The special investigator for proposing a new structure for innovation support at public universities in Sweden, Alf Karlsson, has proposed a radical restructure of the system by 2022.
Appointed by the government on 16 October 2019, Karlsson has published a 468-page report proposing to overhaul a fragmented and sub-optimal support system to a more nationally coordinated and better functioning and funded system over the next two years.
The report argues that this is a historic opportunity for Sweden to overhaul the innovation system at universities in order to maintain a leading position in a changing world.
“In the last 100 years, Sweden has gone from being one of Europe’s poorer countries with a high level of emigration, to becoming one of the most prosperous and innovative and with a relatively high level of immigration. The driving forces behind this development have included innovation and constant renewal,” according to the report.
“In order to maintain our pole position, therefore, we must ensure that we constantly implement change not previously implemented by any other country. We need to be more innovative than anyone else.”
The report proposes dozens of changes to legislation and government funding from the start of 2022.
The report says this is needed to enable higher education and research to make a “greater contribution to new solutions that lead to increased competitiveness, reduced environmental impact and new jobs”.
The report is a rich source of information on the Swedish higher education sector. Karlsson’s mandate was to find out how the support system today, with holding companies and innovation offices at universities and university colleges, could more effectively “contribute to strengthen the innovation force in Sweden and by that strengthen the competitive edge, employment and economic development of the country”.
The white paper from the government to parliament, Innovation as a Driving Force: From knowledge to utilisation, is perhaps the most worked-through document on this issue ever produced in the Nordic countries.
The special investigator, who is a former secretary of state, has been supported in his work by top-level officers from several Swedish ministries and with a 19-member advisory committee composed of representatives from Swedish business, organisations and universities, plus a network of five academics with professorships in innovation at Swedish universities.
He also had meetings with 38 Swedish higher education institutions in the spring of 2020 and with numerous other stakeholders.
In addition to the main report mapping out the Swedish innovation landscape in a comparative perspective, there is an appendix on the innovation system (in English) at the University of Campinas in Brazil, the Indian Institute of Technology Bombay, at universities and colleges in China, at Seoul National University and the Korea Advanced Institute for Science and Technology in South Korea, the support system around the University of Tokyo, and at Stanford University in the United States with an overview in the US (in Swedish), written by the Swedish government’s innovation and research counsellors at these places.
National audit of holding companies
Preceding the special investigator’s report, the Swedish National Audit Office published a review of the governance and management of the holding companies at universities in March 2020.
According to the review, the Swedish government’s governance of the higher education institutions has not properly equipped the institutions to manage the holding companies. Deficiencies in governance include monitoring and communication with the institutions and the holding companies and reporting to parliament.
One question posed by the inquiry is whether there is a risk of overlap between the higher education institutions and other innovation support. The inquiry believes that the greatest risk of this is in healthcare, when a person may have a role that is split between academia and the region.
The inquiry also looked at the Research Institutes of Sweden and the work they do on commercialising research results. The inquiry is of the opinion that its activities do not overlap with the work of innovation offices or holding companies at the universities.
Innovation and commercialisation at universities
The inquiry found that innovation support at Sweden’s higher education institutions is fragmented but higher education institutions play an important role in the use of research-based knowledge and are thus a vital part of the innovation system.
The higher education institutions’ parts of the system include innovation offices and holding companies. Innovation offices are closest to the innovators. The innovation offices are similar to technology transfer offices (TTOs), the main difference being that, at innovation offices, intellectual property rights are kept with the researchers, while at TTOs with the university.
Higher education institutions with innovation offices receive annual state funding of approximately SEK107 million (US$12.3 million) (2020) to support their work.
The organisation, location and working methods of the innovation offices may vary, but one aspect they have in common is that they work within the higher education institution to capture and develop ideas from employees and, in some cases, also from students.
There are currently 13 innovation offices, which means that most of the higher education institutions in Sweden do not have their own innovation office. There are now 18 holding companies at the same number of state higher education institutions.
Three of the holding companies have the lion’s share of investment. The holding companies at Gothenburg University, Lund University and Uppsala University together account for approximately 70% of the investments made by holding companies in the past five years.
