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How high do we have to jump? Raising the ambition-level in Norwegian innovation policy

Technopolis and Samfunnsøkonomisk analyse have delivered a report to the Research Council of Norway on Norwegian innovation policy needs and challenges. The report calls for a «third generation innovation policy», targeting societal challenges and contributing to a much needed transformation of society.1

ERIK ARNOLD, Technopolis, KTH and Manchester University

The recent OECD review of Norwegian innovation policy2 issued a challenge on its very first page: that Norway should address a ‘triple transition imperative’ to

  • Shift towards a more diversified and robust economy
  • Move towards a more competitive, effective and efficient innovation system
  • Achieve these structural transformations while supporting research and innovation that can confront an array of societal challenges.

Is this necessary?

Norwegian performance in research and innovation is in many ways good. Scientific performance is solid, though with few ‘peaks’ of international excellence. There is the «Norwegian puzzle» discussed in the 2008 OECD review3, meaning that innovation and business performance are strong despite low business spending on R&D. This is because Norway specialises in sectors with low R&D-intensity.

R&D in both the state and industry are well funded. Quality of life and income per head are high. Norway even ranks second in the World Happiness Report4.

But the OECD is also right to say that Norway has failed to develop sufficiently systemic policy instruments or to address societal challenges in more radical ways that could stimulate socio-technical transitions (such as changing the way transport systems work or providing healthcare to an ageing population in completely new ways), as opposed to incremental improve-ments.

Too little attention is paid to ‘translational’policies.The subtle lock-ins resulting from Norway’s admirably open way of making policy, taking account of the needs of many interest groups, have not been unlocked. Under such arrangements, established interests can easily block change.

In the first RCN evaluation5, we pointed to the way Norway had to play catchup in genomics via the FUGE programme, because this new area of science had not been able to make its mark in the Norwegian research and funding system. A decade later, the second RCN evaluation6 pointed to the under-funding of IT R&D in Norway, which is clearly problematic in the context of growing digitalisation. The OECD report, in effect, points out that these kinds of policy lock-ins persist and that a more radical approach to policy is needed to avoid them.

The industrial restructuring problem referred to by the OECD is not news: it was already clearly visible at the turn of the millennium. But it is hard to respond as long as there is no sense of crisis or of major opportunity. Norway’s ‘oil adventure’ clearly shows that the national innovation system can tackle major restructuring if there is an incentive, and if the government and state puts its authority behind it.

But while the arguments of Et verdiskapende Norge7 about the need for industrial restructuring were impeccable, they went nowhere because there was no sense of urgency. It is more shocking that the recent ICCP report on Global Warming of 1.5 °C8 caused a sensation for a day and then disappeared. We read these events as symptoms of a need for much more pro-active and integrated approach to policy. Society simply cannot afford to wait for crises to occur but must act first, just as a central bank ideally adjusts the interest rate to prevent the crash rather than to respond to it. That seems to be a central part of the OECD’s message.

Policy and governance

RCN is probably unique for its ability to bring the interests of different sector ministries together into joint programmes and to combine R&I funding instruments to address societal needs and challenges. But, as the OECD points out, the role of the RCN as a «policy advisor from below» is not sufficient if Norway is to introduce disruptive, new and step-change initiatives. Responding to the OECD’s challenge needs stronger coordination and mechanisms to create social and political legitimacy.

Internationally, governments are starting to work with a third generation of research and innovation funding and governance. The first involves funding research and essentially delegating the choice of theme and quality control to the scientific community in the expectation that societal benefits will eventually appear. The second focuses on funding research and innovation in order to get specific societal benefits, especially economic growth. The third shifts attention to the ’societal challenges’. All three generations co-exist in funding systems today. To a large extent, tackling the OECD’s ‘triple transition imperative’ requires Norway to become active in third-generation policy.

How should Norway respond to the OECD’s challenge?

Developing a competitive and efficient innovation system largely involves using the first- and second-generation funding instruments we already have. But the OECD’s two other ‘imperatives’ need much wider societal agreement about priorities and therefore a governance more closely linked to government as a whole than to individual ministries. They also involve going beyond the doctrine of ‘branch neutrality’.

Achieving a more diversified and robust economy requires disruption. One way could be to establish a national diversification programme, in which consortia of companies, research-performing organisations and state organisations develop strategic innovation agendas. Based on these, consortia then compete for project support over a period of several years, based on their agendas. This could apply where old sectors run down (for example, as the oil taps have to be turned off to reduce global warming) or to expanding existing ones (for example, by a massive expansion of aquaculture into new species and feeds).

In structural transformations and societal challenges we would expect a stronger role for society and the state not only in setting priorities and in legitimating the effort but also in implementation. Addressing these challenges requires the active involvement of much more than the research and innovation system, so the governance system needs to be much broader.

Norway is already addressing climate change, though perhaps not in a sufficiently ‘joined up’ way. There is a strong case for focusing on this and a small number of other societal challenges – or ‘missions’ in the sense of blocks of activity that would contribute to addressing societal challenges – to which Norway can make a significant contribution and where doing so will result in economic as well as social benefits in Norway.

This should involve broad consultation, spanning citizens, business, the state and the research community; a foresight exercise, involving panels of informed citizens and stakeholders in creating desirable scenarios involving intervention; and a final selection process, underwritten by government, which selects perhaps three for implementation, based primarily on the amount of economic benefit thought likely to accrue to Norway.

This level of intervention will involve many parts of society, going way beyond the remit of individual ministries or agencies such as RCN, even though these will be important contributors. The government as a whole has to own these interventions and find new ways of governing them, closer to the national than the sectoral level.

The report, Raising the Ambition Level in Norwegian Innovation Policy, can be found here: http://bit.ly/2M4AQBt

Se også: Tredje generasjons innovasjonspolitikk – hva er det?

NOTES

1. This article is based on Erik Arnold, Tomas Åström, Helen Andréasson, Kalle Nielsen, Martin Wain, Maja Tofteng and Rolf Røtnes (2019), Raising the Ambition Level in Norwegian Innovation Policy, Oslo: RCN

2. OECD (2017), OECD Reviews of Innovation Policy: Norway, Paris: OECD

3. OECD (2008), OECD Reviews of Innovation Policy: Norway, Paris: OECD

4. John F. Helliwell, Richard Layard and Jeffrey D. Sachs (2018), World Happiness Report 2018, New York: Sustainable Development Solutions Network

5. Arnold, E., Kuhlmann, S. & van der Meulen, B. (2001), A Singular Council: Evaluation of the Research Council of Norway, Oslo: Royal Norwegian Ministry of Education, Research and Church Affairs

6. Arnold, E. & Mahieu, B. (2012), A Good Council? Evaluation of the Research Council of Norway, Oslo: Ministry of Research and Higher Education

7. Reve, T., & Jakobsen, E. W. (2001). Et Verdiskapende Norge. Oslo: Universitetsforlaget.

8. IPCC (2018), Global Warming of 1.5°C, IPCC Switzerland