Uddannelses- og Forskningsudvalget 2019-20
UFU Alm.del Bilag 31
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Peer Review of the Danish
R&I System
Ten steps, and a leap
forward: taking Danish
innovation to the next level
 UFU, Alm.del - 2019-20 - Bilag 31: Orientering om anbefalinger fra internationalt panel for videnbaseret innovation i verdensklasse, fra uddannelses- og forskningsministeren
Peer Review of the Danish R&I System – Ten steps, and a leap forward: taking Danish
innovation to the next level
European Commission
Directorate-General for Research and Innovation
Directorate G — Research and Innovation Outreach
Unit G1 — ERA and Country Intelligence
Contact (H2020 PSF Peer Review of the Danish R&I System): Ana Correia, Coordinator of the Peer Review of
the Danish R&I System, Unit A1–R&I Strategy and Foresight - [email protected]
Contact (H2020 PSF coordination team):
Magda DE CARLI, Head of Unit G1 – [email protected]
Marnix SURGEON, Deputy-Head of Unit G1 - [email protected]
Stéphane VANKALCK, PSF Head of Sector, Unit G1 - [email protected]
European Commission
B-1049 Brussels
Manuscript completed in September 2019.
This document has been prepared for the European Commission however it reflects the views only of the
authors, and the Commission cannot be held responsible for any use which may be made of the information
contained therein.
More information on the European Union is available on the internet (http://europa.eu).
Luxembourg: Publications Office of the European Union, 2019
PDF
ISBN 978-92-76-11921-0
doi:10.2777/603976
KI-AX-19-012-EN-N
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Reuse is authorised provided the source is acknowledged. The reuse policy of European Commission
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Cover Image © Eurotop.be 2017
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EUROPEAN COMMISSION
Peer Review of the Danish R&I System
Ten steps, and a leap
forward: taking Danish
innovation to the next
level
Prepared by the independent experts:
Christian Ketels (Chair)
Margareta Drzeniek Hanouz (Rapporteur)
Jackie Hunter
Stefan Kuhlmann
Tony Raven
Peers:
Pieter Heringa, Netherlands
Uri Gabai,
1
Israel
Göran Marklund, Sweden
Christopher Palmberg, Finland
Directorate-General for Research and Innovation
1
Uri Gabai participated in the analysis but was not engaged in the drafting of the report and its
recommendations due to a change in role.
 UFU, Alm.del - 2019-20 - Bilag 31: Orientering om anbefalinger fra internationalt panel for videnbaseret innovation i verdensklasse, fra uddannelses- og forskningsministeren
Table of Contents
MEMBERS OF THE EXPERT PANEL ................................................................... 6
SUMMARY AND MAIN POLICY MESSAGES ........................................................11
INTRODUCTION ...........................................................................................17
1
PUTTING DENMARK’S INNOVATION SYSTEM INTO CONTEXT:
PERFORMANCE, PROFILE AND PATHWAYS ...............................................19
1.1
THE ECONOMIC AND BUSINESS CONTEXT ......................................19
1.2
THE DANISH INNOVATION SYSTEM: PERFORMANCE AND
POLICIES .........................................................................................25
1.2.1 The Danish innovation system: performance and drivers ...............25
1.2.2 The Danish Innovation Support System .......................................39
1.3
PATHWAYS: WHAT FORCES WILL AFFECT THE FURTHER
EVOLUTION OF DENMARK’S INNOVATION SYSTEM?...............................47
1.3.1 The domestic context ................................................................47
1.3.2 The global context ....................................................................51
1.4
FROM DIAGNOSTICS TO ACTION: TOWARDS A STRUCTURE FOR
REFORM ..........................................................................................54
1.4.1 Challenges and opportunities for Denmark ...................................54
1.4.2 A two-pronged approach towards a stronger Danish innovation
system ...................................................................................56
2
ADDRESSING CURRENT CHALLENGES OF THE DANISH INNOVATION
SYSTEM ..............................................................................................58
2.1
ENHANCING INDIVIDUAL ELEMENTS OF THE INNOVATION
SYSTEM ...........................................................................................59
2.1.1 Strengthening innovation-orientation of universities ......................59
2.1.2 Strategic instruments to drive ecosystems and domain
development ...........................................................................67
2.1.3 Science
parks,
physical
ecosystems
and
incubators/accelerators .............................................................73
2.1.4 Research and Technology Organisations (RTOs): better
definition of roles .....................................................................75
2.2
STRENGTHENING COORDINATION ACROSS THE SYSTEM .................81
2.2.1 Coordination with private foundations .........................................81
2.2.2 Alignment across the system .....................................................84
2.2.3 International linkages for the Danish innovation system ................87
2.3
EVOLVING THE INNOVATION POLICY TOOLKIT ................................90
2.3.1 Leverage Danish strengths in non-science driven areas like
design, urbanism, and social innovation ......................................91
2.3.2 Public procurement for innovation...............................................95
2.3.3 Impact assessment...................................................................98
3
DEFINE A STRATEGIC AMBITION FOR DENMARK..................................... 101
3.1
MANY STRATEGIES, BUT NO STRATEGY ....................................... 101
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3.2
TOWARDS A DANISH VALUE PROPOSITION IN INNOVATION ........... 104
3.2.1 Key elements of an innovation strategy process in Denmark ........ 104
3.2.2 From choosing a value proposition to action ............................... 113
4
CONCLUSION ..................................................................................... 117
APPENDIX A: METHODOLOGY OF THE REVIEW............................................... 119
APPENDIX B: EUROPEAN INNOVATION SCOREBOARD 2019: DENMARK ............. 121
APPENDIX C: CASE STUDY: THE WELLCOME TRUST ....................................... 122
APPENDIX D: KEY CHARACTERISTICS OF SELECTED PEER COUNTRIES ............. 125
List of Tables
Table 1: Gross domestic expenditure on R&D (GERD), percentage of GDP ...........29
Table 2: Strategic shift in innovation policy rationales .......................................53
Table 3: Key data on Danish universities .........................................................62
List of Figures
Figure 1: Key structural economic indicators, 2000–2007 and 2011–2018 ...........21
Figure 2: GDP per hour worked, USD constant prices, percentage growth, 2000-2007
and 2011-2018 ....................................................................................22
Figure 3: Sector composition of Denmark’s exports, 2017 .................................23
Figure 4: Key results in innovation rankings ....................................................25
Figure 5: Denmark’s performance in the European Innovation Scoreboard, 2013 and
2019...................................................................................................26
Figure 6: Innovation performance of selected countries, score from 0.0 to 1.0 (the
best), 2013-2018 .................................................................................26
Figure 7: Percentage of researchers within the active population, full-time equivalent,
2017...................................................................................................27
Figure 8: Revealed Scientific Advantage and Revealed Technological Advantage in
Denmark by sector ...............................................................................28
Figure 9: Denmark’s R&D expenditure funded by public and private sectors, million
USD, constant 2010 prices and PPPs, 2009–2017 .....................................30
Figure 10: Share of private R&D expenditure by company size, 2008 and 2015 ....31
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Figure 11: Share of total private R&D expenditure by top R&D performers ...........31
Figure 12: Top 10 R&D companies with headquarters in Denmark, 2017/18 R&D
expenditure, million Euros .....................................................................32
Figure 13: Number of R&D active companies and R&D expenditure per company in
Denmark, 2009-2016 ............................................................................33
Figure 14: Public and private R&D expenditure by field of science and Gross Value
Added at basic prices, in percentage, 2017 ..............................................34
Figure 15: Business R&D intensity, adjusted and unadjusted to industry structure,
2015...................................................................................................34
Figure 16: Sales of new-to-market and new-to-firm innovations as a percentage of
turnover, 2018 .....................................................................................35
Figure 17: Innovating SMEs as a percentage of total SMEs, 2018 .......................36
Figure 18: Multi-stakeholder collaboration and state of cluster development (scale of
1 to 7 (best) on left axis); collaboration among stakeholders (scale of 0 to 1
(best) on right axis) ..............................................................................37
Figure 19: Venture capital expenditure, percentage of GDP, 2018 and venture capital
availability score, 2018 .........................................................................39
Figure 20: Schematic representation of the Danish National Innovation System ...40
Figure 21: Financing research, innovation and education, in million DKK .............46
Figure 22: Two-pronged approach for Denmark ...............................................56
Figure 23: Summary of recommendations .......................................................58
Figure 24: Countries’ relative performance in Creativity and design ....................92
Figure 25: Government procurement of advanced technology products, 2017, 1-7
(best) .................................................................................................96
Figure 26: Key strengths and weaknesses of Denmark and the opportunities and
challenges in the global context. ........................................................... 109
Figure 27: Illustrative strategic options for Denmark ...................................... 112
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List of Boxes
Box 1: Recent reform efforts .........................................................................49
Box 2: Examples of Systemic Instruments.......................................................69
Box 3: Case Study: Operational model of the Fraunhofer Society (Germany) .......79
Box 4: Case Study: RTOs in the Netherlands ...................................................80
Box 5: Case Study: Dutch Top Sector Creative Industry ....................................94
Box 6: The role of strategic positioning in innovation policy ............................. 103
Box 7: Case Study: Renewing innovation policies – the case of Finland and the
SUUNTA strategy................................................................................ 105
Box 8 Case study: Germany and its ‘High Tech Strategy 2025’ ......................... 106
Box 9: Case study: Ireland and its ‘Innovation 2020’ strategy.......................... 107
Box 10: Developing an innovation strategy.................................................... 110
Box 11: Sustainable Development Goals as a positioning for Denmark .............. 111
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MEMBERS OF THE EXPERT PANEL
Chair: Christian Ketels
Christian Ketels is Chief Economist of Boston Consulting Group and leads the
Center for Macroeconomics at the BCG Henderson Institute, BCG's think tank. His
research themes include the impact of structural changes in the global economy
on business, the role of location for business success, the future nature of public-
private collaboration, and growth strategies for locations.
Christian has been a member of the Harvard Business School for 17 years, where
he led the research team at Prof Michael Porter’s Institute for Strategy and
Competitiveness; he remains an affiliation as an HBS Visiting Executive. Christian
earlier served as a Visiting Professor at the NUS Lee Kuan Yew School of Public
Policy in Singapore and had further affiliations with BI Norwegian School of
Management, EBS Business School in Germany, and the Stockholm School of
Economics. He has been an advisor to national governments and international
organizations including the World Bank, the European Commission, and the
Nordic Investment Bank, and has been a visiting researcher at the IMF. Christian
chairs the advisory board of TCI, a global network of public and private
organization active in cluster-based economic development and is chair/member
of a number of other advisory and public commissions.
Christian holds a PhD in Economics from the London School of Economics and
further degrees from the Kiel Institute for World Economics and Cologne
University. He was awarded an Honorary PhD in Economics and Business
Administration by Lappeenranta University of Technology, Finland.
Rapporteur: Margareta Drzeniek Hanouz
Margareta Drzeniek Hanouz is an economist, thought leader and expert on data-
driven policy making, competitiveness, innovation and global risks. She led the
World Economic Forum’s economics portfolio and global risks work and worked
with governments and business to define high growth strategies using indicators,
analysis and insight, and through multi-stakeholder processes. She is lead author
or editor of a number of globally recognized benchmarking and insight reports,
including The Global Competitiveness Report and the Global Risks Report series.
For over a decade, she studied the economic development of the Middle East and
North Africa Region, Eastern Europe and CIS and developed joint high impact
work with OECD, WB and EBRD. Margareta designed the economics sessions of
the Forum’s Annual Meeting in Davos and successfully developed, fundraised and
implemented large-scale trade development projects in Central and Eastern
Europe at the International Trade Centre UNCTAD/WTO. She is a frequent public
speaker, international media commentator and facilitator.
Expert: Jackie Hunter
Jackie Hunter has over thirty years of experience in the bioscience research
sector, working across academia and industry including leading neurology and
gastrointestinal drug discovery and early clinical development for
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GlaxoSmithKline.
 Before
joining BenevolentAI Jackie was CE of the Biotechnology
and Biological Sciences Research Council. BenevolentAI is a British held AI
company which is using AI to augment the research capabilities of drug scientists,
radically changing the way R&D is done. The company has raised $200m over
the past 4 years and has offices in London and New York.
Jackie has also championed new business models, such as open innovation,
establishing OI PharmaPartners Ltd to drive innovation in Life Sciences. She was
awarded a CBE in the Queen's Birthday Honours list in 2010 for Services to the
Pharmaceutical Industry and was recently recognized by Forbes Magazine as one
of the top 20 Women Advancing AI Research. She is a member of the Biomedical
Board for A*Star in Singapore, the Science Advisory Board for the Data Science
Institute at Imperial College, London and a Board Director of the UK Bio-Industry
Association. She is also a visiting Professor at Imperial College and at St Georges
Hospital Medical School. She has had held Board positions for both private and
public companies. She is a Fellow of the Royal Society of Biology, the British
Pharmacological Society, Zoological Society of London and the Academy of
Medical Sciences.
Expert: Stefan Kuhlmann
Stefan Kuhlmann is full professor of Science, Technology and Society at the
University of Twente and chairing the Department Science, Technology, and
Policy Studies (STəPS) since 2006. He is also Academic Director of WTMC, the
Dutch Graduate Research School Science, Technology, and Modern Culture.
Earlier he held leading positions at Fraunhofer Institute for Systems and
Innovation Research, Germany, and was Professor of Innovation Policy at
University of Utrecht.
He works on research and technological innovation as social and political
processes, focusing on governance and politics, and he publishes widely in the
field of research and innovation policy studies. He is editor of Research Policy
(Elsevier), Associate Editor of the Int. J. of Foresight and Innovation Policy
(IJFIP), on the Boards Science and Public Policy, Asian Research Policy, and
Evaluation. Books include The Theory and Practice of Innovation Policy. An
International Research Handbook (2010, with R. Smits & P. Shapira); Navigating
Towards Shared Responsibility in Research and Innovation (2016, with R. Lindner
et al.); Research Handbook on Innovation Governance for Emerging Economies:
Towards Better Models (2017, with G. Ordonez);
Handbook on Science and Public
Policy
(2019, with D. Simon et al.).
Expert: Tony Raven
Dr Tony Raven joined Cambridge Enterprise as Chief Executive in December
2011. Previously he was Director of Research & Innovation Services at the
University of Southampton, where he helped establish Southampton’s
international reputation as a leading entrepreneurial university, creating a
portfolio of 11 spin-out companies with four listings on the London Stock
Exchange.
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After graduating with a First in physics from Manchester University, he obtained
his MSc and DPhil from the University of Oxford. He worked at Rutherford
Appleton Laboratories and Osaka University before joining Cambridge-based PA
Consulting in 1983.
In 1985 he was a founder of Summit Technology, the market leader in laser
refractive surgery, which was acquired by Nestlé Alcon in 2000 for $893 million.
In 1987 he co-founded Cambridge-based Sagentia Group plc, a technical and
management consultancy which is listed on the London Stock Exchange. In 1991
he founded Diomed Inc, a pioneer and world leader in therapeutic medical diode
lasers and served as CEO and Deputy Chairman until 2000. Dr Raven is a Fellow
of the Institute of Physics and a Member of the Institute of Directors.
Peer: Pieter Heringa
Pieter Heringa is a senior advisor at the Knowledge and Strategy Department of
the Ministry of Education, Culture and Science in The Netherlands. His work
focuses on the interface between research and policy, primarily in the domains
of science, technology and innovation and recently also education.
Before joining the ministry of Education, Culture and Science, Pieter has been
senior policy official at the Ministry of Economic Affairs, where he worked on
analytical and strategic issues in Dutch innovation policy, with a specific focus on
the governance of Research and Technology Organisations.
Pieter holds a PhD from Delft University of Technology. He started his career as
a researcher at the Rathenau Institute; an independent institute that conducts
research and organises debates on science, innovation and new technology.
Peer: Göran Marklund
Göran Marklund is Deputy Director General and Head of Operational Development
at VINNOVA, which is the Swedish Innovation Agency. Dr. Marklund is also
Swedish representative at and currently chairing the OECD TIP, Working Group
on Innovation and Technology Policy. He has previously been Associate Professor
in Economic History at Uppsala University with the focus on innovation and
economic change. Dr. Marklund has also been Science and Technology Attaché
at the Swedish Embassy in Washington DC and guest researcher at the Center
for International Technology Policy (CISTP) at George Washington University. He
often gives advice to the Swedish Government and to the EU on research,
innovation and growth policy issues. As a researcher, Dr. Marklund has primarily
specialized in innovation and economic change, globalization, and national
competitiveness. In this function he has closely followed OECD’s and Eurostat’s
indicator work and assisted at the meetings of OECD’s group of national experts
of science and technology indicators, NESTI. Dr. Marklund is currently chairman
of the Advisory Board for R&D and Innovation Statistics at Statistics Sweden.
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Peer: Uri Gabai, Chief Strategy Officer (CSO), Head of Strategy and
Economics Division, Israel Innovation Agency
Uri Gabai is Chief Strategy Officer (CSO) at the Israel Innovation Agency. Uri is
charged with assisting in the creation of the Authority's overall strategy and policy
planning. He established this division and was one of the key players behind the
establishment of the Innovation Authority. He is an expert in innovation
economics, fiscal policy and game theory. Prior to his appointment at the
Innovation Authority he led the fiscal team at the National Economic Council of
the Prime Minister's Office for five years.
Peer: Christopher Palmberg, Program Manager, Business with Impact
(BEAM) program, Business Finland
Christopher Palmberg heads the Business with Impact (BEAM) program at
Business Finland to support sustainable solutions for developing markets. His
prior responsibilities include Tekes RDI program portfolio management; funding
and utilization of innovation research for strategy and Finnish innovation policy.
He also holds expert positions in policy and program evaluation panels for the
European Commission and various national funding agencies, he is a delegate to
the OECD Working Party on Bio-, Nano- and Converging technologies and
member of the Advisory Board of the United Nations Technology and Innovation
laboratory in Finland.
Prior to Business Finland he worked as senior innovation policy consultant at
Advansis Ltd, lead the Working Party on Nanotechnology at the OECD in Paris for
the responsible development and use of nanotechnology. He has a background
as senior researcher at ETLA, the Research Institute of the Finnish Economy and
Technical Research Centre of Finland (VTT), with a focus on the ICT industry,
internationalization of R&D and emerging technologies, S&T and innovation
indicators, and policy evaluations.
Christopher Palmberg holds a Ph.D. in Industrial Economics and Management
from the Royal Institute of Technology in Stockholm.
THE POLICY SUPPORT FACILITY SUPPORT TEAM
The project was overseen by the PSF Team in the EC’s Directorate-General for
Research and Innovation (Unit G1 – ‘ERA and Country Intelligence’). Ana Correia
coordinated the exercise and ensured liaison with the Danish authorities. The PSF
contractor supported the EC’s PSF Team in this activity. Bea Mahieu, Partner,
Technopolis Group supported in terms of project management and Jari
Romanainen acted as the quality reviewer.
The Policy Support Facility Support Team thanks Judit Kozenkow for her
contribution to this report.
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THE DANISH AUTHORITIES
The Background Report was prepared by the Peer Review project team of the
Danish Ministry of Higher Education and Science (MHES). Tine Brüchmann Fønss,
Chief Consultant, and Julie Gadegaard Christiansen, Head of Section, coordinated
the MHES’s part of the exercise including the two country visits. The Danish
Advisory Group of the Peer Review supported the panel with professional
feedback and discussions during the process.
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SUMMARY AND MAIN POLICY MESSAGES
Ten steps, and a leap forward: taking Danish innovation to the next level
Motivation and structure of the review
This Peer review of the Danish science and innovation system delivers on a
commitment made by the Danish Ministry of Higher Education and Science
(MHES) in the 2017 strategy for research and innovation. It was conducted by a
panel of international peers and independent subject matter experts under the
European Commission’s Horizon 2020 Policy Support Facility (PSF).
Two factors in particular motivated this review: First, while Denmark ranks high
in measures of scientific performance, there are questions around its ability to
fully leverage these strengths to generate economic outcomes. For Danish policy
makers, there is also the related question as to whether the significant number
of past policy actions taken in recent years have had the intended impact.
Second, while the country performs well today, a growing concentration of Danish
business R&D in a small number of research-intensive firms and a more polarized
global R&D landscape with a small number of dominating hotspots signal
challenges to Denmark’s long-term position as a globally important innovation
hub.
The panel was launched in early 2019 and finished its work in the summer. It had
three key sources of information to draw on: A background report with key data
and facts provided by the Danish Ministry of Higher Education and Science
(MHES), qualitative interviews with a broad range of participants from across the
Danish innovation system, mainly conducted during two country visits by the
panel, and examples from effective policy approaches and practices in other
countries contributed by the peers and experts in the Panel.
The review is organized in four chapters. Chapter 1 lays out the assessment of
the current state of the Danish innovation system and the domestic and
international context it is facing. Chapters 2 and 3 then proceed to the Panel’s
recommendations. Chapter 2 makes recommendations for enhancing
performance within the context of the existing structures. Chapter 3 then
challenges Denmark to outline a distinct strategic ambition and outlines key
aspects on the path towards delivering such a strategy. Chapter 4 provides some
concluding remarks on how Denmark could move forward with the results of this
review.
Assessment of the Danish innovation system
Denmark has a thriving and stable economy and prioritizes inclusive and green
growth. Danish strengths include its outward orientation and a sophisticated
business sector with industrial strength in food, logistics services, and
pharmaceuticals as well as the creative economy. The business environment is
strong, providing a globally competitive context for firms. However, as many
other advanced economies, Denmark experienced slow productivity growth in
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recent years. And the high tax environment is often perceived as a barrier to
business activity, especially for scaling start-ups.
Denmark’s innovation system performs well, in particular in R&D related to life
sciences, where Denmark is world class. There are also several other areas in
which Denmark has evolved as an innovation hub, for example, in wind energy
and robotics. Many strengths contribute to these achievements, such as a highly
innovative business sector, strong human capital, and world-class research
capacity. The analysis shows no immediate threats to this position, fully reflective
of Denmark’s position as a European if not global innovation leader. But while
there is no burning platform, there is a sense that Denmark could do better in
terms of how strengths are translated into results and in its response to structural
changes in the global (innovation) landscape. The review identified a set of
specific challenges and missed opportunities that show this tension:
•
There is high reliance on a very small number of top R&D spending firms and
in specific sectors (mainly life sciences) with limited diffusion to smaller
companies and entrepreneurs.
Global economic trends are raising the bar for attracting/retaining innovation
activities to/in Denmark.
Denmark’s innovation performance has been deteriorating on some indicators
recently, while the EU has been improving on average.
The excellent outcomes in science insufficiently translate into commercial
innovation, in particular in SMEs, start-ups and scale ups.
Efficiency is lost due to a lack of strategic coordination with private sector
foundations that fund a significant and growing share of R&D activity.
Strengths in science could be leveraged more by attracting foreign companies
to tap into the existing knowledge pools.
Strengths in non-science driven innovation and entrepreneurship (creative
industries, sustainability) are insufficiently integrated into the broader
innovation strategy.
Strengths in areas that have clear relevance for global societal challenges
(urbanism, sustainability, social innovation) appear under-utilised.
•
•
•
•
•
•
•
These issues reflect in the view of the Panel an insufficiently systemic approach
to innovation. There is no sufficiently clear, deliberate, overarching strategic
direction of the Danish innovation system. The innovation policy system appears
fragmented, despite high openness to dialogue and discussion, with no obvious
central platform to discuss and take strategic, system-wide decisions. And while
there has been significant policy action, the focus of recent reforms has been on
reducing overlaps and interdependencies across different entities of the system,
not on actively promoting collaboration and coordination at interfaces.
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Recommendations
Based on this assessment, the Panel suggests a two-pronged approach for
strengthening the Danish innovation system. The first set of recommended
actions outlines ten actions to improve the performance of individual elements of
the Danish innovation system. The second set of recommendations concerns
defining a stronger strategic ambition for Denmark, providing a more coherent
structure for aligning individual actions and policies towards a common goal.
The panel identifies
ten steps for improving the Danish innovation system
within the context of its current structure. The first group includes
actions to
enhance existing individual programs and structures:
1.
Universities
Universities are unclear about the expectations the Danish government has
towards them on their role in the innovation agenda, and this drives universities
to make decisions that are not optimal in driving innovation performance. Five
specific recommendations address the clarity of universities’ innovation mission,
the dialogue with the central government on supporting innovation in
universities, the resourcing of universities’ knowledge exchange activities, the
application of relevant EU State Aid rules into national law, and the approach
towards celebrating success and creating role models related to innovation.
2.
Strategic instruments to drive ecosystems and domain
development
Past reforms in the Danish innovation system have led to a dominance of narrow,
project-oriented funding streams that do not support the evolution of ecosystems
and broader innovation domains that are becoming increasingly critical. Four
specific recommendations address the develop of new Danish programs to
support systemic agendas, the creation of platforms for multi-stakeholder
collaboration, a revision of the role the Innovation Fund Denmark plays in this
context, and a broadening of the relevant funding instruments available.
3.
Science parks, physical ecosystems and
incubators/accelerators
Denmark has a number of successful science parks but there is lack of clarity on
their function, the responsibilities of different actors, and the nature of funding
streams; there is also no clear mechanism for best practice sharing. We
recommend a review of the physical innovation ecosystem strategy to clarify roles
and processes.
4.
Research and Technology Organisations (RTOs)
Denmark’s RTOs (seven GTS Institutes) operate well in providing their services
to firms but are currently not fulfilling their potential as an active and strategic
interface between university-based research and technological innovation in
companies. Three specific recommendations address the specific role of the RTOs
in the innovation system, their collaboration with other related institutions, and
the funding model that can support their mission.
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The second group includes
actions to strengthen coordination across the
system:
5.
Coordination with private foundations
Denmark’s private foundations are an increasingly important funder of R&D
activities, but they are not strategically integrated into the policy structure
supporting innovation and there is no common understanding on their strategic
role within the innovation system. We recommend building on existing structures
to enhance coordinated across efforts funded by private foundations and public
sector entities, and to create a dialogue about strategic collaboration.
6.
Alignment across the system
Responsibilities for policies shaping the performance of the Danish innovation
system are distributed across different ministries and levels of government, and
the focus of past reforms has been to minimize the need for coordination rather
than manage linkages that are growing in importance. Four specific
recommendations address the creation of an integrated system of Key
Performance Indicators (KPIs) across government, efforts to increase labour
mobility across ministries, a joint foresight exercise across government, and the
creation of an Inter-ministerial Committee at civil servant level to prepare
discussions on priority setting, KPIs, etc.
7.
