The Evaluation of the Finnish National Innovation System – Policy Report

Veugelers Reinhilde (chair Of The Panel)

Finland current has a well-functioning innovation system. It is, however, not enough to sustain the desired standard of welfare. The rapid evolution of the global operating environment is inducing both qualitative and quantitative changes in the geography of innovative activity. They bring about future challenges and opportunities that are not fully realized in Finland. The panel welcomes the two new elements of Finnish innovation policy – the broad-based approach (Chapter 4) and demand and user orientation (Chapter 5) – but points out risks in their adoption. The former should not lead to considering even minor changes as innovations or to labeling of all enterprise policies as innovation policy. The latter should be interpreted as impartiality to the source, type, and application domain of innovation. The main challenges – weak internationalization (Chapter 6) and somewhat lacking growth entrepreneurship (Chapter 7) – remain orphans in the Finnish system. They are both side issues for a number of public organizations and not particularly forcefully advanced by any. The panel puts forth an outline of (public) actors and responsibilities in the system, which particularly implies changes in these two domains. The panel calls for a clarification and coordination of the roles and interrelations of international, national,regional, and local innovation and non-innovation policies. In recent years local and regional public actors have grown important also in innovation policy, even if they are largely ignored at the national level. The current national innovation support has an ‘unspoken’ regional bias, which may not benefit regional development and may come at the cost of foregone growth (Chapter 8). The panel takes a strong stance for the ongoing university reform (Chapter 9). With relatively autonomous universities incentivized through appropriate funding rules, it has real potential to address the most pressing and timely challenge in Finnish higher education – the increase of research quality. Polytechnics are important actors in the Finnish system with their strong regional and applied role. To streamline the higher education sector, the panel recommends a clear division of labor between universities and polytechnics.
Due to both internal and external factors, The Finnish innovation system is at a crossroads. While some of the panel’s proposals are laborious to implement, they are indeed needed to meet the Finland’s future challenges.

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