BR 6 / Řízení VaV a systémy financování výzkumu v mezinárodní praxi

March 2015
R&D Evaluation Methodology and
Funding Principles
Background report 6: R&D governance and institutional funding in
international practice

R&D Evaluation Methodology and Funding Principles
Background report 6: R&D governance and institutional funding in
international practice
March 2015
Oliver Cassagneau-Francis, Kristine Farla, Malin Jondell Assbring, Peter Kolarz, Bea Mahieu,
Göran Melin, Anke Nooijen, Martijn Poel, Caspar Roelofs, Tammy-Ann Sharp, Brigitte
Tiefenthaler, Frank Zuijdam - Technopolis Group
Kyrre Lekve - NIFU

R&D governance and institutional funding in international practice
R&D Evaluation Methodology and Funding Principles iii
Table of Contents
1. Introduction 1
2. Austria 2
2.1 The R&D governance system 2
2.2 The R&D system 9
2.3 The funding system 12
3. The Netherlands 20
4. Norway 33
5. Sweden 52
6. UK 65
6.2 The R&D System 70
7. Additional countries 78
7.1 Belgium/Flanders 78
7.2 Finland 89

R&D Evaluation Methodology and Funding Principles iv
Table of Figures
Figure 1 Austria: The R&D governance structure ...............................................................2
Figure 2 Netherlands: The R&D governance structure in the Netherlands.............21
Figure 3 Norway: The R&D governance structure in Norway.......................................33
Figure 4 Sweden: The R&D governance structure in Sweden.......................................52
Figure 5 UK: The R&D Governance Structure ......................................................................65
Figure 6 UK: Strategic sectors and technology areas........................................................68
Figure 7 UK: Haldane Principle ..................................................................................................69
Figure 8 UK: Composition of UK GERD by funding sector 1995-2012.......................70
List of Tables
Table 1 Austria: Institutional and targeted funding in Austria (2011)......................12
Table 2 Austria: Distribution of institutional funding among publicly funded
research organisations (2011)...................................................................................................13
Table 3 Austria: Components of the institutional funding for public universities
(total) in the funding period 2013 to 2015...........................................................................14
Table 4 Austria: Components of the institutional funding for IST Austria...............16
Table 5 Netherlands: Basic Indicators for R&D investments in the Netherlands .26
Table 6 Netherlands: Flows of public research funding 2011.......................................27
Table 7 Netherlands: Summary of resources for research and innovation.............27
Table 8 Netherlands: University funds....................................................................................28
Table 9 Netherlands: Components of the institutional funding for research .........30
Table 10 Norway: Shares of total R&D expenditures in Norway (2011)..................39
Table 11 Norway: Shares of total R&D expenditures in the institute sector in
Norway (2011)..................................................................................................................................39
Table 12 Norway: Current expenditure on R&D by field of science and sector of
performance 1991-2011 (mill NOK, per cent).....................................................................40
Table 13 Norway: Thematic areas by sector (2007-2011) in mill NOK (%)...........40

R&D Evaluation Methodology and Funding Principles v
Table 14 Norway: Total R&D expenditure in Norway by sector of
performance/type of institution, 2011...................................................................................43
Table 15 Norway: Current expenditure on R&D by type of R&D and sector of
performance, 2011. Billion NOK and per cent....................................................................43
Table 16 Norway: Key numbers for R&D expenditure in Norway 2005-2011......44
Table 17 Norway: Total R&D costs, 2011, by sector, institution and funding
source ...................................................................................................................................................44
Table 18 Norway: Share of state funding for Higher Education institutions, 2008
.................................................................................................................................................................45
Table 19 Norway: Funding of the institute sector, mill NOK (2013) .........................47
Table 20 Sweden: RO relative importance in the system, 2013...................................57
Table 21 Sweden: R&D indicators for Sweden, 2012.......................................................59
Table 22 Sweden: Public funding of R&D in Sweden, 2012...........................................59
Table 23 Sweden: Funding of R&D performed in Sweden, 2011.................................60
Table 24 Sweden: Components of the institutional funding for research ...............61
Table 25 UK: Key numbers of R&D expenditure 2009-2012.........................................73
Table 26 UK: Institutional and competitive funding allocations 2010-2014 .........73
Table 27 UK: Funding allocations for other types of Research Organisations 2010-
14............................................................................................................................................................73
Table 28 Belgium: IOF allocation keys....................................................................................79
Table 29 Belgium: Components of the BOF fund................................................................81
Table 30 Belgium: Allocation of public funds to basic research 2006-2012...........82
Table 31 Belgium: Breakdown of the HEI institutional funding budget for
teaching and research in 2011...................................................................................................88
Table 32 Finland: University core funding formula implemented since 2010 ......92
Table 33 Finland: Polytechnic core funding formula implemented since 2010....94
Table 34 Finland: The research component of the University core funding
formula (2010) .................................................................................................................................94

R&D Evaluation Methodology and Funding Principles 1
1. Introduction
This report constitutes a background report to the Final report 2 – The Institutional
Funding Principles. It collects the outcomes of the analyses related to the R&D
governance and funding systems in international practice. It sets the context for the
study team’s reflections on the strength and weaknesses of the current institutional
funding system in the Czech republic and especially for the proposed revision of the
funding principles.
We focused on the five ‘comparator’ countries that were identified for this study, i.e.
Austria, the Netherlands, Norway, Sweden and the UK.
Norway, Sweden and the UK are three countries where performance-based research
funding systems (PRFS) are implemented for the distribution of institutional funding
for research. The analysis of the systems in these countries gives a view in particular
on the different criteria and approaches to the PRFS.
In Austria and the Netherlands, instead, the allocation of institutional funding is
determined through block grants and formulas, and performance agreements play a
major role.
We complemented the analyses of the 5 ‘comparator’ countries with an analysis of the
funding system in Belgium and Finland. The latter is the country that is most cited in
international practice for its long-term use of performance contracts; the former is
interesting for its use of a specific fund for basic research, allocated on the basis of a
PRFS.
The comparative analysis of the R&D governance and funding systems collected in this
background report, completed with international statistical data, constitutes the first
chapter of the Final report 2 – The Institutional Funding Principles.

2 R&D Evaluation Methodology and Funding Principles
2. Austria
2.1 The R&D governance system1
2.1.1 General oversight
Figure 1 Austria: The R&D governance structure
Source: ERAWATCH Country Page Austria
The Austrian Parliament wields legislative power. Two committees deal with
research related matters: the Committee on Science and the Committee on Research,
Technology and Innovation, which was established in 2007. In practice, the policy
debate and the development of new policy measures in S&T takes place outside the
parliament to a large extent, mainly driven by the ministries in charge.
At the federal level responsibility for research and technology policy has changed in
the wake of the 2013 elections and is now borne by two (formerly three) ministries:
the Ministry of Transport, Innovation and Technology (BMVIT) and the Ministry of
Science, Research and Economy (BMWFW). There is no formal mechanism of co-
ordination between ministries. In more detail, these are the main RTDI related roles
responsibilities of the different ministries:
1 The following information is partly based on the description published on the Erawatch Country Page for
Austria.

 Ministry of Science, Research and Economy (BMWFW): The former Ministry of
Science and Research was merged with the Ministry of Economy to the new
BMWFW. Internally, the departmental structure and responsibilities related to
science, research and innovation have so far remained unchanged. Main
responsibilities related to science, research and innovation are:
 Responsibility for tertiary education and basic research
 Representing Austria at the European level on issues of international mobility
and the European Framework Programme for RTD
 Institutional funding and governance of public universities, the Academy of
Science, and the Institute of Science and Technology Austria; competitive
funding mainly of basic research and human resources related measures,
which are implemented through agencies
 Responsibility and provision of budgets for several funding agencies, i.e. the
Austrian Science Fund FWF, the Austrian Research Promotion Agency FFG
together with the Ministry of Transport, Innovation and Technology, the
Christian Doppler Society CDG, the Ludwig Boltzmann Society LBG, the
Academy of Science (which also manages some competitive programmes), the
Austrian Agency for International Mobility and Cooperation in Education,
Science and Research OEAD, and aws Austria Wirtschaftsservice.
 Promotion of science-industry collaboration, innovation, entrepreneurship
 Priorities: general institutional and targeted funding across all disciplines;
science-industry relations, innovation, start-ups, HR and gender issues,
citizen science, targeted measures in selected priorities (e.g. sustainability,
research at museums, start-ups, cooperation etc.)
 Institutional funding is handled within the Ministry while targeted measures
(i.e. competitive programmes) addressing the priorities are mainly
implemented through the agencies.
 Ministry of Transport, Innovation and Technology. Main responsibilities related
to science, research and innovation are:
 Institutional funding and governance of the Austrian Institute of Technology
AIT (BMVIT holds 50.46% of the shares), institutional funding of several
other research organisations
 Responsibility and provision of budgets for the Austrian Research Promotion
Agency FFG and AWS Austria Wirtschaftsservice (together with the
BMWFW);
 Funding of applied research
 Thematic foci: technologies, especially ICT, transport & mobility, production,
energy, sustainable building and housing, space, aeronautics; science-industry
relations, HR issues;
 Institutional funding is handled within the Ministry while targeted measures
addressing the priorities are implemented through the agencies, mainly the
Austrian Research Promotion Agency FFG
 Ministry of Finance (BMF) governs the allocation of financial resources and sets,
at least implicitly, standards for the design, implementation, evaluation and
monitoring of programmes. Thus it plays an important role within the research
policy system even though it is not directly responsible for the Austrian R&D
policy. Moreover, the national funding for some research institutions is directly

allocated by the Ministry of Finance, e.g. for the Institute of Advanced Studies HIS
and the Austrian Institute of Economic Research WIFO.
 Several sectoral ministries (e.g. for agriculture, health etc.) also govern and fund
research activities within their field of responsibilities but they rarely participate
in R&D policy debates. Their share in total government R&D expenditures is
small. To illustrate this: The largest sectoral R&D budget (€77m in 2011) is
handled by the Federal Ministry for Agriculture, Forestry, Environment and Water
Management, which was not more than approx. 1% of the total federal R&D
expenditure in 2011. The sectoral ministries allocate most of their research budget
to subordinate research institutions that support the sectoral ministries in the
fulfilment of their responsibilities.
There are two major advisory bodies: the Austrian Council for Research and
Technology Development (Austrian Council), established in 2000, advises the
government on all matters related to research, technology and innovation. The
Austrian Science Board is the main advisory body for all university-related matters. It
advises the BMWFW and also the parliament and the universities.
There is a number of intermediary agencies for the implementation of R&D policy
measures, mainly for competitive (“targeted”) funding programmes addressing a
variety of policy objectives in research, technology development and innovation. The
majority of these measures are managed by three major agencies2 on behalf of the
ministries:
 The Austrian Science Fund (FWF), established in 1968, is Austria's main body for
the promotion of basic research in all fields of science. FWF funds individual
scientists and research teams. The BMWFW is responsible for FWF and its
budget. FWF is mainly governed by elected representatives of the scientific
community. FWF funding is predominantly absorbed by researchers from the
universities and from the Austrian Academy of Sciences. Most of the budget is
spent through thematically open bottom-up project applications. In addition, FWF
manages a few more targeted programmes, e.g. the START-programme to support
excellent young researchers, the Wittgenstein award to support outstanding
individual researchers, the doctoral programmes scheme etc.
 The Austrian Research Promotion Agency (FFG) is the largest organisation for the
promotion of applied research and innovation in Austria. Its main task is the
support of business R&D and cooperative research in bottom-up programmes as
well as in defined thematic priority programmes, mainly addressing companies
and their scientific partners. Moreover, it provides information services with
respect to European cooperation, and it hosts the Austrian Aeronautics and Space
Agency. FFG was established in 2004. Two ministries are responsible for FFG, the
BMVIT and the BMWFW. FFG autonomously manages the thematically open
programme “Basisprogramm” for industrial R&D projects and is commissioned
(mainly by BMVIT and BMWFW) to implement a large number of mission-
oriented programmes, which are either thematically (ICT, genome research,
transport technologies, energy) or structurally (science-industry-collaboration,
gender issues) defined.
 The Austria Wirtschaftsservice Gesellschaft (AWS) was established in 2002 as
state owned banking institution. It is 100% owned by the Republic of Austria,
2 There are some other organisations which act as agencies, i.e. they manage competitive funds financed by
a ministry, but they are comparatively small and will not be described in more detail. The most important
small agencies comprise the Austrian Academy of Science in its role as an agency, the Ludwig Boltzmann
Society, the Christian Doppler Society, and the OEAD.

represented by the BMWFW and the BMVIT. Its main tasks are the funding of
innovation projects in companies as well as seed financing and supporting start-
ups. With respect to research, AWS hosts the secretariat of the National
Foundation for Research, Technology and Development, established in 2004, and
endowed by the Austrian National Bank (ONB) and the ERP-Funds, which acts as
a “funder of funders” as it finances R&D policy measures implemented by one of
the agencies at the federal level (e.g. FWF or FFG).
See chapter 1.1.3. for more information about FWF and FFG.
The following types of research organisations are active in Austria. The examples
name the biggest players in each category; the list is not complete in terms of numbers
but it covers approx. 90% of public institutional research funding. However, not all
organisations listed receive public institutional research funding
 Higher education institutes (HEI)
 22 Public universities
 The Austrian Academy of Science and its research institutes
 Universities of Applied Sciences
 Private Universities (not eligible for public institutional funding)
 Public research institutes:
 IST Austria
 Austrian Institute of Technology AIT
 Regional research centres, e.g. Joanneum Research, Upper Austrian Research,
Salzburg research
 Institute of Advanced Studies HIS
 Austrian Institute of Economic Research
 Sectoral research institutes
 Private research institutes and private research organisations (do not receive
public institutional funding), e.g.
 Members of Austrian Cooperative Research (small centres, thematically
specialised, providing R&D services for companies, measurement & testing,
applied research)
 Institute of Molecular Pathology
 AVL
 Public agencies, e.g.
 National Library
 Federal Museums
 Hospitals: mainly the University Hospitals linked to the three Medical Universities
Research Infrastructures in Austria are normally integrated into research
organisations and not established as independent entities.
There is also a substantial number of ‘Centres of Excellence’ and ‘Centres of
Competence’ in Austria. They are funded through a variety of targeted programmes

and therefore, the public funding they receive through these programmes is not
considered institutional funding.
2.1.2 National strategies & priorities for research
Overview of the research strategies
In March 2011, the Austrian Government published its national “Strategy for research,
technology and innovation“ (RTI strategy)3. The new coalition government which took
office in autumn 2013 names this RDI Strategy as a key guideline in its governmental
programme. The Federal Government’s RTI Strategy has been the result of an
unprecedented multi-layer process, starting with a nationwide stakeholder
consultation (Austrian Research Dialogue), followed by a thorough evaluation of the
research funding system (Systems Evaluation), and a final drafting process involving
government experts from six ministries.
The overall objective remains to become one of Europe’s innovation leaders by 2020.
The quantitative goals are to invest 3.76% of GDP for R&D in the year 2020 (with a
public/private split of 1:2), 2% of GDP for the tertiary sector and 1% of GDP for basic
research. The RTI strategy addresses measures to strengthen national research
structures with a focus on excellence, to foster the innovative capacity of companies,
allow for thematic priority setting, raise the efficiency of governance, and linking
research, technology and innovation to the education system. The strategy should also
help to mobilize research, technology and innovation for the grand challenges of
society and the economy.
Government budget appropriations or outlays for R&D (GBAORD) is around € 2.5bn
in 2013. The highest shares of GBAORD in 2013 by socio-economic objectives can be
found in the categories promotion of the general advancement of knowledge (30.4%),
promotion of industrial production and industry (27.6 %), and promotion of health
(20.8 %). Around two thirds of targeted (i.e. competitive) public funding is distributed
via bottom-up programmes which are not pre-assigned to any thematic priority. A
multitude of thematic and systemic programmes shares the rest.
Thematically targeted R&D priority funding still remains relatively small in Austria.
The programmes are launched by the ministries responsible for RTDI and not by
sectoral ministries, apart from the Ministry of agriculture and environment. Generally
speaking, thematic programmes support application-oriented research and technology
development in collaborative projects (making science-industry cooperation a non-
thematic priority in many thematic programmes) or industrial research projects in a
moderately pre-defined thematic field, and they are normally complemented by a set
of specific additional measures (e.g. networking, feasibility studies etc.). The typical
target groups are universities, research institutes and companies. Projects can
normally be submitted during limited calls for proposals and they are selected for
funding in a standard selection procedure, generally involving assessment by national
and international experts.
Most thematic R&D programmes are managed by FFG, which spent around 25%
(2011: 27%) of its funds in 2012 on thematic programmes on behalf of the ministry in
charge. According to the FFG statistics for 2012, a total of €107m (2011: €126m) were
provided to thematic programmes by the responsible ministries. For comparison: FFG
managed a total funding budget (incl. guarantees) of approx. €462m in 2012 (2011:
€473m). The budget was allocated to thematic priorities as follows (2012 data):
3 English version: http://era.gv.at/object/document/462;
German version http://www.bka.gv.at/DocView.axd?CobId=42655

 technologies for sustainable development incl. energy technologies (€39m)
 ICT (€19m)
 transport technologies (incl. aeronautics) (€30.6m)
 genome research (€2.8m)
 security research (€8.6m)
 future manufacturing.
Likewise, the Austrian Science Fund FWF mainly runs thematically open programmes
to support basic research and (young) scientists. FWF also manages two thematic
programmes funded by the Ministry of Science; these programmes account for no
more than 2.7% of the total funding granted by FWF in 2012 (€196.4m):
 Clinical Research (€3.3m)
 Arts-based Research (€ 2.0m)
Among systemic priorities, the key priority for more than two decades now has been to
improve the links between science and industry. Analyses show that the culture of
R&D cooperation in Austria has improved significantly and that the formerly missing
link between science and industry is no longer a first order problem, however, still an
issue in Austria's R&D policy. A variety and a large number of policy measures in
support of collaboration, networking and clustering have been designed and
implemented, most of which are still running. One of the largest R&D policy priorities
has been the reform of the public university system with the University Act 2002.
Examples of other systemic priorities set out in the RTI strategy are:
 to stimulate firms which do not perform R&D yet to get involved in R&D activities
(e.g. through a low-key voucher programme and indirect funding, i.e. tax credit or
bonus for R&D)
 to support academic spin-offs
 to improve research infrastructure
 to strive for gender equality in RTI
 to improve the governance of the Austrian R&D system
 to foster international cooperation
At the strategic level, the Federal Government has installed the „Task Force RTI“ in
the context of the National RTI strategy. Its tasks are to coordinate and combine the
different efforts and policies of the various federal ministries in the field of RTI. In
particular, the task force is an inter-ministerial body responsible for (i) supporting,
substantiating and coordinating the implementation of the RTI strategy, (ii) the
strategic and system-oriented articulation and coordination of individual ministries’
activities, and (iii) dealing with the recommendations of the Council for Research and
Technology Development. The Task Force RTI is presided by the Federal Chancellery.
Eight working parties have been installed in order to deal with specific issues, e.g.
human resources, research infrastructure, internationalisation etc.
The main players in the implementation of Austrian RTI policies are the two
ministries, BMWFW and BMVIT. They both use a mix of policy measures. In terms of
volume, institutional funding clearly dominates (see funding part of this case study),
but targeted funding seems to be attracting more attention among R&D policy makers
and public administrators who seem to consider it their “free leg”.
A large share of targeted funding addresses thematic or systemic priorities and is
organised in programmes which – in principle – last for a limited period of time.

However, so far not only most of these priorities but also the very programmes have
turned out to be long-living, with some programmes in operation for more than ten or
fifteen years.
Institutional funding itself has been an RTI priority, especially the reform of the public
university system. Other RTI priorities can have an influence on institutional funding
if they are relevant for a research organisation. They can influence some content of the
performance contracts (e.g. projects towards research excellence or the development
of human resources), and the formula-funding for public universities uses indicators
that represent high-priority policy targets (at present and with regard to research:
knowledge transfer, measured by third-party funding). As a very special case, an
entirely new research organisation was founded in in order to reach research
excellence in Austria: the IST Austria.
2.1.3 Level of autonomy of the public research funding bodies
We focus on the two agencies most relevant for funding research, i.e. the Austrian
Science Fund FWF and the Austrian Research Promotion Agency FFG.
Their legal basis for the Austrian Science Fund FWF is the “Forschungs- und
Technologieförderungsgesetz (FTFG)” (Research and Technology Promotion Act). The
FWF has to develop a multiannual programme for the implementation of its tasks,
taking the priorities of the Austrian R&D policy into account, and to operationalize
this programme in annual work programmes. The programmes have to be approved
by the ministry in charge and they have to be published. The act specifies in detail
which other issues have to be approved by the ministry in charge. According to the
FTFG, FWF’s operational and funding budget is financed through the Federal Budget
“depending on the funds available for the purposes “of FWF and based on the
multiannual programme. In recent years, not all funding programmes and activities
suggested by FWF have been funded, according to the ministry in charge due to
budgetary constraints.
FWF has to report annually (and upon request) to the ministry about its activities and
the situation of basic research in Austria and to provide the required monitoring data.
The FWF’s Supervisory Board approves the FWF's annual accounts as well as its
annual budget estimates, long-term plans and annual work plans. The Assembly of
Delegates is charge of approving the FWF's annual report.
The Austrian Research Promotion Agency FFG has been established in 2004 with the
“Forschungsförderungsgesellschaft Errichtungsgesetz FFGG“ („Research Promotion
Agency Establishment Act“) as a fusion of four predecessor agencies. FFG is structured
and organised different than FWF, but FFG’s planning and reporting requirements
towards the ministries in charge are basically the same as those of the FWF.
The most recent institutional evaluation of FWF and of FFG’s predecessor agency FFF,
contracted by the ministry in charge, was performed in 2004. In addition, most
programmes and activities managed by these agencies have been evaluated, either
upon initiative of the ministry in charge or the agency.
Each research council and innovation agency, not only in Austria, typically has a clear
goal to influence the research organisations they fund: they want research
organisations to perform research of higher quality, or to cooperate with partners from
“the other side” (science or industry, or partners from abroad), or to enter into or to
enforce activities in certain thematic fields, to name just some of the most popular
research policy priorities.
In Austria, the agencies mainly operate through a large number of competitive funding
programmes, i.e. they provide financial incentives to their target groups. With respect
to international cooperation, information and support services are provided to
potential participants in international cooperation, especially in the European
Framework Programmes for Research.

2.2 The R&D system
2.2.1 Characteristics of the publicly funded research organisations
In Austria, the biggest research performers in terms of volume are the business
enterprise sector and the higher education sector. 68.8%4 of gross domestic R&D
expenditure in R&D (GERD) in 2011 was spent on research in companies, and 25.6%
in the higher education sector. The public sector covered 5.1% of GERD and the
private non-profit sector accounted for only 0.5% of GERD.
Of all public institutional research funding in 2011, 79.4% (1,388.546 Mill. Euro)5 went
to public universities. 7.3% went to the three largest non-university research institutes
together, i.e. Austrian Academy of Science, the IST Austria and the Austrian Institute
of Technology AIT. 1.6% were granted to museums and the National Library. The large
number of other organisations that receive public institutional research funding share
less than 13% of the total spent in 2011, i.e. they are comparatively small and public
institutional research funding often contributes just small percentages of their total
available budget. Private universities and private research organisations do not receive
public institutional funding in Austria (by definition of private).
Higher education institutes (HEI)
Within the higher education sector (HES) the 22 public universities (including the
university hospitals) play by far the largest role as research performers, consuming
89% of the sector's total R&D budget in 2011 (all sources of funding); another 5.5%
went to the Austrian Academy of Sciences and 3.7% to the 'Fachhochschulen'
(Universities of Applied Sciences). The rest of the R&D expenditures within the HES
was spent at private universities and other institutions. Not all of these institutions
receive public institutional funding.
These are the major recipients of public institutional funding in the HES
 22 public universities
 21 universities offering the full range of tertiary education. Their traditional
missions are teaching and research. The public universities are the backbone
of post-secondary education and of basic research in Austria and also perform
applied research. They are very different in age, size and specialisation.
 1 university of further education, offering only post-graduate courses and
playing only a minor role as a research performer
 The Austrian Academy of Science: The Academy is a learned society and the
largest non-university performer of basic research in Austria, mainly in fields
complementary to the public universities’ activities.
 The Institute of Science and Technology Austria (IST Austria): Newly founded by
law in 2006, established as a greenfield investment, it is dedicated to
internationally competitive basic interdisciplinary research and graduate
education in natural and mathematical science.
4 Statistik Austria: Research and experimental development in Austria by sectors of performance 2011
5 Source: Statistik Austria, published in Österreichischer Forschungs- und Technologiebericht 2014,
Tableenanhang, Tablee 9

Public research institutes
According to the last available full census in 2011, there are 252 public research
organisations in Austria, which comprise a number of very different institutions. Their
tasks range from basic research to providing R&D services for industry. As R&D
performers they play a small role compared to the business sector and the university
sector; together they perform approx. 5% of R&D in Austria (measured as a percentage
of GERD)6.
 Austrian Institute of Technology AIT: is the largest non-university research
institute in Austria performing applied research. AIT covers the entire
spectrum from taking up emerging technologies, first proof of concepts,
applied research to transferring these emerging technologies into specific
applications up to demonstrators and prototyping.
 Regional research centres, e.g. Joanneum Research, Upper Austrian Research,
Salzburg research: relatively small research centres, funded and (co-)owned
by provincial authorities, mainly performing applied research and
development in various thematic fields
 Sectoral research institutes perform R&D in support of a sectoral ministry’s
work e.g. in the fields of environment, agriculture, forestry, water
management, education etc. Some of them also provide knowledge for the
specific clientele or to the public. The latter holds e.g. for the Austrian
Meteorological and Geophysical Office (ZAMG).
Public agencies
This group of institutions includes as the largest players the National Library and the
Federal Museums (e.g. the Museum of Natural History, the Kunsthistorisches
Museum Wien (Museum of Fine Arts), the Technical Museum etc.). They perform
research related to their collections and according to census data spend approx. 18% of
their budget on research.
Special Case: Universities of Applied Sciences
Starting in 1993, 20 Universities of Applied Sciences have been established (status quo
2014) in order to diversify tertiary education in Austria and to meet the demands of
the labour market. Their main task is tertiary, practice-oriented education. They
receive institutional public funding – but not for research. Nevertheless, some of them
have established R&D facilities and these efforts have been supported through
targeted programmes (COIN, Josef Ressel Centres) financed by BMVIT and BMWFW
respectively. The Universities of Applied Science focus on applied research and
technology transfer, mainly addressing regional companies and complementing the
activities of universities.
For information about the funding of Centres of Excellence and Centres of
Competence, see chapter 2.2.3
6 There is no non-ambiguous typology for research performing organisations. For example in the Austrian
case, official census data count the Austrian Academy of Science and its research institutes in the HES; a
number of other organisations are identified as ‚cooperative sector’ within the business enterprise sector.
All of these could also be labelled ‚public research institutes’ for one reason or another. If they were added
to this sector in the statistics, it would grow and all together perform approx. 13% of R&D in Austria.