International linkages for the Danish innovation system
Denmark’s innovation system is internationally well connected, and the country
has some strong policy instruments focused on international linkages. But the
coordination across individual institutions and programs is limited, reducing the
impact Denmark could have. Four specific recommendations address the creation
of contact points for internationalisation within the emerging new business
support structure across Denmark, efforts to ensure and enhance the ability of
clusters and innovation networks to support internationalisation, the creation of
a dedicated program to attract investments of foreign MNCs into R&D centres in
Denmark, and a review of the additionality of incentives for attracting EU funds
as well as other international funds into the R&D system.
The third group includes
actions to evolve the innovation policy toolkit:
8.
Danish strengths in non-science driven areas like design,
urbanism, and social innovation
Denmark has considerable strengths in innovation areas that are not directly
science or technology related, such as design thinking and practice, new
urbanism and creative industries, and social innovation; their potential remains
underutilized given the MHES’ mission to focus on science-driven innovation.
Three specific recommendations address the integration of the national cluster
effort for the design and lifestyle sectors with industrial innovation-oriented policy
programmes, linking the existing “Lifestyle & Design Cluster” with New Urbanism
and sustainability-oriented bottom-up initiatives, and opening up support
programs to existing social innovation grassroots initiatives.
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9.
Public procurement for innovation
Government procurement plays a large role in the Danish economy, but there are
few systematic efforts to leverage its potential in supporting innovation. Three
specific recommendations address embedding innovation into public procurement
practices, appointing a point person for innovative public procurement within the
MHES, and developing an action plan on how to achieve a greater, share of
innovative procurement.
10.
Impact assessment
Denmark has a strong tradition of impact assessment as a critical component of
the innovation policy toolkit but is no longer among leading peer countries in
terms of data-driven impact assessment and innovation system analysis. Three
specific recommendations address the creation of an impact assessment strategy,
focus on assessing the impact beyond narrow economic outcomes, and the
creation of a central quantitative analysis unit to inform innovation policy.
The panel views these recommendations as important and effective to improve
the performance of the Danish innovation. But such evolutionary changes within
the given system will struggle to achieve more transformative changes in
outcomes.
This is why the panel discusses in a second step the opportunities for Denmark
to further elevate its performance by
outlining an overarching innovation
strategy.
Despite many individual strategies and action plans Denmark currently
lacks such a strategy, which is limiting the country’s ability to create positive
systemic effects from the alignment of individual innovation policy actions.
Putting it in place would help unlock such benefits and enable a stronger
prioritization of actions towards areas of highest potential impact.
The content of Denmark’s strategy needs to be grounded in the reality of
Denmark’s existing strengths and weaknesses and of the opportunities and
challenges that the global context offers. The review offers a perspective on the
panel’s observations about Denmark; a full assessment was beyond the scope of
its work and should in any case be led by Danish stakeholders. Based on this
assessment it is a creative task to develop different options for what role
Denmark could play as a place for innovation. Again, the panel offers some
illustrative ideas intended to serve as examples and inspiration, not as a short-
list of the most relevant options.
Overall, the shift towards a more strategic innovation policy approach around a
widely shared value proposition would aim to achieve change in three key
dimensions:
•
More systemic integration of individual innovation policy tools towards
common goals vs enhancing the quality of individual programs or institutions;
More systemic dialogue and collaboration across the entire innovation system
vs creating a structure that aims to minimise the need for coordination;
•
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•
Focus on areas of innovation, including non-science driven areas, in which
Denmark has clear strengths vs generic efforts to ensure academic excellence
and effective technology transfer.
A strategic choice on a value proposition will affect the prioritisation across
existing activities, programs, and institutions. It will require a look at some more
ambitious new policy approaches that Denmark has not pursued very actively so
far, such as mission-oriented approaches. And it will depend for its success on
creating a new organisational structure, for example by establishing an
innovation agency and creating a national innovation council as a strategic
decision-making body.
Next steps
What can Denmark do to translate these ideas into action? The key question that
Danish decision makers have to address is whether they see the need for action.
The Danish innovation system is strong, and despite the challenges we have
identified, there is no burning platform or impeding crisis. Instead, the costs of
inaction are lost opportunities and a gradual erosion of Denmark’s existing
position.
The ten steps outlined in this report can be pursued without the need to elevate
the role of innovation on the Danish political agenda. There is limited if any
additional budget required, even if changes might lead to a difficult re-allocation
of resources within the innovation system. But this does not make the changes
suggested easy: they will only happen, if there is both a clear political signal that
there is a willingness to push them through, and a consensus across the system
that they are needed.
The ambitious jump towards a comprehensive new strategy is in the panel’s view
of a different nature. It requires a much broader engagement with stakeholders,
which will also increase the expectations for real change. And it requires an all-
of-government approach, with actions and ownership beyond one single ministry.
This is more complex, but also more rewarding if Denmark wants to fully mobilize
the significant qualities of its innovation system to generate economic value and
contribute towards addressing the broad societal challenges of our times.
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INTRODUCTION
This Peer review of the Danish science and innovation system delivers on a
commitment made by the Ministry of Higher Education and Science (MHES) in
the 2017 strategy for research and innovation. It was conducted by a panel of
international peers and independent subject matter experts.
The review was conducted under the Horizon 2020 Policy Support Facility (PSF),
a tool set up by the European Commission – DG Research and Innovation under
the Horizon 2020 framework programme, to support Member States and
Associated Countries in improving the design, implementation and evaluation of
national R&I policies. The PSF peer review methodology is available in Appendix
A and at https://rio.jrc.ec.europa.eu/en/policy-support-facility/peer-reviews.
The panel’s mandate was to focus on science-based innovation and the policies
under the remit of the MHES. Where needed, the panel was asked to also look
beyond the boundaries of the MHES and identify where these policies interact
with entities and policies that are the responsibility of other Danish ministries.
The MHES defined two key tasks for the review:
•
Assess how Denmark can adjust public policy on knowledge-based
innovation based on international best-practices,
and
Provide concrete recommendations on further developing the Danish
public policy efforts on knowledge-based innovation.
•
Why is Denmark, a country at the top of many international prosperity and
innovation rankings, initiating a review of its innovation system? Two factors have
been critical in motivating this review: First, while the country ranks high in
measures of scientific performance, there are questions around its ability to fully
leverage these strengths to generate economic outcomes. Second, while the
country performs well today, a growing concentration of Danish business R&D in
a small number of research-intensive firms and a more polarized global R&D
landscape with increasing concentration of R&D in a smaller number of location
signal challenges to Denmark’s long-term position as a globally important
innovation hub.
The review was launched in early 2019 and the Panel finished its work in the
summer. It had three key sources of information to draw on:
•
Key data and facts provided by the Danish Ministry of Higher Education and
Science (MHES) in the Background Report;
2
Qualitative interviews with a broad range of participants from across the
Danish innovation system;
•
2
https://rio.jrc.ec.europa.eu/en/file/12745/download?token=GE80Jvqn
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•
Examples from effective policy approaches and practices in other countries
contributed by the peers and experts in the Panel.
The peer review aims to complement the rich Danish debate on the future of the
country’s innovation system in some specific ways. It takes a holistic perspective
across the system, which has not been done by the other narrower reviews
underway within the Danish government. It provides a comparative perspective
from the outside, where the debate in Denmark seems sometimes surprisingly
inward-focused. And it raises fundamental questions that are hard for domestic
actors to put on the table. In all of these dimensions, it can build on the last
external review done in 2012 under the ERAC framework.
3
This report summarises the Panel’s findings and recommendations and is
organised as follows:
Chapter 1
lays out the assessment of the current state of the Danish innovation
system and the domestic and international context it is facing. This part is based
on information received from MHES as well as data and analysis obtained from
domestic and international sources and findings from interviews conducted during
the two country visits.
Chapters 2
and
3
then proceed to the Panel’s recommendations on how
Denmark can make significant improvements to its approach for supporting
innovation. It takes a two-pronged approach: Chapter 2 makes recommendations
for enhancing performance within the context of the existing structures. It
discusses a ten-step agenda for improvements related to individual elements of
the system, better coordination and a broader innovation policy toolkit. Chapter
3 then moves further, and challenges Denmark to outline a distinct strategic
ambition for what it aims to achieve as an innovation leader in the global
economy. It then discusses how such a choice will drive decisions on activities as
well as organizational structures. Chapter 4 provides some concluding remarks
on how Denmark could move forward with the results of this review.
How is providing advice to an innovation leader different? What the Panel found,
is that there is still a good deal of ‘improving practices’ that need to be considered.
But while that is sufficient for a follower, it is unlikely to be enough for a country
at the frontier of innovation. An innovation leader also needs to focus on
genuinely new approaches, and on making choices that drive systemic changes,
not just marginal improvements. Finally, there is a need to focus more on the
motivation to act. A place that is already doing well in many dimensions needs a
clear reason for why it should invest further energy and resources.
The Panel’s ambition is to provide some practical ideas that can help Denmark to
do better. It also aims to encourage Danish leaders to think differently about
what they want their country to achieve within and through innovation, how the
R&I system can contribute to making this ambition a reality, and what the key
choices are that they are facing on their way there. It hopes to provide a spark
to a discussion about the role of innovation that in Denmark, as well as in many
other countries, always seems important but not urgent.
3
https://rio.jrc.ec.europa.eu/en/library/erac-peer-review-danish-ri-system
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1
PUTTING DENMARK’S INNOVATION SYSTEM INTO CONTEXT:
PERFORMANCE, PROFILE AND PATHWAYS
This first chapter of the report reviews the current state of the Danish innovation
system, seen in the context of broader trends in the country’s economy. The
ambition is to gain insights into whether there is a case for changes within the
Danish innovation system, and what specific issues such efforts should focus on.
The diagnostic is organised into three parts:
•
A brief contextual analysis of the
Danish economy,
its recent performance,
structural elements and strengths and weaknesses based on a review of a
range of indicators:
How is Denmark’s economy doing?
An assessment of the Danish
research and innovation system
that reviews
the performance, describes the system and identifies the potential drivers of
these outcomes:
What characterises the country’s innovation system, what
explains its current performance, and what are the levers to enhance it?
A discussion of the domestic and global factors that shape the future
pathways
Denmark is facing:
What is the context that will affect which type
of change agenda will likely be most effective?
•
•
This section is based on initial inputs that the Panel received from MHES
(Background Report),
4
interviews conducted by the PSF experts with key Danish
stakeholders, and publicly available data and analysis. Where possible, it
compares Denmark’s performance to other selected countries (peers) and the
EU-28 average.
5
Based on this analysis, the chapter concludes by presenting an overarching
structure for the panel’s recommendations,
based on a set of key challenges
and opportunities Denmark is facing.
1.1
The economic and business context
Denmark’s innovation system operates within the context of the country’s
broader economy and society. Its success has to be evaluated in the way it
contributes to Denmark’s overall prosperity, wellbeing, and societal progress. At
the same time, its ability to create impact is shaped by the wider economic and
societal conditions it is exposed to. To set the stage, this section reviews
Denmark’s current situation in terms of socio-economic performance, business
structure and main sectors of the economy and the main strengths and
weaknesses of the environment in which businesses operate.
4
5
https://rio.jrc.ec.europa.eu/en/file/12745/download?token=GE80Jvqn
Peer economies are Finland, Israel, Netherlands, Sweden, and the UK.
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Denmark is one of the most prosperous and equitable countries in the world.
Living standards – as measured by GDP per capita – are among the highest
globally and well above the EU average (See Figure 1A).
Denmark does also well on dimensions of performance that are traditionally not
captured by GDP, like environmental sustainability
6
and social progress.
7
Indeed,
it is one of the best performers globally on multidimensional measures of
economic progress, such as the Inclusive Development Index, where it ranked
5
th
and has seen an improvement in performance over the past five years.
8
The Danish economic model stands out because of its strong social impact. A
preference for widely shared prosperity and equal access to opportunities are
deeply rooted in the Danish society and economy. The GINI coefficient, which
measures the distribution of income (a lower GINI indicates more equality) is at
0.276, below the EU-28 average (0.307).
9
And the relatively low unemployment
rates provide opportunities for economic participation to large parts of the
working-age population (see Figure 1C).
Recent economic performance
In recent years, Denmark has shared the low growth experience of many
advanced peer countries, especially after the global financial crisis (GFC) (see
Figure 1). GDP growth dropped to 1.6% on average in the years following the
GFC (from 1.9% in the years before the GFC). In the short term, Denmark
experienced a more difficult recovery due to high levels of household debt that
took longer to resolve.
10
Structurally, the slowdown in productivity growth has been a critical factor. The
growth of Danish total factor productivity (TFP) is similar to global trends.
Moreover, between 2011 and 2018, labour productivity grew at only 1% per year
on average, less than the pre-crisis period of 1.3% (see Figure 2).
11
The largest
slowdowns in labour productivity growth were recorded in domestically oriented
service sectors and the utility sector.
12
One reason cited for the slowdown in
6
7
8
https://epi.envirocenter.yale.edu/epi-country-report/DNK
https://www.socialprogress.org/
http://reports.weforum.org/the-inclusive-development-index-
2018/tables/?doing_wp_cron=1561023137.4782900810241699218750
Data for 2017, Source: EUROSTAT
http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di12&lang=en
10
9
https://ec.europa.eu/info/sites/info/files/file_import/2019-european-semester-country-
report-denmark_en.pdf
11
https://www.imf.org/en/Publications/CR/Issues/2018/06/20/Denmark-2018-Article-IV-
Consultation-Press-Release-and-Staff-Report-46001
https://www.imf.org/en/Publications/CR/Issues/2018/06/20/Denmark-2018-Article-IV-
Consultation-Press-Release-and-Staff-Report-46001
20
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productivity growth in Denmark is the slowing pace of technology diffusion.
13
Low
investment following the GFC might also have contributed to the weak labour
productivity growth. These trends are not unique to Denmark, and whether there
are any meaningful Denmark-specific factors at play remains an issue of debate.
14
Figure 1: Key structural economic indicators, 2000–2007 and 2011–2018
Source: IMF World Economic Outlook Database for GDP per capita, GDP growth,
unemployment (Eurostat for unemployment EU-28), The Conference Board for TFP.
13
14
https://dors.dk/files/media/rapporter/2017/P17/p17_english_summary.pdf
However, whether Denmark has a relative productivity weakness is still under debate, see
Assessment of the Danish Productivity Council:
https://dors.dk/files/media/rapporter/2017/P17/p17_english_summary.pdf
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Figure 2: GDP per hour worked, USD constant prices, percentage growth, 2000-2007 and 2011-2018
Source: OECD
Note: Data for the year 2010 was omitted as it was a significant outlier.
Economic structure
Most of the Danish economy operates in the services sector that accounts for
77.7% of Danish output and 79,2% of employment. Important services sectors
with particular Danish strengths are for example maritime transport services and
tourism. Industry employs around 18.6% of employees and contributes 19.4%
of output. Agriculture is less important in terms of jobs with only 2.2% of
employment and 2.1% of output but provides critical inputs to the food industry.
15
The public sector plays an important role in the Danish economy, with the general
government accounting for 15.4% of the total economy.
16
Denmark’s enterprise structure is to a large extent dominated by SMEs, which
account for 64.3% of private sector employment. However, a small number of
large enterprises, including strong, home-grown Danish multinational companies
(MNCs) play a more important role than in the EU on average – they account for
35.7% of private sector employment.
17
A particular feature of the Danish economy is the strength of its creative
industries in comparison to other countries: Denmark ranks 5
th
in the latest
15
Data for 2018, figures on share of output shares were calculated by the authors based on
https://statistikbanken.dk/nabp10a and data on employment shares is from
https://stats.oecd.org/viewhtml.aspx?datasetcode=ALFS_SUMTAB&lang=en. Figures include
the public sector.
https://statistikbanken.dk/nabp10
16
17
https://read.oecd-ilibrary.org/industry-and-services/oecd-sme-and-entrepreneurship-
outlook-2019_34907e9c-en#page296
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edition of the Global Creativity Index
18
thanks to its strengths in design and high
exports of creative goods and services.
19
The Danish economy is highly open to trade and investment and strongly
integrated into the EU-wide economy. Exports account for 54.7% of GDP, similar
to the level in Sweden.
20
The country exports mainly to EU partner countries,
notably its neigh bits.
21
Denmark is home to several internationally active MNCs
that drive export performance to a significant extent – Danish MNCs account for
40% of exports, and foreign-owned firms for another third.
22
Figure 3: Sector composition of Denmark’s exports, 2017
Source: Atlas of Economic Complexity
Exports are diversified in terms of sectoral distribution, with the most important
groups being transport, ICT and pharmaceuticals (see Figure 3). The
pharmaceutical and chemicals industry is particularly internationally oriented and
dominated by MNCs – over three-quarters of value added is exported, and MNCs
– Danish as well as foreign-owned - account for almost two-thirds of exports.
23
18
19
20
21
22
23
http://martinprosperity.org/content/the-global-creativity-index-2015/
https://unctad.org/en/PublicationsLibrary/ditcted2018d3_en.pdf
https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS
https://data.worldbank.org/indicator/ne.trd.gnfs.zs
http://www.oecd.org/investment/Denmark-trade-investment-statistical-country-note.pdf
http://www.oecd.org/investment/Denmark-trade-investment-statistical-country-note.pdf
http://atlas.cid.harvard.edu/explore/?country=64&partner=undefined&product=undefined&p
roductClass=HS&startYear=undefined&target=Product&year=2017
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Business Environment
Businesses operating in Denmark find a favourable environment in international
comparison. Denmark is ranked 10
th
on the Global Competitiveness Index (GCI)
that measures the factors and policies that drive productivity
24
and 3
rd
in the
World Bank’s Ease of Doing Business Index.
25
Key characteristics of the Danish
business environment are:
•
•
•
A stable macroeconomic environment and excellent infrastructure;
Healthy, well-qualified human capital, including strong vocational training;
A labour market that balances flexibility with equity and facilitates structural
transformations by emphasising re-skilling (flexicurity model);
Efficient markets for goods and services that ensure a healthy level of
competition and openness;
A financial sector that is sound and effectively provides financing for business
activity;
Strong institutions underpinned by a culture of transparency and efficiency
which keeps corruption and red tape at bay; and
low barriers in terms of the number and length of administrative requirements
companies face.
•
•
•
•
Company taxation is in line with EU and OECD averages, the corporate income
tax rate is at 22%. Personal income taxation is highly progressive with a top rate
of 55.9% while capital income (excluding shares) is taxed at a top rate of 42.7%.
The combined rate on dividends, including the Capital Income Tax paid before
distribution (which is important for investment in businesses and start-ups),
reaches 54.8%, which is high in international comparisons, just as the personal
income tax.
26
To sum up, Denmark has a thriving and stable economy and prioritises inclusive
and green growth. Danish strengths include its outward orientation and a
sophisticated business sector with industrial strength in food, logistics services,
and pharmaceuticals as well as the creative economy. The favourable business
environment stands out for excellent access to talent and therefore provides a
good starting point for supporting innovation and translating it into business
opportunities.
24
25
26
http://reports.weforum.org/global-competitiveness-report-2018/
http://www.doingbusiness.org/en/rankings
https://www.imf.org/~/media/Files/Publications/CR/2018/cr18178.ashx
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However, as many other countries, Denmark experienced slow productivity
growth in recent years. And the high tax environment is often perceived as a
barrier to business activity, especially for scaling start-ups.
1.2
The Danish Innovation System: performance and policies
This section provides the core diagnostic of the Danish innovation system. It is
divided into two parts. First, it discusses Denmark’s innovation performance, and
the key drivers of its achievements. Second, it analyses the policy system that
supports Danish innovation.
This analysis lays the groundwork for identifying the opportunities and
challenges, which the recommendations presented in chapters 2 and 3 of this
review address. It summarizes key facts and data, based mainly on a review of
relevant documents, existing evidence, the background information provided by
MHES and primary research through stakeholder interviews.
1.2.1 The Danish innovation system: performance and drivers
Denmark is ranked highly in key rankings of innovation (see Figure 4), with
particular sectorial strengths in life sciences. According to the European
Innovation Scoreboard (EIS), the main aspects of Denmark’s strong performance
on innovation are its strong research systems, intellectual assets (such as
patents) and human capital, as well as an innovation-friendly environment that
allows innovative companies to grow. At the same time, room for improvement
remains with respect to the economic benefits from innovation, such as
employment impacts, and the deployment of innovation in companies
(Innovators) (see Figure 5).
Figure 4: Key results in innovation rankings
Source: WIPO, World Economic Forum, IMD, European Commission
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Figure 5: Denmark’s performance in the European Innovation Scoreboard, 2013 and 2019
Source: European Commission, European Innovation Scoreboard 2019
The dynamics of Denmark’s performance, however, are weak: After having
improved between 2011 and 2013, since 2013, Denmark’s overall score on the
EIS has declined by 3 percentage points (see Figure 7), while its European peers
have improved, with the United Kingdom and Finland improving the fastest. This
drop masks mixed performance across the EIS indicators. Between 2013 and
2018, Denmark improved mostly on attractiveness of research systems, and firm
investments. However, it deteriorated in terms of innovation within SMEs, as well
as impacts on sales and employment. The EIS Scoreboard for Denmark is
attached in Appendix B.
Figure 6: Innovation performance of selected countries, score from 0.0 to 1.0 (the best), 2013-2018
Source: European Innovation Scoreboard
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Skill base
Denmark’s major advantage is its strong skill base: The percentage of
researchers is well above the EU average and among leading European peers (see
Figure 7). The number of people with tertiary education available for employment
in the Danish labour force is around 800,000. This number is expected to rise to
1.2 million by 2040, an increase of 50% (MHES 2017).
Denmark is attractive for foreign human capital as well: Foreign students account
for a significant proportion of those in tertiary education, and foreign students
account for one-third of enrolled doctoral students. However, recent political
decisions led to some limits on the number of foreign students coming to
Denmark.
Access to high-quality talent, especially in new areas such as artificial intelligence,
is important, and restrictions on the number of foreign students for Bachelor and
Master programmes as well as short cycle higher education programmes could
limit the talent pool that Danish companies can draw on.
Figure 7: Percentage of researchers within the active population, full-time equivalent, 2017
Source: Eurostat
Note: According to Eurostat, the active population represents the sum of employed and unemployed people
between the ages of 15-64.
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Science base
Denmark boasts a world-class science base, in particular in life sciences, where
it leads among OECD countries in terms of the quality of scientific publications
(mainly in pharmaceuticals and biotechnology).
27
Denmark also achieved an excellent 9
th
place in the world in terms of per capita
patent applications.
28
Areas of technological advantage (as expressed in relative
specialization of patent applications by sector in comparison to the world) include
engines, pumps and turbines, food chemistry, civil engineering, thermal
processes and apparatus, and other special machines (see Figure 8). Moreover,
its academic institutions are well connected internationally. The number of
international scientific co-publications is at 265% of the EU average in 2018,
29
the highest result in the EU.
Figure 8: Revealed Scientific Advantage and Revealed Technological Advantage in Denmark by sector
Source: H2020 project- consortium CWTS/Leiden University, KU Leuven
Note: Revealed Scientific Advantage (RSA) represents the relative importance of a sector/subsector in the
publishing activity of Denmark. Revealed Technological Advantage (RTA) represents the relative importance
of a sector/subsector in the patenting activity of Denmark. Specialization index ‘1’ shows the world level and
serves as comparison for the revealed advantages (RSA or RTA higher than 1 mean revealed advantage for
Denmark). Calculations and methodology are based on the Fraunhofer 35 technology classification.
Denmark has the highest proportion of publications within the life sciences among the top ten
percent most cited publications among the OECD countries.
Patent applications per million population. Source: Global Competitiveness Report based on
OECD data: http://reports.weforum.org/global-competitiveness-report-2018/competitiveness-
rankings/#series=IP5PATPOP
International scientific co-publications are measured as the number of international scientific
publications with at least one co-author based abroad (where abroad is non-EU for the EU28)
per million population. (Source: European Innovation Scoreboard)
28
29
28
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Investment in R&D
Denmark’s high R&D spending (GERD) is another key strength. With an R&D
intensity of 3.05% of GDP in 2017, well above the EU average (2.07%), Denmark
reached the national R&D intensity target (3%) it had set in the frame of the EU
2020 strategy About one-third of R&D spending comes from the public sector and
two-thirds from the private sector – a healthy combination in line with leading
peers (See Table 1).
Table 1: Gross domestic expenditure on R&D (GERD), percentage of GDP
2010
2011
2012
2013
2014
2015
2016
Denmark
Finland
Germany
Ireland
Israel
Netherlands
3.06
3.75
2.72
1.61
4.13
1.67
3.45
..
2.81
2009
2.92
3.73
2.71
1.59
3.94
1.7
3.21
..
2.74
2.94
3.64
2.8
1.56
4.01
1.88
3.25
..
2.77
2.98
3.42
2.87
1.56
4.16
1.92
3.28
3.19
2.68
2.97
3.29
2.82
1.56
4.07
1.93
3.3
..
2.71
2.91
3.17
2.87
1.5
4.18
1.98
3.14
..
2.72
3.06
2.89
2.91
1.19
4.26
1.98
3.26
3.37
2.73
3.1
2.74
2.92
1.16
4.39
2,00
3.27
..
2.73
3.05
2.76
3.02
1.05
4.54
1.99
3.4
..
2.79
2017
National
2020
TARGET
3.0
4.0
3.0
2.0
..
2.5
4.0
..
..
Sweden
Switzerland
United
States
EUROPEAN
UNION 28
countries
1.93
1.92
1.97
2,00
2.02
2.03
2.04
2.04
2.07
3.0
Source: Eurostat, OECD
Note: Israel: OECD, GERD
Public R&D funding has increased somewhat in recent years (See Figure 9). This
is mainly due to increased funding by municipalities and regions, while central
government funding for research and innovation remained stable. Fiscal
pressures on the central government led to a re-distribution of some education
funding away from universities. Since 2016 state funding for education has been
cut by 2% every year. Public funding for R&D has increased in 2017 and 2018
after a decrease by 7% from 2015 to 2016.
30
30
https://www.dst.dk/da/Statistik/nyt/NytHtml?cid=26383
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Figure 9: Denmark’s R&D expenditure funded by public and private sectors, million USD, constant 2010
prices and PPPs, 2009–2017
Source: OECD, Statistics Denmark
Private sector R&D spending is concentrated in a relatively small number of large
Danish companies (see Figure 10). The 50 largest R&D active companies
accounted for 70% of the total Danish private R&D investment in 2016,
significantly higher than in a range of other advanced economies (See Figure
12).
31
The eight largest companies alone accounted for about 39% of the total
private R&D expenditures .
R&D activities funded by foreign entities (GERD financed from abroad) amount to
0.27% of GDP (in 2017), similar to the level found in the UK (0.26%, in 2016) or
Netherlands (0.28 in 2016), but below the level found in Finland (0,33%, in
2016).
32
Israel
33
or Finland
34
seem to have attracted a more significant number
of R&D centres of international MNCs, and achieved more visibility in this space.
