Inno evalfi policy_report_28_oct_2009


Published on

1 Comment
1 Like
  • There is strong evidence that Saxony has a similar power of becoming a global microelectronics and hightech hotspot surrounded by a centuries long legacy of top of the top innovation driven by the Saxonian far sighted rulers. August the Strong in the 17th century certainly been on of the major starting points making that happen. '50 Years of Microelectronics' with its official anniversary event just two days ago (check out #SiliconSaxony for Twitter news live from event and before end of the coming weekend for more news)
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Inno evalfi policy_report_28_oct_2009

  1. 1. Ministry of EducationEvaluation of the FinnishNational Innovation SystemPolicy Reportwww.evaluation.f i
  2. 2. This page is intentionally left blank for double-sided printing
  3. 3. Published on 28 October 2009 at 13:00 Finnish local timeEvaluation of the Finnish NationalInnovation System – Policy Reportwww.evaluation.f i (Also available: Full Report) Chair of the evaluation panel: Professor Reinhilde Veugelers Katholieke Universiteit Leuven (Belgium) Other international panelists: Professor Karl Aiginger Austrian Institute of Economic Research (WIFO) Professor Dan Breznitz Georgia Institute of Technology (USA) Professor Charles Edquist Lund University (Sweden) Professor Gordon Murray University of Exeter (UK) Professor Gianmarco Ottaviano Bocconi University (Italy) Finnish panelists: Professor Ari Hyytinen University of Jyväskylä Research Professor Aki Kangasharju VATT, The Government Institute for Economic Research Adjunct Professor Mikko Ketokivi Helsinki University of Technology Head of Unit Terttu Luukkonen ETLA, The Research Institute of the Finnish Economy Research Director Mika Maliranta ETLA, The Research Institute of the Finnish Economy Professor Markku Maula Helsinki University of Technology Professor (Emeritus) Paavo Okko Turku School of Economics Research Director Petri Rouvinen Etlatieto Oy (a subsidiary of ETLA) Professor Markku Sotarauta University of Tampere Researcher Tanja Tanayama HECER, Helsinki Center of Economic Research and Etlatieto Oy Director Otto Toivanen HECER, Helsinki Center of Economic Research CEO Pekka Ylä-Anttila Etlatieto Oy (a subsidiary of ETLA)Publisher: Taloustieto Oy (on behalf of the Ministry of Education and the Ministry of Employment and the Economy)Helsinki University Print, 2009Cover design: Porkka & Kuutsa OyCover photo: Kai Kuusisto / PlugiISBN 978-951-628-490-6 1
  4. 4. Sounding Board Chairs of the sounding board: State Secretary Mikko Alkio (until 31 July 2009) Ministry of Employment and the Economy State Secretary Riina Nevamäki (since 1 August 2009) Ministry of Employment and the Economy Other members of the board: Ministerial Advisor Pirjo Kutinlahti Ministry of Employment and the Economy Director Anita Lehikoinen Ministry of Education State Secretary Heljä Misukka Ministry of Education State Secretary Velipekka Nummikoski Ministry of Finance Director General Petri Peltonen Ministry of Employment and the Economy State Secretary Terttu Savolainen Ministry of Social Affairs and Health Special Government Advisor Ilkka Turunen Ministry of Education Members of the research and support team Ali-Yrkkö, Jyrki; Autio, Erkko; Deschryvere, Matthias; Dixon, Roderick; Hyvönen-Rajecki, Kaija; Koski, Heli; Kotilainen, Markku; Kotiranta, Annu; Nikula, Nuutti; Nikulainen, Tuomo; Paasi, Marianne; Pajarinen, Mika; Palmberg, Christopher; Rogers, John; Saariokari, Pirjo; Tahvanainen, Antti; Takalo, Tuomas; Väänänen, Lotta. This Policy Report summarizes the key findings of the evaluation. The Full Report provides further details and elaboration. Some of the studies conducted to support the evaluation are also available separately: • Autio, E. (2009). High-Growth Firms in Finland: Issues and Challenges. ETLA Discussion Papers, 1197. • Deschryvere, M. (2009). A Comparative Survey of Structural Characteristics of Finnish University Departments. ETLA Discus- sion Papers, 1195. • Kotiranta, A., Nikulainen, T., Tahvanainen A-J., Deschryvere, M., & Pajarinen, M. (2009). Evaluating National Innovation Systems – Key Insights from the Finnish INNOEVAL Survey. ETLA Discussion papers, 1196. • Nikulainen, T., & Tahvanainen, A-J. (2009). Towards Demand Based Innovation Policy? The Introduction of SHOKs as Innovation Policy Instrument. ETLA Discussion Papers, 1182. • Tahvanainen, A-J. (2009). Finnish University Technology Transfer in a Whirl of Changes – A Brief Summary. ETLA Discussion Pa- pers, 1188. • Takalo, T. (2009). Rationales and Instruments for Public Innovation Policies. ETLA Discussion Papers, 1185. • Tanayama, T., & Ylä-Anttila, P. (2009). Tax Incentives as Innovation Policy Tool (in Finnish with an abstract in English). ETLA Dis- cussion Papers, 1189. Free electronic versions of all reports and studies as well as other related material are available at To obtain printed copies of the reports, please fill a form at the web site or contact Riikka Pellikka, Ministry of Employment and the Economy,, +358 50 302 7671. Contacts Pirjo Kutinlahti, Ministry of Employment and the Economy,, +358 10 606 3548 Petri Rouvinen, Etlatieto Oy,, +358 9 6099 0202 Ilkka Turunen, Ministry of Education,, + 358 9 1607 72992
  5. 5. Table of Contents Preface > 4 Executive Summary > 9 Overview and General Conclusions 1. Evaluation Task > 12 2. Future Challenges and Ongoing Reforms > 14 3. Policy Governance and Steering > 20 Six Main Points of View: Summaries by Sub-Panel 4. Broad-Based Innovation Policy > 34 5. Demand- and User-Driven Innovation > 42 6. Globalization of Business Activities > 52 7. Growth Entrepreneurship and Finance > 60 8. Geography of Innovative Activity > 70 9. Education, Research and the Economy > 78 Growth Strategy: A Strong Commitment to Education, Research, and Innovation 10. The Way Forward > 88 Bibliography > 90 Endnotes > 92 3
  6. 6. Preface In the fall of 2008 the Ministry of Education and the in implementing the Strategy and in steering the system Ministry of Employment and the Economy commis- towards a better future. sioned an international evaluation of the Finnish na- Our evaluation task is outlined in the original tional innovation system. As I was in the final months contract notice (ref. no. 2327/420/2008), as well as in of my term as an economic advisor at the Bureau of the evaluation brochure, prepared for the opening European Policy Analysis to JM Barroso, European press conference on 11 December 2008: The Minis- Commission, and not yet fully returned to my pro- tries specifically wanted an independent outside view of fessorship at Katholieke Universiteit Leuven (Belgium), the system. We were to look into the current and fu- the timing was perfect for me to learn about the fea- ture challenges and consider whether or not they are tures of the innovation system that continues to be sufficiently acknowledged and addressed. We were admired and imitated worldwide. to point out needs for institutional and policy adjust- ments and reforms, as well as to draw conclusions on policy governance and steering. Given the short time Shooting a moving target and broad coverage of our task, we were to evaluate the system as a whole rather than focus on individual The evaluation mission turned out to be challenging