2.2.2 Level of autonomy of the publicly funded research organisations
The largest recipients of public institutional funding (public universities, Academy of
Science, AIT, IST Austria) have different legal basis and governance systems, but some
facts hold for all of them:
 They do have the right for autonomous decision-making on their strategy
 They do have the right for decision-making on internal fund distribution
 They all have to report regularly to their funding ministries (written reports at
least once a year, depending on the type of organisation; monitoring meetings
with their ministry)
 Performance contracts are the most important (or the only) governance
instrument between these organisations and their ministry (in the case of IST
Austria, a performance agreement is currently negotiated)
This already summarizes the major developments and trends of institutional
governance in Austria during the past decade. However, the systems are not
unchangeable, and several reform steps have already been implemented or are
currently under preparation (see for example the financing of public universities as
described in the funding part of the Austrian case study).
2.2.3 Research infrastructures and Centres of excellence/Competence centres
Research infrastructures are normally financed through the institutional funding or
through limited competitive funding (mainly for the public universities, see funding
part of the case study). Institutional funding in Austria is normally granted as a block
funding and the recipients decide about the use of the funds internally.
Austria is a member in a number of international research infrastructures (e.g. CERN,
Elettra, EMBL, EMBC, ESO, ESRF, IARC, ILL, IODP/ICDP) and actively participates
in several ESFRI projects. These memberships are normally long-term commitments
which are contractually agreed. The particular funding conditions depend on the rules
for participation set by each infrastructure. Participating in or joining an international
research infrastructure is decided case by case. The precondition for joining any
international research infrastructure is a sufficiently large research community that
would benefit and make use of the infrastructure.
The Austrian equivalent to a ‘Centres of Excellence’ is a ‘Spezialforschungsbereich
(SFB)’ funded under the ‘Special Research Programmes’ run by the Austrian Science
Fund. The goals of this programme are to establish research networks based on
international standards through autonomous research concentration at a single
university location and to build up highly productive, tightly interconnected research
establishments for long-term and interdisciplinary work on complex research topics.
The programme addresses Austrian universities and non-profit research
organisations. Funding is granted for up to 8 years, with a stop-or-go decision after a
mid-term evaluation. SFB are not established as independent legal entities, therefore
this funding is not institutional but targeted funding.
‘Centres of Competence’ in Austria are established and publicly funded through
competitive programmes for a limited period of time (7 – 10 years, depending on the
programme). They are intended to strengthen the links between research institutions
and the users of their results (industry in most programmes). The main types of
‘Centres of Competence’ are: Ludwig-Boltzmann-Institutes, Christian Doppler
Institutes, COMET centres (‘K1’ and ‘K2’), Laura Bassi Centres, Josef Ressel Centres.
Generally – and especially by the funding ministries and their implementing agencies
– the Centres are not considered ‘research organisations’ but ‘projects’. Although in
some programmes, in particularly the largest, COMET, the Centres have to be
established as legal entities, the public money they receive is not considered

institutional, but targeted funding. From our perspective, this is a hybrid type of
financing which could be labelled ‘temporary institutional funding’.
2.3 The funding system
2.3.1 Flows of public research funding
Table 1 Austria: Institutional and targeted funding in Austria (2011)7
GDP: Gross domestic product at market prices 299,240.4 Mill. Euro
GERD: Total intramural R&D expenditure 8,276.335 Mill. Euro
GBOARD: Total Government R&D appropriation 2,428.143 Mill. Euro
GBAORD - institutional funding 1,748.326 Mill. Euro
GBAORD - project funding 679.817 Mill. Euro
Institutional funding as a share of total GBOARD 72 %
Institutional funding as a share of GDP 0.58 %
Institutional funding as a share of GERD 21.12 %
Project funding as a share of total GBOARD 28 %
Project funding as a share of GDP 0.23 %
Project funding as a share of GERD 8.21 %
Institutional funding: project funding 2.57:1 -
Source: Eurostat
In Austria, no comprehensive data are available regarding the level of institutional
funding and its share of overall income for different (types of) research organisations.
However, it is still possible to draw a rough picture of the situation, again showing the
importance and towering size of public universities among the publicly funded
research organisations in Austria: In 2011, 79.4% (1,388.546 Mill. Euro)8 of all
institutional research funding went to public universities. On average, this public
funding accounts for 81.6% of a public university’s total budget9, i.e. 18.4% are income
from competitive sources (grants and contracts). 7.3% went to the three largest non-
university research institutes together, i.e. Austrian Academy of Science, the Institute
of Science and Technology Austria (IST Austria) and the Austrian Institute of
Technology AIT. 1.6% were granted to museums and the National Library. The large
number of other organisations that receive public institutional research funding share
less than 12% of the total spent in 2011, i.e. they are comparatively small and public
institutional research funding often contributes just small percentages of their total
available budget (see Table 2).
7 Source: Eurostat
8 Source: Statistik Austria, published in Österreichischer Forschungs- und Technologiebericht 2014,
Tableenanhang, Tablee 9
9 Source: Federal Ministry of Science and Research: „Universitätsbericht 2011“

Table 2 Austria: Distribution of institutional funding among publicly funded research
organisations (2011)
Institutions Institutional research
funding (Mill. Euro)
Share of GBOARD
institutional funding
Public universities 1.388,546 79.4%
Large non-university research
institutes: Austrian Academy of
Science, IST Austria, AIT
127,848 7.3%
Museums and National Library 27,515 1.6%
Others 204,417 11.7%
Source: Statistik Austria, published in Österreichischer Forschungs- und Technologiebericht
2014, Tableenanhang, Tablee 9
2.3.2 The institutional funding system
2.3.2.1 Criteria used for decision-making on sources allocation
Funding model
In Austria, there is no single mechanism for allocating institutional research funding
to research organisations. There are different systems in place for different research
organisations or types of research organisations. The funding systems for those
research organisations that, taken together, receive the lion’s share of public
institutional research funding have been reformed during the past decade and in some
cases they are still changing, most notably for the public universities. Before the new
governance of funding, the budgets were based on history and negotiation skills. The
transitions to the new governance of funding (e.g. through the University Act 2002)
typically had no short term implications on the size of the budgets; on the contrary, for
the public universities the University Act 2002 limits the annual changes in public
institutional funding in order not to cause instabilities.
The following four (types of) research organisations together account for nearly 87% of
public institutional research funding (see table 2). All other organisations taken
together receive approx. 13% of all public institutional research funding, which
accounts for very different shares of their total institutional budget. Public
institutional funding is normally granted as block funding with no “earmarks” for
research in the cases of organisations that fulfil also other tasks than research (i.e.
research organisations may use the funding as they like as long as they use it to fulfil
their tasks). In other words, it is within the research organisations autonomy to decide
upon the allocation of the funding to its different tasks (teaching, research,
administration etc.). Therefore, the following explanations refer to total institutional
funding.
Public universities
Global University Fund = formula funding + performance contract + competitive
institutional funding (specific projects selected in informed peer review)
At present, these funds (apart from the competitive share) are not earmarked for
research, teaching or any other purpose. See Table 3, below.

Table 3 Austria: Components of the institutional funding for public universities (total)
in the funding period 2013 to 2015
Mechanism %
“Hochschulraumstrukturmittel”:
Formula-based funding + competitive institutional funding
20%
Formula-based funding
Indicator 1: Exams
Number of exams operated in Bachelor, Diploma and Master studies,
weighted by subject.
60%
Indicator 2: Graduates
Number of graduates in Bachelor, Diploma and Master studies,
weighted by subject. For inter-universities degrees, the graduate counts
as 0,5 for each university involved.
10%
Indicator 3: Transfer of knowledge
External funds for R&D projects collected from privates, companies,
foundations and others, both nationally and internationally (grants
and contracts).
14%
Indicator 4: Private donations
External funds collected as donations from privates, companies,
foundations and others, both nationally and internationally
2%
Indicator 5: Cooperation
Competitive institutional funding (projects selected in informed peer
review)
14%
Performance contracts 80%
TOTAL INSTITUTIONAL FUNDING = Block grant (no earmarks for
specific tasks)
100%
Source: Federal Law Gazette for the Republic of Austria, 2012, Hochschulraum-
Strukturmittelverordnung (Higher Education structural funds regulation), 3 September 2012
Part II

The shares in the table above refer to the total budget available at the Federal Ministry
of Science for the institutional funding of public universities in the funding period
2013 to 201510.
The budget appropriations for the indicators 1 to 4 are calculated as follows on an
annual basis: The public universities report the data for all indicators annually. For the
indicators 1 and 2, values are calculated on the basis of the subject weights. Values for
all universities are added to a total indicator value. For each indicator, each university
receives the percentage of the available budget, which equals the university’s share of
the total indicator value.
The funding based on indicator 5 was allocated for the entire funding period (2013 –
2015) based on a competitive call for proposals for all public universities. The funding
is granted for projects that establish new cooperation between public universities as
well as with external partners. Approx. three quarters of the available budget were
dedicated to cooperation in teaching and research, one quarter funds cooperation in
administration.
The University Act 2002 limits the maximum amount of budget cuts to the public
universities in order to safeguard stability and planning security: a university’s block
grant for a given three-years funding period must not be less than 96% of the block
grant in the preceding period. Maximum budget cuts for the annual appropriations are
restricted, too. A cut of 4% over three years might seem small at first sight but it can
account for a large share of the ‘disposable’ budget a rector can use, given the large
share used to cover more or less fixed ‘running costs’. Hence, even this seemingly
small cut certainly sends out a strong signal.
Despite the recent changes, the university funding system in Austria is going to be
reformed again. The major change to be expected is a funding system partly based on
the number of university places, which would imply a change of paradigm in the
Austrian university system with its (largely) free admission policy.
Austrian Academy of Science
The Austrian Academy of Science receives its institutional funding through a
performance contract covering the entire institutional funding from the Federal
Ministry of Science. The first contract was signed for the period 2012 to 2014. A follow
up contract is currently under negotiation.
The Academy of Sciences also fulfils additional tasks on behalf of the Ministry of
Science, e.g. the management of several scholarship programmes. These are
contracted separately.
10 The formula-based funding used before used more indicators and a more complicated formula. It is
described in E. Arnold et al: “The Quality of Research, Institutional Funding and Research Evaluation in
the Czech Republic and abroad“, Final Report, part 3 of the „International Audit of Research,
Development & Innovation in the Czech Republic“

Austrian Institute of Technology (AIT)
AIT receives its institutional funding through a performance contract with the
Ministry of Transport, Innovation and Technology covering the entire public
institutional funding. BMVIT is also the major shareholder of AIT.
IST Austria
IST Austria was founded by law in 2006 and established as a greenfield investment.
Funding is granted through long-term funding agreements lasting until 2026. There
are two providers of institutional funding: the Province of Lower Austria finances the
infrastructure (construction and maintenance), and the Federal Government
represented by the Ministry of Science for all other cost. This part of the funding is
partly conditional and indicator based: A maximum amount of money has been set
aside for a period of 10 years (2007 – 2016), broken down into annual appropriations.
Two thirds of each annual appropriation are paid unconditionally. The size of the
remaining share equals the amount of third party funding (grants, donations) IST
Austria has received in the year before (up to the maximum amount specified, i.e. one
third of the annual appropriation).
A performance contract for the Federal money is in negotiation.
Table 4 Austria: Components of the institutional funding for IST Austria
Mechanism %
Infrastructure (Construction and maintenance)
Long-term funding agreement with the Province of
Lower Austria
100%
(upper limit specified
in the agreement)
Operation
Long-term funding agreement with the Federal
Ministry of Science*
Max. 100%
(upper limit specified
in the agreement)
Annual block grant 66.6%
Performance-based funding (PBF)
Indicator: External funds received the year before (grants
and donations, no contracts)
Formula: PBF = external funds received in the year before
(up to a maximum of 1/3 of the annual block grant)
Max. 33.3%
TOTAL INSTITUTIONAL FUNDING Max. 100%
* A performance contract is currently under negotiation to replace this
agreement. It will most probably also contain a formula funding.

2.3.2.2 Performance contracts & processes
The first performance contracts as a tool of institutional funding in Austria were
signed between the Ministry of Science and the public universities in 2006. They are
concluded for periods of three years. The basic elements of the performance contracts
are laid down in the University Act 2002.
The basic steps of the procedure are as follows:
 Universities formulate (or update) their multiannual development plan
(“Entwicklungsplan”). This is their basis for the negotiations.
 The Ministry of Science provides the universities with guidelines on the structure
of the performance contract and the procedures. Moreover, in a letter to each
rector, the ministry specifies expectations, normally a list of items that have to be
addressed during the negotiations.
 Each university prepares a draft performance contract and submits it to the
ministry.
 Delegations of the Ministry and each university meet several times to discuss the
draft performance contract, which is signed, once agreement has been achieved.
Reporting is standardised and specified in an ordinance. Annual reports comprise a
narrative part, which is basically a description of activities and achievement along the
structure of the performance contract, an overview of progress made towards the goals
specified in the contract, and a large number of monitoring and performance data.
Representatives from the ministry and each university meet twice a year for a
monitoring meeting (“Begleitgespräche”) to exchange information and discuss the
progress made. There are no sanctions if a university fails to reach one or several goals
specified in the contract. Any deviations are addressed in the monitoring meetings.
2.3.2.3 Processes for funding system implementation
There are rules that govern the relationship between the public funders and the
existing recipients of institutional funding in general and, for the largest share of the
funds allocated, in particular (e.g. the University Act 2002, the performance contracts
etc.). However, there are no regulations on how someone could set up a research
organisation in Austria and then apply for institutional research funding11.
The status quo is contingent: it is the way it is. The largest share of public institutional
research funding goes to “logical” recipients, i.e. organisations that traditionally have
received public funding in many European countries because their societal relevance is
largely undisputed: the public universities. For most other research organisations that
receive public funding, public bodies (ministries, governments, even emperors) have
played an important or even decisive role in their establishment: the Academy of
Science, AIT, the regional research centres, the sectoral research centres, the Federal
Museums, the National Library etc. – and most recently, the IST Austria. IST Austria
was established as a basic research institute and graduate school by law in 2006. It
had been proposed and initiated by eminent Austrian scientists and is jointly funded
by the Federal Government and the Province of Lower Austria. In other words, the
establishment of the IST Austria and its public funding was a political decision.
11 There are rules for founding Universities of Applied Sciences and for private universities but they do not
receive institutional research funding (UAS) or no public funing at all (PU).

There are also examples of research organisations loosing institutional research
funding: Beyond the lion’s share of institutional research funding, which goes to the
big players, there is a large number of mainly small organisations that used to receive
institutional funding, mainly from the Ministry of Science on a historical basis. Very
often, their founders had received some start-up funding from the Ministry without
formal procedures and some institutional support thereafter on a historical basis. In
2010, as a response to the budget consolidation crisis the Austrian Ministry of Science
and Research has terminated institutional funding for 70 smaller non-profit
organisations, which are organised on private law basis as associations or limited
companies. Again, it was through a political decision that public funding of research
organisations was stopped.
Most research infrastructures in Austria are placed at, managed and used within
research organisations. e.g. at the public universities, the research centres etc.. It is
mainly financed through institutional and competitive funding. The Ministry of
Science considers the financing and management of research infrastructures a key
challenge.
Centres of Excellence and Competence Centres are funded through competitive
funding programmes. They are set up temporarily and the money they receive is
considered project (“targeted”) and not institutional funding. See the R&D system part
of this case study for more information.
Public institutional funding of Austrian public universities is granted as a block
funding without any preconditions on how to spend it, and the public universities are
autonomous in their decisions about the use of their funding as long as they use it to
fulfil their tasks as specified in the University Act 2002. In essence, this also holds for
other recipients of public institutional funding.
2.3.2.4 Governance of the funding system
Several ministries grant institutional research funding in Austria: The Ministry of
Science, Research and Economy and the Ministry of Transport, Innovation and
Technology together account for approx. 85% of all public institutional research
funding granted. The remaining 15% are mainly financed by the Ministry of
Agriculture, Forestry, Environment and Water Management, the Ministry of
Education and Women’s Affairs, the Ministry of Finance, and the Ministry of Health
(in descending order of research budgets).
Present responsibilities for institutional funding are basically the result of history. The
ministry that first granted institutional funding to a particular organisation is
responsible for this organisation as long as it grants funding.
In Austria, there is neither an obligatory coordination mechanism among research
funders nor a concept of ‘adequate field coverage’. Indeed, the questions is, how would
one know that the disciplines are adequately represented?
In Austria, what disciplines are covered lies mainly within the responsibility of the
public universities, which since the University Act 2002 have been autonomous, and
the other research performers. However, the Ministry of Science could influence the
disciplinary mix a university offers in the performance contract negotiations.
In the past decades, national research priorities in Austria have been either thematic
(e.g. ICT, nano, energy, life science etc. – the usual suspects) or structural (e.g.
science-industry links). These issues are typically addressed through competitive
funding programmes. Institutional funding at large is normally not subject to such
priorities – not least because the bulk of institutional funding goes to universities.
However, some issues are typically brought forward by the ministry in charge and are
then addressed e.g. in the performance contracts.
National infrastructure is mainly incorporated into research organisations, i.e. mainly
funded through institutional (and to a smaller share competitive) funding without a
strong coordination. Participation in international research infrastructures is mainly

driven bottom-up and decided upon on a case-by-case basis (see also the R&D system
part of this case study). There are no formal coordination mechanisms but the efficient
funding of research infrastructure has been (and remains) on the Ministry of Science’s
agenda for several years.
At the strategic level, the Federal Government has installed the „Task Force RTI“ in
the context of the National RTI strategy. The task force is an inter-ministerial body
responsible and its tasks are to coordinate and combine the different efforts and
policies of the various federal ministries in the field of RTI. Eight working parties have
been installed in order to deal with specific issues, one of them for research
infrastructure. This working party has published its first strategy paper in February
this year, the “Österreichischer Forschungsinfrastruktur-Aktionsplan 2014 – 2020”
(Austrian Research Infrastructure Action Plan 2014 – 2020).
2.3.3 Feedback and reflections on the system
In Austria, there is no single funding system in place. Rather funding systems vary
depending on the (type of) organisation. Institutional funding is normally granted in
the context of long-standing working relationship between the ministry in charge and
the research organisation(s). This is one of the advantages of the system as it is flexible
and robust. On the downside, it appears intransparent and complex.
The largest recipients of public institutional research funding have had their
governance systems changed towards multiannual funding arrangements (mainly
performance contracts) and more autonomy to the research organisations (i.e. the
largest players in the system as described above). The advantages of this system for the
beneficiaries are more autonomy and higher planning security. The performance
contracts are concluded for three years, which is a big advantage compared to annual
budgeting. The ministries also consider the longer funding periods beneficial,
although they seem to fear a loss of control and a lack of information.
In the case of the public universities, the University Act 2002 also implied substantial
reorganisation at the universities and the Ministry of Science alike, as many
administrative tasks and responsibilities (e.g. human resources) were transferred to
the universities or even newly established (e.g. quality management). Moreover, the
ministry had to find its new role on a more strategic level; some people still seem
somewhat unsettled. There is an ongoing debate within the ministry on how to
optimize the new governance system, especially with respect to the performance
contracts.
As far as effects are concerned, there is no comprehensive information, and each
individual funding arrangement would have to be assessed individually. For the largest
recipient group, the public universities, the first funding formula applied for their
public institutional funding between 2007 and 2012 has been evaluated. It turned out
to be too complicated to have any steering effect. This is an interesting case: The
indicators were carefully selected in order not to put certain universities at a
disadvantage, e.g. due to size or subject specialisation. The formula was based on a
sigmoid function, which theoretically should have created incentives towards defined
target values for each indicator. Yet, it was too complex to be effective. Consequently,
the new funding formula comprises less indicators and a less complicated formula.

3. The Netherlands
3.1 The R&D governance system
At the first policy coordination level, the government takes decisions on R&D policy.
The government consists of the parliament and the cabinet, both of which are advised
on science and technology policy by the Advisory Council for Science and Technology
(AWT) and by the Royal Netherlands Academy of Arts and Sciences (KNAW). The
AWT advises on policy in the areas of scientific research, technological development
and innovation. The KNAW councils provide advice on matters related to scientific
research, with separate councils established for different scientific disciplines.12
The main actors and institutions in the Dutch science, research and innovation
governance system - the Ministry of Education, Culture and Science (OCW) and the
Ministry of Economic Affairs (EZ) – lie at the second level of policy coordination.
OCW is concerned with science and basic research, whereas EZ is concerned with
technology and innovation. The ministry of OCW has by far the largest budget for
research. OCW has responsibility for science policy and for establishing the (four-
annual) science budget. The last science budget was in 2011 (Strategic agenda for
higher education, research and science policy13). In this policy document, the Minister
of OCW sets out the main policy objectives and the accompanying policy measures.
Other ministries (e.g. Agriculture, Nature & Food Quality (LNV), Health, Welfare &
Sport (VWS) and Transport, Public Works & Water Management (V&W)) also have
their own specific research and innovation policies. The R&D budgets of these
ministries are, however, much smaller than the budgets of OCW and EZ.
The main bodies responsible for managing and implementing policies through
competitive funding are the Netherlands Organisation for Scientific Research (NWO),
the Royal Netherlands Academy of Arts and Sciences (KNAW), and Netherlands
Enterprise Agency (RVO, an agency of EZ). KNAW and NWO function also as an
umbrella organisation for research institutes that carry out basic and strategic
research in various disciplines.14
Government funding for scientific research carried out in the Netherlands is provided
in four different ways:
a) Provision of a fixed contribution (block grant) to institutions by OCW
(institutional funding, or “first flow funding”);
b) (Competitive) funding of research via intermediary organisations (such as
NWO, KNAW, and RVO) by OCW, EZ and to some extent other ministries;
c) Funding of research via the ministry’s own knowledge institutes, for example
at the Ministry of Justice and the Ministry of Health, Welfare and Sport;
12 Ortega-argiles, ERAWATCH Country Reports 2012 : The Netherlands; Country Report: Social Sciences
and Humanities in The Netherlands.
13 Kwaliteit in Verscheidenheid: Strategische Agenda Hoger Onderwijs, Onderzoek En Wetenschap.
14 ERAWATCH Country Reports 2012 : The Netherlands.

d) Direct funding of policy-oriented research.
A large number of organisations conduct research in the Netherlands. Three sectors
are generally distinguished: A) higher education institutes (universities, university
hospitals and universities of applied sciences); B) research institutes, including private
non-profit (PNP) institutes; and C) companies.15
Figure 2 Netherlands: The R&D governance structure in the Netherlands
Elaborated from ERAWATCH Country Reports 2012 : The Netherlands.
The Dutch research strategy is formulated as part of the Higher Education, Research,
and Science strategic agenda of the Ministry of OCW. The aim of the agenda is to
create a higher education system that can compete internationally and performs
internationally outstanding research, as well as to enforce the international position of
Dutch businesses. The strategy has two main pillars: a stronger profiling of the public
research system, and the stimulation of valorisation of knowledge through stronger
15 The Science System in the Netherlands an Organisational Overview.
Other
InstitutesOther
Institutes
1
Netherlands
M inistry of
Education,
Culture and
Science (OCW )
Other
M inistries
KNAW
Institutes
Universities NWO Institutes
M inistry of
Economic
Affairs (EZ)
NWO
Research Council
KNAW
Royal Academy
Accountability and money
Money
GOVERNM ENT
NL Agency
Innovation
Agency
AWT advisory council
KNAW councils
Advice
Other
Institutes

collaboration in the triple helix, i.e. universities, industries and government, and by
targeted investments in the top sectors. The Dutch research strategy 16:
 Aims for a research landscape with a number of internationally recognised and
competing research focus areas, well embedded in European alliances and well-
able of acquiring European funding. These focus areas are primarily formed on the
basis of the criteria scientific quality, and impact. Within these focus areas, there
is close collaboration with companies from the nine ‘top-sectors’ (water, agro food,
horticulture, high tech systems and materials, life sciences and health, chemistry,
energy, logistics, and the creative industry) and social organisations in order to
address the European ‘grand societal challenges’. Important is regional
collaboration, but also national and international collaboration.
 Aims for stronger and more firmly embedded connections between fundamental
research, practice-oriented research, applied research, innovations in companies
and social renewal. In addition to the criteria of scientific quality and excellence,
economic and societal impact are core values of the science system. It aims for a
greater contribution of scientific research to societal challenges, nationally and
internationally.
Also relevant is the Topsector policy of the Ministry of Economic Affairs. The
Topsector policy is aimed at the economic sectors that are the most important to the
international competitive position of the Netherlands, such as the knowledge-
intensive and export-oriented sectors. The government has defined the following
Topsectors: Agri-food, Chemicals, Creative Industry, Energy. High Tech, Horticulture
and propagation material, Life science and health, Logistics and Water. The top sector
approach is geared towards providing a solid exchange between businesses, knowledge
institutes and the government (the 'golden triangle'). The government does not make
its own proposals for the sectors, but invites businesses and scientists to draw up
action plans. Research is an important part of these action plans. Each Topsector has
formed a “Topconsortium for Knowledge and Innovation” (TKI). The TKIs developed
strategic research agenda’s. Institutes like the NWO (the Netherlands Organisation for
Scientific Research), KNAW (the Royal Netherlands Academy of Arts and Sciences),
TNO (Netherlands Organisation for Applied Scientific Research) and the large
technology institutes have to adjust their programmes to the top sectors and the
strategic research agendas in particular.
Implementation of the research strategies
The first pillar concerning profiling of public research is implemented through
performance agreements between the State Secretary and universities for 2013-2017
in three domains:
 Education: improvement of quality and performance and deepened
differentiation.
 Profiling and focus areas in research: stimulate local competences and national
coordination.
 Strengthening knowledge valorisation.
By 2017, 7% of the institutional funding to universities (ca. M€ 325) is meant to be
allocated based on the performance of universities in these three domains.
16 Kwaliteit in Verscheidenheid: Strategische Agenda Hoger Onderwijs, Onderzoek En Wetenschap;
Effecten van Universitaire Profilering En Topsectorenbeleid Op de Wetenschap in Nederland: Een Eerste
Kritische Reflectie.

