requirements
for their strategies, functions and even structures.
In Europe, firms and companies are often seen as
key players in national innovation policies.
- A bottom-up approach!
Another approach, relatively more top-down, has
been successful, at least in Finland, but also in other
Nordic countries.
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4. This approach involves a close cooperation between
the public sector, including all pertinent ministries,
several buffer organizations serving as liaison
in technology transfer and financing, the industry
and other public and private organizations,
and the universities and polytechnics, as well as
the national research institutes.
So the innovation system works rather as a
network than as a ‘one-way street’ from innovation
to production.
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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.
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6. Regional development as supported by R&D 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 polytechnics.
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7. Technology policy in Finland is the responsibility
of the Ministry of Trade and Industry.
The most important tool in executing and financing
technological R&D is the National Technology Agency
(TEKES) (
TEKES 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 R&D activities in companies directly.
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8. In most cases the universities’ collaboration
with business enterprises goes with TEKES serving
as buffer organisation; that is, both the company
and TEKES provide the R&D 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-sized
companies (SMEs) to be engaged in R&D.
In 2005, ca. €180 million was paid by TEKES through the
universities, polytechnics and research institutes for R&D
work with companies or towards creating new companies.
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9. The current investment in R&D 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 R&D expenditure
in Finland is by private companies, and the rest
is public money. The total national R&D
expenditure annually is thus in excess of €5 billion.
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10. Science policy is the responsibility of the
Ministry of Education, and its principal research
financing organisation is the Academy of Finland (
The universities and research institutes are the
key players in publicly funded research.
The Academy of Finland provides annually
over €200 million for (basic) research in
universities and research institutes.
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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.
Special measures have also been undertaken to
engage more women in research careers.
(Nearly 50% of the new PhDs are women!)
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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 tight contract
system, with technology transfer offices and IPR
services available, also in collaboration with local
Technology Parks, etc.
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13. The Science and Technology Policy Council of Finland
is the main coordinating body in national science and
technology policy.
The Council 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.
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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.
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15. The entire higher education sector is now facing
global competition and global market for its services,
which makes the entire innovation system to face
totally new challenges.
One consequence has been that the universities
now require more autonomy, also financially,
to be competive and successful in the new market
situation.
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16. The current Universities Act in Finland is not very
detailed, and it leaves a good amount of autonomy to
the universities themselves. For instance, there is
little reference to the structure of the university;
this issue is left to the universities 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 HEI’s is becoming even more dynamic!
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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 external demands,
e.g. concerning multidisciplinarity in both teaching
and research.
The new situation 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, and promoting
internationalisation, etc.
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18. In the Finnish universities, the lump-sum budgeting
started in 1994, and now the basic financing of the
universities is mostly based on the annual numbers of
Master’s degrees and PhD’s graduated, based on an annual
contract between the university and the Ministry of Education.
(The contract usually covers a 3-year rolling plan.)
The performance and management of universities 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.
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19. Thus the universities have been moving towards
an entrepreneurship mode in their overall activities.
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20. As a (minor) example, if a teacher or staff member
of a university wants to be engaged in entrepreneurial
activities, based on his/her research, 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 university’s premises, instruments, or other services.
This kind of entrepreneurial activity is actually even
encouraged, but usually it takes place through a special
technology transfer office on the campus, or through
the local Science Park, or through some other
comparable measures.
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21. The patent rights by the current IPR law basically
belong to the professor/scientist working 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 company.
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22. The Universities Act requires that the universities shall
evaluate their education, research 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 polytechnics will be
audited for the European Standards and Guidelines in
Quality Assurance (QA), by the year 2010.
The main external evaluation agency is the
Finnish Higher Education Evaluation Council,
FINHEEC (
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23. The importance of researcher training in the universities
is being recognised; it certainly should be part of the
long-term development strategy of any university. The
European Bologna process also calls for the new degree
structure in universities, and the so-called third cycle or
PhD training is getting new strength.
Traditionally, researcher training was based on
apprenticeship whereby a professor produced his/her
successor over many years, and that was all!
Last year 2005 in Finland, ca new PhDs were
graduated.
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24. Thus the ‘new’ universities are facing challenges that
differ from the traditions of their past. They are also
becoming more and more accountable to the society
and to the people they serve. The share of the age class
that enters higher education 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 research-based
university in contrast to the mostly teaching institutions
in the past.
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25. 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 at large.
These are all great challenges for the entire HE system,
which also calls for more professionalismin in the universities’
leadership and management at large; their national and
international environment is growing more complex,
more competitive, and more challenging!
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26. More details of the entire Finnish innovation system are available at:
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