actors, organizations, and instruments. In our evalu- not only due to its considerable scope and shortness ation we looked particularly at whether public bod- of time, but also because of the several ongoing tran- ies and policies assist and incentivize both public and sitions in the Finnish system, in part induced by the private individuals and organizations in generating new innovation strategy (Aho, et al., 2008) that served and utilizing novel ideas. as our starting point; at least four major reforms ad- In collaboration with the two Ministries, the eval- vanced along with our evaluation and dozens of new uation panel settled on six main points of view in the policy initiatives have seen the light this year alone. evaluation (Exhibit 1); the basic choices of the Strat- Our solution to this moving target problem was to egy underlie each point of view. We organized our- employ heterodox approaches and work (partly) in selves into six sub-panels, one for each main point of smaller groups. Despite the evolving nature of the view. Based on the work by the sub-panels, we draw system, as well as the valuable and welcomed diver- our overall conclusions as the whole panel. sity in the opinions of the panel, we ended up with a Each sub-panel was led by an international ex- coherent joint view on conclusions that should help pert working with two Finnish ones: an academic Exhibit 1: The basic choices underlie the Global trends, national structures & their evolution, choices of the Finnish National Innovation Strategy six main points of view, each studied by a sub-panel led by an international BROAD-BASED DEMAND- & GLOBALIZA- GROWTH GEOGRAPHY EDUCATION, expert. INNOVATION USER-DRIVEN TION OF ENTREPRE- OF INNOVATIVE RESEARCH, POLICY INNOVATION BUSINESS NEURSHIP & ACTIVITY AND THE Source: The brochure prepared by the Ministry of Educa- ACTIVITIES FINANCE ECONOMY tion and the Ministry of Employment and the Economy for the opening press conference of the evaluation on 11 K. Aiginger G. Murray G. Ottaviano C. Edquist D. Breznitz R. Veugelers December 2008. A. Kangasharju T. Luukkonen M. Ketokivi P. Okko A. Hyytinen O. Toivanen M. Sotarauta P. Rouvinen P. Ylä-Anttila M. Maula M. Maliranta T. Tanayama Innovation activity in a world without borders Innovative individuals and communities Demand and user orientation Systemic approach The Finnish national innovation system and policy: policy/institutional reforms/adjustments to meet future challenges4
  7. 7. scholar and an innovation researcher representing tical policy concerns. Finland is in a unique position ETLA. Given the task and the time, each sub-panel to lead innovation policy thinking globally by filling had to make hard choices as to its approach and em- these gaps in scholarly knowledge and by providing phasis; all pressing issues could not be addressed. In the scene for real policy experiments.writing the report we have attempted to produce self-contained chapters, even if this necessarily brings about some repetition. Some personal observations on Finland and the FinnsInnovation policy remains an art Finland certainly has more than its fair share of capa-rather than a science ble civil servants, which (as a group) seem to be influ- ential in steering and developing the system. Often In the context of this evaluation, we largely took the they are not only willing, but also eager to accept newpremises for innovation policy for granted, even if ideas and rapidly integrate them into policy discus-we are fully aware that the underlying theories and sion. Nevertheless, Finland seems to share the same empirics remain less-than-satisfactory to effectively institutional inertia as other countries when it comes guide policymaking, which poses a challenge. to implementing reforms. Society’s interest in innovation stems from its Curiously enough, there is almost an expectation central role as a sustainable source of long-term eco- of intervention in Finland. The possibility of a gov-nomic growth and thus improving welfare (Aghion ernment failure in fixing the market is not always & Howitt, 2009). Innovation policy is primarily mo- considered in depth. There seems to be a culture of tivated by failures in the market for information (Ar- direct and visible public involvement – on the other hand row, 1962). While the central role of innovation and there seems to be less trust in alternative more indi-related policy justifications are both clear and undis- rect measures. Broader effects, say with respect to putable, they become much more fraught with diffi- competition or re-allocation of resources, occasion-culty when considered in detail. ally escape policymakers’ attention. As in many oth- For instance, small open economy considerations er countries, consideration of the interaction of the call for adjustments in policy rationales. While this is new (to-be-introduced) and the old (still continuing) indeed frequently acknowledged (Toivanen, 2008), in measures is sometimes lacking. Even if there is a host reality the employed theories and thinking have not of available tools (Takalo, 2009), there seems to be a been adjusted accordingly. tendency to stick with the same traditional instru- Even if innovation policy should be as dynam- ments and sectors. For example, green innovation ic and evolving as its targets, decades can go by with seems to be less integrated into Finnish mainstream little real change in policy conduct. Unfortunately, in- innovation policy discussions.novation policy theories are often mute on how to Incentives of individuals and organizations are adapt and change existing policies into new direc- often mentioned in Finland, but considering them tions, overcoming resistance to change. is not fully integrated into policy thinking. Cutting- The perspective of aggregate societal benefits edge innovative and entrepreneurial activity needs to does receive some attention, but discussion quickly engage the best and the brightest individuals and or-slips into considering individual public bodies and ganizations globally. This is most likely to happen in their actions. One should more often have an over- countries where their successful efforts are rewarded all systemic view of the incentives and actions of in- appropriately.dividuals and organizations currently targeted by a Finns seem to be superb at institutionalizing bewildering array of instruments and measures; how things. However, more attention should be paid to they work in tandem is largely unknown. steering and developing institutions, once estab- The above (and several others) are not just issues lished, to meet changing needs and perhaps discon-in the scholarly research agenda; they are also prac- tinuing them when they become obsolete. Indeed, in 5