Implementation of the second pillar and the Topsector policy is partly done by the
Topsectors themselves. Each Topsector has developed a strategic research agenda.
For the execution of these agendas 2 B€ is committed by the Government by 2015 and
1.8 B€ committed by industry in 2012.17 The second pillar and the Topsector policy is
also implemented by NWO. The Dutch government decided that NWO must allocate
most of their funds for thematic research to the nine economic priority areas selected
by the government. From 2015 onwards, NWO will allocate 100 million euros per year
to research within the economic priority areas that is realised in cooperation with
industry.18
3.1.3 Level of autonomy of the research funding bodies
OCW is responsible for the functioning of the national research system as a whole.
OCW has the responsibility to define the framework within which the research system
should operate, e.g. in terms of internationalisation, emphasis on knowledge
valorisation, or focus and mass. Within these broad guidelines, the other actors in the
research system, including the research funding bodies and research performing
institutes, have their own responsibilities with a large degree of autonomy. Guidance
for these organisations is given by the Ministry’s Strategic Agenda which is published
every four year.
The research funding bodies’ policies are partly based on the national research and
science policy, and partly based on long term strategic plans. NWO and KNAW are in
charge of the evaluation of research conducted at their affiliated research institutes,
while the boards of universities are in charge of the evaluation of research conducted
at their university.
NWO is responsible for allocating competitive funding (“second flow funding”) to
universities and to NWO institutes, and to a lesser extent to other institutes. It also
provides institutional funding (“primary flow”) to a number of NWO research
institutes, functioning as an umbrella organisation. Although NWO falls under the
responsibility of OCW, it is an independent administrative body. The Ministry do not
wants to be involved in the decision making about competitive funding (matter of
principle to not mingle the assessment of research quality and politics). It therefore
has a high level of autonomy, although the Minister of OCW does approve NWO’s
budget and responds to its strategic plan. Furthermore the Ministry sometimes
commissions specific research programmes, e.g. about young talent, minority groups.
These assignments come with additional budget. 85% of the NWO budget comes from
OCW, and 4% from EZ.
KNAW duties are defined by law. Briefly, they are: to serve as a learned society
representing the full spectrum of scientific and scholarly disciplines; to act as a
management body for national research institutes (umbrella organisation); to advise
the Dutch Government on matters related to scientific pursuit. It decides on its own
budget spending and strategic plan. 62% of its budget comes from OCW.19
RVO is part of EZ, and therefore has limited autonomy.
While the research institutes have a very high degree of autonomy, the funding bodies
do have influence. Their secondary funding is dependent on the competitive funding
17 Ibid.
18 See www.nwo.nl
19 See www.knaw.nl

calls from funding bodies, and the newly established performance contracts also affect
the institutional funding (see section 3.3.2.2).
3.2 The R&D system
The Dutch research system includes 14 government-approved research universities
(including an Open University), the research institute TNO (contract research),
research institutes under the umbrella’s of NWO and KNAW (basic research), DLO-
institutes (agricultural research), Large Technological Institutes, research institutes of
ministries and a range of research institutes for public-private partnerships in
strategic research.
3.2.1.1 Research universities
Universities have a three-fold mission: teaching, research and utilisation of knowledge
(valorisation). There are 14 universities (including an Open University) that spend
almost 2.6 billion on R&D (2007), which amounts to 27% of total R&D expenditures in
the Netherlands.20 There are six general research universities, three universities of
technology, four specialised research universities and the Open University.
3.2.1.2 Public research organizations
Public research institutes are a small player in the Dutch science system. They
contribute 10% to total R&D performance and receive 75% of their funds from the
government. The research institutes vary in their focus and the type of research they
perform. In general, the research institutes can be divided into seven different
categories 21:
1. The research institutes of NWO and KNAW. Both organizations are also
intermediary organisations (see section 3.1).
2. Netherlands Organization for Applied Scientific Research (TNO).
3. Large Technological Institutes (GTIs).
4. Research universities of the Wageningen University and Research Centre (WUR).
5. Departmental institutes.
6. Other institutes funded by provinces or other public bodies.
NWO has nine research institutes, focusing mainly on fundamental research in a wide
range of research fields. They receive institutional funding to cover personnel and
equipment costs, and additional funding is obtained by participation in NWO
competitions and attracting other external funds. In 2011, the research institutes
received 97 million euros as institutional funding and obtained 57 million euros
through NWO competitions21.
20 OCW (2010) Wetenschaps- en Technologieindicatoren 2010.
21 Dalen et al., “Public Funding of Science : An International Comparison.”

The KNAW has 18 research institutes, which are organized around three themes:
Humanities and Social Sciences, Life Sciences, and Programming and Social Debate.
The budget of KNAW was 150 million euros in 2012. The institutes receive
institutional funding which does not depend on past performance. Additional funding
can be obtained by applying for (NWO) grants or attracting other external funds21.
TNO is a non-profit organization that focuses on applied research. Its mission is:
“TNO connects people and knowledge to create innovations that boost the
sustainable competitive strength of industry and well-being of society.”22 TNO
focuses on themes that are central the national and European innovation agenda.
TNO’s consolidated revenue for 2012 was equal to 587 million euros of which a third
(192 million euros) was institutional funding from the government. This government
funding includes basic funding 40% and demand-driven funding (60%). Besides the
institutional funding, the government spend close to 120 million euros on projects
performed by TNO21.
The GTIs receive institutional funding from the government (104 million euros of
basic and demand-driven funding in 2012) but the largest part of their budget comes
from public (71 million euros) and private (152 million euros) demand driven funding.
The research institutes of the WUR focus on agricultural research and are also part of
the Foundation DLO (Dienst Landbouwkundig Onderzoek). Furthermore there are
some departmental research institutes, like the National Institute for Public Health
and Environment (RIVM) or the Netherlands Institute for Social Research (SCP).
OCW is responsible for the functioning of the national research system as a whole.
OCW has the responsibility to define the framework within which the research system
should operate, e.g. in terms of internationalisation, emphasis on knowledge
valorisation, or focus and mass. Within these broad guidelines, the other actors in the
research system, including the research funding bodies and research performing
institutes, have their own responsibilities with a large degree of autonomy. This has
been the case for many years and there are no significant changes at this point.
3.2.3 Research infrastructures and Centres of excellence/competence centres
Research infrastructures are funded through competitive funding by NWO. The
research council has three dedicated schemes for research infrastructures:
 The National Roadmap Large-Scale Research facilities: this scheme aims
to strengthen the scientific position of the Netherlands by encouraging the
development and construction of large-scale research facilities. For this purpose,
OCW provides NWO with a structural budget of M€ 40.23 NWO organises a
competition every two-year. The 2013 funding round of the National Roadmap for
Large-Scale Research Facilities was solely for projects included in the 2012
Roadmap. The aim of this round was to invest NWO funds for the National
Roadmap in the best facilities. These funds are also used for investments in the
22 www.tno.nl
23 Call for Proposals: Nationale Roadmap Voor Grootschalige Onderzoeksfaciliteiten.

Dutch participation of European infrastructures. Besides that the Ministry of OCW
provide targeted funds for the Dutch contribution to international infrastructures
such as EMBL, CERN, etc. but also pan European surveys like ESS.
 Investment Grant NWO Large: the aim of the programme is to stimulate
investments in innovative scientific equipment or data collections of national or
international importance. Investment Grant NWO Large is meant for the purchase
of equipment and for the setting up, linking and enriching of data collections. The
NWO contribution is at least € 1,500,000 for all scientific fields with the exception
of the arts, social sciences and humanities for which a lower limit of € 1,000,000
applies.
 Investment Grant NWO Medium: this scheme aims to stimulate investments
in innovative scientific equipment or data collections of national or international
importance. For proposals an upper limit of € 1,000,000 applies for the arts,
social sciences and humanities and € 1,500,000 for the natural and life sciences.
The lower limit is usually € 250,000, yet for certain research areas this amount
may be deviated from.
There are no Centres of Excellence that are financed separately from the
aforementioned public research institutes (e.g. TNO and the TTIs). As such, these
obtain financing through competitive NWO calls.
In the Netherlands, total R&D expenditures amounted to 2.03% of GDP in 2011, and
2.16% in 2012. The national investment target is 2.5% in 2020 (EU target is 3.0%).
Because of the sector structure in the Dutch economy – with a large service sector and
a small high-tech sector within a relatively small industry sector – a 2.5% target is
argued to be more realistic and appropriate than a 3% target. Government is the
second largest funder of overall R&D (35.6%) after the business sector (49.8%). The
public funding amounted to 0.72% of GDP in 2011, which is above EU average (0.68%
of GDP in 2011). The large majority of research is performed by the Business
Enterprise Sector (56.5% in 2012), followed by HEIs (32.4% in 2012). See Table 5 for
trends from 2009-2012.
Table 5 Netherlands: Basic Indicators for R&D investments in the Netherlands
2009 2010 2011 2012 EU27
GDP growth rate -4.2 1 0.5 -1.6 -0.7 (2012)
GERD as % of GDP 1.82 1.86 2.03 (b) 2.16 (p) 2.08 (2012)
GERD (euro per capita) 631.3 657.1 728.9 772.6(p) 534 (2012)
GBAORD Total R&D
appropriations (€ million)
4,851.352 4,857.239 4,975.058 4,664.857
90,351.843
(2012)
R&D funded by Government
(% of GDP)
0.74 - 0.72 (35.5%) - 0.68 (2011)
R&D funded by Business
Enterprise Sector (% of GDP)
0.82 - 1.01 (49.8%) - 1.12 (2011)
R&D performed by HEIs (% of
GERD)
40.1 40.3 33.0 32.4 (p) 23.6 (2012)
R&D performed by
Government (% of GERD)
12.6 11.8 10.8 10.6 (p) 12.0 (2011)

2009 2010 2011 2012 EU27
R&D performed by Business
Enterprise Sector (% of
GERD)
46.7 47.8 56.2 56.5 (p) 63.5 (2012)
Eurostat, Sept 2014. Note: p=Eurostat prevision, b=prevision with break
Table 6 summarises the different flows of public funding (institutional versus
competitive funding). Of the public funding, 49% was institutional funding, and 51%
was competitive funding. Of the overall R&D expenditures, 17.4% was institutionally
publicly funded, and 18.1% was competitively publicly funded. Of the public funding,
22% was allocated to public research organisations (PROs), and 72% was allocated to
higher education institutes (HEIs). The public funding constituted 75% of the overall
income of PROs, and 70.4% of the overall income of Universities (data for UAS not
available). There is no data available on the balance of institutional funding versus
competitive funding of PROs. As for HEIs, about 60% of the income is institutional
funding, and 15% is competitive funding.
Table 6 Netherlands: Flows of public research funding 2011
% of
Overall
Public
funding
% of GDP % of spent
on R&D
PROs (%
of total
income)
HEIs (% of
total
income)
Institutional 49 0.35 17.4 n.a. 60%
Competitive 51 0.37 18.1 n.a. 15%
Overall public
funding
100 0.72 35.5 22 (75) 72 (70.41)
(Dalen, Mehmood, Verstraten, & Wiel, 2014)
Note: 1=data for universities only
Table 7 shows the public funds for fundamental and applied research over the years.
Historically, the majority of public research funds is spent on fundamental research –
mainly conducted at the research universities. Publicly funded applied research is
mainly conducted at PROs such as TNO, and at universities of applied sciences. The
figure shows a trend of increasing funding for fundamental research and decreasing
funding for applied research.
Table 7 Netherlands: Summary of resources for research and innovation
2009 2010 2011 2012 2013 2014
Fundamental
research
3,122 3,183 3,234 3,280 3,282 3,309
Applied
research
512 503 488 455 453 407
Kamerstuk 2012

Universities are publicly financed via different flows of funds. The research
universities receive their public funding via three funding flows.
• The first – the base funding – originates directly from the Ministry of Education,
Culture and Science (OCW) and tuition fees paid by students. It is approximately
60% of total university revenue.
• The second flow of funds consists of research council funding and represents 10 -
15%.
• The third flow of funds makes up the remaining 25 - 30%.
As far as the first stream of funding is concerned, each research university receives a
formula-based lump sum (block grant) for teaching and research. The lump sum
allocation is based on measures of volume (student numbers, diplomas), prices (rates
per student) and historical considerations. The allocation mechanism is known as the
BAMA model, named after the BA and MA degrees that were introduced from the year
2002 onwards. The BAMA model is largely formula-based; it distributes a given sum
of money (set by Parliament) across the 13 research universities. The formula takes
into account the relative performance of each university (as compared to the other
universities).
The Netherlands Organisation for Scientific Research (NWO) is responsible for
allocating the second flow. NWO receives funding from the Education ministry and the
Ministry of Economic Affairs (the latter supports the natural/technical sciences).
NWO then awards project funds after reviewing the research proposals submitted by
researchers. Competition for this type of prestigious funding is high. Only universities
can win competitive research council grants. Such grants have become more
important over the years but are still not very large.
The third flow of funds consists of a heterogeneous mix of revenues from activities
such as contract research (approximately half of the third stream), contract teaching,
consultancies, research commercialization, endowments and renting out university
facilities. Clients are: private businesses, government, non-profit organizations and
the European Union, as well as individual students and staff.
The Dutch universities profit of all three funding streams. Another source of funding
are tuition fees. Table 8, below, provides an overview of the different sources of
income of universities.
Table 8 Netherlands: University funds
2004 2011
Grant Government 61% 57%
Tuition fees 7% 8%
Contract research 22% 26%
Other funding 10% 9%
Source: VSNU

The BAMA allocation consists of a teaching component and a research component,
but this distinction is for calculation purposes only. The teaching component is 45% of
the lump sum and the research component makes up the remaining 55%.
The teaching component consists of (a) a new entrants allocation; (b) a diploma
(BA/MA) based allocation; and (c) a basic allocation. For individual universities, the
shares may differ, due to their relative performance. The basic allocation consists of
fixed amounts per university. These amounts differ also across universities; they have
a historical basis. The emphasis on performance increased in 2000, as degrees
received a higher weight in the formula.
The research component of the BAMA funding model consists of three parts:
A. A basic allocation
B. Allocation for PhDs and designer certificates (in Dutch:
ontwerperscertificaten);
C. Provision research
Ad A: The first part – the basic allocation – consisted till 2003 of fixed allocations per
university. Since 2003 these part is based on the number of Bachelor and Master
diploma’s.
Ad B: As part of their research budget, Dutch universities receive a premium for each
postgraduate degree – i.e. PhD, designer certificate – awarded (based on two-year
averages). For PhDs, two funding rates apply. The rates for science PhDs are twice as
high compared to social science PhDs.
Ad C: This component consists of different elements. The funding is based on a
formula taking into account the type of university (e.g. technical university get extra
funding for their research facilities, Labs, etc.) and some specific tasks. Furthermore is
contains funding for specific activities (e.g. funding for sector plans, top research, etc).
The exact formula for funding is subject to many changes even during the year. These
changes are being made by the Ministry of OCW. It is felt that this art of the formula
for research funding is not very transparent.
In term of funding part C is the biggest part: about 62% of the total budget. Part B
determines around 22% and Part A around 16% of the total research funding.
In 2007, an amount of € 100 million was taken out of “first flow funding” and
redistributed according to each university’s success in terms of winning research
council grants (from NWO) and selected competitive research contracts in the third
stream of funding. However, after a new Cabinet took office in 2007, the Smart Mix
policy was abandoned and the 100 million was redistributed by the research council
for strengthening fundamental research in universities.

Table 9 Netherlands: Components of the institutional funding for research
Mechanism %
Block grant 0
Formula-based funding 100%
 Indicator 1: # Bachelor and Master Diploma’s 16%
 Indicator 2: PhDs and designer certificates 22%
 Indicator 3: distribution based on type and specific tasks activities 62%
TOTAL INSTITUTIONAL FUNDING 100%
* Is additional funding, not part of the institutional research funding for universities.
In 2012 the Ministry of Education, Culture and Science (OCW) introduced
performance agreements for all colleges and universities. The starting point for the
agreement was the ambitions of the colleges and universities in the field of education,
research and valorisation. Colleges and universities were asked to indicate their
strengths and develop a certain profile based on these strengths. This result in a tailor
made performance agreement per college / university. A small part of the funding
(7%) is linked to these agreements. This are additional funds, the money is not part of
the institutional funding for research. The colleges and universities can get funds if
they meet the objectives in the performance agreement.
The research organisations that are entitled to receive public institutional funding are
mentioned in the Law on Higher Education and Research (Uitvoeringsbelsuit WHW).
The organisation must we accredited by the Accreditation Organisation of the
Netherlands and Flanders (NVAO). The NVAO assess the potential quality of higher
education provision alongside national authorities appraisal of legal and
organisational issues. After accreditation the higher education institute can receive
institutional funding. There are no other bodies, e.g. centres of excellence, competence
centres that receive institutional funding.
The institutional funding for research organisation is the responsibility of the Ministry
of OCW. The grants for intermediary organisations like NWO and RVO is provided by
Ministries (OCW for NWO and Economic Affairs for RVO). In addition all the
Ministries has own research institutes, e.g. the Scientific Council for Government
Policy (Ministry General Affairs), African Studies Centre (Ministry Foreign Affairs)
and the research centres at the Wageningen University.

There are no formal coordination mechanisms between Ministries or research funders
to ensure adequate coverage of different scientific fields. The research organisations
themselves are responsible. The Executive Boards of the universities and research
institutions have a large degree of autonomy for research and are also free to allocate
the funding from the first low as they wish (even across teaching and research
activities). However, sometimes the Ministry of OCW can intervene with specific
support measures for certain disciplines (e.g. mathematics).
The national research priorities do not influence institutional funding allocations as
this is formula based. Only 7% of the (teaching) budget is linked to the performance
agreements.
Funding of large-scale research infrastructures is coordinated in the National roadmap
for infrastructures. This roadmap is updated form time to time. NWO receive 40
million euro per year for the implementation of the National Roadmap.
3.3.3 Feedback and reflections on the funding system
In a study on research funding in the last thirty years the Rathenau Institute comes to
a number of conclusions:
 The growth of public research funding in the Netherlands has decreased as % of
National GDP and compare to private R&D. The public funding of Research in the
Netherlands as a percentage of GDP is equal to the average for the EU, and above
the average of the OECD, but lower than in EU countries such as France,
Germany, Finland, Sweden and Austria.
 The funding for basic research is relatively stable. Basic funding for university
research and fundamental research targeted funding streams has not decreased
relative to other streams.
 Within the total core funding for universities and research institutions
the proportion of basic funding has declined. Universities and research institutes
became more dependent on other funding streams (like competitive funding, EU
funding, contract funding).
 The number of programs has increased exponentially, as well as the policy
objectives associated with it. More in general there is a wide variety of funding
instrument sin the Netherlands for research and innovation. Many of these
instruments exist only for a rather short period; there is a lack of continuity.
 The Ministry of Economic Affairs – as the coordinator of innovation policy – has
gain more and more influence on the research infrastructure in the Netherlands.
Economic relevance of research has become much more important and determine
also a (larger) part of the funding for research.24
In general research institutions and policy makers are rather satisfied with the funding
system in the Netherlands. It provides sufficient means for a broad range of
disciplines. Bibliometric studies show that Dutch researchers are relatively productive
24 Rathenau Instituut, 30 jaar onderzoeksfinanciering (Den Haag 2012).

and have high citations scores. In general the research in the Netherlands is of a high
very high level.
A general complaint is the fact that research organisations faces decreasing budgets
and argue for increasing investments in Research and Innovation. Extra funding is
needed in order to maintain the high level research in the Netherlands. Also the exact
formula for research funding for universities is not very transparent and subject to
changes.
There are a number of issues debated when it comes to research funding in the
Netherlands:
 The need of matching funds. Universities underline that the increased dependency
of 2e and third funding flow requires matching funds within the university. NOW
and the EU does not provide full cost funding so the universities has to ‘match’
these funding streams with own means. There are different views whether
matching is a real problem for the universities.
 The autonomy of the institutes: there are many new funding instruments
introduced in the Netherlands, e.g. Top institutes, TKI’s, funding programmes.
The effect is that much more research is carried out in consortia, programmes,
temporary) institutes outside the university. The research in these consortia,
programmes, etc. is in many cases driven by a specific (economic / societal)
agenda. So the level of autonomy for universities/ individual researchers has
decreased.
 Efficiency of the funding system. Bibliometric studies show a relatively good
performance of the Dutch research, both in terms of productivity and citations.
However, the productivity per Euro invested in the research system is rather low.
This might indicate a low efficiency of the funding system. Possible reasons are
research money that is being used for teaching staff, the expensive PhD system or
the cost for intermediary layers.
 Complexity: the increased number of finding arrangement raises the question if
there is an effective steering mechanism. Aren’t there too many instruments with
their own steering (scientific excellence, young talents, societal relevance, etc.). Is
there sufficient alignment between these instruments at a system level?