Such R&D centres are often attractive for international and national talent and
can develop their locations into innovation hubs in their respective areas. They
have particular potential if they can be linked with local companies, especially
research-intensive SMEs.
31
32
33
The data refers to total R&D spending of these companies, both in Denmark and abroad.
https://rio.jrc.ec.europa.eu/en/stats/total-intramural-rd-expenditure-gerd-financed-abroad
In Israel, over 250 research centres were established by MNCs:
https://en.wikipedia.org/wiki/List_of_multinational_companies_with_research_and_developme
nt_centres_in_Israel
https://www.helsinkibusinesshub.fi/foreign-owned-rd-centres-in-helsinki/
30
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Figure 10: Share of private R&D expenditure by company size, 2008 and 2015
Source: SFU 2017
Figure 11: Share of total private R&D expenditure by top R&D performers
Source: OECD
Note: R&D expenditure performed by companies with HQ in the country, Figures can include R&D outside of
the country (headquarters). Statistics do not differentiate.
31
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Figure 12: Top 10 R&D companies with headquarters in Denmark, 2017/18 R&D expenditure, million Euros
Source: EU Industrial R&D Scoreboard
Note: Does not include R&D by foreign owned companies in Denmark
Although Denmark has strong international players in innovation (see Figure 12),
in recent years, the country has experienced an increasing concentration of R&D
activity in a diminishing number of large companies (see Figure 13). Overall R&D
spending remains high, but the absolute number of R&D active companies has
declined since 2009, likely because smaller firms with limited R&D activities have
stopped investing in R&D altogether. While data on R&D concentration is scarce,
there are some indications that this is a global trend and thus not unique to
Denmark. At the same time, this trend was not observed in Finland, where
comparable data is available.
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Figure 13: Number of R&D active companies and R&D expenditure per company in Denmark, 2009-2016
Source: Statistics Denmark, MHES
Note: R&D expenditure calculated at constant prices (2017).
From a sector perspective, medical and health sciences dominate Danish R&D
spending with around one-third of the total R&D expenditure by both the private
and the public sector. However, private sector R&D is more strongly geared
towards the engineering and technology sector (see Figure 14). Denmark’s
overall industrial mix has no major impact on economy-wide private R&D
intensity, while in peer countries (Figure 15), industrial structure is more biased
towards high R&D spending sectors.
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Figure 14: Public and private R&D expenditure by field of science and Gross Value Added at basic prices, in
percentage, 2017
Source: Statistics Denmark, OECD
Note: 2017 data is preliminary for R&D expenditures.
Figure 15: Business R&D intensity, adjusted and unadjusted to industry structure, 2015
Source: OECD, Science, Technology and Industry Scoreboard 2017
Note: A country's industrial structure-adjusted indicator of R&D intensity is a weighted average of its sectoral
R&D intensities (ratio of R&D to value added), using the OECD industrial structure – sectoral share in OECD
value added for 2015 – as adjusted, common weights across all countries. The unadjusted measure of BERD
intensity is an average based on each country's actual sector shares.
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Commercial impact of R&D activities
In a number of dimensions that measure how well R&D is translated into
commercial results, Denmark performs significantly less well than peer countries:
•
Sales of products from new-to-market and new-to-firm innovations are
significantly lower, as a share of total revenue, than the EU average (see
Figure 16) and most of the peer economies. One structural reason is the
industrial structure in Denmark, which has a large share of international trade
services that tend to be less innovation intensive. However, this share has
declined in recent years.
35
The export share of innovative and high tech exports remain below peer: The
Danish export share of medium and high technology products (48%) is
increasing but is below the EU average (56.7%).
36
Although Denmark exports
more knowledge-intensive services than other EU countries, these exports are
declining, while the EU shows a positive trend.
Figure 16: Sales of new-to-market and new-to-firm innovations as a percentage of turnover, 2018
•
Source: European Commission- European Innovation Scoreboard 2019
Note: Indicator is calculated as sum of total turnover of new or significantly improved products, either new-
to-the-firm or new-to-the-market, for all enterprises.
Some of the peers have also experienced decline (Finland, Sweden), while other countries
have increased the share (Netherlands, Israel, etc.).
36
35
However, the Danish export of medium and high technology products, as a share of total
product exports, has increased from 41.7% in 2010 to 48% in 2017, but it remains below the
EU average (56.7%).
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Danish SMEs are less innovation-intensive than those in the European peer
economies. Only 33% of Danish SMEs introduced product or process innovations,
a smaller share than in Finland, Sweden or the Netherlands (see Figure 17). Since
2010 these innovation activities have even slightly decreased.
37
Figure 17: Innovating SMEs as a percentage of total SMEs, 2018
Source: European Commission- European Innovation Scoreboard 2019
Collaboration between stakeholders and linkages
Strong linkages across the innovation system encourage innovation and drive
translation into economic value. Surveys of business executives on collaboration
in innovation shows that Denmark does well on overall multi-stakeholder
collaboration and that strong clusters exist. However, at the more granular level,
there is room for improvement in terms of collaboration in R&D, as expressed for
example by private co-funding of public R&D expenditures or the degree to which
innovative SMEs collaborate with others (see Figure 18).
37
Indicators shown in Figure 18 have declined about 4 percentage points on average from 2010.
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Figure 18: Multi-stakeholder collaboration and state of cluster development (scale of 1 to 7 (best) on left
axis); collaboration among stakeholders (scale of 0 to 1 (best) on right axis)
Source: Global Competitiveness Report, European Innovation Scoreboard
Note: Indicators ‘Multi-stakeholder collaboration’ and `State of cluster development’ are based on surveys of
business executives. For details see:
http://reports.weforum.org/global-competitiveness-report-2018/appendix-c-the-global-competitiveness-
index-4-0-methodology-and-technical-notes/
Entrepreneurship
Denmark has over recent years registered higher levels of new companies per
capita than Sweden or Finland.
38
However, the overall share of early-stage
entrepreneurs in the population remains rather low.
39
Surveys suggest that
Danes have less entrepreneurial intentions, that fear of failure is higher and that
people perceive themselves as not having sufficient entrepreneurial skills than
their peers in other countries. Perhaps more importantly, a smaller share of
businesses survives over the 1, 3 and 5-year mark than in most EU countries.
40
Although many companies are created in Denmark, start-ups struggle to scale
up and grow:
41
Firms lose their growth momentum after three years (as
measured by employment), while firms in Sweden and the Netherlands continue
38
In Denmark, 9.9 companies were registered per 1000 people in 2016 against 3.9 in Finland
and 8.1 in Sweden. Source: World Bank https://data.worldbank.org/indicator/IC.BUS.NDNS.ZS
https://www.gemconsortium.org/economy-profiles/denmark. Denmark is currently not
covered in the Global Entrepreneurship Monitor, so the last internationally comparable data is
from 2014.
https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Business_demography_statistics#Birth_rate
https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Business_demography_statistics#Birth_rate
EU Startup Monitor 2018.
http://startupmonitor.eu/EU-Startup-Monitor-2018-Report-WEB.pdf
37
41
40
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to grow after five and seven years.
42
The limitations to scaling up and to growth
are also reflected in the fact that Denmark has no “Unicorn” company in
comparison to Israel which has four, Switzerland (three) or Sweden (one).
43
One
of the reasons is that successful Danish start-ups moved headquarters abroad
(Tradeshift or JustEat).
Denmark provides rather favourable regulatory conditions for entrepreneurs. It
takes, for example, only 3.5 days to register a company.
44
Yet, despite Denmark’s
well-developed financial system and easy access to finance, the risk capital
availability is limited and private early stage (pre-seed and seed) investment in
start-ups is low. Despite the efforts of the government to attract private venture
capital (VC) and to provide early-stage funding through The Danish Growth Fund
and incubators, VC expenditure is lower than in peer countries (0.06% of GDP in
2018, see Figure 19) and has been declining since 2010.
45
Data from surveys
shows that businesses perceive VC capital as less available in Denmark than in
peer countries (Figure 19). At the same time, data from the EIS shows an
improvement of VC expenditure in Denmark between 2014 and 2018.
42
43
https://www.oecd.org/eco/growth/Cross-country-evidence-on-start-up-dynamics.pdf
Unicorn companies are start-ups with a valuation of over 1bn US$.
Source: https://www.cbinsights.com/research-unicorn-companies
44
45
https://www.doingbusiness.org/
It has to be noted that some sources suggest that early stage funding in individual ecosystem
locations is increasing, notably in Copenhagen and Western Denmark.
Source:https://startupgenome.com/reports/global-startup-ecosystem-report-2019
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Figure 19: Venture capital expenditure, percentage of GDP, 2018 and venture capital availability score, 2018
Source: European Innovation Scoreboard, Global Competitiveness Report
Note: Venture capital availability score ranges from 1 to 7, from lowest to highest. Venture capital expenditure
is defined as private equity being raised for investment in companies. Management buyouts, management
buy-ins, and venture purchase of quoted shares are excluded. Venture capital includes early stage (seed +
start-up) and expansion and replacement capital. The original source is Invest Europe. Three-year averages
have been used.
1.2.2 The Danish Innovation Support System
Denmark has a highly sophisticated and well-developed support system for
innovation with many institutions that fulfil specific roles. Knowledge-driven
innovation
46
is a particular focus for the Ministry of Higher Education and Science
(MHES) and the related support system is mainly positioned under MHES, which
is responsible for the knowledge-based innovation. The Ministry of Industry,
Business and Financial Affairs (MIBFA), which is in charge of the business support
system, focuses on translating knowledge-driven innovation into commercial
results.
The MHES describes Denmark’s knowledge-based innovation system as built
around the following interconnected components (see Figure 20):
1.
Institutions for collaborative research and innovation.
These
include eight Danish universities that conduct research, offer research-
based education, engages in external collaboration and 23 other higher
46
The terms knowledge-driven innovation, RDI or R&D and Innovation are used interchangeably.
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education
institutions,
47
seven
approved
research
technology
organisations (RTOs) that conduct research in addition to technical
services in specialised areas as well as public university hospitals and
sector research institutions.
2.
Knowledge-based technological services.
These include RTOs, whose
primary role it is to provide technical services such as laboratory testing,
calibrations to ensure compliance with norms, etc. The higher education
institutions are increasingly involved in this area.
3.
Institutions supporting knowledge-based entrepreneurship.
Ecosystems for entrepreneurship exist at and around universities but are
also set up by private players.
4.
Sources of funding,
which are composed of public and private players.
5.
Innovation Networks and clusters,
which connect actors in the
system.
Figure 20: Schematic representation of the Danish National Innovation System
Source: MHES with adaptations by authors
47
The 23 other research institutions encompass only those that have a research budget.
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Institutions for collaborative research and innovation and knowledge-
based technological services.
The eight Danish universities are the key research institutions, 23 other higher
education institutions (university colleges, business academies, and other
profession- and practice-based higher education schools, education institutions
in architecture and art and finally the maritime education institutions) focus on
education and applied research and development, and seven approved RTOs
undertake research in addition to technical services in specialised areas.
Universities and other higher education institutions are state-funded,
autonomous institutions. They are governed by boards with a majority of external
members. Those under MHES have four-year strategic framework contracts with
the ministry.
48
The purpose of the strategic framework contracts is to outline the
most important strategic goals of the institutions. The strategic goals are
established based on the specific strategies, strengths and challenges of each
higher education institution.
The universities are funded through three sources:
•
•
•
Basic funding for research
Education funding
External research funding
Universities including university hospitals account for the largest share of public
R&D (95% of the total public R&D expenditure) with other HEIs playing only a
minor role (less than 5% of the total public R&D expenditure).
49,50
Universities
receive annual basic research funding amounting to 8.9 bn DKK (1.19 bn EUR)
from MHES. Since 2016 state funding for education has been cut by 2% every
year. Public funding for R&D has increased in 2017 and 2018 after a decrease by
7% from 2015 to 2016.
51
There is no formal connection between education and
R&D funding. Basic funding for research and education funding are not earmarked
for the research and education activities respectively. The universities can decide
on the allocation of funding across activities.
All Danish universities have established Technology Transfer Offices (TTOs) or
similar entities that scout, patent and commercialise research activities and
provide counselling to researchers. Most universities have also established
specific student incubators and actively promote student entrepreneurship
48
49
The current contract is from 2018 to 2021.
Iris Group: Literature review and assessment of the Danish knowledge-based innovation
support system, 2018.
50
51
These figures include R&D in the hospital sector.
This mainly led to lower funding of IFD and the Independent Research Fund. The block funding
remained unchanged.
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through accelerator programmes, or competitions and events. Several of the
other HEI also have innovation and entrepreneurial education programmes and
encourage students to start their own company.
Although university-industry collaboration has been high on the agenda of MHES
and has increased considerably since the mid-2000s,
52
indicators suggest that
the businesses view the degree of collaboration in Denmark as lower than in other
countries (see figure 18).
53
During the interviews the panel conducted
stakeholders suggested that collaboration is not common among researchers.
The main reason is a lack of incentives. One contributing factor is the perception
among researchers that collaboration with industry may not help their academic
careers and that incentives are not aligned. Indeed, researchers quote conflicting
goals in industry and academia and conflicting timeframes as the main reasons
not to collaborate.
54
In the interviews the panel had as part of this review, the
fear of loss of academic independence was also mentioned.
RTOs (called GTS institutes) provide knowledge-based technology services to
Danish companies. They are non-profit institutions but are run as private
companies, so that services are provided on commercial terms. RTOs provide a
range of services such as testing and validation (47% of GTS users), development
of solutions to specific problems/challenges in development and production
(32%), or certification (25%).
55
They are mandated to mainly target SMEs but
55% of their commercial revenue is generated from large companies.
RTOs are approved by MHES for up to three years, which enables them to apply
for funding from performance contracts from the public research budget, which
co-funds applied research, development and dissemination. Their total R&D
revenue (in 2018) amounted to DKK 672 million (90 million EUR) of which DKK
357 million were from MHES performance contracts and DKK 315 million from
other competitive funds. On top of that DKK 252 million were self-funded R&D.
56
Iris Group: Literature review and assessment of the Danish knowledge-based innovation
support system, 2018.
Denmark ranks 19
th
on the related indicator in the Global Competitiveness Report. This
indicator is based on perceptions of business executives in Denmark. In terms of co-authorship
of publications, a more up-stream indicator of collaboration, however, Denmark leads in the EU.
54
55
53
52
https://dea.nu/sites/dea.nu/files/cbs_dea_survey_of_researchers_external_engagement.pdf
“Analyse af GTS-nettets teknologiske ydelser set fra et brugerperspektiv” Iris Group,
December 2016.
GTS-net: Performanceregnskab for GTS-net 2019. [to be published at www.gts-net.dk. GTS-
net. Performanceregnskab for GTS-net 2019. to be published at www.gts-net.dk.
42
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Institutions supporting knowledge-based entrepreneurship.
Until 2019, several publicly funded incubator operators, which mainly invested
risk capital in start-ups, existed and were complemented by ecosystems for
entrepreneurship at and around universities and as part of private initiatives. As
of 2019, public funding for the four incubator operators (PreSeed Ventures A/S,
Syddansk Innovation A/S, CAPNOVA A/S and Borean Innovation A/S) is being
phased out and new instruments for early support of knowledge-based
entrepreneurship has been developed and transferred into other measures under
the Innovation Fund Denmark and The Danish Growth Fund (see discussion on
funding below).
57
Entrepreneurship support at universities (which can include science parks,
incubators, advisory, etc) are run by each university, and as a result, approaches
differ from one institution to another. Generally, universities have worked with
partners, including other HEI to establish incubators at/around universities to
supply services to start-ups such as office space, advisory services, facilities,
training, or funding and matchmaking support. Activities also target student
entrepreneurship, for example, through student incubators and student
competitions/events or advisory series, mentoring or small grants.
Other key players in knowledge-based entrepreneurship are the Danish Board for
Business Promotion under MIBFA, which co-finance initiatives with MHES and
private players, such as the Novo Nordisk Foundation, which invested DKK 392
million (EUR 52 million) into a new BioInnovation Institute that aims to support
university-based start-ups in biotechnology. The Danish Industry Foundation’s
accelerator programme (Danish Tech Challenge) and the start-up programme of
the Obel Fund at Aarhus University are other examples of private initiatives
(amounts shown above in Figure 21).
Clusters, innovation networks and international linkages.
MHES is funding 17 national innovation networks that facilitate collaboration and
matchmaking, mainly between knowledge institutions and business at the sector
level, in Danish strongholds such as energy, food and ICT as well as emerging
industries. They are independent secretariats operated by universities, RTOs or
cluster organisations that receive basic funding from MHES under two-year
framework contracts. Their budget (in 2016, when there were 22 such networks)
amounted to DKK 235 million (31.48 million EUR), of which 37% was covered by
MHES. In 2017, 5.804 companies acquired new qualifications and tools as a result
of cooperating with one of the Danish clusters.
58
Previously, Danish Regions also co-financed many innovation networks and
regional clusters, whereby there were identified more than 60 publicly funded
57
Although public funding for incubators was phased out, all four incubator operators are
continuing as independent incubators with own funding.
http://www.clusterexcellencedenmark.dk/da-
DK/Quickmenu/Publikationer.aspx?PID=22&M=NewsV2&Action=1&NewsId=776
43
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innovation networks and clusters in 2018. As part of ongoing reforms to reduce
complexity and increase efficiency, the number of publicly funded national
innovation networks will now be gradually reduced. Cluster organisations, too,
are currently undergoing a major reform within MIBFA to reduce the number of
clusters to 10-12 and focus on prioritized Danish strongholds and a few emerging
industries in priority areas. The Danish Board for Business Promotion under the
MIBFA is tasked with selecting the relevant Danish strongholds and emerging
industries for the future, while MHES choose the best clusters within the
strongholds to operate cluster activities.
To facilitate international linkages, MHES, in partnership with the Ministry of
Foreign Affairs, has since 2006 gradually established now eight Innovation
Centres abroad to support Danish businesses and researchers in accessing new
knowledge from abroad and establishing international connections.
59
Universities
support internationalization through their international offices that carry out
activities related to education and talent. MHES also has an office in Brussels –
DANRO. DANRO is a satellite office and part of the EU office at the Danish Agency
for Science and Higher Education, which also incorporates the national contact
point for the European framework program for research and innovation. The EU
office mainly focusses on strengthening Danish research interests within the
European Union as well as promoting and increasing Danish participation in the
European framework program for research and innovation. While the first
represents Danish research interests within the European Union, Like DANRO, the
second Brussels Office, EuroCenter also promotes and increases Danish
participation in Horizon2020 programmes mainly focussed on business advisory
services.
Funding instruments
Public funding.
Public funding is important as baseline funding for universities
and is spread across several instruments. Figure 21 shows the main funding flows
in the Danish R&I system. Basic funding of research amounts to 8.9 billion DKK
(1.2 billion EUR). In addition to this, two main public funds exist. The Innovation
Fund Denmark (IFD) funds strategic research and innovation and was created in
2014 through a merger of smaller funds to administer the main funding
instruments. Moreover, The Danish Growth Fund (DGF, created in 1992 and
under MIFBA) funds innovation in SMEs and provides early-stage funding. In
addition, a number of other research funds operate such as the Danish National
Research Foundation, Independent Research Fund Denmark, or the Development
and Demonstration programmes.
IFD is the main public funding body for competitive funding of business focused
research and innovation in the country. IFD has its own board of directors and is
and independent council under the supervision of MHES. It is among its objectives
to increase the proportion of companies investing in R&D and increasing the
proportion of highly educated people in private companies. It also funds strategic
59
The centres were established in Munich, New Delhi, São Paolo, Seoul, Shanghai, Silicon Valley,
Tel Aviv, Boston.
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research. In comparison to The Danish Growth Fund, IFD focusses on earlier
stage R&D and innovation. It offers programmes for joint research and innovation
programmes and projects between academia and established companies (Grand
Solutions, Industrial Researcher, InnoBooster) and for new firms (InnoBooster
and InnoFounder).
60
IFD has undergone a strategic review following an evaluation of its performance
in 2018. The main findings were that while the merger had been successful and
that IFD programmes were deemed appropriate, the strategic direction and
integration with different actors needed to be strengthened. The IFD should also
improve data collection and strengthen its evidence base.
The DGF provides long-term equity funding on a commercial basis to support
start-ups and existing companies in their expansion including the
commercialisation of R&D, for example, to grow, scale and internationalise. The
purpose is to support the private market and its development in areas and
markets where the private investors often hesitate to enter. The DGF undertakes
direct and indirect equity investments in technology companies, such as robotics
and medical technology, but also VC investments in companies that are not
science and technology-driven, for example, design and/or urbanisation. The DGF
also provides loans and guarantee schemes. Since 2019, the DGF implemented
a VC model internally, complementing the activity of private players such as
business angels. The DGF works with private sector finance providers such as
banks and VC funds, both domestic and from abroad, to encourage them to
become more active in the Danish market.
61
As mentioned above, the overall public funding for R&D (as share of GDP) has
remained stable in recent years after growing historically. Funding by
municipalities and regions has increased, compensating for less funding growth
by the central government. This has likely triggered a stronger focus on
addressing challenges that dominate the local government agenda such as for
example SMEs or health care connected with hospitals.
Private foundations.
A unique feature of the Danish National Innovation
System (NIS) is the important role played by private foundations, which account
for a significant share of the funding. There are numerous private foundations,
notably the Novo Nordisk Foundation, that provide competitive funding to
thematic research areas. The private foundations fund a major share of the
privately funded R&D and also invest in related initiatives or physical spaces, such
as incubators, networks, prizes or events. The Novo Nordisk Foundation (NNF)
alone disbursed over DKK 1.7 billion (EUR 228 million) in 2018. Going forward, it
aims to increase the annual pay-outs to about DKK 5 billion (EUR 671 million) by
2023. NNF invests mainly in life science related R&D and innovation projects at
60
InnoFounder targets new companies and InnoBooster both new and established companies.
Grand Solutions and Industrial researcher programmes are open to established companies only.
DGF operates on market conditions and cover their costs through the interests on their loans
and returns on their investments (with the exception of a few initiatives). Their investment
decisions are based on profit and social returns.
45
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different stages of maturity. The foundation also provides an incubator for life
science start-ups. The funding by private foundations is set to increase in the
coming years. NNF estimates that it will triple funding in three years to match
public funding. The foundations are independent institutions with their own
strategic objectives and plans.
International funding.
Most of the funding for R&D in Denmark comes from
domestic sources. EU and other international sources (for example Horizon 2020
funding) account for only 8.9% of total R&D expenditure (in 2017), which is less
than in Finland (12.1% in 2016) and the Netherlands (13.9% in 2016).
62
One
reason is that at the aggregate level companies and research institutions and
universities are not incentivised to tap into EU funds, because these crowd-out
domestic funding due to regulations.
63
Figure 21: Financing research, innovation and education, in million DKK
Source: MHES
Note: The percentages on the arrows indicate the share of the given R&D funding sector as share of the R&D
performing sector. The percentages add up to 100 for each of the two R&D performing sectors. The figures
are based on preliminary data from 2016 for public R&D investments and data for 2015 for the business
enterprise sector.
62
63
https://ec.europa.eu/eurostat/web/science-technology-innovation/data/database
While this mechanism applies at the aggregate level, university block funding is to some
degree dependent on external funding giving an incentive to attract it.
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Governance and collaboration
Frequent and effective collaboration between different actors and institutions of
the NIS are key to its effective functioning. They enhance efficiency, can give rise
to new solutions and policy innovations and create an ongoing dialogue to align
the activities of different actors towards strategic goals. They also contribute to
structuring and interlinking institutions of the NIS to facilitate access to relevant
services, funding and information for businesses that wish to innovate. These
linkages are, therefore, an important element of the innovation strategy and need
to permeate the governance, strategic and operational levels of the innovation
system. These linkages can be formal or informal. In addition, for sectoral
initiatives or for specific purposes, the Ministries of Energy, Foreign Affairs and
Environment and Food are involved. There is little structured involvement of
private sector entities, including the private foundations, in the discussions on
the overall direction of innovation policy.
Although the relevant ministries are in an ongoing dialogue, a clearly visible
formal platform for coordination of strategic efforts related to innovation at the
highest level of government does not seem to exist. Much of the coordination
across institutions is done informally. This approach to coordination is aligned
with the country’s small size and cooperative culture, and it is working, to some
extent, at the operational level. But there has been a tendency to minimise the
need for coordination across different parts of the system by defining clearly
separated areas of responsibility. Consistent with this approach, recent reforms
have focused on the efficiency of individual organisations and programs and on
reducing the overlaps between them, not the overall effectiveness of the Danish
innovation system.
1.3
Pathways: What forces will affect the further evolution of
Denmark’s innovation system?
Any efforts to improve Denmark’s innovation performance must take into account
both the domestic and the global contexts. Domestic factors will shape the
political dynamics driving the willingness and ability to pursue change.
International factors will influence how effective specific policy actions in
Denmark will be in terms of achieving their desired economic impact.
1.3.1 The domestic context
Denmark’s economy is performing well, and its innovation system is ranked
highly. There is and was no burning platform that would trigger ambitious policy
action to change the Danish innovation system fundamentally. There was,
however, significant overall budget pressure in the post-GFC period.
Institutionally, there were frequent changes in the political leadership of the
MHES. As in many other countries, innovation was politically largely under the
radar: an area left to technocratic discussion, viewed as positive across political
party lines but not pushed as a top-level political priority.
This political context led to a significant number of reform efforts over the last
two decades: the merger of funding instruments, changes in incentives in
universities and colleges or the recent reform of business support structures. Box
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1 presents the timeline of the main developments. The focus of these reforms
was on raising the efficiency of individual parts, not on creating a clear system-
wide strategy. While many positive results have been achieved, this approach
has also led to some unintended consequences:
•
Increased institutional and procedural simplicity,
such as expressed in
the merger of the funding instruments or the reduction of number of clusters,
appears to have reduced room for experimentation and to have increased the
power of existing funders or entities, which appears to have led to reduced
diversity.
An implicit focus on SMEs in general as a target group,
supporting
innovation in all SMEs, with a limited focus on the particular needs of key
innovating businesses, such as larger firms or high-growth start-ups and
scale-ups.
A focus on reforming individual programs and institutions has reduced
the systemic interplay in the NIS,
which was implicit and to some extent
self-organized. This introduced coordination failures as clarity about the role
of each institution was watered down. For example, to increase collaboration
with business, universities proposed support services (for example, laboratory
testing) that were traditionally the role of the RTOs or focused more strongly
on innovation needs of SMEs where colleges traditionally have stronger
linkages. At the same time, the RTOs and colleges were incentivised by the
government to undertake more research and innovation and as a result
compete with the universities.
•
•
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Box 1: Recent reform efforts
2001:
Reorganisation of innovation policy with general innovation under
the Ministry of Business and knowledge-driven innovation under the Ministry of
Science, Technology and Innovation (now the Ministry of Higher Education and
Science) with the objective of strengthening the nexus between education,
research and innovation.