  8. 8. some cases successful public institutions render them- well as to forge a clear division of labor between uni- selves obsolete by assisting development to the extent versities and polytechnics. that sustainable private solutions emerge. The two main weaknesses of the Finnish sys- Upon seeing and hearing all the top innovation tem, (somewhat dismal) growth entrepreneurship policy actors one after another in January 2009, I was and (lacking) internationalization, arguably remain struck by how uniformly they seemed to think and orphans in the system, that is, they are both most- how reluctantly they expressed even remotely con- ly side issues for a number of public institutions and troversial opinions. While this remarkable consensus not forcefully advanced by any. One of the problems is an asset in certain ways, (also) in the domain of in addressing these two issues is that neither is really innovation policy Finland would benefit from more represented where decisions are made. high-flown thinking and outside exposure, for exam- Overall, the Finnish innovation system and its ple, in the form of exercises such as ours. policy-making are very ‘Finnish’ (which in many ways is a great asset). Efforts to change this are yet to bear fruit. While more global exposure is needed Finland has ample upside potential in Finland, it should be kept in mind that it is a tool rather than an end to itself. Internationalization is While not obvious on the surface, a closer look sug- perhaps better advanced by removing its explicit and gests that Finland appears to have certain structural implicit obstacles than by direct measures. challenges. Reactions to them may have been ham- Global – and even European – considerations pered because, according to many indicators, up un- seem to be somewhat remote. While the European til recently Finland was doing well in its traditional Union is looking at Finland, to learn from its innova- strongholds. Now there is both a need and an oppor- tion policy design, Finland should also look more at tunity to make a clear break with the past. It remains the European Union. The Finnish innovation system to be seen whether or not there is sufficient courage has much to gain from integrating into the single Eu- and political will to see these reforms through. It is ropean market for goods and services, as well as into certainly my hope that our exercise does not turn out the European Research and Higher Education Area. to be just another report but that it leads to further Indeed, in my opinion the success of the Finnish uni- material developments. versity reform hangs in part on having a single Euro- In the course of its history the Finnish system has pean market for researchers and students. grown complex to both access and administer. Reac- The ongoing economic and financial crisis start- tions to the Strategy we have been observing during ed to fully unfold only after we had submitted our our exercise mostly add to the existing clutter. As in evaluation proposal and had laid-out our detailed many other countries, touching institutional bound- work plan. Thus, some issues related to the crisis are aries seems to be a taboo in Finland. Yet, it is hard not integrated into our analysis. In any case, develop- to imagine how the necessary streamlining could be ing a country’s innovation system is a medium- and achieved without it. long-term issue. The current crisis may nevertheless In my understanding the ongoing university re- be of such a nature that it induces more long-term form is the most important change in the public as- and even permanent changes in the geography and pects of the Finnish innovation system since estab- locus of specialization in innovative activity. lishing Tekes. While the reform has its risks, the panel It is quite possible that Finland currently has one takes a strong stand for it. We welcome its ambitions of the best national innovation systems worldwide. and encourage its implementation to be even more Even that may not be enough in an era, where the radical than what is currently being suggested. One global operating environment is rapidly evolving of the main issues to be dealt with is the highly divid- and the whole concept of a national innovation sys- ed attitudes and views of the actors within the educa- tem has rightly been questioned (Nelson, 1993). Com- tional system. Furthermore, it would be equally im- panies have been the primary object of the innovation portant to reform non-university public research, as policy but, as they become increasingly footloose and 6
  9. 9. geographically dispersed, the focus may have to shift ion we managed to meet and even exceed the high to nurturing and attracting creative individuals. expectations (at least my own). Obviously this is first The survey conducted to support the evaluation and foremost due to my fellow panelists, impeccably suggests that the actors of the Finnish innovation sys- supported by Etlatieto Oy (a subsidiary of ETLA, Thetem are optimistic about the ongoing reforms and Research Institute of the Finnish Economy) and the re-the future of the system. I personally share this op- search team – thank you very much to all those in-timism: while some of our proposals are laborious to volved! Over a dozen separate studies were conduct-implement, with some adjustments the good Finnish ed to support our work. Some of these are published system could be much better equipped to meet fu- separately along with the two main reports.ture challenges! On behalf of the whole panel, I would like to ex- press our gratitude to the two Ministries, as well as to the Sounding Board overseeing the project, not on-Acknowledgements ly for their generous support, but also for vigorously defending the integrity of the panel.In the course of the past year or so, the evaluation In the course of the exercise we have interviewed exercise proved to be both enjoyable and education- and heard over one hundred key actors and experts al. The final outcome can be seen in this Policy Re- of the innovation system, the names of which are list-port, as well as in the complementing Full Report. ed in Exhibit 2. Furthermore, around two thousand The former serves as a gentle introduction and sum- individuals responded to the survey conducted to mary of our core findings; the latter provides further support the evaluation. The inputs of these individu-details and elaboration. I must say that I am person- als and organizations is highly appreciated – without ally very happy with the outcome, since in my opin- it, we could not have completed our work.Brussels, 18 September 2009,Reinhilde Veugelers, on behalf of the evaluation panel. 7
  10. 10. Exhibit 2: In the course of the evaluation, the panel interviewed and heard over one hundred key actors and experts. The panel would like to thank them all – without their help, it could not have completed its work. Aho Esko, Nokia; Alahuhta Matti, Aalto University; Alitalo Sir- Empl. and the E.; Lemola Tarmo, Advansis; Löppönen Paavo, pa, M. of Empl. and the E.; Alkio Mikko, M. of Empl. and the E.; Academy of F.; Löytökorpi Sari, The Adv. Board for Sectoral Andersen Dorte Nøhr, Danish Enterpr. and Constr. Auth.; An- Res.; Lystimäki Jussi, Idean; Marjosola Juha, Finnish Ind. Inv.; tikainen Janne, M. of Empl. and the E.; Antola Tuula, Kaipaus; Martikainen Mikko, M. of Empl. and the E.; Mattila Markku, Anttila Tapio, Sitra; Bason Christian, Mind Lab; Björkroth Academy of F.; Misukka Heljä, M. of Educ.; Mustonen Riitta, Johanna, U. of Helsinki; Cardwell Will, Technopolis Ventures; Academy of F.; Nevamäki Riina, M. of Empl. and the E.; Nie- Dammert Ritva, Academy of F.; Eerola Essi, VATT; Eskelinen minen Markku, GE Healthcare; Niiniluoto Ilkka , U. of Helsinki; Jarmo, Forum Virium Helsinki; Eskola Antti, M. of Empl. and Nummikoski Velipekka, M. of Finance; Nybergh Paula, M. of the E.; Gädda Lars, Forestcluster; Grundstén