4. Norway
The Norwegian R&D system is first of all characterized by a strong sector principle.
All ministries have a long-term responsibility for the research in their sectors – the
broad sector responsibility – and a responsibility for research covering the ministries’
own knowledge needs for policy development and governance. In short, the sector
principle involves:
 An overall responsibility for research in the sector
 Responsibility to monitor the sector's needs for knowledge
 Responsibility to fund research in the sector
 Responsibility for international research collaboration
The Norwegian Ministry of Education and Research (KD) has the coordinating role of
the research policy. It is carried out through strategic processes, budgetary
coordination and the agency steering of the Research Council of Norway (RCN). The
white paper on research (“Forskningsmeldingen”) presented every 4-6 year to the
Parliament, is the most important strategy document – pointing out the direction for
the research policy in the coming years.
Figure 3 Norway: The R&D governance structure in Norway
Source: Technopolis

RCN is an agency of KD (the Ministry of Education). Norway differs from many other
countries in that it only has one research council. Close to half of RCN’s income is
provided by two ministries: the Ministry of Education and Research (28% of Ministry
funding in 2010) and the Ministry of Industry and Trade (23% in 2010). Other
ministries with relatively important shares in RCN’s funding are the Ministry of Oil
and Energy (~10%) and the Ministries of Fisheries and Coast, Agriculture & Food, and
Environment, each accounting ~5% (in 2010). RCN was created in order to combat the
tendency of the sector principle to fragment the Norwegian research and innovation
system. It channels almost a third of the state’s spending on R&D from sixteen
ministries. The intention from the outset was to provide it with ‘strategic’ resources to
counter-balance fragmentation. Important challenges are e.g. related to whether
research funds are effectively utilized and in the areas where they are most needed;
difficulties to realize cross-sectorial research (and that is not necessarily connected to
one sector's needs).
 Due to the strong sector principle, all ministries have their responsibilities.
Former governments have had a so-called research committee (level 1,
“Regjeringens forskningsutvalg”), but the common perception is that this has not
been a very active or important committee, and that no one at level 1 has been
willing to have a national coordination role. The current government has recently
discontinued the research committee. Therefore, the Ministry of Research and
Education (KD) (level 2) is the true coordinating unit. The White Paper on
research to the Parliament is produced by KD and coordinated with other
ministries (most important are health and trade, industry and fisheries, and to
some degree petroleum and energy, and climate and environment).
In analytic terms, KD’s coordination of research is ‘weak’ coordination, where the
role of KD is to collect and share information about the research activities of the
various sector ministries and bottom-up to prepare the national research budget.
FFN provided resources that KD has used to fill gaps and launch new policies. We
distinguish this from ‘strong’ coordination, which would involve imposing
priorities or reallocating resources among ministries. KD’s leadership of the
process of setting national priorities in successive White Papers similarly amounts
to ‘weak’ coordination, where the White Paper proposes directions rather that
being strongly coupled to mechanisms that impose them25.
 All ministries fund research (albeit to various degree) and in principle, all
ministries fund competitive research, through channeling funds via RCN. Some
ministries, however, have direct funding of institutional research, e.g. primary
industry research institutes being funded by the primary industry sector ministries
(e.g. agriculture and fish). In general, there is little direct public funding of
research outside RCN. The system is characterized either by basic funding or
funding through RCN.
 RCN, Innovation Norway and SIVA are the three main players in the national
research, development and innovation industry and business support system. The
three agencies have different roles, responsibilities, and tasks, but are required to
cooperate in areas of common interest where there are risks of overlap. In short,
the contrasting roles of the agencies could be described as follows: SIVA’s
investments are geared towards physical and virtual centre and incubator
investments aiding innovation, while RCN’s focus is on creating commercial and
25 Jasper Deuten and Patries Boekholt, Prioritering in kennis- en innovatiebeleid, Ervaringen uit Canada,
Duitsland, Frankrijk en Noorwegen, Den Haag: Ministerie van Economische Zaken, Landbouw en
Innovatie, 2009

social value via research grants. Innovation Norway works largely through loans
and is geared towards creating socioeconomic benefits from entrepreneurship,
business development and innovation but without having a research funding role.
In contrast to SIVA, Innovation Norway and RCN both base their support in
individual enterprises and projects, which are in turn encouraged to create
networks. SIVA, on the other hand does not support individual undertakings,
focusing instead on the development of physical and organisational infrastructure.
 Research Council of Norway (RCN): is a subordinate organ to KD. Reports
directly to KD. To some degree RCN also acts as an interest organization on
behalf of the research community (e.g. writing critical chronicles in
newspapers etc.).
 Innovation Norway (IN): Is the Norwegian Government’s most important
instrument for innovation and development of Norwegian enterprises and
industry. IN is owned by the Ministry of Trade, Industry and Fishing (51%)
and the 19 county governments of Norway (49%). IN’s main purpose is to
support companies in developing their competitive advantage and to enhance
innovation. IN supports industry-related research (more emphasis on
development, than on research though).
 SIVA (The Industrial Development Corporation of Norway): is a
governmental corporation and national instrument founded in 1968, owned
by the Norwegian Ministry of Trade and Industry. SIVA aims to develop
strong regional and local industrial clusters through ownership in
infrastructure, investment and knowledge networks as well as innovation
centers.
 Regional health authorities (RHA): We also add a fourth type of agency; the
regional health authorities (in total four), whose main purpose is to provide
specialized health care services to the Norwegian population. In addition to
running the public hospitals in Norway, the RHAs have three main
responsibilities: research, education and training of patients and their
relatives. The RHAs reports to the Ministry of Health and Care Services.
 There are three main types of research organizations in Norway: 1) higher
education institutions, 2) hospitals, 3) independent research institutes. The latter
is somewhat unique in Norway, because its contribution to the overall R&D in
Norway is almost at the same size as that coming from the higher education
sector. In addition to this private companies constitute a fourth main type. R&D at
the county and municipality level is practically non-existent (so is the contribution
from NGOs).
Like other countries, Norway has chosen to make its research performers
increasingly autonomous and to a great extent to steer them using performance-
based funding systems to promote quality, and using external project-based
funding to steer research in thematic terms.
The 2002 Quality Reform of the Higher Education Sector introduced significant
changes in governance. It granted the HEIs more autonomy (e.g. for the use and
internal distribution of their public funding) and tackled quality in teaching and
research by introducing a performance-based funding model (PBRF), fully
implemented in 2006. A similar model was also implemented for part of the core
funding in the research institute sector in 2009. The reform aimed to encourage
modernisation and greater ability to respond strategically to contextual changes
and pressures. This implied a change in the relationship between the higher
education sector and the government. Government maintained its ability to
influence research directions, steer the research base to align with policy
priorities, and ensure performance through more external competitive funding
and shifting the balance of core funding towards more performance-related

funding. More open competition for funding based on quality and relevance was
expected to lead to a more ‘dynamic’ division of labour in the research system. A
key objective was to ensure effectiveness and efficiency of the university and
institute sectors in fulfilling their roles in the education and research system.
Other interventions such as the 2005 Act on Universities and University Colleges
increased the their responsibility for strategic management of research and
granted them the right commercially to exploit intellectual property they
developed. The Acts also mandated that the universities facilitate research-based
innovation through the licensing of technology and spinning off new enterprises.
The universities responded by establishing Technology Transfer Offices, in some
cases jointly with university colleges and other institutions. (RCN’s FORNY
commercialisation programme was for a time used to support these start-up
operations.) Norway opted not to have a Danish-style forced merger between the
government laboratories and the universities, although there has been some
merger activity on a voluntary basis, through mergers among the food research
institutes and a merger between certain institutes and Oslo University College.
 The national research strategies are primarily defined through three documents:
1) KD’s white paper on research – and the follow up in annual state budgets, 2)
different strategies from ministries (i.e. sectorial strategies – for example strategy
for innovation in the public sector, or strategy for biotechnology research), 3) “21-
processes” (a stakeholder-driven national strategy process on behalf of the
government or ministries to promote research-based value creation and
development in key areas of society for the 21st century). The white paper on
research (alt. 1 above) is the main document for research priorities in Norway, and
is considered essential to RCN whose follow-up is strong.
 In the white paper to the Parliament Climate for Research (“Klima for forskning”,
St.meld. nr. 30 (2008-2009)), the Government described five thematic and four
systemic approaches that should form the baseline of Norwegian research policies
were introduced. In the most recent white paper these remained the thematic and
systematic approaches.
 Thematic approaches:
 1) Global challenges: solutions to global challenges, particularly within
environment, climate, marine, food safety and energy.
 2) Improved health and health care services: good health, reduced social
inequalities in health, and health care services of good quality.
 3) Welfare and research-based professional practice in the welfare
services.
 4) A knowledge-based business/industry sector in all areas of Norway.
 5) Industry-relevant research in strategic areas: industry development in
the following areas: food, marine, maritime, tourism, energy,
environment, biotechnology, ICT and new materials/nanotechnology.
In order to achieve this, four systematic approaches were identified:
 A well-functioning research system
 Research of high quality
 High degree of internationalisation in the research
 Effective utilization of research resources and results

National strategies are implemented by RCN (competitive funding) and through
institutional funding (earmarked funds and KD’s budget letters (“tildelingsbrev”)
to the institutions). The growth in national R&D expenditures is concentrated in
the prioritized areas. It is not channelled through or reflected in any ways in the
PBRF.
The risks inherent in sector-based steering of research were clearly identified in the
report of the Grøholt committee. The documents that set out RCN’s goals and
responsibilities include the report of the parliamentary committee for KUF (the
predecessor of KD) identified the need for a ‘countervailing force’ that would balance
the fragmenting tendency caused by sector interests with centralising tendency that
reflected the collective interest. Amongst other things26, it says
The government will give RCN framework conditions that enable the Council to
play an independent strategic role. In this connection, the government will
ensure stability in the overall budgets given to RCN as it becomes established,
and to ensure that the funding structure allows RCN to act as an independent
strategic research agency.27
RCN makes strategies within an overall framework. Strategy development is weak at
level 1, strong at level 2, concentrated at level 3, and fragmented at level 4. RCN,
Innovation Norway and the RHAs all have strong coordinating roles and strategic
action frames in addition to a strong executive role. Within their budget frames they
are allowed to make strategic decisions. Technopolis’ interviews and review of
documents in their 2011-evaluation of RCN suggest that the steering processes
between RCN and individual ministries are cordial and based on trust – more so than
was the case 10 years ago – and some ministries have increased the proportion of their
research expenditure that they channel through RCN as a result. All the ministry
representatives that Technopolis interviewed were pleased with the dialogue with
RCN. They all found RCN to be expedient and competent and thought that RCN
understands their needs. They were also pleased with RCN’s reporting, though
reporting needs differed considerably among ministries. The ministries of Trade,
Industry and Fisheries and Health and Care Services required intensive monitoring
and frequent data deliveries, while KD and other ministries were less focused on data
inputs.
Technopolis described the dialogue to be more two-way now than before. Allocation
letters have overall developed positively and become more instrumental and distinct.
The number of guidelines has generally not increased and the ministries say they
listen more than before to RCN when drafting allocation letters.
In the health sector, the RHAs are working through annual allocation letters
(“styringsdokumenter”), where some general objectives are specified for their research
activities: minimum 20 percent of publications to be co-authored with international
co-authors and 20 per cent of publications to be published at level 2 in the hospital
sector’s PBRF. Research strategies and distribution of funds to hospital within each
regional health authority is up to the RHA to decide.
26 Arnold, E., Mahieu, B., A Good Council? Evaluation of the Research Council of Norway,
Technopolis Group, 2012
27 Innst. S. nr. 192 – 1992–93, p 5

 Each ministry have its budget/allocation letter to RCN. Ministry of health and care
services has its budget/allocation letter to the RHAs and Ministry of Ministry of
Trade, Industry and Fish to Innovation Norway.
 Funding/responsible ministries do this on a regular basis and in their follow-up of
the institutions’ budgets. Both Innovation Norway and RCN has been the subject
of external evaluations. The Office of the Auditor General of Norway also monitors
these funding agencies. In the Ministry of Research and Education, talks are
continuously held between the ministry and the higher education institutions. A
new Management By Objective (MBO) system for RCN was implemented in the
steering and reporting process between the funding ministries and RCN in 2010-
2011. It represents an attempt to integrate ideas from the New Public Management
into that relation, supporting the ministries in the exercise of their sector
responsibility with respect to research while at the same time enabling
coordination and a streamlined process of instruction and reporting. It also
provides an opportunity to review the degree of specificity in ministry instructions
and the dialogue with RCN about particular activities and therefore the room RCN
has to manoeuvre in trying to optimise its activities at the national level while still
making sure that sector needs are met. The MBO system involves three high-level
goals, broken down into a total of 13 subgoals. In 2011, most of the ministries
adopted the system. It is largely overlaid on previous practice, with letters of
allocation providing an indication of which MBO sub-goals ministries want RCN
to pursue on their behalf in addition to a traditional set of tasks and guidelines.
Positioning versus the research organisations
 There has been a debate in Norway to what degree the ministries have
implemented a hands-off approach towards the research organisations. Both KD
and the Ministry of Trade, Industry and Fisheries seem to have implemented this.
The smaller primary industry ministries have arguably a stronger and continuous
steering through their grant letters.
 RCN has a national responsibility for evaluating research in Norway. This is done
either by subject-specific evaluations, institute evaluations or thematic evaluations
(in addition to evaluations of various research programmes in RCN). According to
Technopolis (2011), the closest thing RCN produces to direct ‘advice’ to research
performers is the results of its field evaluations. As far as we know, neither the
regional health authorities, SIVA or Innovation Norway as ever issued any
evaluations of the organizations that they have funded.
4.2 The R&D system
In essence, Norway has three types of publicly funded research organisations: higher
education institutions, public hospitals and the institute sector. The higher education
sector counts of 8 universities, 8 specialised university colleges and 36 accredited
university colleges. Their missions defined in the “Act relating to universities and
university colleges” comprise: a) providing higher education on the basis of the
foremost within research, academic and artistic development work and empirical
knowledge. b) conducting research and academic and artistic development work. c)
efficiently managing resources provided and actively seeking provision of external
resources. d) helping to disseminate the results of research and of academic and
artistic development work. e) contributing to innovation and value creation on the
basis of the results of research and academic and artistic development work. f) making
provisions for participation in the public debate by the institution’s staff and students.
g) helping to ensure that Norwegian higher education and research participates in the
front line of international research and development of higher education provision. h)
cooperating with other universities, university colleges and corresponding institutions
in other countries, local and regional civic and working life, public administration and

international organizations. i) providing continuing and further education in the
institution’s field of operation.
The overall goal of the research institutes in the latter sector is to provide applied
research with high relevance to industry, public sector and society in general in a
competitive marked. The institute sector also has a responsibility for knowledge
development in national prioritized areas, and a special role in relation to innovation:
merging basic and applied research. The institute sector is more than any other sector,
the one that effectuates the national prioritized areas (especially the funding in
relation to global challenges).
Norwegian R&D can be distributed across four sectors. Their shares of total R&D
expenditures in Norway (2011) is as following:
Table 10 Norway: Shares of total R&D expenditures in Norway (2011)
Sector Percentage
Private sector 44 %
Higher education institutions 26 %
Institute sector 23 %
Hospitals 6 %
Source: Report on Science & Technology Indicators for Norway 2013. Oslo: RCN.
In the institute sector, the R&D expenditures are distributed as following:
Table 11 Norway: Shares of total R&D expenditures in the institute sector in Norway
(2011)
Sector Percentage
Other institutions with R&D 19 %
Research institutes with basic funding
from a ministry
16 %
Agricultural and fishery research institutes 11 %
Technological and industrial research
institutes
9 %
Environmental research institutes 9 %
Social sciences research institutes 8 %
Regional research institutes 3 %
Source: Report on Science & Technology Indicators for Norway 2013. Oslo: RCN.

Table 12 Norway: Current expenditure on R&D by field of science and sector of
performance 1991-2011 (mill NOK, per cent)
HE* % Institute
sector
% Private Total %
Humanities 1311,4 9,8 (11,8) 215,9 2,0 - 1527,3 3,6
Social sciences 3057 22,8 (27,5) 1833,4 17,2 - 4890,4 11,5
Mathematics
and natural
sciences
2380,1 17,8 (21,4) 2006,3 18,8 - 4386,4 10,3
Technology 1819,2 13,6 (16,4) 3626,4 34,0 - 5445,6 12,8
Medicine and
health
4590,6
(2323,1)
34,3 (20,9) 1323 12,4 - 5913,6 13,9
Agriculture,
fisheries and
veterinary
medicine
229,3 1,7 (2,1) 1652,3 15,5 - 1881,6 4,4
Unspecified - - 18532,5 18532,5 43,5
Total 13387,6
(11120,1)
100 10657,3 100 18532,5 42577,4 100
Source: NIFU/Statistics Norway.*Including university hospitals. Numbers in parentheses when
university hospitals are excluded
As shown in Table 12, above, there is a clear division of labour between higher
education institutions and the institute sector: Medicine and health is mainly a field in
the higher education sector, whereas technology and (particularly) agriculture,
fisheries and veterinary medicine are strongholds in the institute sector. Of the 4,59
billion NOK in medicine and health research in HE, the university hospitals accounted
for 2,27 billion NOK, so that social sciences is the largest scientific field in Norwegian
universities and university colleges. Similar trends are observed across the national
thematic research priorities (Table 13).
Table 13 Norway: Thematic areas by sector (2007-2011) in mill NOK (%).
HE* % Institute
sector
% Private % Total %
Global
challenges
1946,7 21,1 3609,1 38,1 5332 59,6 10887,8 39,4
Food 436,1 4,7 1177,1 12,4 965,7 10,8 2578,9 9,3
Marine 453,1 4,9 1642,7 17,3 191,8 2,1 2287,6 8,3
Maritime 247,3 2,7 327,1 3,5 906,3 10,1 1480,7 5,4
Health 4580,4 49,7 1898,7 20,1 1545,5 17,3 8024,6 29,1
Welfare 511,5 5,6 623,5 6,6 0 0,0 1135 4,1
Education 975 10,6 121,1 1,3 0 0,0 1096,1 4,0
Tourism 59,7 0,6 69,3 0,7 0 0,0 129 0,5
Total 9209,8 100,0 9468,6 100,
0
8941,3 100,0 27619,7 100,0
Source: NIFU/Statistics Norway.*Including university hospitals.

 Yes, in the HE-sector there is a large degree of autonomous decision-making for
the ROs as receivers of basic funding. The institute sector is by large a “free
sector”. The 2002 Quality Reform of the Higher Education Sector introduced
significant changes in governance. It granted the HEIs more autonomy (e.g. for
the use and internal distribution of their public funding) and tackled quality in
teaching and research by introducing a performance-based funding model
(PBRF), fully implemented in 2006. A similar model was also implemented for
part of the core funding in the research institute sector in 2009. The reform aimed
to encourage modernisation and greater ability to respond strategically to
contextual changes and pressures. This implied a change in the relationship
between the higher education sector and the government. Government maintained
its ability to influence research directions, steer the research base to align with
policy priorities, and ensure performance through more external competitive
funding and shifting the balance of core funding towards more performance-
related funding.
 The internal distributions/processes are formally free, but in reality the
universities are bound. The real autonomy is limited due to a large share of the
funds being tied up in undergraduate students, phd-students, salaries, etc. This
implies a limited strategic window for the units to make their own priorities. In
the institute sector, the basic funding is a small proportion of the total income, but
may be spent freely at activities aimed at long-term competence building, and
promoting scientific quality and international cooperation.
 The HE-institutions report officially every year. The reports are publicly available
at the reporting website.28 An overall analysis is presented every year in a report
by KD called “Status in the higher education sector” ( “Tilstandsrapport for høyere
utdanning”). The institute sector report to RCN, while the hospitals report to the
RHAs.
 Following the introduction of PBRF inn all sectors (HE, institute and health care),
more of the reporting is done directly through PBRF-indicators.
 National research infrastructures are funded on a competitive basis by RCN who
has made a “road-map” (i.e. a priority plan) for infrastructure. The first version of
the Norwegian Roadmap for Research Infrastructure was published in 2010. It
presented large-scale projects of national importance that had achieved very high
ranking in the first funding round under the National Financing Initiative for
Research Infrastructure in 2009. The roadmap is to be revised after each major
funding announcement for research infrastructure issued by the Research Council.
The first revision was published in 2012. The Norwegian Roadmap for Research
Infrastructure 2014 has been updated on the basis of the outcome of the
assessment review process under the third funding round in 2012.
The Ministry of Education and Research now sets aside an earmarked allocation for
research infrastructures, and the Research Council of Norway has established a
dedicated funding initiative. A total of over 200 grant applications have been
processed, and funding has been awarded to around 40 infrastructure projects.
28 http://dbh.nsd.uib.no/styringsdata/

Funding decisions have been made in an application review process in which
competition based on scientific merit is combined with an integrated assessment of
strategic importance. Under the infrastructure initiative, funding may be sought for
research infrastructure of national character with investment costs of more than NOK
2 million. The maximum amount of funding that may be sought from the Research
Council is NOK 200 million.
In addition to this, some research infrastructure is especially funded through
earmarked grants in the state budget, and the HE-institutions do invest in this
themselves (either from their basic budgets but also through external funding from
e.g. EU)
 There are earmarked funds for this through 1) specific programmes at the RCN, 2)
directly from the state budgets (e.g. all research infrastructure at Svalbard is
funded in unique posts in the budgets), 3) participation in large European efforts
(e.g. International Spatial Centre in Sweden).
In RCN’s National Financing Initiative for Research Infrastructure
(INFRASTRUKTUR) funding is also provided for Norwegian participation in Nordic,
European and other international cooperation on research infrastructure, including
Norwegian participation in the implementation phase of projects on the European
Strategy Forum on Research Infrastructures’ (ESFRI) Roadmap. For distributed
international research infrastructures, funding can be provided under this initiative
for building-up and operation of the Norwegian contribution of the research
infrastructure. Decisions regarding international research infrastructure cooperation
involving major, long-term commitments in the form of investments and membership
dues are taken at the ministerial level.
 The Centres of Excellence scheme is a national programme under the auspices of
the RCN, who provides the basic source of funding for the scheme (10-year
funding, the CoE grant is about 1-2 mill Euro per year per centre). Additional
funding comes from the institutions themselves: “The funding plan is to be based
on the principle that the Research Council of Norway in conjunction with the host
institution, or with a SFF consortium consisting of the host institution and its
partners, will jointly provide the resources required to perform the centre’s
activities… Contributions may be provided in the form of own financing, staff
placed at the disposal of the centre and/or essential infrastructure. The Research
Council of Norway requires that the host institution and any consortium
participants cover expenses for the premises, electricity, heating and other
infrastructure for the centre, and that a reasonable amount of scientific equipment
be placed at the disposal of the centre. Research funding that promotes the
centre’s activities, e.g. EU funding, project or strategic grants from the Research
Council or other sources, may be counted toward the required contribution”.
 High scientific quality is the main criterion for the selection of the centres, and are
picked by RCN. The competition for status as a Centre of Excellence is fierce; in
2011, 139 research groups submitted applications. Of these, 29 were found to be
strong enough to make it to the final decision round. Only 13 passed the final test,
after a detailed and time-consuming application process. A new process is soon to
begin.
The funding system
Most striking about R&D expenditures in Norway, is that the research institute sector
is almost as large as the higher education sector (Table 14).

Table 14 Norway: Total R&D expenditure in Norway by sector of performance/type of
institution, 2011.
Bill NOK Per cent of total R&D 2011
Industrial sector 20,066 44
Higher education sector 11,989 26
Institute sector 10,610 23
Health trusts 2,776 6
Total Norway 45,440 100
Source: RCN Indicator report, 2013
There is clearly a division of labour between the R&D performing sectors in Norway
(Table 15): The industrial sector conducting experimental/developmental R&D, the
institute sector conducting applied research and the Higher education sector
conducting basic research.
Table 15 Norway: Current expenditure on R&D by type of R&D and sector of
performance, 2011. Billion NOK and per cent
Sector of
performance
Total Basic
research
Applied
research
Experimental
development
Industrial
sector
Bill NOK 18 532 495 3891 14145
% 100 3 21 76
Institute sector Bill NOK 10 657 1400 7260 1996
% 100 13 68 19
Higher
education
sector
Bill NOK 13 387 6278 5435 1672
% 100 47 41 12
4.2.4 Total
Bill NOK 42 577 8175 16588 17814
% 100 19 39 42
Total R&D expenditure in Norway in 2011 was 1.65 per cent of GDP (Table 16). 43 per
cent of this was from public spending on R&D, of which 31 per cent was in the higher
education sector, i.e. R&D expenditure in the Higher Education Sector was 0.5 per
cent of GDP.

Table 16 Norway: Key numbers for R&D expenditure in Norway 2005-2011
2005 2007 2009 2010 2011
R&D Expenditure (total) as percentage of
GDP
1,51 1,59 1,76 1,68 1,65
R&D Expenditure funded by Government
as percentage of Total R&D Expenditure
45,0 43,0 42,0 - 43,0
R&D Expenditure in the Higher Education
Sector as percentage of total R&D
expenditure
31,0 32,0 32,0 32,0 31,0
Like most countries, Norway has a ‘binary’ research funding system, where state
research performers get general core or ‘institutional’ funding and supplement this by
competing for external project-based funding.
Table 17 indicates that the large universities are more dependent on external funding
than the smaller HE-institutions.
Table 17 Norway: Total R&D costs, 2011, by sector, institution and funding source
Total R&D
costs (bill
NOK)
Direct state
funding (%)
External
funding (%)
University of Bergen 1 730,7 64 36
University of Oslo 3 096,8 57 43
University of Tromsø 1 151,7 60 40
Norwegian University of Science and
Technology
2 450,6 55 45
Norwegian University of Life Sciences 521,5 63 37
University og Stavanger 368,3 69 31
University of Agder 274,1 82 18
University of Nordland 172,5 69 31
Norwegian School of Economics 148,2 88 12
Norwegian School of Veterinary
Science
154,1 59 41
Others1
739,4 80 20
SUM UNIVERSITIES AND STATE
UNIVERSITY COLLEGES
10 807,9 61 39
Regional university colleges² 1 181,0 78 22
University hospitals 2 270,6 83 17
Research Institute Sector 10 912 11 89
1Includes e.g. Norwegian School Of Sport Sciences, Norwegian Academy of Music, Norwegian
Business School, The Norwegian Police University College.² Includes e.g. Oslo University
College, Bergen University College, Lillehammer University College, Molde University College.

In this section we describe the funding system for the three main set of actors in
publicly funded R&D in Norway: the Higher Education institutions, the research
institutes in the institute sector, and the public hospitals. There are different funding
models for each sector.
Criteria used for decision-making on sources allocation
Funding model
The Higher Education Sector: The funding of the institutions consists of three
main components: the basic funding, a teaching component and a research
component.
 The basic funding: equals the total budget of the institutions at the time the PBRF
funding model was introduced, minus the current teaching and research
components. The basic funding has, however, also been adjusted individually for
each institution on the basis of special priorities. For all HE-institutions in
Norway, the average share of the block grant is 60 per cent (Table 18).
Table 18 Norway: Share of state funding for Higher Education institutions, 2008
Basic
funding
Teaching
component
Research
component
Universities 55 % 22 % 23 %
State university colleges 61 % 22 % 17 %
Regional university colleges 69 % 28 % 3 %
Private academic colleges and colleges 49 % 43 % 8 %
All HE-institutions 60 % 25 % 15 %
 The teaching component: is distributed on the basis of produced study credits and
incoming and outgoing exchange students. This component has an open budget
frame, i.e. it will increase as the number of students and study credits increase. On
average this component constitutes 25 per cent of the budgets in the HE-sector.
 The research component: is made up of two parts – a strategic grant and a
performance-based component. The strategic grant is mainly made up of funds for
phd-positions and scientific equipment. The performance based component is
based on four indicators (weights and value for money in 2014):
 0,30 Doctoral degree candidates (320 108 NOK per candidate =
approximately € 38 000)
 0,18 Grants from EU’s framework program for research (and related EU
activities) (1 309 NOK per 1 000 NOK received)
 0,22 Funds from the Research Council of Norway and regional research funds
(156 NOK per 1 000 NOK)
 0,30 Publication points (31 290 NOK (approximately € 3 750) per publication
point).