2003:
First action plan by the government after the reorganisation: ”New
paths between research and business - from thought to invoice” (”Nye veje
mellem forskning og erhverv – fra tanke til faktura”)
2005:
Establishment of the Advanced Technology Foundation.
2005:
Establishment of the Globalization Council, which provided input for
the Government globalisation strategy published in 2006.
2008:
Merger and creation of national innovation networks.
2010:
Business directed innovation strategy: “Enhanced innovation in the
business world” (“Styrket innovation i virksomhederne ”).
2012:
European Research Area Committee (ERAC) peer review of the
Danish research and innovation system characterised the system as overly
complex.
2012:
Innovation strategy: "Denmark – a nation of solutions" introduced
solutions to a range of significant societal challenges (in energy, health,
education, transportation, etc.).
2013:
Establishment of the Productivity Commission, which also makes
some recommendations on the innovation system.
2014:
Establishment of the Danish Innovation Fund by merging three
funding bodies in response to recommendations of the ERAC review. (The
Advanced Technology Foundation, The Council for Technology and Innovation
and The Council for Strategic Research).
2014:
Comprehensive external
collaboration and technology transfer.
evaluation
of
university
business
2016:
Start of the annual reduction of funding for higher education by 2%
per student (FTE) as part of an effort to re-prioritise public spending. One off
cut in state R&D budget by 6%.
2017:
Publication of Strategy: "Denmark – Ready to seize future
opportunities".
2017:
In parallel: Establishment of the Danish Disruption Council by the
Prime Minister.
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2017:
Strategy for research: “FORSK2025”.
2018:
Political agreement to reform the public business-promotion
system, including the cluster organisations, incubators and innovation
networks.
2018:
2018:
2019:
Strategy for life sciences: “Vaekstplan for Life Sciences”.
“Denmark’s Strategy for Digital Growth”.
Review of technology transfer from universities.
Evaluation of the Innovation Fund Denmark.
Reorganisation of the cluster system.
Findings of the committee review of the merit-based evaluation of
researchers.
International expert committee proposal for result based element
in basic funding for research (Fremtidssikring af forskningskvalitet)
International expert panel review of the Danish knowledge-based
innovation system
The combination of slow evolution at the strategic level and frequent change on
the operational level has resulted in an innovation system confronted with a
quandary: On the one hand, there are several dynamic hotspots with high
technology, strong innovation and high economic potential and performance, that
fit in very well into the transformative societal and economic context observed at
a global scale (see section 1.3.2). Examples are innovation and collaborations in
the wind energy sector that leverages the increasing global transformation
towards a low carbon economy, innovation in biotechnology driven by strong local
players that leverages increasing innovation in health care or the robotics cluster
in Odense that benefitted from increasing automatization in manufacturing
sectors around the world.
On the other hand, however, other subsets of the system are less dynamic and
remain somewhat stuck in the domestic context, characterised by local
introversion and fragmentation and present opportunities for improvement. SMEs
do not engage in innovation efforts to the degree possible (see section 1.2.1) and
the linkages between SMEs and key actors in the broader innovation system
remain limited.
64
For example, innovation opportunities in non-science driven
areas (creative industries, social innovation or some aspects of sustainability) are
see e.g. Knudsen et al. 2019: RIO Country Report Denmark 2018 [Draft]; Research and
Innovation Observatory country report series; Joint Research Centre, European Commission
50
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under-used and poorly linked with innovation hotspots in other sectors, notably
with science-driven innovation. Denmark appears to be missing opportunities
that emerge from cross-disciplinary approaches that reflect the country’s
strongholds.
What is more, the national institutional and political environment for innovation
appears to suffer from a lock-in situation that results in short-termism and a
focus on improving operational performance and efficiency. Denmark’s NIS could
significantly benefit from a shared, overarching long-term vision, and better
coordination in selected innovation policy arenas.
A major challenge is that major strategic change would require a higher-level
political commitment and there is currently no obvious actor or mechanism who
could break this cycle. Frequent changes in leadership in government and
ministries have aggravated the situation as they pushed actors to focus on
technical and operational performance in the short term. What is more, the recent
reforms insufficiently respond to the ongoing global economic, social,
technological and political changes and their impact on Denmark’s NIS. The
disregard of the global context could result in Denmark losing its competitive
edge in comparison to other countries that are moving ahead faster.
1.3.2 The global context
The impact of Danish innovation policy choices will to a significant degree depend
on the broader context of the global economy and innovation system. There is a
clear sense that this context is changing and doing so at a much higher pace than
in the past.
The
geography of global innovation is changing.
Companies are increasingly
investing globally in R&D.
65
In the past innovation was a domain where advanced
economies excelled, now emerging markets, particularly in Asia, are quickly
catching up. In 2017, Chinese firms increased R&D investment by 20% compared
with 9% by US firms, and 5.5% in the EU
66
and the number of PCT patents
increased by 13.5% in China against only 0.2% in the US.
67
Innovation is also becoming increasingly intertwined with an ever more complex
geopolitical situation. Much of the current trade tensions between the US and
China have their roots in the perception that China is aggressively challenging
the role of the US as the global innovation leader.
68
Innovative capacity is an
65
66
http://iri.jrc.ec.europa.eu/scoreboard.html
https://ec.europa.eu/info/news/2018-industrial-rd-scoreboard-eu-companies-increase-
research-investment-amidst-global-technological-race-2018-dec-17_en
67
68
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_943_2018.pdf
In ‘China: A strategic outlook’ the European Commission has discussed its view of how Europe
should respond to China’s growing role, also in regards to technology
https://ec.europa.eu/commission/sites/beta-political/files/communication-eu- china-a-
strategic-outlook.pdf
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asset in the new geopolitical competition, and political power is being used to
gain an advantage in the competition for technological leadership.
Within Europe, the new
European Innovation Council
is setting out a new
structure under EU´s
Framework Programs to support disruptive innovation
across Europe. All EU member states, Denmark included, will have an opportunity
to review how their national efforts can best be leveraged by the use of the new
set of European instruments and platforms.
The cost of R&D is increasing, raising the barriers to entry.
The effort
required to come up with an idea is higher than previously, because, due to the
rising stock of knowledge, “more stones need to be turned” to find a new idea.
69
This is consistent with innovation activity being increasingly concentrated in a
small number of large firms
70
, a process we also observe in Denmark. These firms
hold significant market shares and market value, are more productive and pay
higher wages.
71
New technologies – mainly digitalization – drive innovation and
transform many sectors.
Established industries will have to transform
significantly in the coming years to remain competitive. Technologies, including
robotics or digital technologies such as AI, will fundamentally reshape business
and production processes. Many of the digital technologies will benefit from large
market size to be able to scale business solutions quickly. Patent data, for
example, shows that the United States, China, Japan, South Korea and Germany
have emerged as the global leaders for 3D printing, robotics and
nanotechnology.
72
For European countries, international cooperation that can
help scale solutions is crucial.
Innovation policies have seen an
increased focus of major societal
challenges
such as climate change, environmental damage, health and
longevity, urbanization, or income inequality. These challenges represent the
societal objectives of innovation policy and will need investment and innovative
solutions. Most of these challenges require transitions that are systemic in nature
and require new approaches to innovation that have broadened and deepened
the policy rationale for innovation policy interventions. Innovation policies have
moved from addressing market failures and coordination failures to
transformative system failures. Transformative innovation policies need a strong
69
Although, this may differ by industry, the overall number of researchers has increased since
the 1930s by a factor of 23, but annual growth in productivity has declined.
European Commission (2019), European Semester Country Report: Denmark
70
71
https://www.kansascityfed.org/~/media/files/publicat/sympos/2018/papersandhandouts/jh%
20john%20van%20reenen%20version%2020.pdf?la=en Mergers may lead to reduced
competition (and hence innovation), if smaller firms cannot scale up to become competitors.
There is some evidence of this as the rate of firm dynamism is declining in the United States.
World Intellectual Property Organization (2015)
World Intellectual Property Report 2015.
Breakthrough Innovation and Economic Growth.
Available at: https://www.wipo.int/publications/en/details.jsp?id=3995&plang=EN
52
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common vision that gives direction, strongly articulated demand, tightly
coordinated policy and constant renewal (see Table 2).
73
Table 2: Strategic shift in innovation policy rationales
Market failures
(Neoclassical Perspective)
1) Limited experimental
economy
Weak incentives, information
asymmetries and capability
deficiencies limit ideation and
experimentation
Structural System
Failures
(Innovation System
Perspective)
1) Infrastructural
failures
Underinvestment in
infrastructure due to
large uncertainties,
high risk, big scale and
long-time horizons
2) Institutional
failures
Laws, property rights,
regulations, trust,
values, norms and
attitudes could
generate negative
incentives
3) Network failures
Weak cooperation limit
knowledge exchanges,
learning and
empowerment – too
strong clusters could
lead to lock ins.
4) Capability failures
Lack of key
competences,
leadership and
organizational
capabilities limit
absorption of new
knowledge and
innovation
Transformative
System Failures
(System Innovation
Perspective)
1) Directionality
Failures
Weak incentives, lack of
common visions and weak
actor mobilization stop
system transformation
2) Underinvestment in
R&D and innovation
Genuine uncertainty about
results and appropriability
make cost-benefit calculus
impossible
2) Demand articulation
failures
Weakly articulated user
and societal needs and
weak demand articulation
capabilities limit system
renewal
3) Negative externalities
Societally negative effects if
private actors do not have
incentives to include such
costs in their calculations
3) Policy coordination
failures
Under-developed
processes for multi-level
and horizontal policy
coordination limit system
renewal
4) Reflexivity failures
Under-developed systems
and renewal perspectives
in policy evaluation and
policy learning limit
system renewal
4) Overexploitation of
societal commons
Societal commons – land,
water, environment tend to
be overexploited (if they are
not priced)
Source: Based on Weber, RM and Rohracher H.: Legitimizing research, technology and
innovation policies for transformative change, in Research Policy 41, 2012, p. 1037-1047.
Edler, J. and Fagerberg, J.: Innovation Policy: What, Why & How. February 2017; Oxford
Review of Economic Policy 33(1):2-23, available at:
https://www.researchgate.net/publication/315498355_Innovation_policy_What_why_and_how
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1.4
From diagnostics to action: Towards a structure for reform
This section first summarises key challenges and opportunities for Denmark as
they emerge from the diagnostics in Chapter 1. It then outlines a two-pronged
approach for how Denmark can up its innovation system in response. This two-
pronged approach provides the structure for our recommendations: Chapter 2
outlines 10 areas of action that aim to achieve operational improvements within
the existing innovation system structure. Chapter 3 raises more far-reaching
questions about Denmark’s strategic objectives and positioning within the global
innovation system.
1.4.1 Challenges and opportunities for Denmark
The analysis above shows a Danish innovation system with considerable
strengths, placed within a successful economy that is supporting high standards
of living for its population. The overall performance of the Danish innovation
system is strong, in particular in R&D related to life sciences, where Denmark is
world class. There are also several other areas in which Denmark has evolved as
an innovation hub, for example, in wind energy and robotics. Many strengths
contribute to these achievements, such as a highly innovative business sector,
strong human capital and world-class research capacity. The analysis shows no
immediate threats to this position, fully reflective of Denmark’s position as a
European if not global innovation leader.
But while there is no burning platform, there is a sense that Denmark could do
better in terms of how strengths are translated into results and in how the country
prepares for the challenges emerging from structural changes in the global
(innovation) landscape.
The initial diagnostic suggests several challenges and missed
opportunities:
•
Challenges
-
High reliance on a very small number of top R&D spending firms and in
specific sectors (mainly life sciences) with limited diffusion of innovation
to smaller companies and entrepreneurial activity (see Figure 6).
Global economic trends are raising the bar in terms of attracting/retaining
innovation activities to/in Denmark that have a strong economic impact
(see section 1.3.2).
Indicators suggest that on some elements innovation performance in
Denmark has been deteriorating recently, while the EU has been
improving on average (EIS 2018).
-
-
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•
Missed opportunities
-
The excellent outcomes in science insufficiently translate into commercial
innovation, in particular in SMEs, start-ups and scale ups (see Figure 17).
As we will see in section 2.1.1, one reason is that technology transfer
offices in universities are on average not adequately resourced in terms
of funding and capabilities to fully perform their role, and there is room
for improvement in terms of better aligning universities towards
innovation objectives.
Efficiency is lost due to a lack of strategic coordination with private sector
foundations that fund a significant share of R&D activity (see section
1.2.1).
Strengths in science could be leveraged more by attracting foreign
companies to tap into the existing knowledge pools; this is currently
happening only to a limited degree (see section 1.2.2).
Strengths in non-science driven innovation and entrepreneurship
oftentimes linked to other schools such as architecture or art academies
(creative industries, sustainability) are insufficiently integrated into the
broader innovation strategy; the country loses out on cross-pollination
opportunities that could give rise to new products and services (see
section 1.3.1).
Strengths in areas that have clear relevance for global societal challenges
(urbanism, sustainability, social innovation) and opportunities for cross-
pollination across Danish strongholds appear under-utilised (see section
1.3.2)
-
-
-
-
What are the root causes for these issues to emerge?
In the view of the
Panel, they reflect, to a large degree, an insufficiently systemic approach to
innovation in the context of the entire RDI system:
•
There is no sufficiently clear, deliberate, overarching strategic
direction of the Danish innovation system
that reflects rapidly changing
global needs and developments in innovation or a perspective on how they
may affect Denmark in future.
The innovation policy system appears fragmented, despite high
openness to dialogue and discussion.
There is no obvious central platform
to discuss and take strategic, system-wide decisions related to the NIS. The
focus of reforms has been on reducing overlaps and interdependencies across
different entities of the system, not on actively promoting collaboration and
coordination at interfaces.
While many reform efforts were undertaken in recent years to
enhance the functioning of the innovation system, their focus was on
the efficiency of individual parts.
A clear, ambitious system-wide agenda
to connect these individual efforts was missing, and there was insufficient
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•
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focus on their systemic repercussions. This has resulted in some unintended
consequences:
-
Simplicity reduced room for experimentation and created the monopolistic
power of funders.
Implicit target group-thinking (focus on SMEs) misses the needs of large
firms that are key innovators and that are insufficiently linked to the NIS
and high-growth scale-ups.
Focus on individual programs and institutions has eroded systemic
interplay and has blurred boundaries between different players in the
system as roles and responsibilities were changed but not well defined.
-
-
1.4.2 A two-pronged approach towards a stronger Danish innovation system
Denmark is doing well on innovation, but it can, and in some ways, should do
better. But how to get there? Based on the analysis of where the Danish
innovation system is today, the Panel suggests a
two-pronged approach for
the future
(see Figure 22):
•
First,
improve the performance of individual elements of the NIS.
This
implies a review of existing individual elements of the innovation system and
their coordination and developing recommendations on how they can be
improved and what new policy measures can be introduced.
Second,
define a stronger strategic ambition.
This implies asking what
Denmark aims for its innovation system to achieve and then developing
recommendations for how it can achieve that ambition.
Figure 22: Two-pronged approach for Denmark
•
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Chapter 2 ‘Addressing current challenges of the Danish innovation
system’
is about identifying room for improvement in the existing system that
could boost performance. The chapter is organised into three sections: first,
recommendations on how to upgrade individual elements of the system and raise
their overall performance. Second, recommendations for better coordination
across the individual actors in the national innovation system. And third,
recommendations for a broadening of the innovation policy toolkit.
These recommendations will address many of the opportunities that are currently
unlikely to be fulfilled in Denmark and improve the performance of the NIS in key
areas. They can be pursued within the existing policy structure and are, to a
significant degree, under the purview of the MHES.
Chapter 3 ‘Defining a strategic ambition for Denmark’s innovation
system’
is about setting a clear goal and developing the unique strengths that
Denmark needs to achieve it. The chapter is organised into two sections: first, a
motivation of why setting out a clear strategic objective is important, and why
Denmark’s current policies do not provide sufficient direction. Second, a
discussion on what the process to develop a strategy should entail, including
some indicative thoughts on where it might go.
These recommendations are by their nature more explorative and focused on the
process of how Denmark can set appropriate goals for its innovation system that
are clear, take into account external developments and are widely accepted by
stakeholders. These goals would then translate into action priorities and an
alignment of organisational structures, both moving beyond the purview of the
MHES.
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2
ADDRESSING CURRENT CHALLENGES OF THE DANISH
INNOVATION SYSTEM
Denmark has a history of continuously improving the performance of the
innovation system. In light of the unfulfilled opportunities outlined above, the
panel identified room for improvement in specific areas of the Danish NIS. These
should be addressed independently of the decision regarding the strategic
approach outlined in Chapter 3. They address challenges related to improving the
performance of individual institutions or instruments, coordination challenges and
an enhanced policy toolkit.
Figure 23 below provides a summary of these recommendations.
Figure 23: Summary of recommendations
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2.1
Enhancing individual elements of the innovation system
The panel identified key elements of the innovation system, where there is clear
room for improvement. Addressing the following recommendations will enable
Denmark to increase performance within the framework of the current system.
The recommendations are based on a review of documents, panel interviews as
well as practices found in other countries.
2.1.1 Strengthening innovation-orientation of universities
Universities and other higher educational institutions are the sources of key
inputs for research-driven innovation. They provide human capital, generate
academic knowledge, provide access to the global pool of scientific information,
and conduct application-directed research. University research is also a source of
entrepreneurial ideas, spinouts and start-ups and the disruptive industries of
tomorrow are more likely to come from the curiosity-driven basic research at the
universities funded primarily by government and private foundations.
Spin-out companies based on academic research or scholarship (e.g. PhD or
student projects) are an important contributor to creating the industries of
tomorrow. Innovation thus needs to combine application-directed research for
the industries of today together with curiosity-driven research for the industries
of tomorrow. Enabling the translation of this innovation into economic impact is
driven by entrepreneurship education and student support facilities in
universities, and the services that university researchers can tap into to
commercialise their research and ideas. It is also supported by performance-
based incentive schemes, such as making entrepreneurial experience an
advantage for research positions
The eight Danish universities are independent institutions within the public
administration. They agree upon four-year framework contracts with the MHES
to specify the strategic goals of each institution. The individual strategies differ
by institution and take into account their respective strengths and challenges.
The strategic framework contract sets the direction for the development and
priorities of the university. It describes the expected impact at the end of the
four-year contract and how to get there through prioritized strategic focus areas.
The compliance with strategic framework contracts is monitored in annual status
reports and action plans submitted by the institutions. In the status report the
institution evaluates the progress based on the goals, activities and indicators
and pre-defined baselines for each of them. The specific indicators vary across
the institutions, but all include metrics of increased collaboration with business
and society. They include for example the number of spinouts, license
agreements, and number of research collaborations with external actors.
Despite the strong focus on university-business collaboration, the regular debates
between MHES and universities are focused mainly on education, research and
governance. Innovation is not given primary attention in these debates. The
following observations and recommendations emerged from detailed one-day
discussions with the leadership and technology transfer offices of the eight Danish
universities.
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Clarity of the Universities’ Innovation Mission
Challenge:
The universities are unclear about the expectations the Danish
government has towards them on their role in the innovation agenda. There is a
lack of clarity on the universities understanding of their own function in the R&I
system (e.g. more life science-intensive versus more technology-focussed
universities), and on their potential contribution to knowledge-based innovation.
While there are regular meetings between the Ministry and university leaders
under the Danske Universiteter umbrella, the topic of innovation rarely appeared
to be on the agenda.
Recommendation 1.1:
Ensure universities and MHES have a commonly shared
and clear understanding of what is expected of the universities in terms of
innovation. This understanding needs to respect the diversity of the eight
universities and the different ways they are able to contribute to knowledge
exchange. It also needs to extend beyond technology-based innovation and
include social, environmental and service innovations. Those mutually agreed
expectations should then be reflected in the universities’ missions.
74
This could,
for example, be achieved by anchoring innovation more strongly as a strategic
priority for the universities.
Responsible entity: MHES and university leadership
Budget implications: low
Technical complexity: low
Priority: medium
Strengthening dialogue on supporting innovation in universities
Challenge:
Government and universities need to work together to create an
environment and culture in universities in which knowledge exchange and
innovation can flourish. At present there does not appear to be a person or group
in the Ministry with sufficient seniority to influence policy and with a deep
understanding of the complexities and challenges faced by the universities in
effecting knowledge exchange. As a result, the interaction between universities
and MHES on innovation are scarce and there is little focus on innovation as a
strategic priority.
The Knowledge Exchange Concordat in development in the UK is available as an example at
https://bit.ly/2Iar2kg
60
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Recommendation 1.2:
Consider creating a dedicated university innovation role
within MHES of sufficient seniority to be able to influence policy.
The role would be to become an expert and advocate within the Ministry
specifically on knowledge-based university innovation. It should be the
responsibility of such a role to establish a knowledge-sharing arena between the
universities and the Ministry to design and develop policy options and be an
advocate within the Ministry for those policies.
The person would develop a deep understanding of the knowledge exchange
landscape within the universities, to establish an arena where policy options are
co-developed with input from university professionals and to advocate those
policies within MHES. The exact tasks are to be defined, but would include:
•
Understand in detail the university knowledge exchange (and research)
landscape with all its diversity and nuances, and the surrounding Government
policy landscape;
Develop policy proposals for the university innovation agenda;
Act as a policy advisor in this space including on any unintended consequences
of other policies in force or development (such as the State Aid issue);
Build a close working relationship with the universities & their TTOs.
•
•
•
Responsible entity: MHES
Budget implications: low
Technical complexity: low
Priority: medium
Resourcing of knowledge exchange activities in universities.
Challenge:
Knowledge exchange activities are funded by the universities out of
their overall base funding provided by MHES. With cuts in education funding and
in competitive research funds, the support for knowledge exchange activities is
limited. This results in offices that are under-resourced to deal with all the
potential opportunities being created by the research activity. See Table 3 for an
overview of key data related to Danish universities.
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Table 3: Key data on Danish universities
IP protection
expenditures
(million
DKK)
University
Copenhagen
Business
School
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
0
0
124
117
4
0
77
78
0
1
0
0
47
52
0
1
28
37
0
0
0
0
34
40
0
0
33
29
0
0
0
0
4
7
0
0
4
6
0
0
0
0
140
169
12
0
157
176
1
0
1
1
20
20
3
2,5
15
16
1
1
0
0
19,9
20,5
0,5
0,8
6,6
6,9
0,5
0,3
0
0
15,2
14,1
0
0
20,2
21,4
0
0
58
89
513
620
31
26
304
335
58
47
348,042
5.366.274
107,713
3.822.689
375,709
Technical
University of
Denmark
IT University
of
Copenhagen
University of
Copenhagen
Roskilde
University
R&D
Expenditures
(1000 DKK)
62
Priority
Patent
Applications
filed
New R&D
Agreements
with
industry
Commercial
revenues
(million
DKK)
Spinout
companies
established
Invention
disclosures
TTO and
contract
staff (FTE)
LOA's
executed
Licence
portfolio
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IP protection
expenditures
(million
DKK)
University of
Southern
Denmark
2017
2018
2017
2018
2017
2018
33
36
71
81
54
68
13
13
16
11
19
26
3
4
40
31
8
16
2
3
1
2
2
3
35
28
62
64
75
81
12,7
14,5
11,4
11,5
22,5
24,5
1,7
3,3
1,7
1,2
5,5
4,4
1,3
0,9
4,5
3,3
3,4
2,4
128
170
263
348
490
506
1.758.793
Aalborg
University
1.834.268
Aarhus
University
3.033.186
Source: Public research commercialisation data, Ministry of Higher Education and Science
R&D
Expenditures
(1000 DKK)
63
Priority
Patent
Applications
filed
New R&D
Agreements
with
industry
Commercial
revenues
(million
DKK)
Spinout
companies
established
Invention
disclosures
TTO and
contract
staff (FTE)
LOA's
executed
Licence
portfolio
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This limitation of funding for TTO activities has also created a culture in which
thinking is incremental – “if I had X much extra money I could do Y much more”
– rather than holistic – “This is how much potential we think there is and realising
it all would cost…..” This is partly a consequence of the uncertainty of funding in
the technology transfer offices which leads to short term tactical thinking rather
than long term strategic thinking. Stable long-term funding will allow universities
to invest in building and training professional knowledge exchange functions and
create a secure professional career for the practitioners.
Contrary to popular perception, knowledge exchange is not a cash generator for
universities but a net cost. In the United States, 87% of offices lose money and
the 13% that make money are the beneficiaries of (transient) serendipitous
success.
75
The financial benefit is seen in the economy, not the universities, and
can take 10-20 years to materialise. There is a strong argument therefore that
the beneficiaries (i.e. Government through taxes on increased economic activity)
should bear the costs. As noted above though, there is strong academic
competition for the current base funding. Moves to allocate some of that current
funding to knowledge exchange is likely to be academically unpopular and
therefore counterproductive.
Recommendation 1.3:
Consider creating an additional non-competitive
hypothecated funding stream specifically to support the knowledge exchange
activities.
The funding needs to be additional and hypothecated because otherwise it will be
difficult for university leadership to implement it in an effective way. Non-
additional funding would likely cause strong resistance among researchers in the
university environment.
The amount of funding should be decided based on an assessment of the full
potential, not on an incremental basis. Experience in other countries indicates
that a figure of 2.5% of extra-mural research funding could be a rough
guideline.
76
Such a funding would enable the offices to appropriately staff the key
functions and to develop and pursue a strategic vision. One possibility to
implement this would be to follow the UK model, where the government decides
on the nominal allocation. Based on this, universities produce a plan on how they
intend to use the funding. These plans are reviewed by Research England and
approved or adjusted. This approach allows to account for different strengths of
the individual universities.
https://www.brookings.edu/research/university-start-ups-critical-for-improving-technology-
transfer/
76
75
The figure of 2.5% is based on the US requirement that federal agencies are required to
hypothecate 2.5% of their extra-mural research spend to support its commercialisation through
the Small Business Innovation Research Programme. In the UK this share is in practice higher –
about 5% of Government research spend with universities is for supporting research translation.
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The necessary funding could be built up over time to reach this level. The work
programme could be developed in collaboration between the Universities and
MHES including detailed performance metrics.
Responsible entity: MHES
Budget implications: medium
Technical complexity: low
Priority: medium
National Legislation and State Aid
Challenge:
Some aspects of national legislation are perceived by universities as
being not conducive to knowledge transfer. This includes restrictions on the use
of university premises leased from Government to carry out commercial activities
such as incubation and acceleration as a result of the interpretation of EU State
Aid rules. Often the barriers are the unintended consequences of legislation
introduced for other sound reasons. Changes of national legislation to reduce or
remove unnecessary barriers is within the prerogative of the Government.