Henri, Finnish Empl. and the E.; Ollila Jorma, Nokia; Ormala Erkki, Nokia; Ind. Inv.; Hägström-Näsi Christine, Forestcluster; Hakkarai- Paloheimo Annamarja, Finnvera; Parkkari Tuomas, R. and nen Maija, Tekes; Halme Kimmo, Advansis; Hämäläinen Timo, I. Council; Pauli Anneli, EU Commission; Pekkarinen Mauri, Sitra; Hammer-Jakobsen Thomas, Copenhagen Living Lab; M. of Empl. and the E.; Pellikka Riikka, M. of Empl. and the E.; Hansen Marie Louise, Danish Enterpr. and Constr. Auth.; Has- Peltonen Petri, M. of Empl. and the E.; Pikkarainen Mika, M. sinen Saara, SHOK Health and Well-being; Hautamäki Antti, of Empl. and the E.; Pohjola Hannele, EK, C. of Finnish Ind.; U. of Jyväskylä; Häyrinen Kari, FinPro; Heikkilä Pauli, Finnvera; Pötz Marion, Copenhagen Business School; Pulkkinen Raimo, Helve Heikki, City of Kuopio; Hermans Raine, Tekes; Hetemäki Tekes; Pursula Tiina, Gaia; Rintala Kari, TE-Centre; Roma- Martti, M. of Finance; Holstila Eero, City of Helsinki; Honkanen nainen Jari, Tekes; Rosted Jørgen, Fora; Saapunki Juha, PKT- Seppo, Helsinki U. of Techn.; Husso Kai, R. and I. Council; Jär- Foundation; Saarnivaara Veli-Pekka, Tekes; Savolainen Terttu, vikare Terhi, M. of Finance; Kallasvaara Heikki, U. of Helsinki; M. of Social Affairs and Health; Seppälä Esko-Olavi, R. and I. Kalliokoski Petri, VTT; Känkänen Janne, M. of Empl. and the E.; Council; Sipilä Jorma, U. of Tampere; Suurnäkki Anna, VTT; Kari Seppo, VATT; Karjalainen Sakari, M. of Educ.; Kauppinen Syrjänen Mikko, Gaia; Toivanen Hannes, M. of Empl. and the Petteri, M. of Educ.; Kavonius Veijo , M. of Empl. and the E.; Kek- E.; Tukiainen Pauliina, KCL; Turunen Ilkka, M. of Educ.; Vähä- konen Timo, EK, C. of Finnish Ind.; Kemppainen Hannu, Tekes; Pietilä Kirsi, Tekes; Valle Antti, M. of Empl. and the E.; Vartia Kervola Petri, City of Kuopio; Kivikoski Jussi, Tekes; Kop- Pentti, The Adv. Board for Sectoral Res.; Vesa Heikki, M. of Empl. pinen Seija, VTT; Korhonen Kalle J., M. of Empl. and the E.; Ko- and the E.; Vestala Leena, M. of Educ.; Virkkunen Henna, M. of sonen Mikko, Sitra; Kulmala Harri, FIMECC; Kutinlahti Pirjo, Educ.; Virtanen Erkki, M. of Empl. and the E.; Vuola Olli, Neapo; M. of Empl. and the E.; Laine Seppo, Finpro; Laino-Asikainen Wentzel Johan , Sentica Partners; Wilhelmsson Thomas, U. of Tiina, FinPro; Lehikoinen Anita, M. of Educ.; Lehto Petri, M. of Helsinki; Ylikarjula Janica, EK, C. of Finnish Ind.8
  11. 11. Executive Summary Premises This section summarizes some of the key findings of the evaluation. It also serves as an introduction and reading Both the new innovation strategy (Aho et al., 2008) guide for the three parts and ten chapters of this Report. and the subsequent Government’s Communication to the Parliament (henceforth the two are collectively re- ferred to as the Strategy) call for a broad-based and systemic approach as well as demand- and user-ori-Introduction entation in innovation policy. The Strategy highlights the increasing role of information and knowledge in This report completes an international evaluation the society as well as stresses the urgency in address-of the Finnish national innovation system commis- ing the challenges induced by globalization (Chapter sioned by the Ministry of Education and the Ministry 3). The Strategy’s basic choices constitute the premis-of the Employment and the Economy and conducted by es of this independent outside panel. The assigned tasks are The Strategy warns against partial solutions in • To point out needs of institutional and policy ad- developing the system. It rather calls for compre- justment and reforms, hensive renewal and structural development requir-• To draw conclusions on policy governance and steer- ing strategic management within the public admin- ing (Chapter 1). istration. It notes that individual and separate policy The panel took six main points of view (Preface, measures will not suffice.Exhibit 1), each of which was studied by a sub-pan-el led by an international expert accompanied by two Finnish ones. The panel commissioned several sup- Reflections on the Strategyporting studies and carried out an extensive survey. Both qualitative and quantitative methods were em- The Strategy defines productivity improvement as ployed in conducting an evidence-based evaluation. the main objective (Chapter 2), implying a balanced The panel makes critical but constructive remarks consideration ofthat should help in improving the Finnish education, • Developments within existing units,research, and innovation system, which is currently • Re-allocation between existing units,undergoing its biggest changes in the postwar era. It • Entry of new units, andenvisions a system that would get the most out of the • Exit of old units.currently deployed (public) resources; it was not asked The last three re-allocative elements have previous-to consider their appropriate level. The panel’s man- ly been waved aside. Second, the emphasis is on pio-date was not to consider individual organizations or neering, which suggests less (innovation policy) con-their budgetary allocations, but on occasions they are cern for individuals and organizations that are not touched upon. (seeking to be) at the global frontier. Even if the current state of the Finnish innovation The panel welcomes the ambitions of the Strategy system is good, it is not enough: While some of the but challenges some of its key measures. Overall the panel’s proposals are laborious to implement, they panel finds the Strategy vague, leaving room for mis-are indeed needed to meet Finland’s future challeng- interpretation. The panel calls for caution on several es. The survey conducted to support the evaluation accounts: broad-based innovation policy can indeed reveals that the actors of the Finnish innovation sys- be too broad (Chapters 3 and 4). Demand and user tem are optimistic about its future. They are ready orientation (Chapter 5) should be interpreted as im-for, and even demand, major changes. partiality as to the source, type, and application do- The findings have implications for all innovation main of innovation, not as a shift to the other extreme policy organizations. The panel does not wish to im- from the current technology and supply-side empha-ply that any particular organization would not have sis. Analysis reveals that the Finnish system is less fulfilled its mission in the past. international than conventionally thought and that 9
