Giving innovation policy an identity
Sweden assumed the Presidency of the EU Council of Ministers on 1st January. During its tenure, negotiations will shape the structure of the Sixth Framework Programme, which will take us till 2006. How will Sweden influence the outcome? Euroabstracts talked to Göran Marklund(1), head of the Innovation Systems division of Vinnova, the newly-established Swedish Agency for Innovations Systems. At home, Sweden is adopting a more focused policy on innovation,he says. And many of the new ideas spring from involvement in EU research.
Göran Marklund: Swedish participation in the framework programmes has progressively increased since initial small beginnings in FP2, in the early 1980s. Is this trend continuing into FP6?
The tendency is towards a deepening of involvement rather than a growth of numbers of organisations taking part. This will, of course depend on the final structure of FP6, but we believe that the 'large project', or 'big science' philosophy will discourage an increase in the numbers of participants, and will strengthen the involvement of those partners already engaged in pan-European co-operation. People who are already active in projects have learned how to get the best out of these initiatives, and how they can be moulded to their development portfolio.
European exploratory research
How do Swedish companies view the usefulness of participating in EU projects? Do they feel that there is a direct influence on the level of innovation in Sweden?
The companies that are already involved are staying involved, so they recognise the value of co-operation. As for the direct effect on innovation levels in Sweden, I do not think they feel a direct impact: we have carried out studies which indicate that they view the effect as being indirect. By this, I mean that firms, particularly large ones, use the EU framework for exploratory research. Positive results from this work can lead to a company adding the technology to its in-house development agenda, with a view to subsequent commercialisation. As such, the innovation process lies downstream of EU R&D co-operation.
Negotiations on the Sixth Framework Programme (FP6) are continuing. What influence do you expect the Swedish Presidency to have on these talks, and how should the outcome affect innovation, particularly in Sweden itself?
In my opinion, some of the projects will probably become very large, and this sometimes makes it difficult to become as actively involved as we would like. The concept of 'centres of excellence' embedded in the proposed structure also needs refining: the notion is interesting, but not yet well defined. How are they going to be selected, and what criteria are going to be used? There are moves to prioritise research and to build strong technical environments within the Swedish system, so hopefully, the final structure should be compatible with our aims. One thing is for sure, and that is that if these centres are to be effective, we must encourage the mobility of researchers. We hear much talk of the European research area, but if this is to become a reality, expertise must flow freely to where it is most required.
From corporation to entrepreneur
It is well known that government policies can aid innovation or hamper it. What is Sweden's record in this area?
It is true that Sweden scores highly on innovation indicators(2): it invests a lot in R&D, it publishes a lot of scientific papers, and it takes out a lot of patents. But this has not fed through to the long-term economic growth rate (although the information technology boom has boosted growth over the last few years). In the 1970s Sweden had the 3rd-fastest growth among the OECD countries, but we have now dropped back to 17th. And our figures for start-ups are not that impressive. So we have to recognise that investment in R&D does not automatically create marketable innovations.
Another barrier to innovation is that, alone in the world, most of our R&D support has gone to universities, and it is the larger companies that are the best placed to collaborate with them. Small firms find it much harder. So it is really a cultural problem: the system has been too corporate and not entrepreneurial enough. We have been used to working for large employers, whether in the private or public sector. yet our economy needs the constant renewal that only new small firms can bring. So we have a lot to do to open up research to them.
What policies have worked best?
We have not supported innovation as such. What we have tried to do is to create an environment in which innovation and growth could spring up of their own accord, primarily by funding education and research in universities. To a much lesser extent we have also co-funded, along with consortia of industrial members, sector-specific development institutes such as the STFI forestry institute in Stockholm and the SIK food and biotechnology institute in Göteborg.
Other policy initiatives have also had good side-effects on innovation. For example, individuals can get a grant to buy a personal computer, and employers can provide employees with personal computers, without the latter paying tax on the benefit. As a result, Sweden's computer ownership and computer literacy are among the highest in the world: recent figures show that two-thirds of the population over the age of 15 have access to a PC at home. This is good for innovation, because it stimulates demand, and also builds the skills base that the content industry relies on. But the policy was introduced primarily on social grounds, to prevent the creation of a 'digital divide'.
SMEs are widely seen as the powerhouse for future growth in the EU. What national measures has Sweden taken to encourage innovation among SMEs?
Our central support aimed specifically at SMEs is not as extensive as some other EU countries'. There are, however, several different kinds of programmes. We like to talk of 'arenas for co-operation'. We want to encourage collaboration, by building bridges between universities, institutes and small firms. We also provide small amounts of seed financing - in the form of loans which are made before the normal venture capitalists would recognise a project as viable - which can help in the very early stages of a firm's development. Typically, these loans are used to take an idea from conception to the pre-competitive stage of building a prototype.
There are also regional initiatives designed to support SMEs. These include provision of venture capital, management support and mentoring for budding entrepreneurs.
A number of traditional industries - forestry for example - remain crucial to Sweden's prosperity. How are these industries being encouraged to innovate?
The traditional industries - particularly paper and pulp - are dominated by large companies, and our attitude is very much the same as that for the firms in newer areas: give them good framework conditions and let them get on with it.
Distinct identity for innovation policy
Looking into the future how do you see policies affecting both the type and level of innovation in Sweden in a few years time?
The recent restructuring is part of creating an integrated innovation policy in Sweden. Innovation policies will have a distinct identity, rather than being wrapped in a blanket of policies which make no explicit mention of innovation. This should enable us to define priorities within innovation policy, focus on specific areas, and build strong capabilities within them.
Exactly how has Sweden's R&D financing been reorganised to meet these goals?
There were three distinct parts. Firstly, more government money is going into research and this extra funding is under the control of the newly-restructured Scientific Research Council (Vetenskapsrådet), a committee of government-appointed senior academics, who decide research fields of study. This should hopefully reinforce the research environment, by providing a much sharper focus. Previously, most funding was allocated directly to universities. The council will look at the greater picture and decide where research priorities lie.
Secondly there is the question of innovation. A new agency called Vinnova, the Agency for Innovation Systems, has been instituted, which will focus on innovation from a business development perspective. It will encompass all sectoral innovation initiatives.
Finally, I hope that our general industrial policies will concentrate much more on supporting entrepreneurship and promoting successful innovation and growth strategies in Sweden's' regions. The funding for these initiatives is still to be finalised, but they mean that innovation is now recognised as a prerequisite for sustainable growth, and it is firmly on the policy agenda.
(1) Göran Marklund has worked for NUTEK, the Swedish National Board for Industrial and Technology Policy, since 1992, and completed his doctorate - appropriately, on Sweden's technology policy - in 1994. In 2000 he became head of NUTEK's Innovation Systems division, which as from this year has been subsumed into the similarly-named division of a new organisation Vinnova, the Swedish Agency for Innovation Systems. See http://www.vinnova.se
(2) See the European Innovation Scoreboard, as reported in the November 2000 issue of Innovation and Technology Transfer, available at /itt/itt-en/00-6-spec/annex.htm.