The publication points are calculated using the following weights:
Table 4 Norway: The publication indicator – components (2014)
Scientific publications Weight
level 1
Weight
level 2
NOK level 1 NOK level 2
Articles in scientific
journals
1 3 31 290 NOK 93 870 NOK
Articles in anthologies 0,7 1 21 903 NOK 31 290 NOK
Monographs 5 8 156 540 NOK 250 321 NOK
Publications are fractionalized by author addresses. Publication channels at level 2
constitute the most prestigious journals/publishers, and the share of publications in
these channels represents approximately 20 per cent of all publications.
Unlike the teaching component, the research component has a fixed frame, i.e. how
much each institution will get depends both on its own, as well as the production of all
other institutions. On average, the research component constitutes 15 per cent of the
HE’s funding, but with large variations between the four types of institutions in the
sector. Universities have by far the highest relative share (23 per cent).
The Regional Health Authorities (RHA): There is no direct funding from the
Ministry of Health and Care Services to hospitals (except for some special budget posts
related to competence centers, national registries, etc.). Practically, all funds are
channeled through the four RHAs who distribute research funds to individual
hospitals. Most of R&D funds at hospitals are channeled as basic funding via the
RHAs.
In 2014, total budget for the four RHAs were 118,3 billion NOK, of which 1,083 billion
was a specific research grant. Of this sum 30 per cent is a core research grant, whereas
70% (453 million NOK) was distributed based on a PBRF-model similar to the
publication component in the HE-sector. The major difference lies in how much
money one publication point generates. In the hospital sector one publication points
was worth three times as much as in the HE-sector (102 501 NOK versus 31 290 NOK).
The health care sector has one component in its research indicator that the HE sector
has in its teaching component: completed phds. In the health care sector one phd
equals three publication points (=307 503 NOK in 2012).
The publications are fractionalized by author addresses. In addition there are two
more components in the calculation: publications co-written with international
institutions give a weight of 2,5 and publications co-written with hospitals from other
RHAs in Norway give a weight of 1,25.
The research institute sector: The research institutes are mainly funded from
external incomes. They also receive a core funding, of which a certain proportion is
based on a PBRF-model (weight in parentheses):
 Scientific publishing (30 percent) (the publications are fractionalized: if a
publication is co-authored with other national or international institutions, a
weight of 1.25 is given)
 Completed doctoral degrees (5 percent)
 International funding (20 percent)
 National (competitive) funding (45 percent)

The institutes are distributed across four arenas, based on their scientific portfolios
and users. Ministry of Education and Research decides which arena each institute
should belong to following advice from RCN. Four ministries have the responsibility
for the institutes’ basic funding, within their sector:
 Environmental institutes (Ministry of Climate and Environment)
 Primary industry institutes (Ministry of Agriculture and Food, and Ministry of
Trade, Industry and Fisheries)
 Social science institutes (Ministry of Education and Research)
 Technical-industrial institutes (Ministry of Trade, Industry and Fisheries)
The responsible arena department suggests a total budget frame for their arenas, as
well as how much of the budgets should be distributed based on results (PBRF). In
addition to the basic funding, the institutes may also receive a strategic institute grant.
Table 19 Norway: Funding of the institute sector, mill NOK (2013)
Sector Basic funding
(excl. strategic
institute grant)
PRFS
(%)
Strategic
institute
grant
% public funding
of total funding
Environmental
institutes
102,4 5,0 64,7 15,0
Primary industry
institutes
267,0 2,5 7,6 16,0
Social science
institutes
159,0 10,0 0,0 15,0
Technical-
industrial
institutes
234,8 10,0 24,8 5,9
The primary industry institutes have by far the lowest share of the basic funding being
distributed following performance indicators -just 2.5 per cent.
Performance contracts are not used in Norway, but the dialogue meetings that take
place between HE-institutions and the Ministry of Education and Research, do to
some extent function as an evaluation of last year’s results of the institutions, although
no contracts exist where goals are specified. Nevertheless, the Ministry does use
statistics, bibliometrics, etc. to monitor the activities of the HE-institutions.
Performance contracts & processes
We do not believe that such negotiations take place. All research institutions in
Norway (be it HE-institutions, research institutes or hospitals) are partly funded based
on results in the PBRF system, but there are no negotiations connected to this.
Everyone obviously aims at increasing their production/improving their results in this
system. The Ministry of Health and Care Services specify in their grant letters to the
RHAs that all hospitals should strive for a minimum of 20 per cent of their publishing
in level 2 journals, and that a minimum of 20 per cent of the hospitals’ publications
should be co-authored with international contributors, but this is not a matter of
negotiations. The only type of contract negotiation we can think of is the annual
dialogue meetings between KD and the HE-institutions, where there may be room for
negotiations for upcoming budgets.

 Both KD (HE-sector) and RCN (institute sector) make annual status reports for
their sectors based on the institutions annual report and results from the PBRF
system.
Processes for funding system implementation
Entitlement to institutional funding
HE-sector: Institutions are accredited by an agency called NOKUT (Norwegian
Agency for Quality Assurance in Education). In order e.g. to become accredited as
university, NOKUT investigates whether the criterions set out by KD are met:
 The institution’s main activities should be education, research and scientific or
artistic development or procurement. The institution’s organization and
infrastructure should be adapted to its activities.
 The institution must have stable research and scientific/artistic development
activities of high quality related to its scientific areas.
 The institution must have employees in teaching- and research positions in the
scientific fields that are relevant to the study programmes.
 The institution must have accreditation for at least five study programs of at least
five years duration (in total or as joint study programs), which provides it with an
independent right to award higher degrees, as well as lower degrees within several
subject fields. The institution must have examined candidates on both lower and
higher degrees in most of these areas.
 The institution must have a stable researcher training and an independent right to
award doctoral degrees in at least four subject fields. Two of these must be central
in relation to regional enterprises’ value creation, at the same time as the fields are
of national importance. One of the four doctoral degrees can be replaced by
scholarship programs for artistic development work which the institution has been
accredited for.
 The institution must be affiliated with national and international networks within
higher education, research and scientific or artistic development work, and must
contribute in the national cooperation for researcher training and any similar
artistic scholarship program.
 The institution must have a satisfactory scientific library.
The research institute sector: RCN offers advice of approval to KD, who has made
guidelines for national basic funding of research institutes. In these, it is specified that
basic funding can only be given to institutions who fulfill the following demands:
 The institute must conduct research and research dissemination in fields that is of
interest to Norwegian industry/private sector, public administration or social
community.
 The institute must have academic and scientific competence that leads to scientific
publications in well-known publication channels.
 The institute must have a sufficient level of research activity, so that there is a real
competence build-up taking place in the organization.
 The institute must have several funding sources and participate in an open
marked for national and international research funds.
 The institute must take part in a suitable division of labor in the Norwegian
research system.

 Neither the institute’s funding agency, owners or single companies can be given
exclusive rights to research results that have been funded through the basic
funding.
 The institute must be run and organized in such a way that no dividend is payed.
 Academic freedom (etc.).
Just recently, RCN added four specific criterions that must be met, in order to receive
basic funding:
 Income from national and international commissioned projects must represent at
least 25 per cent of total R&D incomes.
 Scientific publishing (i.e. publication points per FTE) must at least be 1/3 of the
average in the institute’s arena.
 The institute must have at least 20 scientific FTEs.
 The institute’s contribution income (e.g. from RCN and EU) must at least equal
ten per cent of total R&D incomes.
The regional health authorities (RHA): Included in the RHA’s funding system
for research, are those hospitals/institutions that the RHAs have an operating
agreement with.
 In the health care sector, several smaller institutions (especially private non-profit
institutions within rehabilitation) have in recent years signed operating contracts
with hospitals, and are thus included in the RHAs funding system. In the HE-
system, some smaller, private colleges have emerged in recent years, and since
they have received accreditation from NOKUT, they are entitled to institutional
funding. In the institute sector, some of the institutes are former foundations
established by (and at) universities, who have become independent institutions
(although largely still owned by the universities), and fulfils RCN’s criterions for
institutional funding.
 National research infrastructures are funded on a competitive basis by RCN who
has made a “road-map” (i.e. a priority plan) for infrastructure. The first version of
the Norwegian Roadmap for Research Infrastructure was published in 2010. It
presented large-scale projects of national importance that had achieved very high
ranking in the first funding round under the National Financing Initiative for
Research Infrastructure in 2009. The roadmap is to be revised after each major
funding announcement for research infrastructure issued by the Research Council.
The first revision was published in 2012. The Norwegian Roadmap for Research
Infrastructure 2014 has been updated on the basis of the outcome of the
assessment review process under the third funding round in 2012.
The Ministry of Education and Research now sets aside an earmarked allocation for
research infrastructures, and the Research Council of Norway has established a
dedicated funding initiative. A total of over 200 grant applications have been
processed, and funding has been awarded to around 40 infrastructure projects.
Funding decisions have been made in an application review process in which
competition based on scientific merit is combined with an integrated assessment of
strategic importance. Under the infrastructure initiative, funding may be sought for
research infrastructure of national character with investment costs of more than NOK
2 million. The maximum amount of funding that may be sought from the Research
Council is NOK 200 million. In addition to this, some research infrastructure is
especially funded through earmarked grants in the state budget, and the HE-
institutions do invest in this themselves (either from their basic budgets but also
through external funding from e.g. EU).

The Centres of Excellence scheme is a national programme under the auspices of the
RCN, who provides the basic source of funding for the scheme (10-year funding, the
CoE grant is about 1-2 mill Euro per year per centre). Additional funding comes from
the institutions themselves: “The funding plan is to be based on the principle that the
Research Council of Norway in conjunction with the host institution, or with a SFF
consortium consisting of the host institution and its partners, will jointly provide the
resources required to perform the centre’s activities… Contributions may be provided
in the form of own financing, staff placed at the disposal of the centre and/or essential
infrastructure. The Research Council of Norway requires that the host institution and
any consortium participants cover expenses for the premises, electricity, heating and
other infrastructure for the centre, and that a reasonable amount of scientific
equipment be placed at the disposal of the centre. Research funding that promotes the
centre’s activities, e.g. EU funding, project or strategic grants from the Research
Council or other sources, may be counted toward the required contribution”.
Use and internal decision-making on institutional funding
The universities can do this within certain limits. However, this is not seen as a
problem. The universities are encouraged to make these priorities themselves, as they
do not have specific budgets for teaching and research. Some institutions get more
research funds than other, but the balance internally between teaching and research is
up to each institution to decide for itself. Nevertheless, KD may send signals about
what they would prefer to institutions to do in the dialogue meetings they have with
the higher education institutions.
Governance of the funding system
 All ministries in Norway funds for research, based on the sector principle, i.e.
every ministry has a responsibility for the necessary research within its own
sector.
 The HE-institutions are free to decide on their portfolios of fields (e.g. they may
close down institutes/programs and create new ones). The coordinating
mechanism thus seems to be RCN’s funding schemes, in which funds are
distributed across programs representing different fields.
 RCN is the executive agency of national strategies, but these reflect thematic areas
(e.g. climate, environment). The HE-institutions decide themselves on their
portfolio of disciplines.
 No, direct funding to institutions is not tied up by scientific strategies. These are
up to the institutions themselves to make. External funds have an impact on the
total budgets, i.e. they are reflected in externally funded projects, but the
institutions decide themselves upon scientific profile and make the priorities
themselves. The institutions need to balance external/competitive funding and
basic funding, but the level of institutional funding of research in Norway is high.
 There is close contact between RCN and the Ministry of Education and Research.
RCN has the mandate to coordinate this through their INFRASTRUKUR
programme, which supports national infrastructure as well as international
infrastructure and participation.
Advantages & disadvantages of the system
According to the HE-institutions there is little room for strategic priorities, as most of
the budgets are tied up in study positions and phd-positions. The sector has large basic
funds, but experience little freedom to prioritize. The Ministry of Education and
Research does not share this view (arguing that lack of prioritization is a matter of
leadership and organizing). The high level of basic funding may be seen as an impetus
to changes, i.e. lack of adaptability, but as the HE-institutions are more inclined to
generate external funding, this may change.

In the institute sector, the general feeling is that the basic funding is too small, making
the institutes too heavily dependent on external/competitive funding, often in small
short-term projects, making it difficult to focus in scientific development.
A large share of the funds is channelled through RCN, and there is a belief among
beneficiaries that these are too tied up by thematic specifications. Informants (not
from RCN) claim that RCN itself feels that the funds are too fragmented because of the
sectorial principle, i.e. there is too little coordination from the funding ministries.
Most institutions (both in the HE-sector and the institute sector) are positive to the
PBRF, as it contributes to more transparency, making distribution of funds more
proportional to the institutions’ contributions.
Effects of the funding system
The implementation of PBRF in all sectors initially caused much concern and criticism
(i.e. too much focus on publishing, meriting quantity instead of quality, etc.). A recent
evaluation of the publication indicator showed, however, that a strong increase in
production, as not led to a decline in quality.
The institute sector has expressed concerns that their low basic funding contributes to
a fragmented project portfolio of competitive projects. It is argued that this had made
it difficult to make long-term strategies and build up competence.
The sectorial principle may be claimed to have some unwanted consequences. It can
be argued that priorities are simply the sum of many single decisions – since there are
no priorities at the national level except those outlined in the White Paper on Research
by the Ministry of Education and Research. So the system can be described as
“business as usual” with some additional funding from year to year. Processes follow a
one-year cycle making stability over years difficult.
Risks of the funding system
Beneficiaries deal with budgets on a yearly-basis making long-term planning difficult.
R&D in Norway is to a small degree characterized by powerful, long-term priorities.
The fact that Norway only has just one research council (and few private sources) may
be a problem for those whose applications are rejected by RCN. RCN needs to
coordinate many (independent) appropriations from funding ministries, so there is a
limit as to how much coordination it is possible for RCN to exercise.

5. Sweden
Figure 4 Sweden: The R&D governance structure in Sweden
The Government’s job is to formulate the overall goals for the different parts of the
administration and to distribute the financial means necessary. The Swedish
Parliament decides on research policy every four years by signing a research policy bill
prepared by the Government and in particular by two major research policy-forming
bodies; the Ministry of Education and Research and the Ministry of Enterprise, Energy
and Communications.29
There is no permanent advisory board at Government level. However, from 2013
through 2011, there was the National Council for Innovation and Quality in the Public
Sector, established by the Government to improve the efficiency and quality of public
activities at national, regional and local level. The Council’s task was to assist the
Government in stimulating innovation and change in public services. Council
members were from the National Agency for Social Insurance (Försäkringskassan),
state owned educational company Lernia, health care business Praktikertjänst, the
Administrative Courts of Appeal (Kammarrätten) and The Swedish Association of
Local Authorities and Regions.30
29 Technopolis, 2011
30 http://www.innovationsradet.se/
Source: Erawatch country reports 2012: Sweden

Sweden has rather small ministries which essentially only direct the policy and
distribute funding. The Ministry of Education and Research has overall responsibility
for the coordination of research policy in the Government offices. It initiates and
oversees the preparation of the research policy bills submitted during each
parliamentary term of office. Because research resources exist within the scope of all
ministries, the Ministry of Education and Research drafts its research policy bills in
collaboration with other ministries. The Ministry is responsible for R&D in the
academic sector and funds institutional research and public competitive funding
through the research councils.31
The Ministry of Enterprise, Energy and Communication is responsible for innovation
policy formulation and also the founder of VINNOVA, which grants competitive
funding. The Ministry of Enterprise, Energy and Communication grants strategic
competence funds (non-competitive) to Research Institutes of Sweden, RISE.32
NOTE: As the institute sector is very small in Sweden, it will only be dealt with briefly
in this report.
Policy is implemented at agency level by research councils and sector agencies, which
execute their tasks in line with the objectives assigned by the Government. Agencies
act and decide relatively independently within the framework of white papers and
other regulations issued by the Government.33
There are three main research councils:
 The Swedish Research Council (Vetenskapsrådet, VR)
 The Swedish Research Council for Environment, Agricultural Sciences and Spatial
Planning (Formas)
 The Swedish Research Council for Health, Working Life and (Forte)
In addition there is one innovation agency, the Swedish Governmental Agency for
Innovation Systems (VINNOVA). The Swedish Energy Agency and the Swedish Space
Board also supports targeted research to some extent.
Funding is distributed on a bottom-up principle; it is the researchers themselves who
design and propose a research idea, and apply for funding. However, the funding
organisations often launch certain themes or other kind of strategic funding channels,
with specific requirements for applicants. In this way there is often an in-built top-
down principle at work as well. Within such themes or strategic areas, a bottom-up
approach is still applied.34
31 Erawatch country reports 2012: Sweden
33 Erawatch website: Sweden

HEI are the main research performers in Sweden. All HEIs except three are in the
form of national agencies.
The non-academic research performing organisations are very heterogeneous, and it is
difficult to provide a general description. There are several Government agencies that
receive all or most of their funding directly from the Government on an annual basis.
There are also a few NGOs that receive varying levels of Government funding.35
A more homogenous group are the research institutes which receive some base
funding from governmental, but the nature of such funding and the ways in which it is
disbursed varies significantly depending on the institute’s field of responsibility. The
Swedish institute sector is small in international comparison. RISE functions as an
umbrella organisation for 16 institutes in various industrial areas. Funding comes
from the Government, EU-funds and from private firms.36
The business sector R&D is mainly internal to large enterprises, as the majority of the
funding of R&D in the private sector remains within the comparatively small number
of very large companies. The public and private R&D systems are institutionally
separate, i.e. that public sector and private sector finance and perform in their own
systems and that there is little interaction between them.
The most important research and innovation policy measure in recent years was the
launch of Strategic Research Areas in the 2008 research bill (issued every four
years), allocating a total of SEK5b over five years to university research groups and
consortia of research groups within 20 specifically chosen areas.37
The bills of 2008 and 2012 were based on the assumption and the policy analysis that
Swedish long-term competitiveness is under threat and needs to be secured by
strategic profiling, resource increases to public R&D, and strengthening of the
interaction between academia and industry. The 2012 bill identified four focus areas
for specific investments:
 Life sciences, including the national centre for life science research, SciLifeLab
 Strengthened basic funding for universities and other higher education
institutions, generally through the base grants for research and doctoral training
 Investments in research facilities; the SciLifeLab facility, and the European
Spallation Source and MAX IV facilities
37 Energy, Sustainable exploitation of natural resources, Effects on natural resources, ecosystems and
biological diversity, Climate models, Sea environmental research, Cancer, Diabetes, Epidemiology,
Molecular biology, Neuroscience, Stem cells and regenerative medicine, Health, Nanoscience, E-science,
Material science, IT and mobile communication, Production technology, Transport research, Security and
crisis management, Politically important geographical regions

 Policy measures aimed at increasing the commercialisation of academic research,
including efforts to strengthen the institute sector
According to the 2012 research bill, medicine is the most prioritised area (consuming
31.4% of the total research budget of the academic sector in Sweden), followed by
engineering sciences (23.4%), natural sciences (18.1%), social sciences (14.5%),
humanities (6.9%), and forestry/agricultural sciences (3.6%).38
A similar assessment of the situation for Sweden was offered in the 2012 National
Innovation Strategy issued by the Ministry of Enterprise, Energy and
Communication. This document is, however, mainly a framework vision statement
and does not launch any concrete policies. The National Innovation Strategy largely
echoed the research bill in its problem formulation: In order to meet the challenges of
the future, including economic globalisation and issues of sustainability, Sweden is in
need of purposeful mobilisation within its entire innovation system. The Strategy is
significantly vaguer in its character than the research bill and thus much less concrete
in its attempted policy solutions to the identified problems. It emphasises the need for
high quality education, a vitalised innovation climate among especially SMEs,
increased mobility between different sectors of the economy and society, quality
enhancements of research in academia, a strengthened research institute sector, and
stronger innovation support infrastructures.39
The implementation of the Regional/National Research and Innovation Strategies on
Smart Specialisation (RIS3) in Sweden is still in the planning stage. Sweden is
undergoing a gradual transformation of its regional government subdivisions; and so
far, new so called Regional Boards have overtaken responsibilities for regional
development from Country Administrative Boards in four regions; Skåne, Västra
Götaland, Halland and in Gotland. These Regional Boards have made independent
efforts to formulate regional innovation strategies. On national level, the responsibility
for RIS3 strategies lies with the Ministry of Enterprise, Energy and Communication,
and its agency the Swedish Agency for Economic and Regional Growth
(Tillväxtverket). Discussions are still underway regarding the approach to be taken by
Sweden in the implementation of RIS3 strategies.40
National priorities are implemented primarily through the Strategic Research Areas.
University research groups have been chosen through open calls and a peer review
process organised by the research councils. Besides the Strategic Research Areas,
research organisations are free to distribute funding internally according to their own
preferences.

Positioning of agencies/ministries versus the ministries/government
The funding agencies are separate organisations with considerable autonomy in
relation to the responsible ministry. Agencies decide on smaller matters themselves,
such as internal organisation and staffing, and are free to set priorities on field or
programme level according to their own understanding. The Ministries send
instructions in the form of regulations with general objectives and annual allocation
letters, which include both what kind of activities the agencies should prioritise and
the amount of resources they are assigned for these different activities.41
The research councils use the money for the respective areas primarily through open
calls from individual researchers or from institutional bidders. Governmental funds
are rarely earmarked for a specific scientific field. In turn, the agencies are obligated to
annually report back to the Ministries about results and costs in relation to the
allocation letters. This information then forms the foundation for future new
objectives and requirements. Agencies also can receive special objectives, which are
often reported respectively.42
In practice, Ministries can exercise some steering and control over their agencies. The
goals can, e.g. be formulated in a way that allows more or less room for interpretation.
The amount of money that is assigned to the different objectives has a very imperative
effect and can limit the agencies’ room for action.43
Funding agencies are not evaluated or monitored in a systematic manner. There are,
however, public agencies that perform evaluations of, amongst others, funding
agencies and research organisations. Evaluation agencies are the Swedish National
Audit Office (Riksrevisionen), the Swedish National Financial Management Authority
(Ekonomistyrningsverket) and the Swedish Agency for Public Management
(Statskontoret). The agency for Growth Analysis (Tillväxtanalys) plays an important
role in evaluations concerning innovation and growth policy. The agencies report
directly to either the Government or the Parliament and all reports are publicly
available.44
Positioning versus the research organisations
Funding agencies do not typically try and influence universities, but they can exercise
some influence through the calls they choose. For example, some agencies, like
VINNOVA and research funding foundations, sometimes require co-funding from the
industry.
The funding agencies are not in charge of the national evaluation of the publicly
funded research organisations (HEIs). However, VR is involved in the bibliometric

evaluation of HEIs, which is part of the performance based research-funding model.
VR has provided some methodological support and is in charge of collecting the data.
5.2 The R&D system
There are 36 HEIs for which the state is the responsible authority. In addition there
are ten or so private higher education providers. The main task of the state HEIs is to
organise educational programmes based on scientific or artistic foundations and
proven experience, and to carry out research and artistic research.
The Swedish institute sector is small in international comparison. Research Institutes
of Sweden (RISE) functions as an umbrella organisation for 16 institutes divided into
four corporate groups:
 Innventia (from basic research to direct consulting in paper, pulp, packaging and
biofuel)
 SP Technical Research Institute of Sweden (applied research, technical studies
and investigations, quality assurances, standardisation and certification in various
fields)
 Swedish ICT (Applied research, knowledge creation and innovation in ICT)
 Swerea (Applied research in materials, process, product and production
technology)
RISE’s vision is a for Swedish research institutes to compete successfully in the global
knowledge market, and to be world leading in the development and renewal of
Swedish industry.
Table 20 Sweden: RO relative importance in the system, 2013
SEK billion %
Governmental appropriations for R&D45 31,5
Institutional support for HEIs 15,7 50
Funding agencies 9,2 29
RISE institutes46 0,6 0,02
In 2009, the Swedish Government presented a bill on greater autonomy for HEIs
"Academia for this day and age" (Govt. Bill 2009/10:149), which came into effect in
2011. The reform strengthened the formal autonomy of universities and stripped the
45 Budget bill 2014 (Prop. 2013/14:1)
46 Budget bill 2014 (Prop. 2013/14:1)

Government of its previous privileges of prioritising between research areas in the
R&D appropriations.47
HEIs can form decisions about e.g. the organisation, allocation of Government
appropriations within the organisation, quality assurance procedures, new
professorships and research focus.48 With the exception of the Strategic Research
Areas funding scheme and some similar earmarked funds, the Government relies on
the HEIs and the research councils to decide on internal funds distribution and the
processes to do so, and to make priorities.49
HEIs are not obligated to report back to the Ministry. Funding agencies can, however,
require research organisations to report back, but it is up to each funding agency to set
their own criteria when allocating funds.
VR is commissioned by the Government to fund national research infrastructure and
Swedish participation in international infrastructure. The council provides funds
through calls of proposals. VR also finances memberships in several international
infrastructure organisations that give Swedish researchers access to facilities.
Contributions can take the form of membership fees, but also in-kind grants where
Swedish universities and other research institutions develop components for
infrastructures or create nodes in Sweden for international infrastructures.
Research infrastructure is also, to a smaller extent, funded by the research councils
(databases, equipment, contributions towards construction of MAX IV). The Swedish
National Space Board finances various satellite projects used in astronomy, and the
Bank of Sweden Tercentenary Foundation finances archives and libraries. Many
infrastructures that are used partially or totally for research are financed by other
agencies, research institutes, county councils, and within universities and HEIs.
Since 2009, HEIs are responsible for local infrastructure and equipment; to maintain
local resources and to develop technologies and methodologies that can be used for
infrastructure. HEIs have since started their own processes for prioritising and
financing equipment and local infrastructures.50 Prior to 2009, the Knut and Alice
Wallenberg Foundation (KAW) was the dominant financer of advanced equipment
and infrastructure.
Competence centres are funded by the research councils and research foundations
through competitive funding. Centres are co-funded by industry and/or academia.
Examples include:
 Academically based competence centres that feature notable industry involvement
(funded by VINNOVA, Swedish Energy Agency, VR, the Foundation for Strategic
Research and the Knowledge Foundation);
48 http://english.uka.se/
50 http://www.vr.se/