  12. 12. there are signs that it is falling further behind (Chap- incentives and ample rewards on success in risky en- ter 6); current ways of addressing the issue are clear- deavors are needed as well. ly not working. Since the 1980s Finland has been in transition The Finnish innovation system lacks explic- from an investment-driven catching-up country to- it cross-ministerial decision making and execution wards an innovation-driven and knowledge-based (Chapters 3 and 7). The panel hesitates with the frontier economy (Chapter 2). With this transition Strategy’s proposal to extend the Cabinet Committee on the locus of Finnish innovation policy has to change Economic Policy to include innovation matters, even towards more experimentation, risk-taking, and ac- though it is in line with the panel’s proposal that the ceptance of failure. Innovation policy should mostly Ministry of Finance and the Ministry of Employment and be concerned with the coming up with, and employ- the Economy should assume a joint responsibility for ment of, truly novel ideas (new-to-the-world and the enterprise-side of innovation (and growth) policy radical/disruptive innovations) with considerable so- (Chapter 7). A broader and stronger Research and In- cietal significance. novation Council is seen as an alternative for renewing Due to changes in operating environment (e.g., the Cabinet Committee. globalization), logic of innovation (e.g., democrati- zation), and internal developments in Finland (e.g., reaching the frontier), the work of all six sub-panels A call for a systemic renewal points towards shifting innovation policy emphasis from established incumbent companies and other or- One consequence of weak coordination within the ganizations towards individuals and their incentives. system is that occasionally several organizations go after the same societal problem (e.g., lacking growth entrepreneurship) with similar tools, which leads to Reforms wasteful replication and adds to institutional clutter. Current (public) aspects of the system are an out- The panel takes a strong stance for the university re- come of an evolution of several decades. The sys- form and encourages it to go further than what is cur- tem has grown complex to both access and adminis- rently being suggested (Chapter 9). The panel calls ter. Thus, the evaluation calls for a reform of the cur- for a continuation of the higher education reform: rent research and innovation system, including its ra- Polytechnics are important actors in the system with tionales and goals as well as its organizations and in- their strong regional and applied role and emphasis on struments. The provided outline (Chapter 10) should bachelor-level education. In the course of the 2000s, not be taken as a blueprint or an organization chart however, there seems to be an increasing tenden- but rather as a guiding principle. It is nevertheless cy to make them more like nationally- and globally- the case that the desired outcome cannot be reached orientated research universities.1 In the panel’s view without touching existing organizational boundaries. this does not serve the interests of the system.2 There Taken individually, most new policy measures should be a clear division of labor between universi- are consistent with the Strategy. Taken jointly, they ties and polytechnics. appear piecemeal solutions the Strategy warns against. The panel is cautiously optimistic about the na- The panel calls for pre-screening of new actions in or- tional Strategic Centres for Science, Technology and In- der to prevent duplication and overlaps (Chapter 3). novations (SHOKs) but suggests limiting public re- Several sub-panels touch upon the issue of using sources devoted to them (Chapter 4).3 In the panel’s tax incentives and on the role of the Ministry of Fi- view SHOKs are mostly about incrementally renew- nance more generally (Chapters 3, 4, and 7), which in ing larger incumbent companies in traditional indus- innovation policy has been tolerating but remote. The tries. panel urges for consideration of all possible innova- The true reform of sectoral research (public re- tion policy tools: Knowledge and human capital as well search organizations, PROs) remains in gridlock as enablers of innovative activity are important, but (Chapters 4 and 9). Even if the PROs make a worthy so-10
  13. 13. cietal contribution as well as provide quality research have a negative overall impact in the relatively dis-and services, the panel believes that they have consid- advantaged regions (Chapter 8). While direct cost is erable upside potential that could be unleashed. The not very large, the total cost becomes considerable in panel recommends moving their academically-orien- terms of hampered regional development and fore-tated research to universities and organizing the re- gone growth. The panel’s proposal is to make the sys-maining tasks into 4–5 units in accordance with larger tem transparent and not to make regional imbalanc-societal needs (as opposed to the ministries’ adminis- es a concern for national direct support of private in-trative boundaries). A long-term binding action plan novative activity.5is needed to implement the reform. The panel calls for a clarification and coordina-tion of national, regional, and local innovation pol- Final remarkicies as well as their links to other (non-innovation) policies (Chapter 3 and 8). Local and regional actors The Finnish system is at a crossroads due to both in-have grown important also in innovation policy mat- ternal and external factors. Innovation (policy) is in ters. They have, e.g., assumed similar tasks as TE- turmoil worldwide. While Finland is quite well-po-Centres.4 Currently national innovation support has sitioned to meet future challenges, there is a uniquean ‘unspoken’ regional bias. Primarily through the opportunity for further reforms. Furthermore, both previously ignored re-allocative elements, nation- structural challenges and the financial crisis bring al direct support for private innovative activity may about a sense of urgency that should not be wasted. 11
  14. 14. 1. Evaluation Task Premises The brochure prepared by the Ministry of Education and Ministry of Employment and the Economy for the open- The evaluation is based on the basic choices of the ing press conference on 11 December 2008 outlines the National Innovation Strategy: evaluation as shown below (Sections Evaluation, Objec- • Innovation activity in a world without borders. tives, Premises, and Task are direct copies from the bro- chure; italics as in the original; additions in parenthesis). • Demand and user orientation as a basis for innova- tion activity. • Individuals and communities create innovations. • Systemic approach – interdependence of success factors. Evaluation In August 2008 the Ministry of Employment and the Task Economy issued a contract notice on a public procure- ment regarding an International Evaluation of the Finn- Given the short time and broad coverage of the task, ish National Innovation System. The Ministry selected the innovation system is mostly evaluated as a whole; the project through a group of international panelists thus the focus is less on individual actors, organiza- (the members of the panel: Page 1 of this Report) co- tions, and instruments. The evaluation is less about ordinated by Etlatieto Oy, a subsidiary of ETLA, The history or current structure and more about coming Research Institute of the Finnish Economy. The work up with proposals for enhancing the system to meet will be completed in September 2009. future challenges. The main points of view in the The evaluation is headed by a panel of interna- evaluation are defined by the six sections in the fig- tionally acknowledged experts. Each foreign panelist ure above (see Exhibit 1 in the Preface of this Report); works with two Finnish panelists. The panelists will the basic choices of the strategy underlie each of the draw their overall conclusions in part based on these sections. sub-projects. The project is overseen by a Sounding Board pri- marily consisting of state secretaries in various min- Remarks istries (the members of the board: Page 2 of this Re- port). The panel commissioned about a dozen supporting