Supermodel Secrets

December 1, 2006

Continuity, generosity and simplicity make Finland's research funding system a real eye-catcher. Raimo Väyrynen praises its elegance

Finland is without doubt one of the success stories of national science and technology policy. In little more than ten years, total spending on research and development as a proportion of gross domestic product grew from less than 2 per cent to 3.5 per cent, due mostly to the rapid increase in corporate R&D, especially in the electrotechnical sector. Corporate R&D now accounts for some 70 per cent of all such spending.

A similar leap will be hard to replicate. The best we can hope for is that corporations continue to recognise the intrinsic value of research and innovation and keep the most valuable parts of their R&D cycle in Finland.

For this to happen, the public sector must show its commitment to high-quality R&D. At roughly 1 per cent of GDP, the public share of total R&D is not particularly high by international standards. But it increased quickly in the second half of the 1990s when the Government used income from the privatisation of state-owned firms to bolster public R&D spending.

The aim was to help the economy recover from the depression of the early 1990s. This commitment to science and technology continues today.

Indeed, public and private commitment to R&D and the systematic organisation of science and technology are hallmarks of the "Finnish model". R&D spending has broad support among policymakers. Funding agencies do not need to worry about whether the next government will abandon R&D; they can confidently expect continued interest.

Another hallmark of the model is its relative simplicity and coherence.

Apart from universities and public research institutes, which fall under various ministries, research funding is concentrated in two bodies: the Academy of Finland and the Finnish Funding Agency for Technology and Innovation (Tekes).

The academy, which had a total budget of €7 million (£185 million) for 2007, represents the national research council and funds basic research, primarily in universities. All academy grants are based on bottom-up competition and are peer reviewed before a decision is made by one of the four research councils or by the academy's board. In 2005, three quarters of the peer reviewers came from outside Finland. The academy also provides science policy advice to the Government and pursues international co-operation with the European Union and individual countries.

Tekes provides extensive funding - a total budget of €498 million for 2007 - for applied industrial research conducted at universities, research institutes and companies, usually in co-operation with one another. Another big player is the Finnish National Fund for Research and Development (Sitra), which is part public venture-capital group, part think-tank.

The system is co-ordinated by the Science and Technology Council (chaired by the Prime Minister), which comprises key ministers, business representatives, trade unions, funding agencies, research institutes and universities. The council issues regular reports and guidelines for Finland's science and technology policy and outlines budgetary commitments to, and priorities for, R&D.

Collaboration among key participants contributes to the system's coherence. Universities, the academy and Tekes have strong strategic relationships with corporations and research institutes, especially the VTT Technical Research Centre of Finland. Over the years, the academy and Tekes have developed a working relationship that led to the development of the Finland Distinguished Professor Programme (FiDiPro), in FinnSight2015, a joint exercise in science and technology foresight, and in the initiatives leading to the establishment of the Strategic Centres of Excellence in Science, Technology and Innovation.

Raimo Väyrynen is president of the Academy of Finland.

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