Questions often arise relating to the management and transfer of intellectual property rights. Overall, the inquiry found that there is a need for increased guidance and governance in relation to the state aid regulations within the higher education institution-based innovation support system.
Rewarding external co-operation
Karlsson told University World News that the main conclusion is that the results of research and other activities based upon it at Swedish universities must be implemented by the public sector or private companies to a greater degree than today.
“I have hence made recommendations to the Swedish government on how this can be done and how the effects of that work can be reported to parliament,” he said.
“In order to get as much innovation as possible, it is absolutely imperative that Swedish universities implement a culture where cooperation with the world outside of the academic context is rewarded and where cooperation is co-creation.
“I have recommended that the Swedish government give universities better tools to drive co-creation and cooperation and to reward the universities that succeed.”
He said he had also recommended that the government build a structure in which support for utilisation – the taking of research to market or to a stage at which it makes an impact – and co-creation is available to students and faculty no matter what university they study or work at.
“I am convinced that the system I have suggested will lead to more utilisation and more innovation. I believe that the results will differ between universities, depending on their leadership and on whether the private and public sectors connected with the university ask for it or not.”
The inquiry proposes a number of measures to remedy the shortcomings in the appropriateness and effectiveness of the current support. The starting point is a broader definition of ‘utilisation’ which requires higher education institutions to ensure that not only research results, but also other knowledge acquired at the institutions benefit society.
There has historically been a lack of ongoing monitoring and evaluation of the higher education institutions’ work on utilisation. The inquiry proposes that monitoring of utilisation be more rigorously included in the annual monitoring programme run by the Swedish Higher Education Authority, with an evaluation every four years.
Those institutions whose work to support utilisation is deemed successful can be allocated an innovation office by the government, following a proposal from Vinnova, Sweden’s innovation agency. Higher education institutions that qualify for an innovation office receive a government appropriation of SEK5 million to SEK20 million.
One observation made by the inquiry is that some ideas, especially those that are scientifically complex, should be incorporated at a relatively early stage. This is partly because the higher education institutions and their students, researchers and other staff do not have the resources to develop the idea further.
Several higher education institutions’ innovation offices say this often means that the idea never reaches the market because they are not close enough to it.
To remedy this, the inquiry proposes additional funding for the evaluation of commercial potential, the ‘verifying for growth’ (VFT) programme, of SEK100 million a year.
The inquiry also proposes various measures to assist with more strategic work on intellectual property rights. The inquiry says all higher education institutions should be tasked with developing an intellectual property strategy.
The inquiry believes that learning is key at all levels, particularly in entrepreneurship. To develop shared learning between higher education institutions and to enhance the availability of expertise, the inquiry proposes the establishment of a national centre for entrepreneurship.
The centre will be financed through appropriations of SEK20 million a year. The centre will be driving and developing education in Sweden and will have the responsibility for offering training to every student at masters and PhD level.
The inquiry’s proposals create structures for more innovative higher education institutions and their associated innovation offices, for holding companies and for various government agencies and will give higher education institutions increased freedoms with regard to the holding companies and their role.
The overall cost of the proposals is SEK340 million per year. This includes SEK100 million for increased VFT support, SEK30 million for financing instruments (for example, the National Funding Agency) and an increase of SEK168 million for the activity of the innovation offices when they achieve their full capacity.
There will be additional costs for establishing and running the financing company (SEK10 million a year), Vinnova’s grants and evaluation of innovation office activity (SEK5 million a year) and the Swedish Patent and Registration Office’s remit to deliver intellectual property support to the higher education institutions (SEK5 million a year).
In the IVA webinar, Karlsson said the total costs of the inquiry will be in the area of SEK400 million, of which SEK318 million has to be found from the universities’ budgets. He said that, in the context of the total research component comprising 3.4% of GNP (SEK155.5 billion) and Swedish higher education’s total income of SEK73.9 billion, this share is modest.
But Professor Åsa Lindholm Dahlstrand at Lund University described this as the “elephant in the room”.