studies and conducted an extensive structured sur-Evaluation of the Finnish National Innovation System vey. It interviewed and heard over one hundred ac- Objectives tors and experts. It received nearly two thousand survey responses. All available information was ana- The objectives of the evaluation are: lyzed both qualitatively and quantitatively. To the ex- • To form an outside view of major drivers of change tent possible, the panel’s aim has been an evidence- in the system, as well as to evaluate how well they based evaluation. are addressed in innovation policy. As touched upon in the Preface of this Report • To identify ways of addressing the current and fu- – with some gaps in scholarly knowledge, limited ture challenges. budget/time, and a constantly evolving surround- • To point out needs for institutional and policy ad- ing world – analysis will not provide solid guidance justments and reforms. in all issues. In these cases the panel has understood • To draw conclusions and recommendations for the that it is specifically requested to provide its informed policy governance and steering. opinion and judgment. On some issues there is neces- sary and welcomed diversity in these opinions, which is not forcefully ironed out in this Report. 12
  15. 15. Finland is in a position to lead innovationpolicy thinking globally. On several accounts the evaluation has proceed refining the proposals, and overseeing their imple-in the spirit of the two most important innovation mentation.policy documents in Finland – the new innovationstrategy (Aho et al., 2008) and the subsequent Gov-ernment’s Communication to the Parliament. One Structurechoice is the panel’s inclusive definition of innova-tion, even if insufficient theoretical and empirical This Report is divided to three main parts and tenbacking on occasion forces it to resort to the prevail- chapters:ing convention. • This first part provides an overview of the evalua- This Policy Report is accompanied by the Full tion and its general conclusions (Chapters 1–3).Report, which provides further details and elabora- • The second part contains the summaries of thetion. With these two reports, the work of the evalu- contributions by the six sub-panels (Chapters 4–9).ation panel is complete, even if many panelists have • The third part briefly elaborates on the longer-already volunteered for disseminating the findings, term future of the system (Chapter 10). Exhibit 3: Plenty of international interest on the evaluation. Upon introducing the project on 11 December 2008, the web vant documentation. Towards the end of September 2009, the site was launched. The site provides general site had attracted around 2,500 visits of 1,600 unique visitors information on the evaluation process as well as links to rele- from 52 countries worldwide. Evaluation Task 13
  16. 16. 2. Future Challenges and Ongoing Reforms • Pioneering in innovation does not lend itself to di- This chapter provides the context of the evaluation in a rect measurement, but for instance Finland’s share nutshell by first reviewing some aggregate innovation- of the applications at the European Patent Office has related indicators and then summarizing its actors’ opin- been on a continuous rise up until the new millen- ions on the Finnish innovation system. nium (Exhibit 4, right). While it is true that this is in considerable part attributable to Nokia, if also other countries’ most influential company with re- spect to patenting is removed, Finland’s relative Catching up and forging ahead? position does not change drastically (Exhibit 5). Finland’s relatively brisk economic growth in the Productivity improvement and pioneering in inno- early 2000s hid the fact that its strongholds – forest- vation are the two foremost policy goals according to and ICT-related businesses as well as industrial ma- the Proposal for Finland’s National Innovation Strategy chinery and equipment – were facing structural chal- (Aho et al., 2008). On both accounts, Finland’s post- lenges (Rouvinen, 2009). In innovative activity this war track record is rather admirable, at least if the was manifested by the fact that R&D working hours latter goal is understood to include catching up with declined somewhat in 2005 and considerably in 2007 the leading economies: (Exhibit 6) – for the first time in the postwar era. • According to the broadest measure of productivity Also the composition of the R&D hours worked we can reasonably compare across countries (Ex- conducted within the Finnish national borders is hibit 4, left), Finland has almost caught up with the changing towards more challenging coordination, con- United States, which is typically considered to be ceptual design, and managerial tasks, while routine the global productivity leader. tasks (such as basic technical drawing) as well as Exhibit 4: Catching up with the US produc- Labor productivity level Finland’s patent share tivity – Pioneering in innovation. 40 1.5% Finnish and US labor productivity of non-financial 35 corporations in 2004 Euros (left). Finland’s share of 30 the annual European Patent Office applications right). USA 25 1.0% Log scale Finland has almost reached the US labor productivity Finland 20 level (left). Finland’s share of the applications at the European Patent Office has been rising up until the 0.5%Evaluation of the Finnish National Innovation System new millennium (right). 15 Sources: Left – calculations by Nevalainen and Maliranta (2009) with the data of Statistics Finland and the US Bureau of Labor Statistics. Right – ETLA calculations with OECD data. 10 0.0% 1975 1980 1985 1990 1995 2000 2005 1977 1981 1985 1989 1993 1997 2001 2005 Exhibit 5: Nokia accounts for much of Patents by country Patent share Patents by country Finnish patenting, but so does the lead- of the top firm w/o the top firm ing corporation in some other countries. Applications at the European Patent Office, 2000–6. Nokia Netherlands Netherl. 42,722 48% 24,952 (Finland) (w/o Philips) Note: Refers to simple counts and is thus not adjusted for Sweden Sweden 21,679 Philips 15,470 the size of the country. Only those patent applications of 42% (w/o Ericsson) the top firm that were applied for from the location of the (Netherlands) country in question have been included in that firm’s and Ericsson Austria country’s data. Patent applications have been collected Austria 12,557 29% 12,301 (Sweden) (w/o Voestalpine) from the database based on the applicant’s country code, and firm name (top firms). Finland 12,226 Novo Denmark 12% 6,767 (Denmark) (w/o Novo) Source: ETLA calculations on the basis of the OECD PATSTAT database. Denmark 7,757 Voestalpine Finland 2% 6,284 (Austria) (w/o Nokia)14