State Aid regulations are directly governed by EU rules; national legislation is
merely translating these rules into domestic laws. However it did feature strongly
as a significant barrier in discussions both with universities and with industry to
an extent that is not seen for example in the UK. Danish universities initiated and
paid for a review of the State Aid requirements by the law firm Bech Bruun (BB).
The report which included guidelines on State Aid in knowledge exchange has
been published recently. The Ministry was only involved in the very earliest stages
of the project.
The State Aid regulations are sufficiently imprecise as to require interpretation
and there is a paucity of case law to assist in that interpretation. It has not been
possible in the time available to get to the bottom of why State Aid is seen as a
major issue in Danish knowledge exchange but not in other EU countries such as
the UK. It may be down to different levels of pragmatism in interpreting the
regulation. What is clear from conversations with the European Commission is
that innovation is a high priority, that it does not want to impede knowledge
transfer in support of innovation and that since 2014 the Commission’s desire to
become involved in giving exemptions outside the General Block Exemption
Regulation (GBER) has declined.
Given the problems that State Aid issues were attributed with creating and the
interest of the European Commission in facilitating and fostering innovation in
the EU member States, there is an opportunity to bring greater clarity to what is
and isn’t required through conversations between the Commission, the Ministry
and the universities.
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Recommendation 1.4:
Review with the universities where Danish legislation is
not helpful to the university innovation agenda and consider what changes could
be made without impairing the wider objectives of the legislation outside of
university activity. This review should complement the recent joint review by
universities and MHES on IP and tech transfer.
Initiate a dialogue with the Commission and the universities to clarify the
application of State Aid requirements to university knowledge exchange. From
that, develop clear Government guidelines on the application of State Aid to
knowledge transfer so that there is a common understanding by all parties set
nationally rather than differing interpretations set locally by different parties.
Responsible entity: MHES with universities
Budget implications: low
Technical complexity: medium
Priority: high
Celebrating success and creating role models
Challenge:
Within the academic community, the traditional academic culture
focussed on research and education prevails. Nevertheless, there have been
some significant successes which are not necessarily widely known or
understood. There is much more that can be done to reveal and celebrate the
successes and create academic role models. Few academics would not aspire to
a senior academic position in a leading international university such as Stanford,
MIT, Oxford or Cambridge in all of which entrepreneurship is an integral part of
the academic culture.
There are some successful examples in Denmark. The University of Southern
Denmark (SDU) allows academics on permanent contracts at the university to
return to the same position if they leave to start a company. This allows founders,
with the knowledge required by the spin-out, to go with the spinout for a period
of time, which can be vital in the early stages of a company’s life. However,
founders are not always the right people to drive scale-up and having an option
to return to academic life is important.
In revealing and celebrating such success, it will be important that
entrepreneurship is seen as inclusive of the breadth of academic activity,
including the arts, humanities and social sciences, not just a technology/STEM/life
sciences focus. Revealing and celebrating success will also strengthen the
perception among the public and politicians of the role of research in innovation.
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Recommendation 1.5:
Develop in addition the existing innovation awards, a
dedicated programme to reveal and celebrate the success of academic
entrepreneurship in Denmark aiming at a culture change with the academic
community but also with the general public and politicians. This programme
should also provide a stronger incentives for academics to innovate as part of the
recent review.
Responsible entity: MHES
Budget implications: low
Technical complexity: low
Interrelation with other activities: connected to the review of the academic merit
system
Priority: low
2.1.2 Strategic instruments to drive ecosystems and domain development
The emergence of new sectors and the solutions to broader societal challenges
are increasingly the result of a systemic set of linked innovations, not just one
technological breakthrough or scientific discovery. The full value of individual
discoveries in these domains is only revealed if they are combined with
complementary research activities or business model innovations.
Funding mechanisms that support only narrow research efforts by an individual
entity fail to adequately support research with the potential for such systemic
effects. Strategic funding programs need to be based on a vision of an entire
innovation agenda and pathway, moving beyond individual projects assessed in
isolation.
In addition, many of today’s challenges are too complex to solve with governance
approaches that involve only a few, or one, implementation agencies. Moreover,
the next generation of science, technology and innovation policies will not be the
sole responsibility of governments but rather a concerted action of all actors in
the entire knowledge and innovation system.
77
This drives the need for strategic
instruments to promote multi-stakeholder interactions across sectors and
industries as new policy instruments.
With strategic instruments, we refer to Research, Development and Innovation
(RDI) promotion schemes that have an explicit intent to consolidate R&D and
innovation activities in specific directions, for example, related to a technological,
economic or broader societal aim. To achieve this goal they have to operate at
the systemic level. Good examples are schemes to support different types of
Kuhlmann, S. and A. Rip, 2018, Next generation Innovation Policy and Grand Challenges,
Science and Public Policy,
pp. 1-7.
67
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public-private and multi-stakeholder partnerships at the interfaces of research,
industry and technology or industry sectors (see Box 2).
Strategic instruments have a set of specific characteristics:
78
•
They mobilize a
broad array of academic institutions, firms, and other
entities
that are connected through a different types of linkages and shared
interests in a specific market or technology domain.
They often have a
stronger element of top-down steering,
such as
earmarked government funding and prioritisation, linked to specific
government strategies and objectives. Good examples of these types of
programs include the Finnish SHOK program, the Swedish Sectoral programs,
the German Spitzencluster program as well as the Austrian Compact
program.
79
Actors in the field,
rather than RDI funding agencies,
are empowered
to
draft road maps, identify key stakeholders and propose thematic focuses and
strategic initiatives. Strategic instruments combine therefore a top-down with
a bottom-up approach.
They explicitly
aim to utilise the power of digital and other types of
platforms
(for example, data platforms, biobanks) as a new source of
innovation that goes beyond more traditional approaches such as for example
university research and technology transfer used to boost entrepreneurship
and innovation.
They also
focus on cross-sectoral collaboration and enabling
technologies.
In many countries these new strategic instruments have
replaced previous and more traditional models, such as the SHOK in Finland
and the Sector program in Sweden, which previously had a sectoral narrower
R&D focus and top-down governance model.
•
•
•
•
The following observations are based on interviews with stakeholders and users,
a review of strategic documents of different organizations, notably the IFD and
the recent IFD review. The Panel also drew on the experience of peer countries,
such as the Netherlands and Sweden.
78
79
This list is based on the experiences of Sweden, Finland and the Netherlands.
https://www.taftie.org/sites/default/files/Taftie_TF_CompAct_Final_Report%20_LV.pdf
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Box 2: Examples of Systemic Instruments
Examples of systemic instruments in Sweden
Four kinds of systemic instruments, which complement each other could be
considered. These are based on the experience in Sweden, which has
implemented a systemic approach to innovation. Importantly, while each of these
tools has particular strengths and weaknesses, and each of them can achieve
impact individually, they work best when there is a high-level ambition they can
contribute to.
Mission processes
– mobilising actors across industries, across disciplines,
across ministries and across agencies to formulate bold missions for societal
outcomes related to systemic challenges, which requires system transformation.
Such missions and mission processes could, (through the missions formulated
and through the co-creation processes leading up to them) serve as
fundamentally important policy directions across government ministries and
agencies as well as mobilizing the commitments, resources and trust between
different actors that would be necessary to successfully mobilise towards reaching
the missions.
Mission processes are a meta approach for the other tools described below.
However, a new approach and experimentation is needed to define missions,
because no recognized methodology for doing so exists.
Strategic Innovation Programs
– aiming at catalysing long-term, broad-based
strong commitment of key innovation actors towards a common vision connected
to an area with substantial potential (or importance) for future competitiveness.
The agendas and the consecutive roadmaps should generate cross-sectoral,
cross-industrial and cross-technological fertilisation. They should be implemented
in a series of calls and other measures and steered strategically by the key
stakeholder groups responsible for the agendas (bottom up). The main partners
are firms and HEIs but also the public sector. Firms are often the main drivers
but administratively the managing organisation differs, based on specific
legitimacy.
Strategic innovation programmes allow for large scale collaboration between
leading firms and academia based on foresight and have an important
demonstration effect for the system as a whole. They are flexible and evolving
approaches that allow for addressing the key challenges across different policy
arenas, for example regulation instead of funding. However, their systemic
impact is very hard to evaluate and given the novelty of these approaches, there
is a need for deep learning and constant improvement to ensure that the
objectives and measures are not oversimplified.
Societal Challenge Consortia
– aiming at catalysing stepwise, targeted,
strongly committed consortia in addressing urgent specific societal challenges
that could be practically addressed in the country, but which could have potential
for scaling towards corresponding international challenges. This could be based
on the concrete potential of public sector benefits and private firm revenues, if
successful in generating the envisaged solutions. The public sector, in the form
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of parts of municipalities and county councils, are almost always in forefront,
together with innovative firms. There are often several firms, which need to
connect their solutions in order to generate viable businesses and contribute to
solving the societal challenge. The main partners are public sector agents and
private firms, often together with HEIs and or research institutes, and
increasingly with public regulatory institutions.
These consortia can generate key niches solutions on the way towards large scale
solutions, allowing for problem-oriented approaches. They play an important role
in demonstrating that certain solutions for transformational challenges that
require changes across the system can work.
Competence Centres
– aiming at generating and supporting strong hubs of
excellence in key competence areas characterized by high, international,
attraction gravity on companies, talent and capital. These could drive the
directions of the strategies and behaviour of firms and HEIs and their overall
patterns of relationships, and which could stimulate innovative HEI-research and
HEI-research agendas. The main partners in competence centres are private
firms and public HEIs. HEI-based steering and location of activities.
The competence centres were successful in driving progress in basic science in
collaboration with industry and academia. However, the Swedish example shows
that they were too small compared to the investment of science centres globally
and that this limits attractiveness to MNCs.
Challenges
Following the changes undertaken across the Danish NIS in recent years,
ministries and their agencies have streamlined their processes and become
increasingly specialized within their specific mission and mandates. This has also
led to the development of new policies within these specific missions and
mandates.
These reforms, the specialisation across ministries and agencies and fine-tuning
of policies and instruments, have largely been driven by a desire to increase the
efficiency of the RDI system. However, they lacked a strategic approach that
would leave more room for new instruments that incentivise cross-industrial and
cross-sector collaborations across many stakeholders in areas of strategic
importance.
There are examples of some new Danish cross-industrial and multi-stakeholder
instruments, such as the INNO+ initiative,
80
grand solutions scheme of the Danish
80
INNO+ is an initiative promoting mission-driven societal partnerships implemented by IFD.
Although it has not yet been evaluated, it gave rise to first partnerships including: Trialnation -
http://www.trialnation.dk/ - (improving environment for clinical trials) and Future Cropping -
https://futurecropping.dk/en/about-future-cropping/ - (future intelligent regulation for precision
farming).
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Innovation Fund and the MADE initiative.
81,82
However, by and large, it seems
that the focus has been predominantly on funding narrower R&D projects within
sectors or industries. As a result, the Danish R&I system comprises a mix of
interesting and efficient individual instruments rather than a strategic policy mix
of instruments that creates collaborative platforms for key actors and
stakeholders across sectors in areas of strategic importance.
The dominance of narrow, project-oriented funding streams does not support the
evolution of ecosystems and innovation domains that move beyond individual
technologies or solutions. At a time when the more disruptive industrial
developments currently unfold at the interfaces of industries and sectors, where
enabling technologies such as artificial intelligence, neuro- and nanotechnologies,
clean technology and new business models have their most pervasive impact, the
lack of appropriate models of promoting innovation may lead Denmark to lose
much of its innovative edge. Further, the lack of strategic instruments may also
lead to a suboptimal utilisation of Danish capabilities and their creative
combination and thereby hinder the emergence of new innovation and business
ecosystems.
The shift from traditional R&D project-based funding models to new strategic
instruments that promote multi-stakeholder interactions across sectors and
industries is very clear in many other advanced countries in the Nordics and
Europe. Recent examples include especially the Strategic Innovation Programs
83
in Sweden and business ecosystem promotion
84
in Finland and the top sector
policy in the Netherlands.
85
81
The MADE initiative brings together different actors in the innovation space and industry to
work together on making Danish manufacturing future-ready through innovation, education and
research.
https://ufm.dk/en/publications/2013/inno-catalogue/inno/inno-a-platform-for-inspiration-
and-prioritisation-for-strategic-investments-in-innovation?set_language=en&cl=en
83
84
85
82
https://www.vinnova.se/en/m/strategic-innovation-programmes/
https://www.businessfinland.fi/en/for-finnish-customers/services/ecosystems/
https://www.government.nl/topics/enterprise-and-innovation/encouraging-innovation
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Recommendations
Recommendation 2.1:
Building on the experience with the INNO+ initiative,
develop a specific Danish approach to promoting systemic (i.e. longer-term,
multi-partner and multi-project) agendas based on actor-driven roadmaps that
facilitate networks, actors and stakeholders across technological and industrial
sectors in areas of strategic importance. This new approach should look beyond
narrow funding of R&D projects to include needs for orchestration, possibilities to
maximise new types of platforms and other new sources of innovation that rely
on ecosystem dynamics. It should take stock of lessons learnt from previous
similar programs in peer countries.
Recommendation 2.2:
Include a platform approach within the model in
Recommendation 2.1 that links stakeholders, sectors and industries through
enabling technologies (for example, digital platforms, public data, biobanks) and
supports new types of ecosystems from the ‘bottom-up’. This type of structure
may need seed funding from government; it should also include a dedicated effort
to more strongly link MNCs with SMEs.
Recommendation 2.3:
Further empower Innovation Fund Denmark with the
mandate and mission to develop such a systemic model and platform approach
across governmental silos, technology and industry boundaries. In Denmark, the
MADE initiative is one good example of such an approach, the Finnish ecosystem
and Swedish Strategic Innovation programs are other good examples. As a first
step, the government should take stock of existing digital and other types of
platforms, testbeds and emerging networks that can be leveraged further through
a clear mandate. It should also be accompanied by new and more robust impact
assessment approaches and metrics (see Section 2.3.3).
86
Recommendation 2.4:
Extend current RDI funding models and their
interlinkages to support a more systemic mix of policies and instruments that
covers a broader spectrum of RDI activities (road maps, R&D, testbeds, network
facilitation, ecosystem orchestration, innovative procurement, linkages to global
value chains etc.). Possible extensions may include a need to notify new
instruments with the European Commission.
Responsible entity: Government
Budget implications: medium
Technical complexity: medium
Priority: medium
Compare with https://innovationsfonden.dk/sites/default/files/2019-
03/evalueringsrapporten-002.pdf , see also the evaluation of the Finnish SHOK programs
https://rio.jrc.ec.europa.eu/en/library/licence-shok-external-evaluation-strategic-centres-
science-technology-and-innovation).
72
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2.1.3 Science parks, physical ecosystems and incubators/accelerators
Science Parks, physical ecosystems and incubators/accelerators are an important
part of a country’s innovation ecosystem. One of the most important roles they
play is to stimulate the flow of knowledge and technology between universities
and companies and provide a conducive environment for the creation and scaling
up of spinouts.
Effective science parks, like the High-Tech Campus based on the Phillips Research
site in Eindhoven, provide shared infrastructure, including prototyping facilities,
to help young companies access mentoring and finance. The. Investment in
science parks can also drive investment into companies by providing them with
incubation and follow-on space. The Stevenage Bioscience Catalyst science park
opened in 2012 with an investment of just over £40m from the UK government,
GlaxoSmithKline and the Wellcome Trust. Over the past seven years, it has
attracted key tenants, both large and small, such as Life Arc, GE and Freeline,
and overall companies on the park have attracted over one billion pounds of
inward investment.
The following observations and recommendations are based on interviews with
users of the system, a one-day visit of Panel members to the Robotics Cluster in
Odense as well experience in other countries, notably the UK.
Challenges
Within Denmark there are science parks and other physical ecosystems that
support many sectors, for example, the Copenhagen Bio Science Park COBIS ,
DTU Science Park, Symbion, the robotics clusters at Odense or the Agrobusiness
Park. These appear to have grown up relatively independently and not as a part
of a coordinated national innovation strategy across the whole ecosystem. For
example, the robotics cluster was established as a response to a downturn in the
Lindo shipyard.
There is also a strong demand for such science parks and incubators/accelerators
in Denmark, especially among the young entrepreneurs and would-be
entrepreneurs interviewed for this review. In some areas, there is a clear
shortage of physical space and infrastructure that would enable more rapid
growth of new companies, for example, lack of prototyping or demonstrator
space.
There appears however, to be a lack of clarity about how public-private
collaboration in the context of physical innovation infrastructure should work.
Roles and responsibilities of the different actors and structure of funding streams
are unclear. Moreover, there does not appear to be a mechanism by which best
practice and sharing of information across science parks within and between
sectors can occur. Clearly, there are some very successful science parks with
good examples of innovative business models, effective mechanisms to stimulate
entrepreneurship and ways to incentivise spinouts from universities, but how
widely these are communicated is not clear.
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There is also a need for clarifying funding streams and how they could be
structured between different actors. Facilities like incubators are generally not
commercially profitable. However, they are essential for early stage incubation of
young companies that then move on to follow on spaces that can be operated
commercially as they attract larger companies (e.g. MNCs) as well. The
requirement for incubation facilities and funding for such parks would be clearer,
and these could also be accessible to start-ups originating from non-academic
institutions since it did not appear to be easy for industry derived start-ups to
obtain some of the benefits afforded spinouts from academia, for example,
accelerators and incubators.
There were some good examples of best practice that could be more widely
adopted. The University of Southern Denmark (SDU) promotes mobility between
physical spaces and the university by allowing academics on permanent contracts
at the university to return to the same position. It also allows young companies
to incubate within the university for as long as they require. However, this is not
usual as there are certain legal constraints on the time (due to interpretation of
EU State Aid rules, see section 2.1.1) that companies once formed and funded
can remain within an academic institution. The SDU also runs courses and
mentorship programmes that help new entrepreneurs, for example, in design.
Although a number of factors mentioned in more detail elsewhere, for example,
finance and technology transfer capabilities (see Section 2.1.1), are important in
driving the ecosystem, they are especially important for incubators and
accelerators.
Finally, the recommendation in section 2.1.1 for a review of the application of
State Aid rules is also applicable to incentives for the physical ecosystem and for
companies wishing to scale.
Recommendation 3.1:
Government should consider reviewing the physical
innovation ecosystem strategy and provide clearer mandates for actors (e.g.
universities and private sector partners) and develop a set of guidelines for best
practice as well as greater clarity on funding streams and their potential
structure. In particular it should consider the following:
•
Universities should be able to provide incubation facilities and training in the
skills and competencies required for start-ups under conditions that are
optimal for the companies
Ways in which non-university derived start-ups could be incentivised and
helped to grow should be explored
A mapping of existing infrastructure needs for key sectors, for example, for
prototyping, should be carried out
•
•
Responsible entity: Government in collaboration with universities and regional
funders.
Budget implications: high
Technical complexity: medium
Priority: medium
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2.1.4 Research and Technology Organisations (RTOs): better definition of
roles
In many advanced countries, the national innovation system includes a bridging
function between academic research institutions and industrial or societal
organisations. In the UK, for instance, this bridging is mostly performed by
organisations within the academic eco-system. In Germany and other countries,
particular RTOs act as an intermediary bridge. The function of RTOs is
“to harness
science and technology in the service of innovation, to improve quality of life and
build economic competitiveness with high impact for society”.
87
RTOs cover a broad spectrum of technologies and scientific fields. Normally their
work ranges from applied research to the development of new products and
services.
“RTOs thus take a unique position in the deployment process from
science to innovation. They closely cooperate with industries, large and small, as
well as a wide array of public actors. With their open-innovation business model,
one of the core missions of RTOs is to transfer research and technology to the
market with high impact for society”.
88
Although the potential impact of RTOs in
boosting innovation is much less studied than that of other policy instruments,
there is evidence that interactions with an RTO can have a strong, positive effect
on both the turnover and productivity of companies.
89
The following observations are based on interview with the leadership of most of
the Danish RTOs as well as information provided by MHES to the Panel on the
performance and key data of the RTOs.
Challenge
Denmark’s RTOs (seven GTS Institutes) need a revision of their strategic
positioning and the funding and operating modes. The RTOs generally service
Danish companies, and especially SMEs. More than 16,000 private Danish
companies buy services from the RTOs each year.
90
The institutes offer their
clients mainly R&D-based and testing services, and they provide access to
technological facilities. About 41% of turnover is generated in testing services.
91
87
IDEA Consult 2015. ”EARTO Economic Footprint Study: Impact of 9 European RTOs in 2014”,
Brussels (EARTO).
Idem.
88
89
Comin, D, G. Licht, M. Pellens, and T. Schubert 2019. ”Do Companies Benefit from Public
Research Organisations? The impact of the Fraunhofer Society in Germany”. ZEW Discussion
Papers, no 19-006, ZEW-Leibniz Zentrum für Europäische Wirtschaftsforschung, Mannheim.
https://www.econstor.eu/bitstream/10419/193962/1/1067840613.pdf?mc_cid=5bf67d4de4&
mc_eid=e767d08f32
90
However, almost 80% of the customers make purchases of less than 3400€ in value (and 40%
less than 700€ in value). See Self-Assessment of the Danish knowledge-based innovation
system.
GTS 2018. ”Performance statement by the GTS institutes 2018”. Taastrup (GTS-foreningen).
In detail: 47% of GTS-users buy services within testing and validation. 32% buys
development/solutions referring to specific problems/challenges in development and production.
25% of users buys certifications. 22% of GTS users participate in publicly financed RDI-projects.
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They are less involved in strategic technological and innovation-oriented research
(although there are notable exceptions such as robotics).
While the GTS Institutes perform by and large well in this current profile,
compared to their organisational counterparts in other European countries, the
Danish RTOs:
•
Cannot
to the same degree be considered as an active and strategic
interface
between
university-based
research and technological innovation in
companies.
In other countries, the bridging function of RTOs includes the mobility of young
researchers from universities to RTOs and further to companies and back, as
a mode of ‘absorptive capacity’
92
and knowledge transfer in both directions.
93
Earn most of their
income from company services (76.6% of turnover is
generated by commercial sales to the private sector, 6% is from commercial
sales to public sector.).
94
Receive relatively
little public funding
(mainly via performance contracts and
project grants), so their capacity to create their own new knowledge is limited.
There are large differences in the amount of funding of the individual GTS
institutes, but on average, about 10% of turnover of the GTS comes from R&D
performance contracts –
de facto
the state basic funding.
95
This is low
compared to other European RTOs. That may also explain why several of the
interviewees indicated that the investment in state-of-the-art research
infrastructure seems under pressure. In the long run, this can further threaten
the already weak strategic position of GTS institutes as an interface between
university-based research and company-based technology development.
•
•
Moreover, the position and mission of the GTS institutes in the Danish innovation
system have become less clear cut. Since 2013, the university colleges and
business academies have a mandate to conduct applied research. The maritime
higher education institutions have conducted applied research since 2015. Like
the RTOs, the HEI focus on SMEs but also on public institutions like for instance
hospitals, primary schools and social municipal offices where the graduates from
the university colleges primarily find jobs. The university colleges have steadily
developed their operational model (in terms of staff, partnerships, etc.) to fulfil
their mandate to conduct applied research. The business academies and maritime
HEI are smaller institutions and the adaptation to the enlarged mandate takes
more time. Meanwhile, the universities are also stimulated to become more
Cohen, W. M., & Levinthal, D. A. (1990). „Absorptive capacity: A new perspective on learning
and innovation”.
Administrative science quarterly, 35(1),
128-152.
93
92
As for Denmark, a recent study [Videnskabeligt personales karriereveje, Damvad 2018]
documents that approximately 1 pct. of researchers (young and old) leave the university sector
annually for other public or private employment. Of these, 18,4 pct. leave for employment in
private R&D services. The study does not follow the flow of researchers further from private
R&D-services to industry or back. This finding is based on the interviews conducted by the panel.
”Performance statement by the GTS institutes 2018”. Taastrup (GTS-foreningen)”
Idem.
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94
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entrepreneurial and establish closer links with industry. They increasingly provide
services that are similar to those the RTOs traditionally provide, such as facilities
for laboratory testing.
The literature review suggests that Danish RTOs may have the potential to reach
more companies, if access to facilities were improved, and if the technological
skills of the staff were supplemented with stronger business skills.
96
However,
the literature review also indicates, that companies that are already advanced
technology users within their industry experience greater value creation from
using RTOs than companies that consider themselves as technological
“followers”. Technological followers are more likely to use the RTOs for more
traditional tests, calibration services, etc. rather than R&D projects, while larger
companies and technology leaders are more likely to work together with the RTOs
in research and development projects.
Recommendations
Recommendation 4.1:
Rethink and clarify the role of the different actors in the
research and innovation system, with special attention on the role of both RTOs,
and university colleges, business academies and maritime HEI with respect to
universities.
97
As the self-assessment report already states:
“Companies may find
it unclear which institutions to cooperate with and how the different types of
institutions can contribute to their innovation processes. There may be a potential
to establish a clearer division of labour, while at the same time provide incentives
for the different actors to collaborate”.
98
RTOs could, for example, have a clear
role in applied, “mission-oriented” research. Universities of Applied Science or
polytechnic institutes in some countries (for example, Finland) have a stronger
focus on their regional role. The optimal role in Denmark depends on the overall
strategy (see Chapter 3). The OECD has gathered many inspiring examples on
the role of higher education institutes and public research organisations in case
studies on the Knowledge Triangle approach.
99
Budget implications: low
Technical complexity: low
Interrelation with other activities: medium-high; should fit in overall strategy
development
Priority: medium
96
See IRIS 2918. “Literature review and assessment of the Danish knowledge -based innovation
support system. Prepared for the Danish Ministry of Higher Prepared for the Danish Ministry of
Higher Education and Science”, November 2018
These recommendations would complement the Recommendation 1.1 “Clarity of the
Universities’ Innovation Mission”
98
99
97
See Self-Assessment of the Danish knowledge-based innovation system (p. 15).
OECD 2016. ”Enhancing the contribution of Higher Education and Research Institutions to
Innovation. Background document, case studies”.
Paris: OECD. https://www.oecd.org/sti/Case%20studies%20-%20KT%20Event_FINAL2.pdf
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Recommendation 4.2:
Enable inter-institutional collaboration: Ensure that
coordination mechanisms and communication channels are established, put more
systemic incentives for collaboration between RTOs and universities in place. One
can think of (1) new institutional vehicles (such as institutes, merged
organizations or new organizations) to promote new sectors and disciplines, (2)
funding levers for collaborative research proposals (see the case study on the
Dutch top sector policy in Section 2.3 of this report), or (3) the development of
joint road maps for large research infrastructures. In the latter approach, the
shared facilities can initiate further interactions (joint research projects, etc.). In
specific cases, depending on the role and mandate that is allocated to the actors
in the system, it is also possible to explore further horizontal integration
(mergers, shared subsidiary organisations, etc.) – Denmark has merged a few
research institutions with higher education institutes before.