“If universities have to reduce the intake of doctoral students by 500 or one-sixth of the annual intake as such a proposal will imply, I do not think this will be met with enthusiasm by the ‘professor of Latin’,” she said , referring to Karlsson’s comment that the main issue at universities now is to create enthusiasm for the proposals also by “the professor of Latin”.
Professor Stephen Hwang told University World News: “As vice-chancellor of Halmstad University, which has innovation as one of its core values, I am very positive towards the ambition of strengthening innovation capacity of Swedish higher education institutions.
“I agree on the report’s important point that the Knowledge Foundation or KK-stiftelsen has been successful in developing the capacity of collaboration with companies leading to better use of research in companies, although the report does not really follow up on this point with proposals.”
He said the less research-intensive universities have, in general, shown a much higher interest and skill in collaborating with companies, making a big positive difference in the regions where they are situated. If the government is interested in the development of Sweden’s regions outside the big cities, they should support better research at such universities.
“I think that the report’s proposals of increasing the funding for commercialisation and utilisation, making it possible for all higher education institutions to have holding companies and that these should be authorised to deploy funds for utilisation, is positive,” he said.
He described the proposal for every higher education institution to have its own innovation office as “positive” and the plan for a Finansieringsbolag, universities’ jointly owned financing company that should support licensing of business ideas as “valuable”.
“I also think that, as suggested, the research councils could have a more active role in utilisation.”
However, Hwang said the proposals for changes in the law and government regulation recommended in the report are not welcome.
“Swedish higher education institutions are already highly regulated through numerous laws and government regulations. It is not in line with academic freedom to try to steer universities even further, rather the opposite measures should be taken, leading to an increase of academic freedom and less political steering.
“There is nothing preventing utilisation efforts of universities today, so further regulations are unnecessary.”
Instead, he urges increased funding to create a positive push towards further utilisation, for example, promoting research done in collaboration with a non-academic partner as the case is with the Knowledge Foundation research support.
Deputy Vice-Chancellor of Lund University Professor Sylvia Schwaag Serger told University World News: “As a university with a strong focus and track record on innovation and societal challenges, we welcome the broader definition of innovation as not only being about technology and commercial value, but also including solutions and concepts that strengthen social, economic and environmental sustainability in a broader perspective.”
She also welcomed the emphasis on co-creation. “Innovation support at Swedish universities is influenced by the profile, attributes and strengths of the individual university, but also by the local and global ecosystem within which it operates,” she said. “This diversity is beneficial to the Swedish society and innovation system, and universities should be encouraged and enabled to develop their innovation support based on their respective contexts and assets.
“It is also important that universities with holding companies retain their ability to invest in an innovation, and we are, therefore, critical of the suggestion to deprive them of this capacity.”
Simon Edström, president of the Swedish National Union of Students, told University World News: “Our only comment is that we see great value in allowing those who have recently graduated to still have access to the innovation support system.”
However, Professor Ole Petter Ottersen, rector of Karolinska Institute in Stockholm, told University World News that he is “deeply sceptical” of such a radical restructuring of the innovation system.
“The proposals threaten to dismantle the expertise that has been built over decades in the current holding companies. The proposals also miss the fact that the quality and volume of research is key to successful innovation. What I find laudable is the focus on entrepreneurship. Here we have an opportunity to build on and strengthen extant schools that have already proved successful in this field.”
An imbalance to redress
The former director of research administration at the University of Bergen in Norway, Kristen Haugland, who has worked in commercialisation of research for more than three decades, told University World News: “The report discusses how hospital organisations are at risk of coming into conflict with universities or in a competitive position and that this is a situation crying out for collaboration. As the report says, it is often the same person responsible at both organisations.”
He said the report underlines the culture that has to be developed within the university and the need of top leadership to engage in this. “This is a central point and will require long-term work. And universities have to be rewarded for this work and not ordered to transfer resources from other parts of the budget.”
“In Norway, we have over recent years seen star examples on value creation and the values created are often awarded to the private investors and to a lesser degree to universities and the ‘gründer’ scientists. If the reworking of the Swedish system can contribute to redress this imbalance, that will be an encouragement for universities.”