 Research institute based competence centres that feature notable industry
involvement (funded by VINNOVA, the Foundation for Strategic Research and the
Knowledge Foundation);
 A range of programmes funded by VINNOVA, such as VINNVÄXT and VINN
Excellence Centres.51
Table 21 Sweden: R&D indicators for Sweden, 201252
Indicator
GERD SEK122b
GERD as % of GDP 3,41%
BERD as % of GDP 2,31%
BERD as % of GERD 67,9
HERD as % of GERD 27,2%
GBAORD as % of GDP 0,85%
Table 21, above, presents the R&D indicators for Sweden. The Government sector and
the private non-profit sector act mainly as financiers of research (their investments in
R&D account for 5% of the total R&D expenditure).
As seen in Table 22, the Government annually invests some SEK30b in R&D. The
institute sector is very small by international comparisons.
Table 22 Sweden: Public funding of R&D in Sweden, 201253
Governmental appropriations SEK30,3b
Institutional funding SEK14,5b
Funding agency support SEK8,4b
Public research foundation support SEK1,3b
Government support for Research Institutes of Sweden SEK0,5b
There are no comprehensive data of the level of institutional versus competitive
funding. Institutional funding for HEIs (block grants and performance based funding)
accounted for SEK14,5b of Government appropriations for R&D in 2012. Funding
agency support (VINNOVA, VR, Forte and Formas) accounted for SEK9,2b, out of
which around 50% is allocated to HEIs. Additionally, public research foundations
distributed SEK1,3b in 2012.
53 Statistics Sweden

The Government has increased appropriations for R&D the last few years. In the
research bill of 2012, the Government suggested an increase of R&D appropriations by
SEK0,9b, 2014-2016.
Table 23 Sweden: Funding of R&D performed in Sweden, 201154
Source recipient Total Business
enterprise
Higher
education
Other55
Private funding 70 981 66 191 4 188 602
Public funding
- of which is Govt. funding
33 709
29 208
4 179
3 989
24 904
22 660
4626
2559
Funding from abroad 13 197 10 774 2 154 269
Total R&D in Sweden 117 888 81 145 31 247 5496
As shown in Table 23, above, business enterprises dominate the Swedish R&D sector,
both as source of funding and as performer. Most of the R&D funding in Sweden is, in
fact, internal to business firms, and generally, the share of total R&D funding that is
transmitted between sectors is very low. Public R&D in Sweden is mainly performed
by the academic sector.
Criteria used for decision-making on sources allocation
Since World War II, Swedish central government-supported basic research has in
principle been funded in two ways: through direct appropriations to HEIs and through
appropriations via the research councils.56 The first way of funding stream contains
the basic funding of HEIs; block grants and a performance-based model. The second
stream is the external competitive funding (not a direct resource from the state) and
comes from research councils, agencies for support of directed research and so on (for
example public or semiprivate foundations for strategic research, environmental
research etc.).
The Ministry of Education decides on the distribution of the block grants for research
in HEIs. The amount of funding initially allocated to a HEI is related to Government
resources at the time. After that, each HEI receives roughly the amount as in previous
year, with some adjustment for increased costs.
54 http://www.scb.se/en_/Finding-statistics/Statistics-by-subject-area/Education-and-
research/Research/Research-and-development-in-Sweden---an-overview-international-comparisons-
etc/Aktuell-Pong/2012A01P/Funding-of-RD-performed-in-Sweden/
55 Government authorities, county councils, municipalities, private non-profit
56 http://www.regeringen.se/sb/d/10086/a/114033

Since 2009, there is a new model for distribution of direct funds, handled by the
Ministry of Education with methodological support from the Swedish Research
Council (Vetenskapsrådet, VR). All new direct funding since 2009, plus 10% of every
HEIs direct funding from the previous year, is allocated according to the performance
system. Indicators are scientific output (publications and citations), and external
competitive funding, which account for 5 % each.
The first year, 2009, only the new funding (additional funding compared to 2008) was
affected and was allocated based on the indicators. In 2010 all new funding was again
allocated based on the same indicators. On top of that, 10 % of the fixed basic funding
was also redistributed. However, before the redistribution a guarantee sum is
deducted, based on the number of students at each HEI. In effect about 8 % was
redistributed. From 2011 and onwards, each HEI put in the same amount they
received from the redistribution the year before minus the guarantee sum plus 10 % of
the new basic funding, if any. It turns out that the loss or gain for a specific HEI is at
most 2 % and for the vast majority of HEIs is well below 1 %.
The Ministry of Enterprise, Energy and Communications fund RISE Research
Institutes of Sweden, fully owned by the Swedish Government since 2007. As the
Swedish institute sector is very small, it will not only be dealt with briefly in this
report.
The table below shows institutional funding for HEIs.
Table 24 Sweden: Components of the institutional funding for research
Mechanism %
Block grant 90%
Performance-based funding – Bibliometrics 5%
Performance-based funding – External funding 5%
TOTAL INSTITUTIONAL FUNDING 100%
5.3.3 Performance contracts & processes
There are no performance contracts for institutional funding.
Entitlement to institutional funding
All public HEIs receive institutional funding, whereas non-public HEIs must be
approved by the Government. In order to be approved, HEIs must be accredited
according to the Higher Education Act and offer education free of charge for students.
There are examples of new HEIs in Sweden, both private and public. Those who were
accredited receive institutional funding, and those who have not been accredited do
not.
Infrastructure is funded through competitive funding from the research councils and
research foundations. Competence Centres and Centres of Excellence are funded
through competitive calls, which often require co-funding from the industry and/or

HEIs. HEIs finance local infrastructure and basic equipment themselves, and can use
institutional funding for purchasing equipment.
Use and internal decision-making on institutional funding
Sweden does not have a major problem with HEIs using funding earmarked for
research for education, and vice versa. Funding for education and research are
distributed as two separate appropriations, which are also to be reported back to the
Ministry of Education and Research in a separate manner. According to interviews, is
it still possible for HEIs to use funds incorrectly, which can be a problem for an
individual institution, but it is not considered a national problem and no actions have
been taken to prevent this.
Only one ministry, the Ministry of education, funds institutional research. The
ministry is also responsible for R&D in the academic sector at large and public
competitive funding through the research councils. The Ministry of Enterprise, Energy
and Communications funds applied research at the industrial research institutes, RISE
(Research Institutes of Sweden Holding AB), as well as competitive funding through
VINNOVA.
There are no formal coordinating mechanisms among research funders, research
council are principally free to set their own priorities on field or programme level.
There used to be a coordination group for the former research councils (research
councils for natural science, medical research and for forest and agriculture,
discontinued in 2000), to ensure that some applicants did not receive excessive
funding whereas others were left out. The former research councils were reorganised
into VR in 2001. There are, however, no formal coordination between VR, Forte,
Formas and VINNOVA.
There are some discussions of whether or not the Humanities receive enough funding
compared to other fields, such as Medicine, but this discussion not necessarily related
to the lack of coordination but more with difficulties of receiving competitive external
funds.
There is no national strategy for discipline coverage; HEIs are free to distribute funds
according to their own preferences. With the exception of the Strategic Research Areas
funding scheme, and some similar funds earmarked for specifically designated
research areas, the Government relies on the academic institutions to make priorities.
Strategic Research Areas were introduced in the 2008 research bill, allocating 300 m€
over five years to HEI research groups and consortia of research groups within 20
specifically chosen areas.57
VR is commissioned by the Government to fund national research infrastructure and
Swedish participation in international infrastructure. VR has a Council for Research
Infrastructures (RFI) that collaborates with other research councils to develop a long-
term strategic plan to give Swedish access to the most qualified research
infrastructures in Sweden and other countries.
The RFI includes members from Forte, Formas and VINNOVA and published a guide
to infrastructures in 2008, updated in 2012. The guide addresses proposals for new

infrastructures and recommends new infrastructure projects or areas where Swedish
research could benefit from greater national and/or international coordination.58
In 2012, the Strategic Research Areas funding scheme, as well as preceding
programmes aimed at strengthening larger research environments in specially
prioritized areas, were critisised by scholars for the one-sided focus on ‘excellence’, i.e.
the allocation of vast sums of money to already comparably successful research
environments. The funding schemes have been accused of skewing competition in
favour of those prejudiced to be excellent rather than those with proven qualities. Not
least the non-university side of the academic sector, i.e. the smaller regional colleges,
are said to have been discriminated against by the launch of these programmes.59
Also, from scholars’ point of view, there is continuous criticism that the system is built
on competitive funds, which is very bureaucratic and time consuming. Applying for
competitive funds takes too much time, and funding agencies require researchers to
report back in formal and time consuming procedures. Competitive funds are also few
and far between, and researchers can never feel secure in having sufficient funds.
From the perspective of the HEIs, they seem to benefit from the freedom to distribute
funds internally, and from the performance-based model for allocation of research
funds. According to a study that Technopolis Sweden conducted in 2012, the
introduction of the performance-based model, have encouraged HEIs to create their
own performance-based models and strategic priorities for internal distribution of
funds. Our study showed that performance-based distribution is more common and
more extensive at the HEIs’ faculty level than at the central level, mainly because a
faculty encompasses only one main scientific field. However, despite the freedom to
allocate resources internally, HEIs typically use performance-based models that are
very similar to the model used by the Ministry of Education and Research.60
There has been some critique from funding agencies, and at Government level, of the
lack of coordination between funding agencies. The agencies do not complement each
other, as was planned, and do not have enough joint efforts. This issue was particularly
raised in a Government inquiry, “Research Funding – Quality and Relevance (SOU
2008:30), where a new public agency for research and innovation was proposed (the
new agency was never realised).
It should be noted that, while there are complaints on Government level about the lack
of coordinated efforts, the Government continues to delegate responsibilities for
quality enhancement and the design of new governance mechanisms, to its agencies
and to the HEIs. The most recent governmental reforms have strengthened the formal
58 The Swedish Research Council’s Guide To Infrastructures 2012
60 Faugert & Co Utvärdering, ”Med glädje, men inte med lätthet” –om högskolans fördelning av de direkta
statsanslagen för forskning, 2012

autonomy of HEIs, including giving HEIs the right to prioritise between research areas
in the R&D appropriations. The responsibility for implementation of new PBFS is laid
on VR and Swedish Higher Education Authority.61
Effects and risks of the funding system deal not so much with the disadvantages of the
academic funding system, but with the strong division between the academic and
industrial research sectors. The latter has thus far not been extensively mentioned in
this report, perhaps a consequence of the strong split between the two.
The Government has been explicit in at least three consecutive research bills (2004,
2008, 2012), as well as other official documents (e.g. the 2012 National Innovation
Strategy) that the public R&D system is in need of strategic mobilisation and
purposeful efforts to enhance the level of interaction between academia and
industry/society to strengthen the innovativeness of the economy at large.
 Although the general level of quality of Swedish (academic) research is already
high, it will have to be improved in order to be globally competitive in the coming
decades.
 The degree of interaction between the academic sector (basic research) and
industry, and the commercialisation of research results from academia, is
unsatisfying and needs to be increased.
 Swedish public R&D is characterised by breadth rather than cutting-edge, and
there is a need for specialisation and strengthening in specific areas. 62
Generally, the policymakers’ collective view on shortcomings in the Swedish R&D
system relates to the “Swedish paradox”, i.e., compared to its strong figures of annual
R&D investment as percentage of GDP, Sweden suffers from an inadequate level of
returns from public investments in R&D. Several factors for this “paradox” have been
stressed:
 A historically determined structural division of labour between the state
sponsoring basic research in academia and the private sector sponsoring applied
research and development in-house
 A partly historically determined relative dominance of large MNCs in the
industrial sector and a consequent relative lack of venture capital and other
critical resources for innovation in SMEs
 A generally poor entrepreneurial climate in comparison with many other
European countries; mainly comprising of poor incentive structures for starting
firms compared to regular employment, that largely stems from the structure of
the welfare system which favours wage earners.63

6. UK
Figure 5 UK: The R&D Governance Structure
Source: Technopolis
The UK has a large and complex national research and innovation system governed by
a parliamentary system where the head of government (Prime Minister) is a member
of the legislature and is the leader of the largest party in parliament. The government
(Level 1) is made up of 24 ministerial departments (Level 2) responsible for putting
government policy into practice with their associated agencies, 23 non-ministerial
departments usually undertaking regulatory roles and 300 agencies and public
bodies64 (Level 3). The UK ministry with the overall responsibility for science and
innovation nationally is the Department of Business, Innovation and Skills (BIS). BIS
is also responsible for Higher Education.
BIS has the lead executive role in research issues and maintains the national research
strategy as well as being the major source of funds for research in the public sector. It
provides funds for the seven Research Councils65 (organised on a disciplinary basis),
which in turn support R&D both in Higher Education Institutions (HEIs) and
independent research organisations. They also invest in Research Council Institutes
and fund access for UK researchers to international facilities. The current level of
council investment into research totals around £3 billion per year.
Thus, with this in mind, BIS has oversight for much of the UK’s R&D policy
formulation and is the principal author of the national strategy for R&I, although it is
64 See Appendix XX for list of government departments and the number of agencies and public bodies they
each work with
65 See Appendix XX for lit of research councils and examples of research areas funded

important to note that each Research Council is required to develop its own research
strategy and implementation plan against this backdrop (in consultation with the
academic community and a wide range of users and stakeholders).
BIS is also responsible for the overall UK science budget with the resource component
of the budget in 2011/12 around £4.5 billion and the capital budget around £0.5
billion.
The agencies and public bodies that work alongside ministries such as BIS provide
functions and support around regulation, funding, promotion and co-ordination.
These agencies are in charge of implementing detailed policy development and co-
ordination are the main funders of research and innovation.
There are several other government departments that fund applied research of direct
relevance to their own policy activities (departments) or operations (agencies). The
main big spenders on research, aside from BIS, include:
 Department of Defence (£1,306 million)
 Department of Health (£904 million)
 Department for International Development (£236 million)
 Department Environment, Food and Rural Affairs (£161 million)
In recent years, the UK has returned to using industrial policy and strategy as a
mechanism to help the UK economy and business compete and grow. The current UK
strategy is the Innovation and Research Strategy for Growth (IRS) was published in
December 2011 and is the central guiding document for UK research and innovation
policy and priorities nationally.66 This policy document is supported by an Economics
Paper, which provides an analysis of the general context within which the research
strategy was situated.67
The national strategy emphasised the need to strengthen the country’s ability to
accelerate the commercialisation of emerging technologies, and to capture the value
chains linked to these. Commercialisation of research is recognised globally as a vital
part of Research and Innovation and is a key policy and public sector area for
investment. There are no established metrics for measuring it, but commercialisation
is where the benefits of research and innovation can be realised and the impact felt in
the economy and through supply chains. The national strategy also notes that the UK
needs to do more to encourage the development of technician-level skills and higher-
level skills to support this innovation work.
The UK Industrial Strategy (2012)68,69 also lists a series of ‘eight great technologies’ in
which the government (with advice from the RCs and TSB) has judged the UK can gain
a competitive advantage globally and which have real potential for economic and
social benefits in the UK (and internationally too). BIS worked with the Research
66 www.bis.gov.uk/assets/biscore/innovation/docs/i/11-1387-innovation-and-research-strategyfor-growth
67 Innovation and Research Strategy for Growth, BIS Economics Paper No 15, December 2011
68 www.gov.uk/government/policies/using-industrial-strategy-to-help-the-uk-economy-and-business-
compete-and-grow
69 The UK Industrial Strategy is complemented by a series of home nation strategies focusing on key growth
sectors, allowing each part of the UK to build on its assets through Smart Specialisation, and identifying
local strengths and building collaborative networks.

Councils and the Technology Strategy Board (an executive non-departmental public
body) to select eight great technologies after carefully analysing UK existing scientific
and business capabilities. Each technology:
 Is an area in which the UK has world-leading research
 Has a range of applications across a spectrum of industries
 Has the potential for the UK to be at the forefront of commercialisation
The eight great technologies are:
 Big data and energy-efficient computing
 Satellites and commercial applications of space
 Robotics and autonomous systems
 Synthetic biology
 Regenerative medicine
 Agri-science
 Advanced materials and nanotechnology
 Energy and its storage
The targeting of these technology areas shows how the government is working with
researchers and industry to foster world-class technology capability in the UK. They
are not exclusive or exhaustive, and there are many other important areas of science
and innovation in which the UK excels and will excel in future.
Over the past year (2013/14) the “Government has allocated more than £2 billion to
industrial strategy objectives, a clear indicator of commitment in a period of fiscal
constraint” (HM Government, 2014)70. These efforts have been matched by industry,
which has invested time and financial resources to set the strategic direction and to
provide match-funding the majority of investments made by the government.
70 HM Government (2014) “Industrial Strategy. Government and Industry Partnership”. Progress Report.

Figure 6 UK: Strategic sectors and technology areas
Source: BIS
As mentioned previously, BIS has oversight for much of the UK’s R&D policy although
it is important to reiterate that the Research Councils are required to develop their
own research strategies and implementation plans against this backdrop in
consultation with the academic community and a wide range of stakeholders and
users.
Funding for the Research Councils, it ultimately from BIS and the funding they receive
for research is allocated to the research councils under the ‘Haldane principle’. This
means that while government sets the overall size of funding and its distribution
between the research councils according to its strategic priorities and it is then left to
the scientific community (coordinated by the Research Councils) to select specific
projects within relevant fields on the basis of scientific merit, as assessed by peer
review. The government may however, ask the research councils to consider
addressing areas of strategic national importance in setting their funding
programmes. The Haldane principle does not apply to the research budgets of
Government Departments, which are used to fund research to support their
departmental policies and objectives.

Figure 7 UK: Haldane Principle
Source : RCUK
Monitoring / evaluation of the efficiency of the research councils is carried out by the
Cabinet Office. The Cabinet Office conducts triennial reviews of all non-departmental
public bodies. This process started in 2011 or 2012 and has two purposes; to provide a
strong challenge of the continuing need for individual NDPBs looking at both their
function and form and employing the ‘3 tests’ discipline and to review the control and
governance arrangements in place to ensure that the public body is complying with
recognized principles of corporate governance71.
The triennial review of the Research Councils along with Research Council UK was
published in April 2014 and was a two-stage process. The first stage assessed the
contributing need for the functions and form of the Research Councils and RCUK and
stage two subsequently looked at compliance with statutory accountabilities, financial
and management responsibilities as defined by the Cabinet Office. The second stage
was carried out by a team from BIS, independent from the Research Councils and the
BIS sponsor team responsible for overseeing the Research Councils72.
71 https://www.gov.uk/government/collections/triennial-review-reports
72https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/303327/bis-14-746-
triennial-review-of-the-research-councils.pdf

6.2 The R&D System
6.2.1 Characteristics of the publically funded research organizations
Public funding in the UK accounted for approximately 21% of R&D funding in 2012;
just under 40% of this was spent on R&D within UK public research institutes (£2.2bn
of a total £5.6bn)73.
Figure 8 UK: Composition of UK GERD by funding sector 1995-2012
Source: Office of National Statistics
Higher Education Institutions in the UK are autonomous bodies, which have a
charitable status and are free to seek funding from a variety of sources. The majority
of their funding comes a dual support system. Under this system, the Higher
Education Funding Councils (separate bodies exist for England, Scotland, Wales and
Northern Ireland, with funds derived from ministries responsible for education)
provide general funding, used mainly for academic salaries and research
infrastructure, while the Research Councils provide funding for projects (including
salaries of contract researchers), research training and centres on a competitive peer-
reviewed basis. The other principal funding source for research is the charitable, non-
profit sector, notably the Wellcome Trust, which is the largest single funder of medical
research. There is one private university: the University of Buckingham. The
representative body and membership organisation is Universities UK, whose
membership is comprised of the executive heads of the UK’s universities.
In recent years, greater emphasis has been placed on the 'Third Mission' of
universities, i.e. greater engagement with businesses and local communities. To this
end, the HEIF represents the main policy stimulus, although HEIs individually and
collectively engage in a variety of 'outreach' activities and several regional and trans-
regional consortia have been set up to address this activity.
Public sector research organisations in the UK carry out applied research (an in
some instances fund) of relevance to their own requirements or those of their lead
department. There are about 100 of these organisations in the UK and an example
would be the Health and Safety Laboratory.
73http://www.ons.gov.uk/ons/rel/rdit1/gross-domestic-expenditure-on-research-and-
development/2012/stb-gerd-2012.html#tab-R-D-Expenditure-by-Funding-Sector

Research Council Institutes and Centres are those institutes for which the
Research Councils have established a long-term involvement as a major funder such as
the Medical Research Council Cancer Cell Unit. A further list of institutions can be
found at http://www.rcuk.ac.uk/funding/noparentrcs/.
6.2.2 Level of autonomy of the publically funded research organisations
In the UK universities are autonomous organisations able to set their own research
strategies and make their own personnel decisions. Most UK universities have been
through a process over the last 15-20 years of professionalisation of the management
structure and system. This has seen a move away from an academic-led collegiate
management structure to one that tries to strike a balance between a stronger and
more ‘corporate’ central management system and a collegiate system. This
centralisation more readily facilitates the setting of strategies and organisational
plans.
However, for most universities much of their research is funded from public funds and
therefore they only have the flexibility that the public funding system allows. The
block grant from the Higher Funding Councils is the only source of research income
truly at the discretion of university management. However, as block grant income is
linked to research performance at the discipline level (previously via the RAE and now
by the REF), individual departments and research groups have considerable influence
over its allocation.
Research Councils have a responsibility to demonstrate the value and impact of the
research activities that they fund. The Research Councils UK use information that
researchers provide on the outputs, outcomes and impacts of the Research Council
funded project to report to both the Government and the public. The collection of this
data enables the Research Councils UK to provide a strong evidence base to support
the continued funding of research in the UK; improve the quality of reporting research
outcomes to government, the public and other organisations; maintain a longer term
relationship with grant holders to capture new developments and impacts from
research long after a grant has finished and open up communication with researchers
and research organisations to offer new opportunities to explore how best to capture
the results of research funding. In 2013, the Research Councils undertook the first
phase of a project to increase the commonality in which research outcomes are
gathered, in response to feedback from the research community and as part of a wider
move to greater harmonization across the Research Councils. The second phase of the
project, initiated earlier this year was to implement a common user experience for
providers of research outcomes data and finalize a common data model across the
Research Councils74.
6.2.3 Research infrastructures and Centres of Excellence / Competence Centres
The UK hosts a large number of national and international research facilities with over
€1.14b allocated to construct ten large scientific facilities with another €385m
allocated to five future projects since 2000. Apart from the physical scientific
infrastructure, the UK’s innovation infrastructure also includes the National
Measurement System (NMS), the academic IT network, the UK’s intellectual property
regime and the UK’s standards and accreditation system, plus major initiatives such as
the Census of Population Programme.
74 http://www.rcuk.ac.uk/research/researchoutcomes/

In 2013, Research Councils UK (RCUK) published a Strategic Framework for Capital
Investment - Investing for Growth: Capital Infrastructure for the 21st Century. This
provides a strategic framework against which Research Councils will plan future
investments in the UK’s capital infrastructure for research. The new Framework will
continue to include large facilities as previously described in RCUK Large Facilities
Roadmaps, but has broadened to include other significant capital priorities.
The Research Councils also support infrastructures through the provision of
equipment funding and a number have their own institutes with research laboratories
and are responsible for maintaining their infrastructure. Research Councils support
the provision of access to leading edge international experimental facilities, often
through international subscriptions or joint funding. The STFC has a particularly
active role in facilitating such arrangements and invested around €674m in 2010-
2011.
The Large Facilities Capital Fund (LCFC) is the main source of funding for large
facilities in the UK. It provides capital investments in new and existing facilities and
infrastructure that Research Council budgets cannot cover. The LCFC has a projected
allocation of almost €400m between 2011-2015 which will contribute to the capital
costs of the construction, expansion, enhancement, upgrading or replacement of
facilities either nationally or internationally.
Institutional funding also extends to a number of Centres of Excellence in the UK.
There fall under two different categories:
1. Innovation and Knowledge Centres (IKCs), which are centres of excellence
with five years’, funding to accelerate and promote business exploitation of an
emerging research and technology field. Their key feature is a shared space
and entrepreneurial environment, in which researchers, potential customers
and skilled professionals from both academia and business can work side-by-
side to scope applications, business models and routes to market.
The EPSRC works with other research councils e.g. BBSRC and public sector
funders such as the Technology Strategy Board (TSB) to develop the
interdisciplinary skills, infrastructure and research programmes needed to
advance the field towards application for UK benefit, with due regard to
ethical, social and regulatory considerations75.
2. Centres forming part of the Centres of Excellence Initiative and under this
scheme funders (public and non-profit sources) have come together to fund 5
Centres of Excellence, which are designed to strengthen research into complex
public health issues such as as obesity, smoking and health inequalities. The
Centres bring together leading experts from a range of disciplines and work in
partnership with practitioners, policymakers and wider stakeholders to tackle
public health issues76.
75 http://www.epsrc.ac.uk/newsevents/news/syntheticbiologyprogress/
76 http://www.esrc.ac.uk/research/major-investments/ukcrc.aspx