100
Budget implications: medium
Technical complexity: medium
Interrelation with other activities: medium
Priority: medium-high
Recommendation 4.3:
Review the funding model of the RTOs. Currently, the
GTS institutes receive two forms of public funding: based on performance
contracts (ca. 10% of turnover) and competitive project funding (for example,
the Innovation Fund and Horizon2020, also about 10%, including international
funds). If the GTS institutes are to play a bigger role as a strategic interface
between basic research and commercial innovation activities, they will need the
means to invest in maintaining and developing a state-of-the-art knowledge base
(including large research infrastructures). The funding model should ensure that
the RTOs can build up knowledge to increase their absorptive capacity (for
example, by hiring more PhD students) with similar conditions as universities for
example by providing RTOS with base funding from the state. They need that to
remain a relevant strategic partner for industry in the long term. The funding
model can also be used to provide incentives for collaboration with universities
and to keep the RTOs in their hybrid position between the public and the private
sphere and between the academic and the ‘civilian’ sphere.
101
Budget implications: medium-high
Technical complexity: medium
Interrelation with other activities: low
Priority: medium-high.
100
101
Idem.
Gulbrandsen, M. 2011. ”Research institutes as hybrid organizations: central challenges to
their legitimacy” Policy Sciences (2011) 44: 215. https://doi.org/10.1007/s11077-011-9128-4
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When considering a revision of the institutional and financial set-up of Denmark’s
RTOs (and in particular the current GTS institutes), it can be useful to reflect on
the funding and operating modes of the Fraunhofer Society in Germany and the
RTOs in the Netherlands (see Boxes 3 and 4).
Box 3: Case Study: Operational model of the Fraunhofer Society (Germany)
Case Study: Operational model of the Fraunhofer Society (Germany)
With a total budget of more than
€2.5
billion in 2019, Fraunhofer is the largest
contract research organisation in Europe. Fraunhofer conducts applied research
in the areas of health, security, communication, energy and the environment in
72 institutes and research units at locations throughout Germany. The Society
employs a staff of more than 26,600.
102
Fraunhofer’s budget has three main sources.
Roughly one-third is provided
through
basic funding by the German government.
The other
two-thirds
are acquired by the individual institutes, either through
publicly funded
projects
within consortia or through bilateral
contract research with
industry.
Fraunhofer has a highly decentralised governance model. Individual
institutes may set their strategic and scientific focus largely autonomously, as
long as they manage to balance their budget and stay in line with Fraunhofer’s
general strategic scope.
Compared with other publicly funded research organisations in Germany, the
share of industry revenues is relatively high and a unique feature of Fraunhofer.
To foster this role, a more or less self-regulating financial model is used to
allocate basic funding among the institutes: “A large amount of the basic funding
from government is distributed to the institutes via a competitive key which
encourages them to operate within a specific ratio of industrial revenues. When
institutes acquire 25–55% of their total budget through contract research with
industry, they are rewarded with a higher share of basic funding than institutes
operating outside that corridor, i.e. with a share of less than 25% or more than
55% of their revenue from industry.” (Cuhls et al. 2012, 235).
103
This formula
“strengthens the competitiveness of the individual institutes in the industrial
contract research market, but also leads to a certain degree of competition
between them.”.
104
At the same time, cooperation between various knowledge domains within the
72 Fraunhofer institutes is needed to address complex interdisciplinary system
approaches in R&D. Hence, Fraunhofer fosters and intensifies cooperation
between institutes to fully utilise the strength of its broad R&D portfolio with
https://www.fraunhofer.de/en/about-fraunhofer/profile-structure/facts-and-figures.html
(approached March 25, 2019).
Cuhls, K., Bunkowski, A., & Behlau, L. 2012. „Fraunhofer future markets: From global
challenges to dedicated, technological, collaborative research projects”. Science and public
policy, 39(2), 232-244.
104
103
102
idem
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various measures.
105
Institutes of similar scientific and technological scope form
a total of eight knowledge domain groups (defence and security, information and
communications technologies, innovation research, life sciences, materials, light
and surfaces, microelectronics and production). Within the groups, institutes plan
and strategically align their respective R&D portfolios. Another platform of
cooperation is built by the 22 Fraunhofer expertise alliances, in which institutes
team up to represent specific fields of expertise to the market (e.g. water
systems, cloud computing, lightweight structures etc.). Members of an alliance
often come from different institute groups, thus exhibiting the transdisciplinary
nature of the alliances. Moreover, Fraunhofer headquarters fund internal research
programmes for joint R&D projects in order to support cooperation between the
institutes.
Box 4: Case Study: RTOs in the Netherlands
Case Study: RTOs in the Netherlands
A substantial part of applied research in the Netherlands is performed by five so-
called applied research organisations (TO2): TNO, Wageningen Research, NLR,
Deltares and MARIN. These organisations coordinate their activities toward
government in the ‘Federation TO2’ and align their research to provide added
value in the area of applied knowledge.
The TO2 institutes each have their own profile and differ greatly from one
another. Not only in size (between 368 and 2715 FTE, in 2015), but also in terms
of funding. Generally speaking, all have at least three different sources of
funding: a lump sum provided for by the national government, public funding
that is earned in competition (for example, H2020, national grants, etc.) and
private funding.
Their lump sum government contribution was between 9% and 41% of turnover
(in 2015). The RTOs are encouraged to use the lump sum as a lever to attract
other forms of funding, within boundaries of, for example, state aid rules, but
also requirements regarding economic sectors, and sometimes tasks that are
imposed upon the RTOs by law or societal issues that need to be covered by the
institutions. The amount of the lump sum is not influenced by the success rate in
attracting private funding, but some of the other forms of public funding are
(notably the “PPS-toeslag”, see Section 2.3.1). The most recent evaluation of the
RTOs (2017) concluded that there is insufficient space in the portfolio of the TO2
institutes for societal issues which are not driven by a direct demand (and
financing) from companies. The emphasis of the government on the financial
performance of the TO2 institutes, and declining public funding of most TO2
institutes, forced the institutes to obtain more funding from the market, resulting
in an increasing focus on topics with a quick financial return. Partly in response
to this evaluation, the total funding has been increased with an additional 75 M€
per annum since 2018, largely for improving the long-term knowledge base and
105
idem
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investments in research infrastructures, and for activities on societal challenges
(mission-based).
There is limited overlap in (economic) sectors covered by the different TO2
institutes. In societal areas where multiple TO2 institutes are active, each TO2
institute generally has its own specialisation.
The TO2 institutes are just one of the players in the public knowledge and
innovation ecosystem (besides, for example, universities and universities of
applied sciences). The classic bridging function of the applied research institutes
(the translation of basic knowledge into the applications in the market) is subject
to change because universities have also moved towards applied research (higher
TRL) and some universities of applied sciences also increasingly focus on
research. Not all TO2 institutes have been able to accommodate these changes
to the same extent. This may, from a societal perspective, result in a suboptimal
situation, where government-funded institutions may work past each other, and
sometimes even compete with each other, instead of working together.
2.2
Strengthening coordination across the system
In the past, much of the coordination in the Danish innovation system took place
through informal structures. The rising complexity of the system and subsequent
reforms that aimed at simplifying it and making it more efficient have reduced
interaction and coordination. The panel identified several instances where
increased coordination would lead to higher efficiency. Examples include the
alignment of procurement, a cross government innovation policy, or better
coordination with private foundations.
The next set of recommendations addresses the need for better coordination
across the individual actors of the Danish NIS, in particular, coordination with
private foundations, better alignment across the system, and strengthening
international linkages by establishing international innovation contact points in
municipalities.
2.2.1 Coordination with private foundations
Private foundations fund a significant and growing share of research carried out
at universities and other public institutions; they play an important role in the
research and innovation ecosystem across all Europe.
106
While there are a very
large number of private Foundations, most are small with an average income of
0.2 million EUR. In 2012, Foundations provided approximately 4.5 billion EUR to
research and 0.5 billion EUR to innovation across the EU. Importantly, the
Foundations from four countries (UK, Germany, Sweden and Denmark) account
for two-thirds of EU Foundation spend on R&I in the EU. This highlights the
importance of Foundations in the Danish ecosystem. An important finding from
the EUFORI study of Foundations across the EU
107
was that there is generally a
106
107
http://euforistudy.eu/
http://euforistudy.eu/
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lack of coordination between private and public initiatives, which leads to
inefficiency and potential imbalances in the ecosystem.
In the future, it is anticipated that private foundations will not only continue to
play an important role in the Danish ecosystem but in fact will grow in significance
as they broaden the portfolio of research they support and increase their funding
level. For example, the Novo Nordisk Foundation, which is the largest Foundation
in Denmark, has broadened its remit from healthcare and life sciences to include
natural and technical sciences and sustainability.
108
Since 2007 it has supported
the development of the Copenhagen Bioscience Cluster with over EUR 850 million
invested in four research centres and two infrastructure projects. Since 2010, the
Foundation has donated more than DKK 13 billion (EUR1.7 billion), primarily for
research within biomedicine and biotechnology and diabetes treatment at
universities and hospitals in Denmark and the other Nordic countries.
109
Universities and public research institutes are the primary recipients of funding
from private foundations. Much goes to research, but there appears to be an
increase in the amounts provided for innovation and entrepreneurs. For example,
the Lundbeck Foundation has a venture capital arm with a portfolio of small
biotech companies based on Danish university research funded by
 the
Lundbeck
Foundation, called Emerge.
110
Two initiatives have been recently launched in this space. In November 2018,
MHES together with public and private foundations started a platform for
strengthening collaboration, the Forum for Research Funding. It will address
questions ranging from external funding in Danish universities, but also how to
improve researchers’ career paths and research infrastructure. In May 2019, the
public Danish National Research Foundation and four of Denmark’s major
research-funding private foundations have agreed on funding the Pioneer Centres
a joint national research initiative at the level of 1 billion DKK, 134 million EUR.
The initiative was developed with MHES and initial focus is on artificial intelligence
and climate/energy.
111
The following observations are based on interviews with private foundations and
public funders, a review of strategic documents and web pages of the foundations
as well as receivers of funding of private foundations.
Challenges
Coordination among private foundations and the MHES can be strengthened in
Denmark and given the large size of the Danish private foundations, this is an
108
109
110
111
https://novonordiskfonden.dk/en/strategy-and-goals/
http://cph-bioscience.com/en/about
https://www.lundbeckfonden.com/en/about/organisation/
The Danish National Research Foundation will administer the initiative. The total public
funding contribution is 400 million DKK and the Carlsberg Foundation, the Lundbeck Foundation,
the Novo Nordisk Foundation, and the Villum Foundation will contribute 600 million DKK.
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issue of even higher importance than in the rest of Europe. Consultations with
stakeholders from the current exercise and the 2019 review of the IFD
112
confirmed that there was very little dialogue at the strategic level with
government or other funders and foundations, like the Novo Nordisk Foundation
or the Danish Industry Foundation.
The current situation is that foundations are not strategically integrated into the
Danish innovation ecosystem. They do not fund infrastructure components in the
way the Wellcome Trust does in the UK (see Appendix C). They are not
consistently at the table when innovation strategies are discussed and
formulated, and they do not work with public funders to strengthen existing areas
and build capacity in new areas of research and innovation.
Given the importance of foundations to R&I funding in Denmark (for example,
the NovoNordisk Foundation
113
paid out 1.7bn DKK in 2018, and aims to increase
its pay-outs to 5bn DKK by 2023;
114
the Carlsberg Foundation
115
gave out
approximately 400 million DKK in grants in 2018;
116
and the Lundbeck
Foundation
117
gave more than 500 million DKK),
118
there are real opportunities
for synergies in terms of seeding new areas, supporting research and innovation
capability development and co-funding of infrastructure (see the Wellcome Trust
case study in Appendix B). For example, in the late 1990s, it was clear that there
was a need for significant funding for infrastructure renewal in UK universities.
The Wellcome Trust made funds available which were matched by the
government and became the Joint Infrastructure Fund. This demonstrated that
such funding was important and made a significant difference to the universities'
research capabilities. At this point, the Wellcome Trust funding was reduced, and
the government supplied the necessary funding via a Higher Education Funding
stream.
Dialogue and collaboration take place at the operational level, but there are
currently no initiatives to establish a dialogue or common understanding on the
strategic role of the private foundations within the NIS and on the overall shared
objectives that both the public sector and private foundations aim to achieve.
There is also room for better exploiting complementarities and explore ways in
which they can learn from each other. For example, foundations can be more
flexible and innovative in their funding strategies; other funders could involve the
foundations more in their strategic processes. This does not mean that the
112
113
114
https://innovationsfonden.dk/sites/default/files/2019-03/evalueringsrapporten-002.pdf
https://novonordiskfonden.dk/en/
https://novonordiskfonden.dk/en/news/novo-nordisk-foundation-increased-payouts-by-30-
in-2018/
115
116
https://www.carlsbergfondet.dk/en
https://www.carlsbergfondet.dk/en/About-the-Foundation/Finance/Revenue-and-
distribution-of-funds
https://www.lundbeckfonden.com/en/
https://www.lundbeckfonden.com/en/business-activities/invest/investments/
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117
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independence of Foundations would be compromised, but it would potentially
enable them to have a greater influence on the whole ecosystem in a more co-
ordinated way.
Recommendation 5.1:
Building on existing initiatives and structures such as
the Forum for Research Funding the government should: (1), Explore the
potential for government policy initiatives to further stimulate strategic
collaboration between foundations and public funders of research while
maintaining the independence of the foundations and not using their funds to
substitute for government funding. (2) Seek ways of increasing strategic
alignment and interaction by inviting cross-participation in policy and strategy
processes. This will help the foundations to identify common interests and
thereby facilitate future collaboration.
Other public funders, such as the Innovation Fund Denmark, should explore how
they can better work together with the foundations to shape new, important areas
of research that will drive innovation and capability building in Denmark.
Given that the foundations themselves, while independent, play such a central
role in research funding in Denmark in a way that is different to that in other
countries, it is suggested that they explore ways in which they could better work
together and seek opportunities to contribute to national policy making and
strategy without compromising their independence.
Budget implications: low
Technical complexity: low
Interrelation with other activities: development of an overarching strategy;
science park and incubation strategies
Priority: medium
2.2.2 Alignment across the system
Governance structures and arrangements play a critical role in either enabling or
preventing reform and performance improvement in the Danish system. A key
role of these governance structures is to ensure a clear split of roles and
responsibilities and coordination across the different actors, as well as strategic
alignment towards objectives. These aspects are important for ensuring that
impact is maximized, and resources are used efficiently.
In the 2012 ERAC peer review of the Danish research and innovation system,
119
the existing system was assessed as overly complex. The report also stated that
activities were not coordinated effectively and pointed out that instruments
ERAC peer review of the Danish research and innovation system, Expert Group Report
prepared for the European Research Area Committee, 2012:
https://ufm.dk/publikationer/2012/peer-review-of-the-danish-research-and-innovation-
system-strengthening-innovation-performance
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overlapped. Several measures have been taken since then to simplify the system
and avoid overlapping instruments, yet the coordination of the institutions
involved remains an issue, as the panel could note during interviews with main
users of the NIS.
Challenge
The need for coordination and alignment is broader than the division of tasks
between the MHES and MIBFA, as almost every ministry interacts with the
innovation ecosystems, not to mention agencies, local authorities and many
semi-public stakeholders. Yet several stakeholders have indicated that a clear
common approach continues to be absent between MHES and MIBFA. It seems
that the decision has been made (whether implicitly or not) to divide tasks
between the units, and to minimise the interface between them. This also implies
that the ministries lack a shared vision and aspirations, and their strategies are
partial and fragmented, while there is overlap in the stakeholders that they serve
and in the goals that they aim to achieve. Interviewees both from within and
outside government state that there is a need for an overarching strategy but
also for more horizontal coordination. This becomes especially apparent, for
example, in the domain of public-private partnerships (where technology is
developed, and prototypes are tested, in the pre-commercial phase). The same
holds in the area of innovative public procurement (the government acts as a
launching customer, see section 2.3.2 in this report) because such activities go
across the border between the competences of different ministries.
Perhaps the greatest need is for a systemic overview of the governance structures
that Denmark will need to both improve performance across the whole research
and innovation system and mount a serious response to complex and global
societal challenges in a world where innovation has become more of a distributed
process (involving various contributing firms and organisations) and where
general purpose, enabling technologies are eroding traditional industry
structures. Many advanced countries face difficulties in aligning the different
institutions involved in their respective innovation systems, and Denmark could
become a leading example if it manages to develop a well-coordinated approach.
Recommendations
Recommendation 6.1:
Develop an integrated set of innovation policy Key
Performance Indicators (KPIs) at the national level, with specific mandates for
each ministry and agency.
Monitor progress on these KPIs at a level above that of a specific ministry (for
example, in a ministerial council or in the Cabinet). The system of KPIs could be
nested with a few broad guiding principles at the national level (for example,
related to societal functions that need to be addressed), see also the section on
impact assessment 2.3.3. At the national level, most challenges are systemic in
nature and are hard to capture by predefined, quantitatively measured KPIs. The
high level KPIs (e.g. contribution to SDGs, patenting rates, or private leverage of
public R&D investments as a proxy for demand articulation) could then be
combined with KPIs at a level that reflects the specific tasks of a ministry or
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agency within those guiding principles (e.g. share of innovative products in
firms). To avoid high administrative burdens, align the KPIs with data that is
already monitored (for the European Union Innovation Scoreboard, for OECD
purposes, etc.) and choose unified indicators across the entire STI-system (from
top-cited scientific articles to availability of venture capital, depending on the
chosen strategy). Set priorities in terms of challenges, areas of technology,
clusters and value chains rather than attempt to pre-judge market outcomes as
part of research and innovation policy.
Such an approach would create more clarity across stakeholders about their roles
in supporting the overall aims of Danish innovation. It also forces the
stakeholders to discuss their respective responsibilities in realizing the KPIs. The
process of selecting and deciding on KPIs is as important as the KPIs themselves
in this respect. The challenge of using KPIs is that they can lead to
oversimplification and that some qualitative, complex or highly interconnected
objectives are more difficult to measure. This is often the case for systemic
objectives. The monitoring and interpretation of KPIs should therefore be carried
out with care, paying attention to the broader context and strategy, as most KPIs
are a proxy for a much broader phenomenon.
Recommendation 6.2:
Encourage labour mobility between ministries (and
agencies). The Netherlands, for example, has the so-called 3-5-7 principle,
implying that all managers in national public organisations switch to a new
position at least every 7 years. This stimulates labour mobility across
organisations, and this, in turn, improves the mutual understanding, informal
exchange of information, shared networks, etc.
Recommendation 6.3:
Conduct a joint foresight exercise to support priority
setting. This could be in conjunction with incentives for joint knowledge
development (for example, a funding lever for ministries that jointly send out a
call for research proposals on topics at the intersection of their policy domains).
Finland has been quite successful with such an approach (Finnsight and other
national foresight activities).
Recommendation 6.4:
Create an Inter-ministerial Committee at civil servant
level to prepare discussions on priority setting, KPIs, etc. In the Netherlands, for
example, the Ministry of Economic Affairs has prepared the recent shift to a
mission-driven innovation policy, yet the other ministries that are most involved
have defined the scope, context etc. of the societal missions. The letter to
parliament on the shift is discussed and agreed upon both at civil servant level
and at ministerial level, with all ministries involved. This process deliberately
builds upon structures that have been developed earlier, for example, in the Top
sector initiatives, so that it is relatively easy to tap into existing networks and
cross-organisational collaborations.
Budget implications: low to medium
Technical complexity: low to medium
Interrelation with other activities: depends on the approach chosen
Priority: high
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2.2.3 International linkages for the Danish innovation system
One of the key aspects of globalisation is the global nature of knowledge. Ideas
and codified information are more widely available than ever, and the academic
community has become increasingly connected globally.
For innovation, this has profound implications: Innovators can tap into a global
pool of knowledge, not ‘only’ the research and scientific expertise that is available
locally. This does not mean that local conditions are any less important – they
are still critical in providing insights on how new scientific insights can be used to
serve market needs, and in facilitating the process from idea to economically
viable offering. It does mean, however, that Danish innovators would be
significantly constrained if they would only tap into local knowledge: 0.3% of all
patents (0.6% of all patents from foreign inventors) filed in the US are from
Denmark (USPTO, 2019).
In parallel, the global corporate R&D landscape is in flux: There is a growing
dominance of MNCs in global R&D activity. These large companies have access
to large markets and deep global value chains, both key conditions to justify the
high fixed costs of R&D on a global scale. R&D activities globalise; that is, they
move from traditional locations in OECD countries to be present in some key
emerging economies like China and India. At the same time, global R&D activity
is concentrating in a relatively small number of places. The pressure on ‘marginal’
locations to keep their R&D hubs is growing, especially if they do not have a large
domestic market.
There is significant evidence that Denmark’s research system is highly
international. Co-publications with authors from outside of Denmark are high,
more than two and a half times higher than EU average,
120
and there is a
significant number of foreign researchers employed in Danish academic
institutions. Denmark also plays an active and successful role in the EU Horizon
2020 program.
121
Despite the fairly small size of the country, Danish institutions
submit 6.63% of all eligible EU proposals and have a success rate of 15.27%,
above the EU average of 11.98%.
122
There are also a number of policy instruments that Denmark has established to
support internationalisation. Innovation Centre Denmark
123
is present in eight
global innovation hotspots and provides support for researchers, companies and
entrepreneurs. Denmark’s presence in global innovation hotspots compares well
120
121
https://ec.europa.eu/docsroom/documents/35886
http://ec.europa.eu/research/horizon2020/index_en.cfm?pg=country-profiles-
detail&ctry=denmark#profile
https://webgate.ec.europa.eu/dashboard/sense/app/a976d168-2023-41d8-acec-
e77640154726/sheet/0c8af38b-b73c-4da2-ba41-73ea34ab7ac4/state/0
123
122
https://thetradecouncil.dk/services/innovation
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with peers like Switzerland,
124
Germany
125
and the UK.
126
The Danish clusters and
innovation networks have, over time, supported a large number of international
linkages; the last annual report
127
mentions almost 1000 international
collaborations in more than 70 countries. The opportunities of the Danish
innovation system are also being touted as a key reason to locate in Denmark by
Invest in Denmark.
128
However, the Panel’s interviews with users painted a mixed picture of where
Denmark currently stands in terms of leveraging its innovation system
internationally and tapping into international knowledge flows:
•
The
financing structure
provides, at the system-level, limited incentives to
attract EU funds. Any additional EU funding leads to a direct reduction of
national funding.
The
Danish Innovation Centres
achieve integrated action across ministries
abroad but lack a coherent dissemination approach in Denmark. In particular
there is no systemic rollout of contact points toto where innovation is
happening, for example in SMEs across the country, innovation networks or
cluster organizations.
Young, high-growth innovative companies
are perceived as leaving
Denmark as they scale, sometimes as the result of foreign acquisitions.
There are a number of
foreign investments into Denmark-based
research
(wind energy, IT) but no sufficiently prioritized strategy to
systematically leverage Denmark’s research assets by deliberately attracting
global R&D centres.
In recent years, the
role of clusters and innovation networks
in
internationalisation has been recognised in funding structures. The 2018 MHES
call provided seed funding for internationalisation as part of the general
funding streams. The funding is perceived as very limited and not long-term
enough to justify efforts that require multiple years to generate results,
especially in more difficult foreign markets.
•
•
•
•
124
125
126
127
https://www.swissnex.org/
https://www.dwih-netzwerk.de/de/
https://www.gov.uk/world/organisations/uk-science-and-innovation-network
http://www.clusterexcellencedenmark.dk/da-
DK/Quickmenu/Publikationer.aspx?PID=22&M=NewsV2&Action=1&NewsId=776
https://investindk.com/set-up-a-business/test-and-innovation
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Activities of peer countries
Internationalisation has become an increasingly important aspect of innovation
policy. A few examples show how the specific challenges faced by the Danish
innovation system have been addressed elsewhere.
Finland has created dedicated domestic contact points for internationalisation.
129
These offices provide a simple window into the Finnish innovation system and are
fully integrated with the overall business support activities available to firms.
Germany has launched a specific support program
130
to help clusters in their
internationalisation efforts. The program is open to all networks and clusters and
provides competitive funding for the establishment of specific linkages to foreign
innovation hotspots.
Israel has a focused program to attract R&D centres
131
from globally active MNCs.
This is one of the central vectors of Israel’s FDI attraction efforts and
complements a range of other instruments at the science and bilateral level.
Recommendations
Denmark has a strong knowledge platform, robust international linkages, and a
global reputation as an innovation leader in science and non-science driven areas.
The following four steps will enable the country to leverage these assets
significantly more in the global innovation arena, something that happens now
only to a limited degree:
Recommendation 7.1:
Embed contact points for internationalisation into the
emerging new business support structure across Denmark to connect the Danish
Innovation Centres to businesses throughout the country. The role would involve
acquiring knowledge about what innovation centres offer to companies, organize
networking events, connect businesses with innovation centres, etc.
Responsible entity: MHES, Ministry of Foreign Affairs (MFA), MIBFA
Budget implications: low
Technical complexity/need for new capabilities: medium to high
Priority: high
129
130
131
https://www.ely-keskus.fi/en/web/ely-en/
https://www.bmbf.de/de/cluster-netzwerke-international-547.html
https://innovationisrael.org.il/en/our-value-propositions/enterprise
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Recommendation 7.2:
Ensure and enhance the ability of the changing cluster
and innovation landscape structure to support internationalisation
Responsible entity: MHES, MFA, MIBFA
Budget implications: low
Technical complexity/need for new capabilities: medium to high
Priority: high
Recommendation 7.3:
Assess the creation of a dedicated program to attract
investments of foreign MNCs into R&D centres in Denmark
Responsible entity: MFA, MHES
Budget implications: Medium to low
Technical complexity/need for new capabilities: medium
Priority: medium to high
Recommendation 7.4:
Review the additionality of incentives for attracting EU
funds as well as other international funds into the R&D system
Responsible entity: MHES, MFA
Budget implications: medium to high
Technical complexity/need for new capabilities: low
Priority: medium to low
The impact these steps can achieve relies to some degree on progress in other
parts of the action agenda outlined in this report. An overall strategy that defines
Denmark’s positioning and value proposition as a place to innovate and run
innovation-driven businesses would send a much clearer signal to foreign
partners and investors as to what they can gain from working with Denmark. A
clear structure for collaboration across the different parts of the Danish
government system delivering on this value proposition would ensure that
Denmark is not only more present at the interface of international collaboration
but is also organised to deliver once projects are underway.
2.3
Evolving the innovation policy toolkit
The panel found that there is a need to evolve and modernise the innovation
policy toolkit of the Danish government. Stronger mission and demand
orientation would enable the country to align efforts better and to more fully
leverage traditional Danish strengths in urbanism and design, strengthening
MNC-SME collaboration, as well as public procurement for innovation. In some
areas, this will require new instruments, in others, it can draw on existing efforts
that have the potential to be strengthened.