  17. 17. Globalization is inducing a qualitativechange in innovative activity. T&k-henkilöstön tutkimustyövuosien vuosimuutos sektoreittainExhibit 6: R&D working hours in Finlanddeclined in 2005 and 2007.Annual change of all R&D working hours done inFinland (%).Structural challenges have put downward pressureon R&D hours worked in Finland. For the first timein the postwar era, hours dropped in 2005 andagain in 2007.Source: Statistics Finland.6 6 3 3 6 6 5 5 7 7 8 8 6 5 4 4 2 2 2 2 5 5 11 10 13 9 4 2 3 4 2 1 1975 1980 1985 1990 1995 2000 -1 -3 2005market adaptation and customization are increasing- tion seems to be a long-term trend in Finland (Exhib-ly being located overseas, also in the case of predomi- it 7, bottom). The changing task-by-task compositionnantly Finnish-owned and -operated companies (Ali- of innovative activity in many developed countriesYrkkö & Tahvanainen, 2009). Becker, Ekholm, and is more recent; it reflects the exploitation of globalMuendler (2009) echo this for Germany; they note opportunities for cost and talent arbitrage and thusthat off-shoring is associated with a shift towards the changing locus of specialization across countriesmore non-routine and more interactive tasks in Ger- (and even across individuals).many as well as with a labor-composition shift to- The changing locus of specialization in the provi-wards highly educated workers. Their last observa- sion of goods and services does not imply that every-Exhibit 7: Most R&D hours worked are R&D labor hourscarried out in the business sector –hours are increasingly done by more Business sector Higher education Public sectoreducated R&D workers. (incl. polytechnics) (incl. private non-profit)Evolution of total R&D hours worked in Finland bysector (top) and the composition of hours by work-ers’ educational level (bottom).Source: Statistics Finland.6 4,942 15,028 30,090 31,940 2,308 7,662 15,596 16,503 2,994 6,884 7,738 7,800 1971 1991 2001 2007 1971 1991 2001 2007 1971 1991 2001 2007 Educational composition of R&D labor hours Future Challenges and Ongoing Reforms Business sector Higher education Public sector (incl. polytechnics) (incl. private non-profit) 30% 23% 24% 28% 29% 22% 28% 37% 48% 0% 5% 56% 48% 63% 1% 3% 6% 30% 5% 29% 41% 36% 37% 36% 3% 18% 2% 42% 38% 10% 34% 42% 30% 30% 36% 24% 35% 35% 32% 35% 21% 25% 3% 5% 5% 6% 12% 16% 1971 1991 2001 2007 1971 1991 2001 2007 1971 1991 2001 2007 Above master Master Bachelor Other 15
  18. 18. Finland’s traditional locomotives of growth have either vanished or reached a level, at which major jumps are unlikely. thing would move to China or to other off-shore lo- the transition Acemoglu et al. describe. In the 2000s cations. It does, however, mean that innovation and some of the aggregate productivity growth in Finland other business activities will become more geograph- is attributable to intensifying creative destruction and ically dispersed. In principle each narrowly-defined renewal – now particularly in services (the same proc- activity will seek its globally optimal location. While ess was intense in manufacturing from the mid-1980s many supply chains remain quite local, it is neverthe- to the mid-1990s) – and new micro-dynamism, i.e., less worthwhile to consider what the great second un- slowly emerging more entrepreneurial Finland. bundling (Baldwin, 2006) implies for innovation and Finland is nevertheless facing a double chal- other business activities. lenge: The old welfare trajectory – and industries as- Finland is currently in a situation where tradition- sociated with it – should not lose steam too fast; at al locomotives of economic growth – expanding quan- the same time new sources of welfare should emerge. tity and quality of available skills and competences of There is a strong desire among policymakers to learn its citizens, deepening of tangible and intangible cap- where the next leading companies and industries ital, catching up with the global leaders, intensify- might be found. While this desire is understanda- ing productivity-enhancing creative destruction (and ble, global business, and Finland as a country, has market competition driving it), as well as improv- evolved in such ways that it is increasingly doubtful ing institutions – are either out of the game or have that the question could be answered to any relevant reached a level at which major jumps are unlikely. degree of accuracy. The future of the country is less Given that old strongholds are no longer expanding, on a few leading industries and companies and more Finland is actively seeking new sources of welfare. on widespread entrepreneurial activity. This poses a A considerable part of the Finnish success in the challenge to traditional Finnish policies, which have past decades is attributable to increasing openness of a (successful) history of national missions and target- the economy as well as to the long-term commitment ed programs, even if the system is not – and never to (and volume-wise expansion of) education and re- was – a top-down planning system. Finland’s struc- search. While this policy mix is still held dearly in tural challenges were present well before the ongo- Finland, increasing openness, R&D intensity, or edu- ing financial crisis, which only heightens the sense of cational attainment are in themselves insufficient for urgency in addressing them. reaching the desired growth rates. In the context of the current crisis, much of the Policies that supported the accumulation of Finnish stimulus is passive or automatic, i.e., fun- wealth in the catching up phase are not the same as neled via its extensive social safety nets. Finland is the policies needed to support prosperity in a leading nevertheless making considerable active stimulus asEvaluation of the Finnish National Innovation System economy in the current global environment. Acemo- well and with that – like in its great economic slump glu, Aghion, and Zilibotti (2006) note that countries at of the early 1990s – again signaling its sustained com- early stages of development pursue an investment-based mitment to innovation. As compared to 2008, govern- strategy – maximize investment but sacrifice selection. In ment R&D expenditure will increase 7–10% in 2009. the postwar era Finland made heavy tangible and in- As for 2010, a further 5–10% increase is being consid- tangible investments in part at the expense of selec- ered, along with possible tax incentives for venture tion. Due to its past success, Finland should move on: capital and business angel investment as well as with Acemoglu et al. note that closer to the world technology a general R&D tax incentive scheme.7 frontier an economy should switch to an innovation-based strategy with short-term relationships, younger firms, less investment, and better selection of firms and managers. How its actors see the Finnish When Finland was far from the global productivi- innovation system ty frontier, it could advance by adopting technologies and ways of conduct that were already established The survey conducted to support the evaluation (Ko- elsewhere. Imitation and incremental improvement tiranta et al., 2009) covers a wide range of actors and were good strategies. Finland is on its way to make provides new insights. In the survey the national in-16