Table 25 UK: Key numbers of R&D expenditure 2009-2012
2009 2010 2011 2012
R&D Expenditure (total) as
percentage of GDP
1.82% 1.77% 1.78% 1.72%
R&D Expenditure funded by
Government as percentage of
GERD
32.6% 32.3% 30.5% 28.9%
R&D Expenditure in the Higher
Education Sector as percentage
of GERD
- 27% 26% 27%
Source: Erawatch, Office of National Statistics
Table 26 UK: Institutional and competitive funding allocations 2010-2014
Research funding allocations 2010-11 2011-12 2012-13 2013-14
Institutional £1,603M £1,558M £1,558M £1,558M
Competitive £2.55bn £2.60bn £2.57bn 2.60bn
Source: HEFCE; BIS Allocation of Science and Research Funding
Table 27 UK: Funding allocations for other types of Research Organisations 2010-14
Funding for additional type of
RO
2010-11 2011-12 2012-13 2013-14
National Academies
Royal Society
British Academy
Royal Academy of Engineering
£87.8M £87.5M £86.5M £86.5M
UK Space Agency £163.1M £205.6M £191.9M £192.8M
Other Programmes
Science and Society
International
Foresight
Evidence and Evaluation
£43.6M £24.5M £24.1M £24.1M
Source: BIS Allocation of Science and Research Funding

There are two major types of institutional funding in the UK. The first is allocated to
universities in the Higher Education sector in the form of a block grant from HEFCE
and equivalent bodies in devolved administrations. This has previously been allocated
on the basis of the results from the RAE. This has now been replaced by the REF
which uses a process of peer-review supplemented by citation data to create quality
profiles each submission; comprised of three elements: impact, outputs and
environment. In 2011/12 this type of institutional funding was worth 2,752 million.
The second type of institutional support is competitive funding which is provided via
Research Council grants and programmes. Grants are awarded on the basis of
applications made by individual researchers, which are subject to independent, expert
review. Awards are made on the basis of research potential, irrespective of
geographical location. This type of funding is relatively flexible and supports projects
ranging from small travel grants to multi-million pound research programmes.
Funding covers a wide range of activities including the research projects themselves,
feasibility studies, instrument development, equipment, travel and collaboration and
long-term funding to develop critical mass. In 2011/12 this type of institutional
funding was worth 3.8 billion ad all UK HEIs, research institutes for which research
councils have a long-term involvement as a major funder are all eligible for this type
of funding. Independent research organisations are eligible if they possess an exisiting
in-house capacity to carry out research that materially extends and enhances the
national research base.
The UK does not use performance contracts.
Institutional funding allocated in the form of a block grant by HEFCE is based on the
results of the REF and all HEIs are eligible. Although the REF is not mandatory for
HEIs, if HEIs do not take part in the REF they are not eligible to be allocated funding
in this way. Money allocated in this way is primarily used for academics salaries and
research infrastructure.
For institutional funding allocated via competitive funding, all UK HEI’s, research
institutes and designated independent research institutes are eligible for funding. Any
independent research organisation can apply for IRO status and Research Councils
UK will send the appropriate documentation to complete to apply.
Research Councils also support infrastructures through the provision of equipment
funding and a number have their own institutes with research laboratories and are
responsible for maintaining their infrastructure. Research Councils support the
provision of access to leading edge international experimental facilities, often through
international subscriptions or joint funding. The STFC has a particularly active role in
facilitating such arrangements and is responsible for operating large-scale research
facilities as well as managing the UK access to large-scale facilities in other countries.
The STFC invested around €674m in facilities in 2010-2011.
For facilities and infrastructure that the Research Councils cannot cover the Large
Facilities Capital Fund (LCFC) is the main source of capital funding for large facilities
in the UK. The LCFC has a projected allocation of almost €400m between 2011-2015
which will contribute to the capital costs of the construction, expansion, enhancement,
upgrading or replacement of facilities either nationally or internationally.
In the UK, the primary source of income in HEIs for teaching is through student
tuition fees. Where tuition fees cannot meet all of the costs of teaching, HEFCE has a
fixed budget to support this. From 2013-14 this covers:

 Funding for high-cost subjects
 Funding to support very high cost STEM subjects
 Taught postgraduate courses
 Flexible learning: part time and alternative modes of study
 Additional funding for providers operating in London
 A Student Opportunity allocation for students from disadvantages backgrounds
 Funders for providers with distinctive provision
 Strategically important and vulnerable subject areas
BIS provides the institutional funding in the UK and the funding received for research
is allocated to the Research Councils under the ‘Haldane Principle’ described in the
R&D section of this case study. The UK does not directly prioritise specific areas of
research but instead applies horizontal support to maintain the overall performance of
the research system. This is coupled with objectives of making the science base
responsive to the needs of the economy and both increasing the level of business
investment in R&D and the level of engagement with the science base. Thus thematic
and sectoral research policies are operated largely though government expenditure via
ministries and departments research to support their specific policy portfolios, either
as in-house research or through commissioned research from higher education or the
private sector i.e. research and technology organisations. However, it is important to
note that certain fields of research funded by the government attract larger budgets
simply due to the scale of demand i.e. health.
There are also a number of Cross-Research Council programmes, which receive
substantial financial support. The programmes tend to cover novel, multidisciplinary
approaches needed to solve many of the big research challenges over the next 10-20
years. The Research Council UK coordinates the delivery of this research under six
priority areas:
1. Digital economy
2. Energy
3. Global Food Security
4. Global uncertainties; security for all in a changing world
5. Living with environmental change
6. Lifelong, wellbeing and health
Each theme is important in terms of the knowledge and skilled people, which will be
generated as well as having a significant potential for delivering economic impact.
Delivery of these benefits and economic impacts will be accelerated by the effective
coordination of the programme through the Research Council UK.
Aside from BIS, there are other government departments that fund applied research,
which is of direct relevance to their own policy initiative or operations. Funding is
competitive and the main spenders include:
 Dept. of Defence (£1,306 million)
 Dept. of Health (£904 million)
 Dept. of International Development (£236 million)
 Dept. Environment, Food and Rural Affairs (£161 million)

6.3.3.1 Advantages & disadvantages of the system
Institutional and competitive funding in the UK is dependant largely on peer review
which relies on experts making judgements about which research deserves funding
During the process of peer review, multiple panels and UoA lead to greater consistency
of panel operation and a fairer assessment of interdisciplinary areas.
Reduced number of panels in the REF versus the RAE may run the risk of
undermining confidence in the peer review process that will be carried out in non-
science subjects
Less incentive to collaborate within institutions and produce co-author papers as only
one colleague can return this as an output for the REF, however, this may increase
collaboration with researchers in other institutions as co-authors from separate
institutions can return the same output.
Stress-full and time consuming process for those involved, may impact morale
Output for individual researchers limited to four ‘items’ meaning that large quantities
of high-impact research may not be submitted and subsequently not rewarded by the
REF
6.3.3.2 Effects of the funding system
Top performing academics have seen individual benefits in terms of increased salaries
and attractive relocation packages as universities compete for the best researchers,
particularly in the period leading up to the RAE / REF.
Institutions may begin selectively directing funding to the highest-rated departments,
which in part has some justice, however the degree of selectivity may be cause for
concern.
Very small numbers of staff on the borderline could affect the financial outcome for a
research area, thus encouraging institutions to leave out staff to raise the overall
rating.
Potential over-concentration of funding and under-mining the relationship between
teaching and funding.
Funding assigned for according to perceived economic and social benefits. It is often
difficult to predict which research will create the greatest practical impact???
Changes in publication behaviour, with academics seeking to publish in journals in
disciplines with a higher normalised citations scores and that the opportunity for
interdisciplinary dialogue will be lost.
Changes in publication behaviour where research crosses the boundaries between the
science-based disciplines and those where a light-touch peer review process is
proposed.
Newer journals not as well represented in the Web of Science in terms of content of
the in articles cited, this may contribute to behaviour change by researchers in their
publication habits.
Added Value attributed to collaboration and interdisciplinarity by the REF may
incentivise the dishonest attribution of authorship to boost the department’s REF
score.

6.3.3.3 Risks of the funding system
Huge pressure on academics to publish research papers in the right journals as the
REF only funds research that is ‘internationally excellent’ or ‘world leading’ with jobs
potentially at risk if this is not delivered upon.
Increased separation between teaching and research with some academics now having
teaching only contracts leading to separation between teaching and research where in
the past excellence in teaching and research have been thought as inextricably linked.
A large proportion of an HEIs funding is from teaching and fierce competition for
students and so it is important that attention and efforts are not diverted away from
teaching and the ‘student experience’ in the pursuit of research monies when teaching
in itself is a big financial consideration for HEIs.
Different prestige and status associated with different academic roles according to
those most likely to be entered into the REF leading to certain academic roles being
undervalued
Further concentration of research funding would carry the risk of reduced research
capacity for some regions, greater differential student experiences and a reduction in
the diversity of the UK’s research base.
Increase in the bureaucratic nature of the research assessment process
Reluctance of researchers to pursue high-risk long-term projects since these projects
are less likely to result in publication. Projects such as these often result in ground-
breaking research but the pursuit of publications and impact stories may lead to more
conservative research projects to help ensure this before the project starts.
No distinction between different research outputs such as books and articles, therefore
there is little incentive for longer term projects with fewer research outputs, despite
these taking much longer to produce.
Economic and social impact is more applicable to disciplines closer to the market,
making impact proposals for discipline such as the arts and humanities more difficult
to score well in, potentially undermining basic research in these areas.
Impact factors will lead to further commercialisation and the subsequent narrowing of
the research agenda. Research outputs that attempt to understand the world around
us should be evaluated by the quality of their contribution to human knowledge rather
than on their contribution to company balance sheets. This is particularly poignant in
light of impact indicators revolve around creating new businesses, commercialising
new products and attracting R&D investment from global business,
Blue sky research may become increasingly difficult to fund, distorting the nature of
research activity carried out in universities with publication becoming the primary
end, not knowledge creation or intrinsic interest in a subject.

7. Additional countries
7.1 Belgium/Flanders
7.1.1 Introduction
This chapter focuses on the funding system for research in the Flanders, and more
specifically the Special Research Fund (BOF), which is a funding system for bottom-up
basic research in the Higher Education Institutes (HEI).
We cover the criteria that are used for the distribution of this fund, based on a formula
called BOF key, and the conditions that are set for the internal allocations of this fund.
We also look into the developments in the BOF key, its data sources, and the
consequences of the BOF system on the research community.
Finally, we briefly cover the principles for the distribution of institutional funding for
teaching and research, since the 2008 reform partly based on the BOF key.
Of particular interest for this study and the evauation and funding system to be
developed for the Czech Republic are
 The conditions set for the awarding of BOF funding, essentially establishing a
light-weight performance contract system
 The minimum threshold set for institutional funding for research (fixed
component)
 The adjustments to the BOF fund distribution reflecting the need to take into
account the positioning of the medium-sized universities
 The effects of the BOF criteria on the Flemish research system
 The procedures established for the management of the VABB-SHW
7.1.2 Background: description of the R&D System
The governing bodies for R&D
Belgium is a federal country that has three regions: Wallonia, Flanders and Brussels-
capital. The federal state retains the responsibility for funding research programmes of
national interest, such as in the area of space and defence. The regions have a
decentralized and autonomous research policy and are responsible for funding
education and fundamental research at universities and higher education
establishments. There are different protocols for the evaluation of science, tied to
different institutes and to different disbursements of funding. In this chapter we look
at the research funding system of the region Flanders.
 Competitive funding for research is coordinated via agencies such as the Fonds
voor Wetenschappelijk Onderzoek (FWO) and the Agentschap voor Innovatie door
Innovatie en Technologie (IWT).
 FWO – Flanders provides competitive funding via support grants and
programmes
 IWT funds innovation schemes to enterprise and HEI (hogescholen and
Universities).
 The Department of Economy, Science and Innovation (EWI) governs the Flemish
research system. EWI coordinates and evaluates a range of instruments that
finance fundamental and strategic basic research. It directly funds the six Flemish

universities (institutional funding) and every year, it computes and publishes the
funding to be allocated via the Special Research Fund (BOF) and the Industrial
Research Fund (IOF). BOF is a fund dedicated to bottom-up basic research; IOF is
dedicated to innovation-focused research. Distribution of BOF and IOF funding is
based on a performance-based funding model, which includes research inputs and
outputs such as counts of academic staff, degrees awarded, publications and
citations outputs (see further below). The IOF additionally includes innovation
and collaboration performance – see Table 28.
Table 28 Belgium: IOF allocation keys
IOF-Key (2010) Weight
Proportion (weighted) of doctorates 15%
Proportion of publications and citations 15%
Institution’s proportion of industrial contract income 30%
Proportion of income from the European Framework Programme 10%
Proportion of patents 15%
Proportion of spin-offs 15%
Source: OECD (OECD 2010)
R&D actors in the Flemish system
The Higher Education Institutes (HEI) sector .in the Flanders is composed of
universities and colleges (‘hogescholen’).
Universities are highly research-intensive in the Flanders and account for more than
85% of the academic output77. There are currently five academic universities in the
Flanders:
 Katolieke Universitei Leuven (since 2014 integrates Katolieke Universiteit Brussel)
 Universiteit Hasselt78
 Universiteit Antwerpen
 Universiteit Gent
 Vrije Universiteit Brussel
The Colleges have earned a full-fledged higher education status in the reform of 2008.
They typically conduct more applied-oriented research. They include:
 Artesis Plantijn Hogeschool Antwerpen
 Arteveldehogeschool
 Erasmushogeschool Brussel
 Groep T Hogeschool
77 ECOOM. Vlaams IndicatorenBoek, 2013
78 The University Hasselt has a special agreement with the University of Maastricht – which led to the
establishment of a transnational university. Special regulations exist with respect to attributing financing
and measuring the performance of the transnational university.

 Hogere Zeevaartschool Antwerpen
 Odisee
 Hogeschool Gent
 LUCA School of Arts
 Hogeschool West-Vlaanderen
 Karel de Grote-Hogeschool
 Hogeschool Thomas More Kempen
 Hogeschool Thomas More Mechelen-Antwerpen
 Katholieke Hogeschool Leuven
 Katholieke Hogeschool Limburg
 Katholieke Hogeschool Vives
 Hogeschool PXL
Next to the universities, which are the most important actors in the field of basic
research, the Flemish government decided to concentrate resources in a number of
relevant strategic areas of scientific and technological innovation research. For this
purpose, it founded four big Flemish research centres, the so-called SOC – Strategic
Research Centres. Common characteristics of these centres are their institutional
funding on the basis of 5-year performance contracts and their explicit focus on
industry. The four SOCs are
 The Interuniversity Centre for Micro-electronics – IMEC
 The Flemish Intsitution for Technological research – VITO
 The Flemish Institute for Biotechnology – VIB
 iMinds, previously the Institute for Broadband Technology – IBBT
Other research institutes are the Strategisch Initiatief Materialen – SIM (focused on
advanced materials), the Centrum voor Medische Innovatie – CMI (focus on medical
innovation) and the FISCH-initiative (focus on durable chemistry and advanced
materials). There are also a number of institutes for policy-oriented research and
management schools.
7.1.3 The BOF fund for bottom-up basic research
Overview
The Special Research Fund (BOF) is a public fund dedicated to the funding of basic
research in HEIs.
It was created in 1985 with the objective to stimulate groundbreaking research. An
additional objective is to encourage universities developing an internal research policy.
With this intent, specific conditions were set to be elegible for BOF funding (see
further below).
The BOF funding is allocated among the universities through a parameter-driven
model, also referred to as the BOF key. The rationale for the creation of this model was
to allocate funding on a fair basis; contemporaneously, the BOF key is used to reward
universities for their performance.
The BOF key is made public. The percentual distribution of the fund, instead, is sent to
the universities and other stakeholders, but is not published. Since 2013, the BOF-key

is used also in the calculation of the university institutional funding and other funding
mechanisms.
The unit of assessment at the national level is the university, which is also the final
recipient of the funding. The individual is the unit of analysis when it comes to the
evaluation for the internal funding allocation.
The volume of the BOF fund
The BOF fund budget is set on an annual basis by the Flemish government, deciding
on the budget to allocate to the three components of the BOF, i.e. (see Table 29):
 The basic component of the BOF, constituting the major component of the fund
 The sources dedicated for the funding of Tenure Track grants, i.e. for the coverage
of the salary costs of postdoc researchers that participate in the programme (5-
year term contracts with precise objectives, followed by a fixed-term contract is
completed successfully)
 The sources dedicated for the Methusalem programme and ZAP grants, i.e. long-
term grants for individual excellent researchers, allowing them to focus exclusively
on research and/or pursue international research. The Methusalem programme
was launched in 2006 and became part of the BOF fund in 2009. The Methusalem
budget has increased substantially from €3,000 in 2006 to almost €20,000 in
2012. ZAP mandates are to the benefit of excellent academic staff
The basic BOF is the key component of the fund distributed among the universities on
the basis of the BOF key (Table 29). This is followed by the Methusalem programme
components and the Tenure Track grants.
Table 29 Belgium: Components of the BOF fund
2006 2007 2008 2009 2010 2011 2012
Basic BOF 99,033 100,726 105,140 107,138 107,130 107,677 116,090
BOF - Tenure Track 2,800 5,653 5,645 8,961 9,154
BOF - Methusalem-
programme
3,000 10,051 15,242 20,532 20,076 19,402 19,822
BOF – ZAP grants 1,500 3,029 4,587 4,348 4,196 5,586
Total BOF 102,033 112,277 126,211 137,910 137,199 140,236 150,652
Basic BOF 97% 90% 83% 78% 78% 77% 77%
BOF - Tenure Track 0% 0% 2% 4% 4% 6% 6%
BOF - Methusalem-
programme
3% 9% 12% 15% 15% 14% 13%
BOF - ZAP-grants 0% 1% 2% 3% 3% 3% 4%
BOF funding has increased fivefold since 1993 (as the allocation criteria have
gradually become more complex). From 2006 to 2012 the BOF subsidy has relatively
moderately increased from around €99,000 to €116,000.
It has constituted a relatively stable share of 45% in the Flemish public funding of
basic research (Table 30). In 2007, the Hercules financing was introduced, aimed at
providing Flemish researchers with research infrastructure.

Table 30 Belgium: Allocation of public funds to basic research 2006-2012
2006 2007 2008 2009 2010 2011 2012
FWO-Flanders
(competitive
funding)
132,750 138,259 146,504 151,131 148,415 156,186 173,040
BOF 102,033 112,277 126,211 137,910 137,199 140,236 150,652
Hercules (50%) 2,800 7,803 7,803 7,418 5,250 10,270
Total 234,783 253,336 280,518 296,844 293,032 301,672 333,962
FWO-Flanders
(competitive
funding)
57% 55% 52% 51% 51% 52% 52%
BOF 43% 44% 45% 46% 47% 46% 45%
Hercules (50%) 0% 1% 3% 3% 3% 2% 3%
Source: Vlaams Indicatorenboek Wetenschap, Technologie en Innovatie, 2013
The 2013 changes to the BOF fund
On January 1, 2013, changes were made to the BOF decree. These were
 The introduction of a number of conditions for eligibility to BOF funding related
to strategic governance, quality management, communication on science and
diversity
 The establishment of dynamic minimum shares for the University of Hasselt,
the University Antwerp, and the Free University Brussels, with the aim to ensure a
more stable funding for each university enabling them to undertake longer-term
commitments. The minimum shares were, in 2013, 2.91% for the University of
Hasselt, 10.12% for the Free University of Brussels and 11.75% for the University of
Antwerp. A growth path with an upper limit on the minimum financing is
foreseen; this upper limit is, in 2013, 4%, 10.5%, and 13%, for these universities
respectively. The minimum shares are dynamic because, depending on the growth
/ performance of the universities, from 2014 there is scope to increase the share of
minimum funding. As the University of Hasselt is still growing in capacity, it will
benefit from a guaranteed grow-path in the minimum financing.
 Measures to offer more opportunities to women in science, such as priority
rulings in case of new openings for independent academic personnel (ZAP) and
postdoc researchers through the use of BOF resources
 The revision of some parameters in the formula, the so-called BOF key
The rationale for the minimum share was to take better into account the diversity
between universities. Universities are scrutinised under the exact same conditions
despite great differences in size, objectives and performances. The minimum
percentages in the BOF-key for each of the smaller universities are to ensure a more
stable funding stream for research. Larger universities also have relatively better
access to a wider range of funding channels (e.g. EU funding) and have better
opportunities to attract researchers. The minimum share rule is intended to
compensate for this financial disadvantage, thereby ensuring a sufficiently
differentiated university landscape in the Flanders.
In relation to the BOF key, the 2013 regulation aimed to ensure that the
bibliometric parameters envisaged the following:
 Encourage both productivity and visibility;

 Define the degree of excellence via international quality standards;
 Use impact factors to classify groups of magazines (not for the assessment of
individual publications);
 Average the extreme variation of impact factors within and between disciplines (to
avoid skewing investment in experimental sciences with high impact factors);
 Transparency in the count;
 Apply the count across all disciplines (discipline neutral);
 Ensure that the count is compatible with the VABB-SHW count scheme.
Internal distribution of the BOF fund
The BOF funding for research process is based on the principle of the universities’
autonomy. The funding is directly allocated to universities, i.e. granted as a lump sum
to specific BOF funds within each university. This is then followed by an internal fund
allocation process in each university, deciding on the final allocation of funding to
fellowships and projects.
The internal university allocation is usually based on a peer-review process, involving
international experts and an assessment of the (bibliometric) performance of the
submitters, as well as a detailed review and assessment of the substance of the work
proposed. However, the university autonomy in the management of the BOF fund is
increasingly limited and precise conditions and expectations are being set for the
eligibility to BOF funding (see the next chapter).
And universities are regularly assessed on this process and its outcomes. CRITIQUE
ON COSTS.
In order to complement the information provided through the BOF keys, at the
national level an external evaluation of the universities’ research performance is
organised every two years. This includes research and HR management as well as the
quality of the processes adopted internally to allocate the BOF funding.
Conditions linked to the BOF funds
There are several conditions put on the HEIs to be eligible for BOF funding in
terms of research strategy and governance79:
 The university management draws up a five-year strategic plan defining its policy
for scientific research in general and the focus for spending the BOF funds in
particular
 The University Board shall adopt rules for the internal allocation of basic
component in the BOF fund; to be embedded in the Charter of Good Governance
of the university
 Universities report on their performance on an annual basis
79 See article 22 BOF 2013,
http://www.ond.vlaanderen.be/edulex/database/document/document.asp?docid=14492

 Universities are part of and adhere too the Flemish science communication policy
and support the general principles of the relevant marketing and communication
plan of the Flemish Government in the matter
 The Flemish Minister is authorized to further determine the regulations and
attach funding to the abovementioned conditions.
The strategy plan should include as a minimum
 The key principles of the governance approach
 The instruments and action plan to reach the defined objectives
 The financial means for the achievement of the objectives
Specific attention should be dedicated to
 The monitoring and evaluation of the quality of research
 The principles of good governance in research
 Increase in participation of women and minorities in research
 The training and career development of researchers
 Communication on ongoing and concluded research
There are specific indications also for the internal use of the fund. These include:
 Conditions are placed on appointing new ZAP academic staff/post-doctoral staff.
Under certain conditions, the under-represented sex is given preferential
appointment in order to achieve an improvement in gender balance.
 The BOF-2013 decree outlines that a maximum of 25% of university spending on
BOF-ZAP mandates can be allocated to mandates that extend indefinitely. At most
15% of the BOF-ZAP resources are allocated to attract outstanding researchers
from abroad or from another research institute, under a minimum employment
rate of at least 50%.
 At least 50% of the BOF funds are to be allocated to projects for fundamental
research of the following types
 Projects with a duration of 4-6 years and minimal annual funding of €45,000,
carried out by research groups of excellent scientific value. This is to be
demonstrated by means of objective data, more specifically on the basis of
publications or other indicators of scientific quality. The Flemish minister
competent for research governance can increase this minimum value
 Projects with a duration of 2-5 years and minimal annual financing of
€150,000. The Flemish minister competent for research governance can
increase this minimum value
 Each year, at least 3.5% of the BOF funding is allocated to grants or projects in the
framework of international scientific collaboration. In relation to research grants
for researchers from abroad, eligible costs are limited to personnel costs (salary of
fellowships), eventually complemented with a bench fee. For the research projects,
personnel, operational and equipment costs can be accounted for.
 The allocation of funds for the Methusalem programme must be based on an
external evaluation of the research proposals by an international panel, to be
organised by the university. Every 7 years, an internal panel is to evaluate the
effectiveness of the research project (objectives reached), the HR aspect of the
project (research training), and the adequacy of the research plan for the following
7 years

Finally, the internal regulation for the allocation of the fund should define
 The research initiatives that can be funded and the conditions and criteria for their
selection
 The procedures for the allocation of the resources for the research grants and
projects, with as minimum conditions:
 The funding is allocated by the university management after motivated advice
by an internal research council
 Maximum two third of the internal research council is of the same gender. If
the research council does not meet this requirement, it cannot give legal
advice; the same ruling accounts for all selection and advisory committees
involved in the allocation of the funding
 The university’s research council selects the research grants and projects to be
funded
 Experts will be involved for the appraisal of large project proposals; these
experts will be external to the university and will be appointed following a
procedure defined by the university management
 Funding of Methusalem grants are decided through appraisal by an internal
panel of experts
 The rules for the organisation of calls and funding approvals
 The methodology for the ex-ante evaluation of the proposals, the ex-post
evaluation of the projects implemented, and eventually the interim evaluation
 The process for the communication of the proposal appraisal results to the
researchers
 The process for the communication to the researchers on the selection procedures
 The process for the researchers to present appeal
The university is entitled to allocate the following shares of the BOF fund for
internal management purposes:
 2% of the basic BOF fund component for the activities of the offices responsible for
research coordination
 1% of the basic BOF fund component (or at least 100,000 euro) for the expenses
related to operational and personnel costs that are directly linked to the
management of research projects or initiatives funded by the BOF fund
Critique on the BOF system
In 2010, the Flemish Interuniversity Council (VLIR) nominated an external committee
to evaluate the quality of research management in the Flemish universities80. The
committee concluded its work expressing some major critiques to the BOF system.
80 Beoordeling van de kwaliteit van het onderzoeksmanagement van de Vlaamse universiteiten, Vlaamse
Interuniversitaire Raad, Brussels, 2010