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2.3.1 Leverage Danish strengths in non-science driven areas like design,
urbanism, and social innovation
Denmark could better leverage its strengths in innovation that are not directly
science or technology related, such as (1) design thinking and practice (2) new
urbanism and creative industries and (3) social innovation.
These areas were selected based on interviews, literature review and a
comparison with peer economies (for example, Finland). Their implementation
will require a process to select these areas that involves different stakeholders
and parts of government. These efforts could be made in a rather incremental
and evolutionary way, like the other areas described in this chapter. Or they could
become major pillars of a strategic national value proposition choice as outlined
in Chapter 3.
Design thinking and practice.
Challenge:
A stronghold of Denmark has been its design tradition. Famous
functionalistic design and architecture were developed in the mid-20th century,
influenced by the Bauhaus school (see also Figure 24). Many Danish designers
used new industrial technologies and combined them with ideas of simplicity and
functionalism to design buildings, furniture and household objects, many of which
have become iconic and are still in use and production. Scoreboards show that
Denmark is the best-performing country in Europe in creativity and design.
132,133
Given this legacy and its innovative potential for future economic development of
the country, in 2007, the Minister for Economic and Business Affairs presented
‘DesignDenmark’, a government white paper on the direction for design policy in
Denmark.
132
Hollanders, H., and A. Van Cruysen 2009. "Design, creativity and innovation: A scoreboard
approach." Pro Inno Europe, Inno Metrics: Holanda, Hui, D., Ng, C., Mok, P., Ngai, F., Wan-kan,
C., & Yuen, C. 2005. A study on creativity index. Hong Kong: Home Affairs Bureau.
Macoun, A. et al. 2007. : “The Danish Design Cluster”, Final paper for Microeconomics of
Competitiveness, https://www.isc.hbs.edu/resources/courses/moc-course-at-
harvard/Documents/pdf/student-projects/Denmark_DesignCluster_2007.pdf, accessed June
14, 2019.
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Figure 24: Countries’ relative performance in Creativity and design
Source: Hollanders, H., and A. Van Cruysen 2009
Via funding for innovation network activities, MHES is currently supporting the
“Lifestyle & Design Cluster”. This cluster is promoting innovation and sustainable
growth, primarily in small and medium-sized interior and clothing companies as
well as in the creative industries.
134
This effort could be reinforced by and
strategically linked with industrial innovation-oriented policy programmes, e.g.
the strong Danish efforts and achievements in the field of innovative robotics, or
agro-food-related innovation efforts.
Recommendation 8.1:
Strategically link the national cluster effort for the
design and lifestyle sectors with industrial innovation-oriented policy
programmes, potentially jointly with the Danish Design CENTER. Establish inter-
sectoral platforms of key actors in industries, research, society and government
to explore opportunities and demand for design/technology integration and
innovation and the spread of user design centred principles across industries, and
to develop and implement related initiatives (see e.g. Box 5: Dutch Top Sector
Creative Industry).
Budget implications: medium
Technical complexity: medium
Interrelation with other activities: high
Priority: high
134
See https://ldcluster.com/en/about-us/.
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New urbanism and creative industries
Challenge:
Denmark, and in particular greater Copenhagen, has become an
esteemed site of vibrant initiatives towards sustainable modes of transportation,
urban design and development (‘Copenhagenisation’)
135
and lifestyle (for
example, Nordic Food), a Northern European variation of ‘New Urbanism’.
136
So
far, these developments have been spurred by rather diverse actor groups in
society and the economy, partly supported by municipalities, and yet hardly
linked with national innovation policy or the activity of corporations. There is a
growing recognition that solutions to the increasingly complex and new societal
and business challenges require interdisciplinary thinking and collaboration.
Denmark will miss out on these opportunities if this type of thinking is not
encouraged.
The Government could help to connect corporations or other more traditional
innovation actors more strategically with the design sector, Sustainable
Development Goal (SDG) initiatives and social innovation protagonists (see
section below), knowledge institutions, start-up platforms, and incumbent
industries. The required clustering process could be inspired by the Dutch
experience with the ‘Top Sector Creative Industry’ (see Box 5).
Recommendation 8.2:
Link the existing “Lifestyle & Design Cluster” with New
Urbanism and sustainability-oriented bottom-up initiatives, for example,
modelled on the Dutch Creative Industry Top sector (see Box 5).
Budget implications: medium
Technical complexity: medium
Interrelation with other activities: high
Priority: high
135
E.g. Colville-Andersen, M. 2018. “Copenhagenize: the definitive guide to global bicycle
urbanism”. Island Press.
Scott, A.J. 2014. "Beyond the creative city: cognitive–cultural capitalism and the new
urbanism." Regional Studies 48.4: 565-578. https://doi.org/10.1080/00343404.2014.891010
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Box 5: Case Study: Dutch Top Sector Creative Industry
Case Study: Dutch Top Sector Creative Industry
The Dutch government has named nine so called “top sectors” in which it wants
the country to excel, among them the Creative Industry. “Government, experts
and companies are looking for ways to strengthen one another in a structured
way. That joining of forces has yielded a rich knowledge infrastructure for the
sector. The parties receive targeted support from the Dutch government.
Moreover, the sector is heavily organised around an internationalisation agenda.”
“The Creative Industry has a top team as a medium for innovation. This team
includes representatives of science, government, business and in many cases
also education and other parties.”
137
A sponsor of the Top Sector is ‘Creative Industries Fund NL’, the Dutch cultural
fund for architecture, design and digital culture, as well as every imaginable
crossover. The Fund strives to make a substantial contribution to the quality of
professional design practice within and especially between the disciplines of
architecture, design and digital culture. Part of this endeavour is the
interdisciplinary interplay between the cultural, social and economic domains. The
Fund supports exceptional and innovative projects and activities of designers,
makers and cultural institutions in the creative industries.
138
Social Innovation:
Working towards sustainable modes of transportation and
development, and other SDGs, will often also require social innovation, i.e. new
social practices that aim to meet social needs in a better way than the existing
solutions. Social innovation “encompasses 1) a change in social relationships,
systems, or structures, and 2) such changes serve a shared human need/goal or
solve a socially relevant problem.”
139
Denmark’s current innovation policy
portfolio does not include proactive measures to engage with socially driven
innovation efforts in society.
Here Danish innovation policy could draw on and strengthen existing grassroots
initiatives, for example the Danish Social Innovation Club. So far, such initiatives
have been able to establish supportive linkages with municipalities, civil society
organisations and companies, yet hardly with the NIS.
see https://www.holland.com/global/meetings/holland-in-congres/creative-industries/top-
sector-creative-industries.htm
138
139
137
https://stimuleringsfonds.nl/en/the_fund/organization/about_the_fund/
van der Have, R.P., and L. Rubalcaba 2016. "Social innovation research: An emerging area
of innovation studies?"
Research Policy 45.9: 1932. https://doi.org/10.1016/j.respol.2016.06.010
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Recommendation 8.3:
(1) Link national innovation policy with and strengthen
existing social innovation grassroots initiatives, and (2) make sure that the
younger generation can engage with such efforts. Include actively social
innovation organisations in deliberations about future innovation policy priority
setting. Allow social innovation initiatives to actively participate in research
funding programmes and schemes of the Innovation Fund Denmark (IFD).
Budget implications:
Budget implications: low
Technical complexity: medium
Interrelation with other activities: high
Priority: medium
2.3.2 Public procurement for innovation
Public procurement can offer a tremendous market for innovative products and
services and can be an integral part of a demand-driven innovation policy. The
potential market is particularly large in Denmark, where government spending
accounts for 55.5% of GDP,
140
the third highest in the EU, and the Danish public-
procurement market is equivalent to 16% of GDP. Public procurement for
innovation is an important instrument for creating demand for innovation
particularly at a time when many societal challenges call for increasing public
investment and solutions that are innovative and unique and require
interdisciplinary approaches and the collaboration of different stakeholders.
However, successful approaches to public procurement for innovation involve
numerous measures and are challenging and complex to implement because they
touch on many policy areas and levels of government and require long term
commitment.
141
In Denmark, this potential appears underutilised. Public procurement decisions
are not driven to great degree by considerations related to fostering innovation
than in other countries as indicated by perceptions of business executives (see
Figure 25). A recent benchmarking exercise by the European Commission has
shown that Denmark is a low performer (rank 20) in terms of leveraging public
procurement for innovation.
142
140
141
OECD: https://data.oecd.org/gga/general-government-spending.htm
For an overview of good practices, see for example:
https://read.oecd-ilibrary.org/governance/public-procurement-for-
innovation_9789264265820-en#page1
https://ec.europa.eu/digital-single-market/en/news/benchmarking-national-innovation-
procurement-policy-frameworks?utm_source=e-
mailnieuwsbrief&utm_medium=email&utm_campaign=AWTI+e-mail+alert
95
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Figure 25: Government procurement of advanced technology products, 2017, 1-7 (best)
Source: World Economic Forum, Executive Opinion Survey 2017
Note: Data based on a survey of business executives responding to the question: In your country, to what
extent do government purchasing decisions foster innovation? [1 = not at all; 7 = to a great extent]
Public procurement is mainly taking place at the local government level. The
Danish Competition and Consumer Authority offers guidance on the public
procurement regulation and the Agency for Modernization of Public Services
(under the Ministry of Finance) is in charge of procurement policy. SKI (The
Danish State and Municipalities Procurement Services) acts as a central
purchasing body.
In the field of innovation procurement, the key actor is the Danish Business
Authority, which managed the Market Development Fund (MDF). This fund was
created based on the 2012 innovation strategy. It co-finances projects in
companies to test innovative solutions and adapt them to markets, and it was
given a mandate to foster innovation through public procurement. In the past,
the MDF has provided grants to public procurers to prepare and implement Pre-
Competitive Procurement (PCP) and Innovation Partnerships (PPI). In October
2013, Denmark launched the Strategy for Intelligent Public Procurement, which
outlined the objectives for public procurement as efficiency, innovation,
sustainability, and social responsibility. The Ministry of Environment has a
programme on green procurement, which can support innovative solutions in the
environmental space.
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Challenge
MDF financed some innovative solutions in the areas of health, environment and
social innovation at the municipal and regional levels as pilot projects. MDF was
liquidated 1st of January 2019 and the target group previously funded by the
MDF became the responsibility of the IFD.
At the same time, other measures that are considered best practice are not used
in Denmark. These include:
143
ensuring that innovation procurement is included
in horizontal and sectoral policies; developing an action plan with quantitative
targets and better connecting the public procurement agencies to innovation
expertise. During the interviews conducted as part of the review, the panel got a
sense that innovative public procurement is under-utilised in Denmark and not
on the agenda of the MHES.
Currently, the Competition and Consumer Authority is undertaking a review of
the legal guidelines for public procurement that will be published in early 2020.
Although establishing a policy mix that successfully uses procurement as a driver
of innovation requires action at many levels (including target setting for
innovative procurement, IP regime, review of legal definitions, etc.), the current
review provides an opportunity to re-think the legal guidelines in a way that
allows for a stronger focus on innovation. The new procurement guidelines should
be elaborated with inputs from key players in the innovation system to ensure
that the link between innovation and public procurement is strengthened.
Recommendation 9.1:
Embed innovation into the public procurement practices
to ensure that public procurement can play a key role in creating a market for
innovative solutions, starting with pilot programmes.
Recommendation 9.2:
Consider appointing a point person for innovative public
procurement within the MHES tasked with instilling the innovation agenda into
procurement policies, developing tools supporting innovative procurement and
who could bring hands-on expertise in this space.
https://ec.europa.eu/digital-single-market/en/news/benchmarking-national-innovation-
procurement-policy-frameworks?utm_source=e-
mailnieuwsbrief&utm_medium=email&utm_campaign=AWTI+e-mail+alert
97
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Recommendation 9.3:
Consider developing an action plan on how to achieve a
greater, share of innovative procurement based on data and recommendations
from existing policy reviews,
144
with the involvement of relevant stakeholders.
The action plan should include a quantitative target.
Budget implications: low
Technical complexity: medium
Interrelation with other activities: IFD review, ensure alignment towards societal
objectives; need to align across many different policy areas
Priority: high (due to an ongoing review of procurement guidelines and the
window of opportunity related to the restructuring of MDF.)
2.3.3 Impact assessment
Successful innovation policy needs to be evidence-based; it cannot simply rely
on general principles. Data is critical for policy decisions at different levels:
•
Impact assessment for
individual programs
based on strong analytical
methods is critical to assess their effectiveness;
Impact assessment on the
systemic level
of the innovation system is critical
to assess the complementarity and completeness of the overall policy mix;
A related
system of
preassigned
KPIs
aligned with expected impact of each
initiative/institution helps to monitor the performance of different institutions
in the space and helps align activities around the most important goals, as
suggested in Recommendation 6.1;
Contextual data
on existing Danish strengths and weaknesses as well as
global opportunities and threats is critical to making overall decisions on the
strategic priorities across the innovation system.
•
•
•
Denmark has a strong tradition of impact assessment as a critical component of
the innovation policy toolkit. The Danish Agency for Science, Technology and
Innovation started doing methodologically advanced impact assessments in
2006. The Danish Commission for Technology and Innovation published an
overall strategy for evaluation and impact assessment
145
in 2010. The Danish
https://ec.europa.eu/digital-single-market/en/news/benchmarking-national-innovation-
procurement-policy-frameworks?utm_source=e-
mailnieuwsbrief&utm_medium=email&utm_campaign=AWTI+e-mail+alert and
https://ec.europa.eu/regional_policy/sources/policy/how/improving-investment/public-
procurement/study/country_profile/dk.pdf
145
144
https://ufm.dk/publikationer/2010/innovationdanmark-strategi-for-evaluering-og-
effektmaling
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Productivity Commission
146
then also argued for a stronger focus on impact
assessment in its recommendations for innovation policy in 2013. The
foundations laid down in that year have informed a range of studies since then,
for example the assessment of the Danish Innovation Incubator Programme
147
in
2015, the R&D tax credits
148
in 2019, and two systemic assessments in 2014
149
and 2016.
150
A review of the quality of impact assessments
151
done in 2018 found
them to be of generally high quality but also narrowly focused on individual
instruments. The main recommendations of this review was to establish a general
evaluation protocol. The few studies done on more systemic impact were
generally older.
Despite these robust foundations, Denmark is no longer among leading peer
countries in terms of data-driven impact assessment and innovation system
analysis (see also Appendix A). This view is in line with similar recent
observations made by the Commission reviewing the Innovation Fund
Denmark.
152
Apart from the Innovation Denmark Database, which compiles
information on R&D spending of Danish companies, data on the overall effects of
innovation policy seem to be fragmented, and there is no obvious central place
within the government to track overall trends in performance and the global
context in which the Danish innovation system operates.
Peer countries including Norway, Sweden, the Netherlands, Ireland, and
Singapore have, in the meantime, put an increasing focus on evidence and impact
assessment. NESTA in the UK has been at the forefront of developing new tools
and methodologies. In Denmark, the private foundations have launched their own
efforts on impact assessment, and often also on broader assessments of the wider
innovation system.
Recommendation 10.1:
Launch a renewed effort to create an impact
assessment strategy, building on the previous work done in 2010 and focused
specifically on assessing systemic effects of innovation policy actions.
146
http://produktivitetskommissionen.dk/media/159695/Faktaark_8_Anbefalinger%20vedrøren
de%20innovationsområdet.pdf
https://ufm.dk/publikationer/2015/econometric-analysis-of-the-danish-innovation-
incubator-programme
148
149
147
https://ufm.dk/publikationer/2019/evaluering-af-skattekreditter
https://ufm.dk/publikationer/2014/the-short-run-impact-on-total-factor-productivity-
growth-of-the-danish-innovation-and-research-support-system
https://ufm.dk/publikationer/2016/the-effect-of-multiple-participations-in-the-danish-
innovation-and-research-support-system
150
https://ufm.dk/publikationer/2018/review-af-viden-om-okonomiske-effekter-af-virkemidler-
til-fremme-af-privat-fou
152
151
https://ufm.dk/publikationer/2019/innovation-fund-denmark-report-of-the-international-
evaluation-panel-2019
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Recommendation 10.2:
Widen the focus on assessing the impact beyond
narrow economic outcomes to include a broader range of societal goals on
Climate Change, Social Inclusion, etc., for example, by connecting the
assessment to the SDGs.
153
Recommendation 10.3:
Evaluate the creation of a central quantitative analysis
unit to inform innovation policy with a mandate, including centralisation of KPIs
to inform impact assessment (database/dashboard), context analysis and the
development of new indicators to track innovation performance.
Budget implications: low
Technical complexity: medium to high
Interrelation with other activities: limited, important input towards a strategy
process
Priority: medium to high
153
It has to be noted, however, that data and assessment methodologies on broader societal
objectives are scarce. Denmark could take a leading role globally in terms of developing such
methodologies.
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3
DEFINE A STRATEGIC AMBITION FOR DENMARK
The recommendations of Chapter 2 suggest improvements to individual elements
of the innovation system, to the overall coordination across different players and
proposes a broader set of innovation policy tools. These recommendations are
important and will improve the performance of the NIS. But such evolutionary
changes within the given system will struggle to achieve more transformative
changes in outcomes.
This chapter discuss the opportunities for Denmark to further elevate its
performance by outlining an overarching innovation strategy. The lack of such a
strategy is limiting the ability to create positive systemic effects from the
alignment of individual innovation policy actions. Putting it in place would help
unlock such benefits and enable a stronger prioritization of actions towards areas
of highest potential impact.
3.1
Many strategies, but no strategy
A central observation that has emerged in this review is that Denmark has no
clearly defined articulation of what it aims to achieve as an innovation leader. In
short,
there is no holistic innovation strategy.
This might be a surprising
statement, given that there are quite a number of often high-quality policy
documents that are called ‘strategy’, and many initiatives that have a strategic
ambition. What they all lack, however, is an overarching vision across the whole
of government that clearly spells out what Denmark wants to achieve within the
global innovation landscape, and how it intends to get there.
In late 2017, the Danish government published ‘Denmark – ready for the future’,
laying out its objectives for Danish research and innovation. The document
included a range of new initiatives in both areas, including the launch of several
reviews to propose more specific actions in the fields identified. This report is the
result of one of those reviews; others focused specifically on the Innovation Fund
Denmark and other aspects of the innovation system (see Chapter 1).
Earlier, in 2012, Denmark approved an innovation strategy with more than 25
policy initiatives. The strategy triggered, what was, in many ways, a successful
upgrading of several key institutions and activities across the innovation system.
Many of the observations that motivated the actions outlined in the 2012 strategy
continue to ring true today, for example, the need for a stronger demand-pull
perspective. Some high-quality strategies exist for parts of the innovation
system, for example in life sciences (Vaekstplan for Life Sciences, 2018) or in the
space of renewable energies. Denmark’s Strategy for Digital Growth from 2018,
however, makes surprisingly limited references to the role of innovation and
research.
In parallel, there are a number of entities that have discussed the strategic
challenges of the Danish innovation system. The Danish government’s Disruption
Council (created in 2017) convened key leaders from politics, business, and
beyond, and covered a range of topics deeply intertwined with innovation. Earlier
the Danish Productivity Commission (created in 2013) also made
recommendations on the innovation system. Specifically, within the innovation
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area, there is a range of advisory groups, one example being the Danish Council
for Research and Innovation Policy, that has provided focused advice on
innovation policy.
What, then, is missing?
It is, in our view, a systemic perspective on what value
Denmark aims to provide as a location for innovation in a global and European
context, and what it wants to achieve by playing this role. Without such a
perspective it is hard to prioritise across different activities, it is hard to achieve
systemic synergies across individual tools and entities, and it is hard to assess
whether Denmark is fundamentally successful in its innovation policies.
These issues are particularly important because Denmark is an innovation leader.
Innovation leaders need to do more than fix inefficiencies in existing activities or
copy successful practices by others. They
need to chart out the ‘next level’ of
what leading practice means.
And this next level, in most cases, does not
mean a new program design, but a better way to deploy and synchronise actions
across the innovation system towards an ambitious goal and value proposition.
A
value proposition
is useful because it helps to select and prioritise among the
large number of potential measures that can be taken to ‘support innovation’. Is
it best to focus on a general R&D tax credit, attract foreign researchers, fund a
cluster program, or launch a national venture capital fund? All have merits in
principle, but their relative contribution depends on what value a location aims to
offer, and what other instruments it is thus using. Without a guiding principle to
navigate across them, the allocation of especially funding easily becomes a
matter of path-dependency and political power. This is a reality in Denmark as in
many other countries; a clear strategy can create a countervailing dynamic.
Without a value proposition as a guiding principle, locations can still gain benefits
from a strong innovation system and from improving individual policies or actors
that are part of it. And many steps that need to be taken and initiatives to launch
will be useful across a wide range of strategies. But such efforts alone will fail to
leverage the full opportunities that arise from a systemic integration of such
efforts towards a common goal. In the panel’s view, this is a reasonable
description of where the Danish innovation system is at the moment.
Denmark is,
in the Panel’s view,
not only in need of an innovation strategy
that sets out a more sharply nuanced value proposition,
but it also
needs
to develop a clear structure to develop and implement the strategy.
The view from stakeholders consulted as part of the current review is that the
existing strategies trigger only limited action across the system. They tend to
address individual issues often in a disjointed manner and thus fail to have the
support and deeper impact that a systemically coordinated and broadly shared
strategic agenda could achieve.
The
absence of a clear positioning choice
could be the result of
disagreements on where Denmark should go among key stakeholders or a lack
of access or communication. The Panel found little evidence that either of these
is the case. An alternative explanation is that this choice and the debate leading
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towards it has just not been had in a structured way and at a sufficiently high
level of political authority. The evidence collected by this review suggests that it
is a matter of structure:
systemic action across a loosely connected
structure like an innovation system requires the establishment of a
central, politically empowered process to:
•
Achieve a common view of the current situation and opportunities and ensure
buy-in from stakeholders;
Take visible decisions on an overall strategic direction and action priorities that
can guide the individual decisions actors across the system will take in their
own authority;
Follow-up on the actual implementation and impact of actions.
Box 6: The role of strategic positioning in innovation policy
•
•
The role of strategic positioning in innovation policy
What does strategic positioning in innovation policy mean? It means specifying
the value your location sets out to deliver in the global innovation landscape. This
value proposition identifies in what parts of the innovation journey a location aims
to make its major impact (idea generation, prototyping and market testing, start-
up, scale-up) and for whom (geographic focus, thematic focus, firm type, specific
societal challenge). It also builds on a country’s strengths. The value proposition
thus reflects a choice; you cannot deliver everything to everyone, even as an
innovation leader. It is about picking what value you want to offer, not what
‘winner’ or sector you want to support.
For globally successful innovation hubs, there is often a fairly clear notion of what
their value proposition is. And as it turns out, their positioning in innovation tends
to be closely linked to the overall role that the country plays in the global
economy:
•
For
Israel,
it is acting as a
tech hub
– deeply integrated into the global tech
and financial scene – that “manufactures” new companies and technologies
based on top local talent
For
Ireland,
it is serving as a
platform for global
(mainly US)
MNCs’
innovation-driven activities targeting the European market,
leveraging
access to the Single Market and providing attractive fiscal conditions
For
Finland,
it is leveraging the country’s inherent
IT and engineering
skills
to create companies that can serve global markets, building on a strong
skill base and effective mechanisms to leverage local strengths
•
•
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•
For
Singapore,
it is providing an efficient platform to
marry global skills
with Asian market needs,
offering a top-notch business environment and
a location right at the heart of South-East Asia
For
Germany,
it is constantly
enhancing the country’s existing
industrial strengths
through new materials, technologies and approaches,
building on existing key clusters and a robust research infrastructure well-
linked to business
•
Making a choice aligned with your circumstances as a country is more important
than making one that is completely unique. This choice, and the value proposition
that embodies it, is in many cases more an implicit understanding across the
innovation system than a formal decision written up in a public document. Its
effectiveness is not so much a matter of its formal nature, but of the way it gets
generated and is then shared and ‘lived’ across the innovation system. But if an
implicit understanding does not exist, it needs to be formalized.
3.2
Towards a Danish value proposition in innovation
Suggesting a specific value proposition as the foundation of a Danish innovation
strategy goes beyond the scope of this Panel because it should be the outcome
of the political process in Denmark. What this chapter aims to do instead, is to
provide some thoughts on both process and content and examples from other
countries, keeping in mind that many different approaches to developing
strategies exist.
3.2.1 Key elements of an innovation strategy process in Denmark
The content of Denmark’s strategy needs to be grounded in the reality of
Denmark’s existing strengths and weaknesses and of the opportunities and
challenges that the global context offers. Figure 26 summarises some of the key
observations from the Panel’s work, pulled together from different parts of this
report. In an ideal case, such an exercise would be undertaken through
stakeholder consultations and would be informed by analysis. Given the
complexity of global developments, the analysis would need to be forward-
looking. A foresight exercise could help think about what strengths Denmark
could bring to the table in light of rapid global developments. Foresight has played
an important role in the Finnish Strategy process (see Box 7). Boxes 8 and 9
provide additional examples from Ireland and Germany.
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Box 7: Case Study: Renewing innovation policies – the case of Finland and the SUUNTA strategy
Case Study: Renewing innovation policies – the case of Finland and the
SUUNTA strategy
In 2013, the main innovation policy agencies (Academy of Finland, Tekes, Sitra,
Finnvera, and Finpro) in Finland decided to join forces and develop a new joint
strategy (the so-called SUUNTA strategy) with the aim of shifting the focus of
RDI support beyond individual projects, companies and sectors towards broader
business ecosystems in areas of key importance to Finland. This SUUNTA strategy
work was preceded by extensive sense-making and foresight work related to
megatrends, significant business opportunities and challenges that Finland is
facing, and it aims to create innovative new ways to implement policy. Increasing
uncertainty and complexity in the global economy, coupled with rapid
digitalization and tightening competition implies that companies increasingly
build their competitiveness through symbiotic relationships with collaborators,
competitors and other actors within business ecosystems. This is challenging
current innovation policy thinking, implementation and impact assessment.
In Finland, the SUUNTA strategy has
identified natural resources and
resource efficiency, digitalisation,
wellbeing and health as areas where
there is most potential for new
business ecosystems to emerge, and
also considers ways through which
these ecosystems can connect to
global hubs and attract investments
to Finland. The emphasis of the
SUUNTA work is on identifying
emerging business ecosystems and
boosting these through better coordination between the main innovation policy
agencies, for example, by mandating ecosystem orchestrators, creating physical
or virtual platforms for ecosystem extension, identifying and addressing barriers
for developments, securing political support where needed, and by developing
policy instruments so that the agencies can work more seamlessly together.