  19. 19. The current performance of the Finnishinnovation system is quite satisfactory.novation system (NIS) refers to the totality of private grade for 2014 is 8-. The representatives of public re-and public actors producing and applying knowledge and search organizations constitute the only group believ-information to promote the welfare of Finnish citizens.8 ing that the performance of the system will deteriorate The respondents of the survey were asked to in coming years. The representatives of national pub-grade the overall performance of the system on the lic education support organizations (comprised ofFinnish school grading system from 4 (fail) to 10 (ex- the Ministry of Education (ME) and the Academy of Fin-cellent) in three points of time: five years ago, current- land) are the most optimistic about the system’s futurely (spring of 2009), and in five years. Most groups of performance – perhaps reflecting the upside poten-respondents think that the system has been improv- tial of the ongoing reforms in their core domain – fol-ing in recent years, its current performance is quite lowed by associations (including labor market partic-satisfactory, and that its performance will improve in ipants on both sides) as well as national public inno-the coming years (Exhibit 8). The average grade goes vation support organizations (comprised of the Min-from 7 in 2004 to 7½ in 2009; the average (expected) istry of Employment and the Economy (MEE) and Tekes,Exhibit 8: Most stakeholders think that 9-the Finnish national innovation systemhas been improving and will continue to Govt: Education support orgsdo so – its current performance is quitesatisfactory. 8½The past, present, and future school grades bygroup.The past, present, and future average grades are 7 8+ Other: Associations(2004), 7½ (2009), and 8- (2014). The representatives Govt: Innovation support orgsof public research organizations constitute the onlygroup believing that the performance of the system Govt: Other nat. public orgswill deteriorate in coming years. The representatives 8 Educ.: Polytechnic rectorsof national public education support organizations Sectoral: Public research orgsare the most optimistic about the system’s futureperformance; smaller innovative firms are the Other: Municipalitiesleast optimistic. Overall private actors consider the 8- Intermediaries: Otherperformance worse than public ones. Finance: Business angels, VCsNote: The respondents of the survey were asked to grade Educ.: University rectorsthe overall performance of the system on the Finnishschool grading system from 4 (fail) to 10 (excellent). 7½ Intermediaries: TE -centresGroups: Gov’t: Education support org’s – The Ministry ofEducation (ME) and the Academy of Finland. Gov’t: Innova- Govt: Other ministriestion support org’s – The Ministry of Employment and the Sectoral: Other research orgsEconomy (MEE) and Tekes. Gov’t: Other ministries – All be-sides ME and MEE. Gov’t: Other nat. public org’s – Includes, 7+ Firms: Non-innovative Future Challenges and Ongoing Reformsfor example, Sitra, Finnvera, and Finpro. Intermediaries: Firms: Larger innovativeOther – Includes, for example, regional developmentcenters and companies and science and business parks. Educ.: University dept headsFirms: Smaller innovative – Firms employing less than 50 Firms: Smaller innovativeemployees that have had innovative activity in the past 7three years. Firms: Larger innovative – Firms employing atleast 50 employees that that have had innovative activityin the past three years. Firms: Non-innovative – Firms thathave not had innovative activity in the past three years.Other: Associations – Several interest groups such as the 7-Confederation of Finnish Industries EK and the Federationof Finnish Technology Industries. More information on therespondent groups in the survey report.Source: Kotiranta et al. (2009). 6½ 6+ 2004 2009 2014 17
  20. 20. The system has grown complex to both access and administer. the Finnish Funding Agency for Technology and Innova- universities, as well as to support the international- tion). Smaller innovative firms are the least optimistic ization of universities. about the future performance. Overall private actors Given the importance and extent of the reform, it consider the performance worse than public ones. is comforting to note that for all objectives across all The respondents were asked to consider the en- groups – with the exception of teaching quality in the tity of public bodies in the system as well as the (pub- case of university department heads – the reform is con- lic) promotion of private innovative activity on a scale sidered to be an improvement over the current state from very complex to very simple. Exhibit 9 summa- of affairs (Exhibit 10). The divergence of the views of rizes the results. As to the public aspects of the sys- university rectors and department heads is notewor- tem (left), with the exception of education support thy and indeed a problem requiring attention. organizations (ME, Academy) having a virtually neu- In enterprise innovation policy the establishment tral position, all groups of respondents lean towards of the Strategic Centres for Science, Technology & Inno- considering the system complex rather than sim- vation or SHOKs is the most significant new policy ple. As to the promotion of private innovative ac- instrument in the 2000s. SHOKs are viewed rather tivity (right), it is interesting to note that the sys- positively (Exhibit 11, left), especially by the repre- tem appears the most complex to the TE-Centres, sentatives of the national central administration. private business angels and venture capitalists, as The possible reform of public research organi- well as other intermediaries (comprised of public or zations (PROs or sectoral research, as they are collec- publicly-supported regional/local competence, ex- tively referred to in Finland has been on the agen- pertise, innovation, and technology centers) that are da in Finland for several decades with little visible supposed to be the frontline in assisting businesses in progress to date. The respondents were asked how maneuvering the system especially when it comes to they would see a possible reform of PROs. All re- growth-seeking entrepreneurial startups. spondent groups believe that a reform would im- The ongoing university reform is the system’s prove the performance of PROs, which arguably re- most important change in several decades. Its ob- flects the belief that there is considerable unrealized jectives are to improve research quality, to improve potential in them that is currently held back by ad- teaching quality, to enhance the societal impact of ministrative hurdles. Exhibit 9: The system is viewed as being Complexity of entirety of Complexity of promotion quite complex. the system’s public actors of private innovation Complexity of the national innovation system as Govt: Education support orgsEvaluation of the Finnish National Innovation System a whole (left) and of the promotion for private in- Govt: Innovation support org‘s novative activity (right). Govt: Other ministries Govt: Other nat. public orgs Virtually all groups of actors considered the system rather complex. The national public education sup- Educ.: University dept heads n/a port organizations stand out as the only group that Educ.: University rectors n/a deems the system to be simple rather than complex Educ.: Polytechnic rectors n/a (even if their position is virtually neutral). Sectoral: Public research orgs n/a Note: Illustrates deviations from a neutral position. See the Sectoral: Other research orgs n/a survey documentation (Kotiranta et al., 2009) for details. See the note in Exhibit 8 for definitions of the groups. Intermediaries: TE-centres Source: Kotiranta et al. (2009). Intermediaries: Other Firms: Smaller innovative Firms: Larger innovative Firms: Non-innovative Finance: Business angels, VCs Other: Associations n/a Other: Municipalities n/a Very Very Very Very complex simple complex simple 18