The Commission agreed with the stakeholder communities that the BOF has become
too complex and unclear. On the one hand, the BOF key has become complex in its
parameters used, which is to be added on to their lack of continuity and ongoing
changes. In addition, the BOF fund has expanded with the introduction of financing
for tenure track academics and Metrusalem financing. Each of these financing streams
has independent objectives. At this stage the committee concluded that, with reference
to the increased complexity, no additional funding mechanisms should be initiated.
Rather, the existing channels of financing should be strengthened.
Following the evaluation by the external committee, additional criticism was made on
the use of journal impact factors and the lack of normalization across disciplines –
disciplines with traditionally higher impact factors receive relatively higher scores. As
a result, scholars may choose to invest in disciplines with higher impact factors.
The BOF key has its consequences on the career path of individual researchers.
The Commission noted that not all academic personnel receive BOF funding internally
and the reasons behind this uneven distribution are partly linked to the parameters
used for the central BOF funding. There is an uneven distribution of the funding with
certain staff members charged with heavy teaching workloads and not having the
opportunity to acquire research experience. In some universities, part of the staff is
condemned to teaching without acquiring an adequate level of research experience.
The Commission expressed concern on the consequences of this phenomenon for the
integration of education and research, which is a fundamental characteristic of
university education. A similar concern was exoressed by the evaluation commission
in 2004.
In recent years the discussion on scientific integrity and the academic pressure to
perform / publish has escalated substantially. The main challenge is the impact of
measuring publications/citations on researchers. The BOF explicitly is not meant to
rank universities or to do more than divide money in an equitable way. However,
universities often use the same principles in their internal distribution of funds and
thus substantial pressure is put on the researchers to publish more. The Committee
questions whether this so-called ‘rat-race’ compromises academic integrity. The
committee references the ‘European Code of Conduct for Research Integrity’ and the
report of the European Science Foundation (ESF) ‘Fostering Research Integrity in
Europe’ as a relevant benchmark and encourages universities that have not yet
implemented specific policy on academic integrity to do so.
Finally, at a more general level, the Committee considered that in the Flemish research
funding system as a whole, there is a disproportionate balance between funding of
targeted and bottom-up research. This is a result of the increased focus on the
valorisation of research and research results – by government policy and EU policy.
This is also evident in the BOF funding distribution criteria. There has been an
increase in the targeted funding for science and innovation, EU funded projects,
projects with industrial partners, etc. In contrast, there is stagnation in the financing
of bottom-up research, including the BOF fund. A reduction of investment in bottom-
up research is a matter of concern.
7.1.4 The institutional funding for teaching and research
In 2008, a University Reform was introduced that set the Colleges firmly at the level of
the Universities, jointly forming the Flemish Higher Education Institutions sector, and
introduced common funding systems for the two HEI typologies. This included a
revision of the institutional funding system for both universities and colleges,

introducing a PRFS component based on quality indicators (for both teaching and
research).
The Minister of Education set the following principles for the new institutional
funding system81:
 The system must be kept simple. This will increase the efficiency for reaching the
objectives, reducing to the maximum the burden for the governance bodies and
the HEIs
 It must be transparent. Transparency is needed in order to reach legitimacy.
This also means that third parties need to be able to understand the logic and
objectives of the data. This implies that teaching and research components of the
funding need to be clearly separated
 The new system needs to be common for the entire HEI sector in the Flanders,
i.e.universities and colleges. Collaboration agreements between these two
typologies of institutions will be taken into account
 Institutional funding will be provided as a lump sum, including the ‘incentive
funding’ copmponents. The institutions remain autonomous in their decision
making on internal allocation of the funding. Obviously, the institutions will be
accountable for how they distribute the funding from public sources internally and
how they use it
 The new system must be relatively stable and foster planning of financial
management. This means that changes in the parameters should not be too
abrupt. Institutions need to maintain the possibility to do mid-term planning
 There must be a step-wise introduction of the new system. In the long-term it
will provoke considerable shifts in institutional funding and the institutions need
to be given the time to prepare for that. Transition measures will therefore need to
be set in place to go over from the old to the new system
A major objective for the introduction of the PRFS was to foster an improvement of
teaching and research quality in the region, both for universities and colleges.
After a long period where the number of students mostly determined the overall
budget of institutional funding for the HEI’s, the decree of 14/03/200882 established
the new partly formula-based institutional funding model for the Higher Education
Institutes (HEI) in the Flanders.
There are two components to the institutional funding budget, one for teaching and
one for research, each with a fixed and a performance-based component. The ratio
institutional funding for teaching versus research is to gradually increase towards
55%/45%.
Table 31 shows the budget allocation for the different components in 2011.
81 Frank Vandenbroucke, Vlaams Minister van Werk, Onderwijs en Vorming, Voorstel aan de
werkgroep financiering, 2004
82 http://www.ond.vlaanderen.be/edulex/database/document/document.asp?docid=13988

Table 31 Belgium: Breakdown of the HEI institutional funding budget for
teaching and research in 2011
In m€ Share
Teaching
Fixed 106 8%
Variable 888 69%
Total 994 77%
Research
Fixed 111 9%
Variable 186 14%
Total 281 23%
Overall total 1,293 100%
Different shares of the teaching funding (both fixed and variable components) are
foreseen for the different HEIs in the educational system, i.e. colleges and universities.
From the year 2014 onwards, distinction is made between
 The professional oriented colleges
 The professional oriented art schools
 The academic universities
In relation to the institutional funding component for research, the Decree set a
minimum threshold on:
 At least 65 doctorate diplomas awarded over 4 years (the years t-7/t-6 until t-3/t-
2)
 At least 1,000 publications over 10 years (the years t-12 and t-3)
The BOF key determines the variable component. Normalisation for the size of the
HEI is based on the following weighting scales:
 For the number of doctorate diplomas awarded:
 Factor 3 - the number of doctoral degrees awarded is less than or equal to 65
 Factor 2 - the number of doctoral degrees awarded is greater than 65 and less
than or equal to 500
 Factor 0 - the number of doctoral degrees awarded is greater than 500
 For the number of publications:
 Factor 3 - the number of publications is less than or equal to 600
 Factor 2 - the number of publications is greater than 600 and less than or
equal to 3000
 Factor 1 - the number of publications is greater than 3000 and less than or
equal to 10000
 Factor 0 - the number of publications is greater than 10000

7.2 Finland
Funding for universities in Finland is formula-based. Crucially, education and
research are not considered separately, but instead both feed into the formula, making
it partially performance-based and partially based on size (ie number of students, etc)
of the institution.
Though an RAE-style comprehensive assessment exercise was proposed in Finland in
2010, this never materialised. Nevertheless, funding allocation in Finland is effectively
performance-based, though on a broad range of criteria relating to the full range of
HEIs’ operations – notably including teaching – is applied and obtained regularly
through annual data submission of each institution to MINEDU.
Within the Finnish government, the Ministry of Education and Culture (MINEDU) is
responsible for steering science policy. Its remits include the funding of basic research
and its infrastructure and the allocation of core funding to Finnish Higher Education
Institutions (HEIs) and the Academy of Finland (AKA) - the national agency that
funds basic research from individual researchers and research units of universities and
research centres. R&D evaluations and impact assessments are also part of its remits,
when related to national R&D policies and the Academy of Finland. In Finland
universities and polytechnics are responsible for the evaluation of their own quality
assurance operations and outcomes, with support from the Higher Education
Evaluation Council (FINHEEC).
Some distinction exists in Finland between the universities and the polytechnics.
Whilst the mission of universities is to conduct scientific research and provide
research-based instruction and postgraduate education, the polytechnics train
professionals in accordance with labour market needs. However, the role in research
in polytechnics is getting increasingly important, though its focus is much more on
applied research, targeting more explicitly the R&D needs of regions and local
enterprises. Originally, there were 20 universities and 26 polytechnics in Finland, but
following the 2010 University Act (see below), several mergers have taken place, where
especially the smaller universities and polytechnics merge with larger ones, with the
expected result being 15 universities and 18 polytechnics in total, once all planned
mergers are complete.
In Finland, for universities and the polytechnics, the distribution of the institutional
funding is partly performance based, guided by common criteria, and partly linked
to the individual performance contracts with the Ministry, taking into account
strategic lines and objectives (prospective) as well as evaluation of the achievement of
previously agreed targets (retrospective). Finland’s use of performance-based funding
for HEIs is rather old and well established. It was extensively reformed in 2010, when
Finnish universities gained their autonomy with the Universities Act, with
introduction of a new set of criteria that focus increasingly on research objectives and
outputs.
Overall, the main emphasis is on capacity-building and assisting the institutions to
fulfil strategic goals and priorities. Finland especially stands out in terms of the
priority given to teaching and training as key indicators of quality.
7.2.1 Inclusion of individual staff
Assessment is conducted at the level of the institution, with individual staff in no way
formally highlighted in the assessment. In fact, though each university and polytechnic
submits its publication data on an annual basis to VIPUNEN, everything is made
public on the VIPUNEN website, except for personal data related to the author (TG
2013). In some part, this is due to the fact that universities/ polytechnics were fully
state-owned until 2010 and academics were classed as civil servants, making

individual competitive performance assessment problematic. Since the major higher
education reforms of 2010 this status of academics has changed, but there is no
evidence that this has lead to any kind of individual-level performance assessment
from a national research funding perspective. Internally, there is of course the
possibility that research performance assessment is happening, though there is
currently no evidence for this either.
The literature frequently notes that the university (rather than eg departments or
research groups) is the key level of assessment in Finland, but that universities are at
liberty to distribute the performance-based share of research funding at their own
discretion among their various department. Once again, little is known about how this
happens, though the literature notes frequently that universities may choose to reward
individual or departmental performance, or align their internal funding allocation
with wider strategic science priorities.
7.2.2 Indicators and scoring systems
Specific indicators are:
 Number of teachers/researchers
 Agreed number of doctoral degrees
 Effective number of doctoral degrees
 Funding from Academy of Finland (centres of excellence)
 Funding from TEKES
 Funding form competitive international research programmes
 Number of publications in
 Peer reviewed international journals
 Refereed journals
 Books
 Number of other publications
 Number of teachers and researchers spending time abroad (> 1 week) (TG, 2013)
The publication indicators noted here of course only reflect the amount of output and
say little about quality. To add this dimension, publications are additionally divided
into a three-point scale:
Level 1: Channels recognised as scientific
 The channel is specialised in the publication of scientific research outcomes
 There is an editorial board constituted by experts;
 The scientific publications are subject to a peer evaluation focusing on the entire
manuscript.
Level 2: Prestigious scientific publication channels
 Mainly international scientific publications channels, with the editors, authors and
readers representing various nationalities. The journals publishing reviews only
must not account for an overly large share of the whole.
Level 3: channels representing state-of-the-art quality in the respective field
 The research published in them represents the highest level in the discipline and
has very high impact (e.g., as measured through citation indicators);
 The series cover the discipline comprehensively, not limiting to the discussion of
narrow special themes;

 Both the authors and readers are international and the editorial boards are
constituted by the leading researcher in the field;
 Publication in these journals and series is highly appreciated among the
international research community of the field. 83
The scale was built through a publication forum project between 2010 and 2012 with
the objective to produce a national rating of journals, conference and book series, and
book publishers in all disciplines. It involved 23 field-specific panels with 210
panellists. Ratings are to be reviewed every three years. Besides the criteria, by which
publication channels are to be classified, the classification panel additionally is limited
by quotas, where no more than 20% of channels can be Level 2 or 3, and the total of
level 3 channels cannot exceed 25% of the overall number of level 2 channels.
This ranking system will be put into operation from 2015 onwards, with publication in
channels 2 and 3 to be assigned greater weight in the calculation of publication
outputs. The ultimate intention here is to avoid publication patterns that emphasise
volume rather than quality of outputs.84
7.2.3 Use and context of the choice of indicators
Benneworth et al (2011) summarise the rationale behind Finland’s funding criteria:
The new steering model aims at a structural development of higher
education institutions linked with the general reforms of the research
system and the modernisation of higher education in Europe. This
means that the main objectives are to improve the quality of teaching
and research, to boost international competitiveness, greater
effectiveness, profiling and internationalisation.
As such, even at the level of performance agreements between MINEDU and each HEI
(universities and polytechnics), five domains of performance are considered:
 Basic studies and study processes (quality of study processes)
 Scientific postgraduate education
 Research, development and innovation
 Internationalisation
 Social impact
The large proportion of weight given to indicators of student numbers and graduates
simply reflect the absence of tuition fees in Finland. Other indicators reflect various
challenges and priorities. Most notably these include:
 Inclusion of funding from TEKES as an indicator is symptomatic of the changing
relationship between research and innovation: there has traditionally been a
strong division of labour between science and basic research on one hand, and
technology with direct commercial implication on the other. Over the past few
years however the co-operation has increased significantly between the Ministry of
83 For full criteria, see http://www.tsv.fi/julkaisufoorumi/materiaalit/jufo_panelguidelines_17122013.pdf
84 See Puuska HM (2014) Scholarly Publishing Patterns in Finland. P 81:
http://tampub.uta.fi/bitstream/handle/10024/95381/978-951-44-9480-2.pdf?sequence=1

Education and the Ministry of Employment and Economy (and by extension
TEKES) on issues related to science and innovation. An example of this
collaboration is their participation in the Research and Innovation Council and its
steering of Finnish R&D policy. Inclusion of TEKES funding, and more generally
of social impact of research in the domains and indicators of funding allocation at
Finnish universities is a logical expression of this shift towards closer cooperation.
 Internationalisation is another prominent aspect of the selection of indicators in
Finland. This choice reflects a key problem pointed out in the Finnish system,
namely its low level of internationalisation, not so much in terms of international
co-publication, but in terms of direct international experience, both in-coming and
out-going. As such, indicators rewarding time spent abroad are a direct response
to this acknowledged weakness.
7.2.4 Scoring system & weights
There is a standard core funding formula for universities, the majority of which is
effectively related to the size of the institution or the extent of its activities, with
additional parts based on quality. Furthermore, the bulk of this formula consists of
teaching and training.
Table 32 Finland: University core funding formula implemented since 2010
Funding based on the quality, extent and
effectiveness of the activities: 75%
Other education and science policy
objectives: 25 %
Education: 55% Research and researcher
training: 45%
Extent of activities 85% Extent of activities 75% Strategic development 25%
Quality and effectiveness
15%
Quality and effectiveness
25%
Education and discipline structure 75%
Source: Joint Report by the Economic Policy Committee (Quality of Public Finances) and the
Directorate-General for Economic and Financial Affairs, Efficiency and effectiveness of public
expenditure on tertiary education in the EU, Annex: country fiche Finland, European Economy
Occasional Papers No 70.
The components of the ‘Quality, extent and effectiveness’ scoring are calculated based
on the following aspects:
Extent of activities in education
Degree targets and their attainment continue to play a key part in the model because
they are the key outputs of universities. However, the focus on degree-based funding
has shifted from targets to outputs, in order to find a balance between plans and
reality. The idea is to have incentives in place. Making the number of degrees awarded
a criterion in funding encourages universities to organise their activities in such a way
as to make it possible for students to complete their degree studies within the normal
time.
Up to the early 2000s the institutional funding component of the budget was directly
based on annual institutional targets for Master’s and doctoral degrees, as agreed with
the Ministry of Education for each main field of study offered by the university. Target
figures were simply multiplied by a field-specific cost factor, which was also agreed for
the three-year contract period.
With a view to balancing the annual variations in the number of degrees awarded by
the smaller universities, the average number of degrees over several years will be
considered. The differences in the cost structure of different fields of education
(including the specific nature of the arts; required equipment) and in teacher training
colleges will be taken into account in the funding model as part of the educational and

disciplinary structure funding element, which forms part of ‘other education and
science policy objectives’
Quality and effectiveness in education
 The quality of education and functioning of study processes (80%), of which
 The number of students studying for first- and second-cycle higher education
degrees completing at least 45 ECTS credits in one academic year (50%)
 The number of student graduates who started studying for their first degree in
x after 7 years have passed (50%)
 Internationalisation of education (20%), of which
 Number of outgoing and incoming exchange students in Finland (duration of
exchange over 3 months) (50%)
 Number of ECTS credits completed in education in a foreign language (and the
number of ECTS credits completed abroad included in the degree) (13%)
 The number of ECTS credits acquired abroad and included in the degree is included in
the calculation when the data collection of the statistical material is complete
(12%)
 Number of international degree students (25%)
Extent of activities in research and researcher education
 Teaching and research person-years (50%);
 Total number of doctoral degrees determined in the agreement between the
Ministry and the university (25%);
 Total number of doctoral degrees completed at the university (25%)
Quality and effectiveness of research and researcher education:
 Nationally competed research funding (60%), of which
 Academy of Finland funding for the university (50%),
 Funding allocated to the university on the basis of the Academy’s decisions on
Centres of Excellence (30%)
 Tekes funding for the university (20%)
 Scientific publications (20%), of which
 Number of refereed international publications (60%)
 Number of other scientific publications (40%)
 Internationalisation of research (20%), of which
 Amount of internationally competed research funding (60%)
 Overall extent of teacher and researcher mobility (40%)
In effect, this means that the element of the formula relating strictly to performance
measures for research equates to 8.44% of the entire formula (an increase from
previous years, see Ministry of education FI 2005, p63)Reflecting the different
mission and focus, there is a different approach to allocation of core funding to
polytechnics:

Table 33 Finland: Polytechnic core funding formula implemented since 2010
Government transfer
(Unit price*number of students)
€849m in 2009
State subsidy
€24m in 2009
70% 30%
On the basis of calculated
number of students
On the basis of completed
degrees
Project funding (approx. €20m)
Number of students
determined by field of
study
2-year average Performance-based funding (€4m)
Discretionary raise of unit price
Source: Benneworth et al 2011
For university research specifically, weighting of the different indicators is also
available, though it should be noted that this only constitutes 45% of the whole core
funding formula where, in the absence of tuition fees, education of non-researchers
makes up the bulk of allocation:
Table 34 Finland: The research component of the University core funding formula
(2010)
Metrics Weight
Extent of activities 75%
Researcher
training
Number of teachers and researchers 50%
Agreed number of doctoral degrees 25%
Effective number of doctoral degrees 25%
Quality and effectiveness 25%
Competitive
funding - national
Funding from the Academy of Finland (Centres of excellence) 45%
Funding from Tekes 15%
Competitive
funding -
international
Funding from competitive international research programs (does not
include contract research and EU structural funds)
12%
Research outputs Number of publications in peer reviewed international journals,
refereed journals, scientific books
14%
Number of other publications (articles in edited books, printed
conference publications, monographs and series of publication of the
universities themselves)
6%
Mobility - outgoing Number of teachers and researchers spending abroad at least one
week (at least two weeks, in 2010 and 2011)
8%
Source: Opetusministeriön asetus yliopistojen perusrahoituksen laskentakriteereistä (Ministry
of Education Decree university funding criteria for the calculation), 771/2009)
7.2.5 Effects of the use of these indicators
For the bulk of indicators, especially those that are heavily weighted in the funding
formula, little can be said, save for the fact that they ensure a relatively high level of
stability of funding based on student intake and graduation rates.
The internationalisation-dimension meanwhile seem to be taking hold, with The
academy of Finland (2012) producing data indicating increased numbers of non-
Finnish PhD students and funding recipients (Academy of Finland 2012).

There is an issue with Finland’s measurement of research outputs: the ERAWATCH
2012 country report on Finland notes that whilst the total number of research outputs
places Finland in a strong international comparative position, this is not necessarily
the case when it comes to research quality, and notes that in terms of international
rankings, Finland has few areas of international excellence. As such, the relative
emphasis in the indicator selection on numbers of publications is problematic. The
inclusion of a rudimentary 3-point scale to gauge quality of research outputs goes
some way to address this imbalance between number of outputs and research quality,
though ultimately it remains a system that is not especially well aligned to solve the
key problem noted in the literature.
7.2.6 Sources:
Foss-Hansen H (2010) Performance indicators used in performance-based research
funding systems, OECD, 2010 (DSTI/STP/RIHR(2010)4).
Rebora G & Turri M (2013) The UK and Italian research assessment exercises face to
face, Res. Policy (http://dx.doi.org/10.1016/j.respol.2013.06.009)
Technopolis (2013) Measuring scientific performance for improved policy making –
Survey Report, TG, 2013
NZ Ministry of Education (2012) An international comparison of performance-based
research funding systems (PBRFS), NZME.
Ministry of Education FI (2005) OECD thematic review of tertiary education –
Country background report for Finland. Publications of the Ministry of Education,
Finland, 2005-38; available: http://www.oecd.org/education/skills-beyond-
school/36039008.pdf
Benneworth P, de Boer H, Cremonini L, Jongbloed B, Leisyte L, Vossensteyn H & de
Weert E (2011) Quality-related funding, performance agreements and profiling in
higher education - An international comparative study. Center for Higher Education
Policy Studies, University of Twente; available:
http://www.utwente.nl/mb/cheps/publications/Publications%202011/C11HV018%20
Final%20Report%20Quality-
related%20funding,%20performance%20agreements%20and%20profiling%20in%20
HE.pdf
Academy of Finland (2012) The State of Scientific Research in Finland 2012.
Publications of the Academy of Finland 7/12; available:
http://www.aka.fi/Tiedostot/Tieteentila2012/en/The_State_of_Scientific_Research_
in_Finland_2012.pdf
AArrevaara T, Dobson I & Elander C (2009) Brave New World: Higher Education
Reform in Finland. Higher Education Management and Policy, 21(2); available:
http://www.oecd.org/edu/imhe/50314040.pdf
Könnölä T (2012) ERAWATCH Country reports 2012: Finland. Available:
http://www.minedu.fi/export/sites/default/OPM/Koulutus/koulutuspolitiikka/Hank
keet/Kv_nakokulmia_Suomen_kk-
jarjestelman_kehittamiseen/Liitteet/ERAWATCH_country_report_2012_Finland.pd
f
Auranan O & Nieminen M (2010) University Research funding and publication
performance – an international comparison. Research Policy 39 pp822-834

Appendix A - UK Government Departments
Department Function No. of associated
agencies and public
bodies
Attorney general’s Office Provide legal advice to the
government
4
Cabinet Office Provide support to the Prime
Minister and Deputy Prime
Minister
18
Department for Business,
Innovation and Skills
Support and drive economic
growth
48
Department for Communities
and Local Government
Create great places to live and
work
10
Department for Culture,
Media and Sport
Protect and Promote cultural
and artistic heritage
44
Department for Education Providing education and
children’s services in England
9
Department for Environment,
Food and Rural Affairs
Responsible for policy and
regulations on environmental,
food and rural issues
35
Department for International
Development
Lead’s the UK’s work to end
extreme poverty.
2
Department for Transport Support the UK’s transport
network by planning and
investing in transport
infrastructure.
21
Department for Work and
Pensions
Responsible for welfare,
pensions and child
maintenance policy.
13
Department of Energy and
Climate Change
Works to ensure the UK has
secure, clean and affordable
energy supplies and promote
international action to
mitigate climate change.
8
Department of Health Lead, shape and fund health
care in England.
23
Foreign and Commonwealth
Office
Promotes UK interests
overseas
11
HM Treasury Government’s economic and
financial ministry,
maintaining control over
public spending, setting the
direction on the UK’s
economic policy and working
to achieve strong and
sustainable growth.
7
Home Office Leads on immigration,
passports, drug policy, crime
policy and counter-terrorism.
27

Ministry of Defence Protect the security,
independence and interests of
our country at home and
abroad.
29
Ministry of Justice Responsible for the criminal
justice system and to protect
the public and reduce
reoffending.
39
Northern Ireland Office Represent Northern Irish
interests within the UK
government and represent the
UK government in NI>
3
Office of the Advocate general
for Scotland
UK government’s Scottish
legal team.
0
Office of the Leader of the
House of Commons
Provide support to the Leader
of the House of Commons.
0
Office of the Leader of the
House of Lords
Provide support to the Leader
of the House of Lords.
0
Scotland Office Represent Scottish interests
within the UK government
and represent the UK
government in Scotland.
1
UK Export Finance UK’s export credit agency. 1
Wales Office Represent the UK
government in Wales and
represent Welsh interests in
Westminster.
0
Source: https://www.gov.uk/government/organisations

Appendix B - Research Councils in the UK
Research Council Examples of research areas funded
Arts and Humanities
Research Council
AHRC History, classics, archaeology, modern languages and linguistics,
English language and literature, the visual arts and media,
philosophy, law, religious studies, music and creative and
performing arts
Biotechnology and
Biological Sciences Research
Council
BBSRC Biosciences, including genomics, stem cell biology, food safety,
plant and livestock breeding, bio-processing, whole organism
biology relevant to the understanding of diet and health, ageing,
animal health and welfare, biological populations and systems
Engineering and Physical
Sciences Research Council
EPSRC Mathematics; chemistry; physics; materials science; engineering;
computer science, including high performance computing;
energy research; research into the built environment;
information and communications technology; research into
innovative manufacturing.
Economic and Social
Research Council
ESRC Sociology; economics; anthropology; political science; area or
regionally based research and geography; international relations;
cultural and media studies; law and linguistics; psychology.
Medical Research Council MRC Full range of medical research from studies of molecules to the
implementation of research findings into clinical practice
Natural Environment
Research Council
NERC Environmental research, survey and observation work across a
wide spectrum of disciplines, including the geo- and earth
sciences, atmospheric research and oceanography, biodiversity
and ecology, climate change research, environmental chemistry
and physics; satellite based Earth observation, polar research,
and management of land and natural resources.
Science and Technology
Facilities Council
STFC Astronomy; computational science; energy; nuclear physics;
particle physics; space science.

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