At Tekes, the Finnish Funding Agency for Innovation, the SUUNTA strategy is
being implemented in a range of new programs. For example, the ‘Bits of Health’
program wishes to enable new business ecosystems related to digital health care
solutions, the ‘5
th
Gear’ program seeks to nurture new business ecosystems
related to next-generation ICT telecommunications standards, while the ‘IoT’
program addresses new opportunities related to the Internet of Things. Further,
the ‘Business with impact (BEAM)’ program is co-funded by the Ministry of Foreign
Affairs, with the aim of building business ecosystems for inclusive innovation in
collaboration with developing countries. Meanwhile, work is also ongoing to utilise
new types of ‘ex-ante’ impact assessment approaches for better sense-making
and real-time monitoring.
Source:https://tem.fi/documents/1410877/4430406/Christopher_Palmberg_Sylvia_Schwaag_
Serger_PPP_Models.pdf/9ef8ff59-0519-4ea0-a270-6e09d7908ef4)
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Box 8 Case study: Germany and its ‘High Tech Strategy 2025’
Case study: Germany and its ‘High Tech Strategy 2025’
According to the Global Competitiveness Report 2018, Germany is the world
leader in innovation. The country’s declared goal is to move from an inventor
country to a global innovation leader. As Germany has a long-standing and
extended national innovation system, it may serve as a case for successful
cooperation among its actors. We described one of the elements, the Fraunhofer
Society in details in Section 2.1.4 in Box 3.
The latest innovation strategy of
Germany, ‘High
Tech Strategy
2025’
aims at promoting cutting-
edge
innovations
and
technologies
and transferring
them to the people as increase in
prosperity, growth and quality of
life. Therefore, it targets areas
such
as
health
care,
sustainability, climate change,
energy, mobility, security, etc.
154
Performance facts about Germany (2019)
8
th
European Innovation Scoreboard
9
t
h
Global Innovation Index
1
st
Innovation
pillar
of
Global
Competitiveness Index Innovation
pillar
The Strategy is an orientation to
all actors in the German society
with cooperation being one of its central element. Cooperation is of high priority
for the German Government, which involves all federal ministries through
thematic missions
155
and connects business, science and society through
continuous dialogue. The Strategy is therefore dynamically developed along the
ideas of the public, advisory boards, industries, researchers and government
entities.
Cooperation elements for implementing the
High-Tech Strategy 2025:
1. Involving the society:
156
As innovations are more and more
originating from citizens, the German government made it its priority to
promote the participation of the civil society in innovation besides
industry and research.
There are increasing number of digital platforms available for the
citizens, including the possibilities provided by the framework of the
‘Year of Science’: exhibitions, competitions, forums.
154
155
156
https://www.hightech-strategie.de/de/hightech-strategie-2025-1726.html
https://www.hightech-strategie.de/de/missionen-1725.html
https://www.hightech-strategie.de/de/kommunikation-und-partizipation-1710.html
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The traditional dialogues are now accompanied by new formats to
involve the society into other activities: agenda settings, independent
research activities, projects, and even strategic exchange.
2. High-Tech Forum:
157
The German Government is committed that a
continuous and expanding strategic dialogue between politics, science,
industry and society is crucial element of the success of the innovation
strategy.
To dynamically develop the Strategy, a High-Tech Forum of 20 experts
from science, industry and civil society was set up and it serves as an
advisory board for research and innovation co-led by the Federal
Ministry of Education and Research and the Fraunhofer Society.
The High-Tech Forum is responsible for supporting the innovation policy
with implementation and action plans and advising on specific areas of
future importance.
3.
Communication concept:
To maintain transparency of and to increase
involvement in the implementation of the Strategy, the Government set
up a communication concept for continuous information provided for all
stakeholders.
Box 9: Case study: Ireland and its ‘Innovation 2020’ strategy
Case study: Ireland and its ‘Innovation
2020’
strategy
Ireland’s strategy creation process described below may serve as a guideline
for Denmark to form its own strategy with a vision and mission by strengthening
its existing capacities and developing new ones for further success.
The ‘Innovation
2020: Excellence Talent Impact’
strategy of Ireland for research
and development, science and technology for the period of 5 years (2015-2020)
was launched to build on the notable success of the Irish government’s previous
science strategy during the past decade. It has resulted in a significant
improvement of Ireland’s innovation performance in the European Union and
globally.
The current strategy is part of the Irish comprehensive strategy (Enterprise
2025)
to reach full employment on a sustainable basis with the vision for Ireland
to become global innovation leader. The innovation strategy’s main objective is
to build on existing infrastructures and forming significant private-public
collaborations by increasing the total investment in R&D in Ireland to 2.5% of
GNP by 2020 (double of the 2014 level), mainly delivered by the private sector.
The strategy follows a whole-of-government approach in terms of
implementation.
157
https://www.hightech-strategie.de/de/steuerung-und-begleitung-1709.html
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The Irish process of forming ‘Innovation
2020’
strategy:
158
1.
End of Strategy for Science, Technology & Innovation (SSTI) 2006 to 2013.
2.
Launch of
Research Prioritization
to identify the Government’s primary
science, technology and innovation policy goals with the greatest potential
economic returns.
3.
Establishment of the
Interdepartmental Committee
on Science,
Technology and Innovation (IDC) in 2014. Participants:
a.
Department of Jobs, Enterprise and Innovation (chair)
b. Other key Government Departments, including Education and
Skills, Finance, Health, Foreign Affairs and Trade, etc.
c. Chief Scientific Adviser to the Government
d. Higher Education Authority
4.
Development of
studies
for the strategy in areas, such as:
a. Ireland’s future research infrastructure needs
b. Independent review of Research Prioritisation
c. Strengthening enterprise R&D
d. Market focused research centre landscape
e. IP capability of Irish firms
f.
Ireland’s participation in international research organizations.
5.
Launch of a written
consultation
process and the Consultative Forum in
early 2015:
159
a. A consultation document with key thematic areas was sent to
stakeholders from industry, public sector and academia.
b. A Consultative Forum was held involving 120 major stakeholders to
discuss the issues appeared from the work of the IDC and the
written consultation process (Summary Report).
6. Publication
of the Strategy Innovation 2020: Excellence, Talent, Impact
in 2015.
7.
Establishment of the Innovation 2020
Implementation Group
in 2016,
by merging the Interdepartmental Committee on STI, the Research
Prioritisation Action Group and the Horizon 2020 High Level Group, chaired
by the Department of Jobs, Enterprise and Innovation, for a coherent,
streamlined and coordinated execution of the Strategy.
158
https://www.enterprise-ireland.com/en/News/PressReleases/2015-Press-
Releases/Government-publishes-ambitious-Innovation-Strategy-Innovation-2020-Excellence-
Talent-Impact.html
https://dbei.gov.ie/Djei/en/Consultations/Consultation-for-Successor-to-Strategy-for-
Science-Technology-Innovation.html
108
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Figure 26: Key strengths and weaknesses of Denmark and the opportunities and challenges in the global context.
Source: Authors
This is a high-level overview, not a full assessment. And it is one that for most in
the Danish innovation system has few surprises – most elements draw on existing
sources, like the analyses done by the Danish Council for Research and
Innovation Policy and the private foundations that can be used. Nevertheless, it
will be valuable for key decision makers in the Danish Innovation System to
review this assessment together to identify where different groups, for example,
the large R&D-intensive firms in Denmark, have a different view on the
importance and quality of Danish conditions.
Based on this assessment of the current situation and possible futures, it is a
creative task to develop different options for what role Denmark could play as a
place for innovation. Box 8 outlines key steps in the process of developing a
strategy.
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Box 10: Developing an innovation strategy
Developing an innovation strategy
The exhibit below outlines some of the key dimensions in the process of
developing an innovation policy strategy. It is important to capture both the
domestic and the global context; focusing only on one of these two creates
choices that are myopic or illusionary. It is also critical to explicitly capture the
ambitions and values that are needed to move from data to strategic choice. And
finally the strategy needs to be more than a statement of intent; it needs to be
underpinned by a concrete set of actions and an implementation structure that is
able to deliver them.
The process of developing a strategy is often at least as important as the final
outcome. Inclusiveness and active engagement are critical:
•
The information needed to make the appropriate choices is dispersed across
the many different parts of the innovation system. Bringing this information
together opens the door to a common view of the current situation that the
Danish innovation system is in.
The resources and decision-making power to then drive action in line with the
strategy is also dispersed. Aligning actions across government is only one part,
aligning actions across firms, universities and research institutions, private
foundations, and many others is at least as critical. While government policy
can influence the non-government parts of the innovation system, its influence
is limited
•
While data is crucial, it is important to understand that at its core, strategy is
always about choice:
Where does the Danish innovation system aim to
create real value, be differentiated, and how does it plan to achieve this
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goal?
There might be a range of options that are all feasible for Denmark. Data
can help identify those that are relevant, and then allow an evidence-based
decision to be made between different real options.
This is a decision that only
the stakeholders in Denmark can make.
Figure 27 presents four illustrative options to describe distinctly different possible
directions for Danish innovation policy. These are intended to serve as examples
and inspiration, not as a short-list of the most relevant options. Box 11:
Sustainable Development Goals as a positioning for Denmark describes in more
detail how an SDG focus as an anchor for Denmark’s positioning could look like.
Box 11: Sustainable Development Goals as a positioning for Denmark
Sustainable Development Goals as a positioning for Denmark
One potential anchor for Denmark’s vision are the Sustainable Development
Goals (SDGs). There is no doubt that public and private investment in initiatives
directed at attaining SDGs is increasing which creates demand for innovative
solutions.
Addressing the SDGs requires an inclusive perspective, beyond the classical focus
of innovation policy for industry. Grand societal challenges and SDGs are
“transformative” in the sense that they are part of overall societal development
rather than just arguments for setting priorities in ongoing research and
innovation systems (in policies, in practices). Grand Challenges are also occasions
(and incentives) for new constellations of innovation actors to emerge and
become active”.
160
Denmark’s ‘Research 2025’ aims to create new technological
opportunities, green solutions and better health and welfare through
transforming global societal challenges into new opportunities for growth and
export for Danish companies.
161
Still, overarching efforts to foster new actor
constellations and launch major transformative initiatives with major investments
have remained limited.
Societal Challenges are weakly or at best incrementally addressed, while
requiring substantial transitions and cross-sectoral, cross-industrial, cross-
technological in silo-breaking thinking and decision-making processes. At the
same time, they contain great opportunities for development of business
opportunities and capabilities in emerging and future rapid growing markets, as
global needs related to corresponding societal challenges transform into actual
demand for solutions.
Kuhlmann, S., and A. Rip 2018. "Next-generation innovation policy and grand challenges."
Science and public policy 45.4: 448-454. https://doi.org/10.1093/scipol/scy011
161
160
See https://ufm.dk/en/publications/2018/research2025-summary
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In order to catalyse such innovation processes, instruments of a different kind
than have previously been dominating would be needed. They should be
characterized by challenge defining lead users and business firms, consortia
partners relevant and broad enough to efficiently address solution search. Their
development should, in turn, be characterized by stage gate processes with
increasing consortia partner commitment, related to key strategic priorities in
partnering organizations.
Figure 27: Illustrative strategic options for Denmark
These and other options should be evaluated in a process that involves
stakeholders and based on the ambitions Danes have for their country, and what
matters to them as they evaluate the potential steps necessary to achieve them.
All of the options developed should be attractive, otherwise they will not enable
a real choice. But they will require different trade-offs to be made. Consider the
following illustrative questions:
•
Is there a willingness to create stronger incentives and space for
experimentation, including through lower taxes and weaker regulation in
certain areas, if that is what is needed to strengthen entrepreneurship?
Is it acceptable for a significant share of public support to go to efforts that
are risky and where, thus, a given number of them will fail?
Is it important to make a contribution to addressing global or European
societal challenges, or should specific options be evaluated by their impact on
Danish GDP and job creation?
Is it relevant whether the major beneficiaries of Danish research funding are
Danish companies and citizens or those from other countries?
•
•
•
A decision for any such choice enables a clear prioritisation of activities towards
achieving the specific goal defined. This is why choosing to go after all the options
developed for Denmark is not a useful decision: it would fail to create focus on
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any particular set of activities, and would not be able to communicate externally
what in particular Denmark is strong in.
However, it is important to recognise that a significant part of the innovation
system provides more ‘generic’ activities that are not dependent on this choice.
The focus on a specific value proposition is fully compatible with an academic
system that contracts research and provides education in a wide range of fields,
respecting academic freedom. It is also fully compatible, and indeed needs to be
combined with, programs that help Denmark’s economy to master new cross-
cutting technologies like AI even when this is not part of the unique positioning
that Denmark is pursuing. Strategic choice in public policy is about setting
priorities.
Overall, the shift towards a more strategic innovation policy approach
around a widely shared value proposition would aim to achieve change
in three key dimensions:
•
More systemic integration of individual innovation policy tools
towards
common goals vs enhancing the quality of individual programs or institutions.
More systemic dialogue and collaboration across the entire innovation
system
vs creating a structure that aims to minimise the need for
coordination.
Focus on areas of innovation, including non-science driven areas, in
which Denmark has clear strengths
vs generic efforts to ensure academic
excellence and effective technology transfer.
•
•
The ambition, then, is to elevate the many assets of the Danish innovation system
and enable them to make a more sustained impact, not to dramatically
deconstruct what exists to create an entirely new system.
3.2.2 From choosing a value proposition to action
The value of any strategy and value proposition ultimately depends on how it
changes actions and behaviour. A pre-condition to changing behaviour is that the
relevant stakeholders are involved throughout the process so that they feel co-
ownership of the strategic outcomes. Choices need to be broken down into
specific efforts, into responsibilities for specific institutions, and in budgets and
investments needed to create the necessary capabilities.
The strategy should also define clear goals and metrics that describe the outcome
to be achieved. This is important for two reasons: first, it makes it possible to
monitor progress, and check whether the actions chosen are effective in getting
Denmark closer to where it aims to be. Here, there is a clear connection to the
new push on a cutting-edge system for impact assessment and performance
tracking proposed in chapter 2.3.3. And second, it can inspire broader support
for the strategy. While some might be motivated by the value proposition itself,
for many, it will be the impact that Denmark can achieve for itself and for others
that will be the key reason to rally around the strategy.
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A strategic choice on a value proposition will affect the prioritisation
across existing activities, programs, and institutions,
such as, for example:
•
A focus on start-ups and their acceleration requires specific action on science
parks, incubators. risk capital, taxation, physical infrastructure for testing,
export promotion, procurement procedures for start-ups, and the like.
Leveraging Danish strengths in non-science driven areas of innovation
depends on the availability of policy platforms across ministries, support
programs that are neutral as to their science linkages, and a dedicated
program to leverage these strengths internationally.
Operating as an R&D lab for MNCs is much more a question of the
infrastructure for expats, tax rules specific to R&D, and clear & simple rules
for the collaboration of firms with academic institutions.
Orienting the Danish innovation system around Denmark’s existing industrial
profile would raise the importance of RTOs and science parks, create more
urgency around rules and regulations for technology transfer, and could have
implications for where science investments are made.
•
•
•
It will also require a look at some more
ambitious
new policy approaches
that
Denmark has not pursued very actively so far. Mission-oriented approaches that
stress the role of government in creating demand for innovation have gained
significant traction across the EU. They will feature in Horizon Europe, and they
have been included in the recent UK industrial policy. Denmark should consider
using such an approach as a way to spearhead its activities around a specific
domain.
At a more tactical level, a challenge-driven innovation programme can translate
this idea into reality. Such instruments exist in Denmark in the space of
renewable energy and could be applied to other areas of societal importance as
well. The challenge-driven innovation programmes catalyse stepwise, targeted,
strongly committed consortia addressing urgent, specific societal challenges that
could be practically addressed in a national context, but which could have the
potential of scaling towards corresponding international challenges. This could be
based on the concrete potential of the public sector benefits and private firm
revenues, if successful in generating envisaged solutions. The public sector,
including parts of municipalities and county councils, are almost always in the
front seat, together with innovative firms. Groups of firms often need to connect
their solutions in order to generate viable businesses and to contribute to solving
the societal challenge. The main partners are public sector agents and private
firms, often together with HEIs and or research institutes, and increasingly with
public regulatory institutions. Innovation tournaments are an interesting new
option. They define a specific problem and provide economic benefits for its
solution without prescribing any particular technology or approach.
Critically, more or less any strategy will depend for its success on creating
a new
organisational structure
across the Danish innovation system that enables more
effective dialogue, decision making, and impact tracking towards the new goals.
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The need for strategic alignment encompasses MHES and the MIBFA, as well as
almost every ministry as all of them, interact with the knowledge and innovation
system, not to mention agencies, local authorities and many semi-public
stakeholders.
Below we sketch two institutional setups that Denmark could consider. They are
meant as source of inspiration to devise a solution that fits the institutional and
political ecosystem of Denmark. They imply that innovation policy is elevated
within government to a level that is above any single ministry. Two options
should, in the Panel’s view, be further analysed:
•
Establish an innovation agency:
Sweden (Vinnova) and Norway
(Innovation Norway) have national innovation agencies that have a leading
role in the design and implementation of their countries innovation policies.
Germany has recently announced the creation of a new Agency for Disruptive
Innovation as a joint effort of the ministries for the economy (BMWi) and
research (BMBF).
162
Important features of innovation agencies, which are semi-independent from and
functioning outside the ministries, of the kind that exist in other Nordic countries
are:
•
Good conditions and capacity for learning from a long history of past
experiences and making use of that learning in strategy development, even
when Governments and other institutional structures change.
Strategy and program design capacity based on systems analysis that allows
identification of areas and targets that are important for the innovation system
to address/aim for. Such capacity also allows for continuous improvement
based on learning from evaluations and monitoring of past and on-going
strategies and programs.
Experimentation and experiment-based learning that is possible because of
the quasi-autonomous mandate of the agency. This allows for trying out new
directions and program designs at smaller scales both in terms of new kinds
of initiatives and within existing programs.
•
•
Alternatively, some countries also created innovation councils led by the Prime
Minister and involving all ministries. These are frequently set up to formulate
strategies and coordinate at the national level. Coordination mechanisms do seem
to work best when there is a real willingness to align strategically and to
coordinate. The remit and the authority given to an Innovation Council should
truly reflect a commitment to drive change at the level of the whole research and
innovation system.
Moreover, Denmark could consider creating an innovation agency. The different
options should be carefully considered and discussed within Denmark. One option
162
https://www.gouvernement.fr/en/france-s-ambitions-for-investment-and-innovation
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– but not the only one to consider - could be to expand the mandate of the IFD
to also cover the role of an innovation agency. This would require additional
funding for IFD, but more importantly, a new set of capabilities and a significant
change in culture, as funds operate based on different objectives.
•
Create a powerful national innovation council as a strategic decision-
making body
or broaden the mandate of existing structures like the Danish
Council for Research and Innovation Policy (DFiR) accordingly. Currently, the
council does not have decision making competence and provides independent
and expert advice capacity to policy makers on research, technological
development and innovation. The council should consist of members
representing the composition of the cabinet that could be appointed by each
involved minister. This council would need to be led by the Prime Minister to
ensure sufficient decision-making power. It would have a mandate to take
strategic decisions related to innovation across the different government
entities and to develop and implement the strategy. It should be supported by
a secretariat and the analytical unit proposed in Section 2.3.3 as well as
foresight capacity.
Such a council could also include members from abroad in an advisory capacity,
or a separate international board could be created. External views are often
invaluable and catalyse more dynamic reflections and discussions. Some OECD
countries use their councils to develop strategic priorities and/or to coordinate
within both government and non-public stakeholders (see OECD, 2018 for
possible configurations of a research and innovation council).
163
The Finnish
Technology and Innovation Council, for example, has adopted guidelines and
visions with influence at the national level. France has, in 2018, announced the
creation of an Innovation Council to assist the Government in its strategic
choices.
164
While there are many different ways to ensure strategic alignment, it is the
Panel’s view that an institutional structure that sits above the minister level could
provide strategic direction, coordination, alignment, and future-orientation to the
actors of the NIS that is missing in Denmark today.
To sum up, it is the panel’s view that such a strategic exercise and a more precise
definition of the vision behind Denmark’s NIS can be highly beneficial for
Denmark. It would take the overall contribution of individual elements such as
agencies or funding entities towards societal and economic objectives to a new
level. It would also allow for a more deliberate targeting of instruments and for
strengthening the linkages and coordination of the system to work towards a
vision that stakeholders have bought in.
OECD, 2018: Science Technology and Innovation Outlook: Adapting to technological and
societal disruption. OECD Publishing, Paris. https://doi.org/10.1787/sti_in_outlook-2018-en
164
163
https://www.gouvernement.fr/en/france-s-ambitions-for-investment-and-innovation
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4
CONCLUSION
Reviewing the performance of an innovation leader is a request to provide advice,
but it is also a source of learning and inspiration. The peer review of the Danish
innovation system has provided ample opportunities for both.
Denmark’s innovation system has key strengths, especially in scientific research,
some research-intensive industries, but also in non-science driven innovation,
that many other countries envy. These strengths are embedded in a successful
economy that is supporting a high and widely shared quality of life for Denmark’s
population. And they are anchored in a robust business environment and a well-
developed policy support system for innovation.
What we found in this peer review is that
Denmark is despite all of these
strengths facing a dual challenge:
•
First,
it is missing out on generating the full socio-economic value of
the strong innovation system the country has developed.
This is a
challenge that the Danish policy system has recognized, and that provided the
impetus for this review.
Second,
it is failing to respond to a range of broader changes in the
global innovation and innovation policy landscape,
which in our view
could challenge Denmark’s current position. This is a danger that in our view
has received insufficient attention in the Danish debate.
•
What can Denmark do in response?
We propose a
two-pronged approach
or, as the title of this report frames it,
‘A leap into the future: Ten steps
towards taking Danish innovation to a new level
.
The ‘ten steps’ are actions that can be taken with the existing structures of the
current Danish innovation system and its policy support environment. They are
more evolutionary changes, and in many instances draw on existing momentum
and efforts. But they also add some elements that in our view have been left
unattended recently. Most importantly, the system needs to raise its ability to act
as a system addressing more systemic challenges, not as a collection of efficient
but independent individual programs and entities. For all of them, we have aimed
to provide concrete and actionable recommendations.
The ‘leap into the future’ is then challenging Denmark to outline a clear and
differentiated ambition for its innovation system, and the role Denmark is aiming
to play in the global innovation game. Building on the previous ten steps, it
sharpens both the internal prioritisation and delivery structure and the external
communication of what value Denmark is able to offer to foreign talents, research
institutions, companies, and societies. To successfully ‘leap’, Denmark has to
mobilize and involve the breadth of its innovation system participants in
discussion, decision, and action. A process like this may seem revolutionary, and
maybe even risky. But many individuals and organizations we have met during
this review seem ready to take up the challenge; in fact, there seems a
widespread yearning to take the Danish innovation system to a new level. We
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have aimed to provide a structure and a starting point for such a major process
to be successful.
What can Denmark do to translate these ideas into action? The key question that
Danish decision makers have to address is whether they see the need for action.
The Danish innovation system is strong, and despite the challenges we have
identified, there is no burning platform or impeding crisis. Instead, the costs of
inaction are lost opportunities and a gradual erosion of Denmark’s existing
position. This type of situation does not create momentum for major change, but
rather for continuity. Danish decision makers will have to weigh these costs
against the priorities they see in other policy areas.
The ten steps outlined in this report can be pursued without the need to elevate
the role of innovation on the Danish political agenda. There is limited if any
additional budget required, even if changes might lead to a difficult re-allocation
of resources within the innovation system. But this does not make the changes
suggested easy: they will only happen, if there is both a clear political signal that
there is a willingness to push them through, and a consensus across the system
that they are needed.
The ambitious jump towards a comprehensive new strategy is in the panel’s view
of a different nature. It requires a much broader engagement with stakeholders,
which will also increase the expectations for real change. And it requires an all-
of-government approach, with actions and ownership beyond one single ministry.
This is more complex, but also more rewarding if Denmark wants to fully mobilize
the significant qualities of its innovation system to generate economic value and
contribute towards addressing the broad societal challenges of our times.
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APPENDIX A: METHODOLOGY OF THE REVIEW
The Review was part of the EC’s Horizon 2020 Policy Support Facility (PSF). The
objective is to provide recommendations for how Denmark’s effort in knowledge-
based innovation can rank among the global elite, and support stakeholders
working effectively and in close cooperation towards common overall objectives.
The PSF Panel kicked off its work on 28 January 2019 and finalized in September
2019. The process started with a review of existing evidence based on desk
research. The Ministry of Higher Education and Science provided a background
report as well as additional resources analysing main indicators, a literature
review as well as a historical overview of the development of the Danish National
Innovation System. The panel complemented this information with relevant data
and insight from international organizations (e.g. Eurostat, OECD, World
Economic Forum) and other pertinent published data and analysis.
In the course of the review, additional evidence was collected during two field
visits to Denmark. The panel held extensive consultations and interviews with a
wide range of stakeholders and users of the Danish Research and Innovation
system. The purpose of the first visit (4-7 March 2019) was to gain a sense of
the main challenges and strengths of the Danish NIS. During the second visit (5-
8 May 2019), initial recommendations were tested with key stakeholders and
remaining information gaps were filled to ensure that the recommendations are
relevant and timely.
The consultation process included a wide range of stakeholders, including but not
limited to:
-
Companies ranging across the entire company life cycle, i.e. from
(student) start-ups to multinationals as well as relevant business
associations;
University and college leadership, technology transfer professionals and
researchers;
Main public and private R&I funding entities as well as main operators in
the system (RTOs, cluster, networks), and
representatives of government agencies and other ministries relevant to
the R&I, members of councils and ongoing initiatives;
Institutions and companies involved in the Robotics cluster at the
University of Southern Denmark in Odense.
-
-
-
-
In total, nearly 200 stakeholders were interviewed or consulted either individually
or in small-group interviews during the country visits or over the phone. In
addition, individual organizations provided written inputs into the process.
The panel paid particular attention to ensuring complementarity with the
numerous ongoing reviews targeting individual elements of the R&I system were
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under way in Denmark. While the panel reviewed the innovation system as a
whole, university hospitals and the Geological Survey of Denmark and Greenland
(GEUS) were not part of this review. The relevant members of these reviews were
consulted and overlaps of findings are referenced in the report.
Individual panel experts contributed to individual recommendations based on
their expertise while national peers mainly contributed based on the expertise of
their countries.
In the process of collecting evidence, the panel noted that many data limitations
exist in Denmark, when it comes to the main characteristics of the innovation
system and to assessing the impact of innovation policies on a regular basis.
Some of the Panel’s requests for data on indicators that are standard KPIs in
other countries could not be fulfilled within a reasonable timeframe or not fulfilled
at all. Despite a wealth of evaluations that are undertaken regularly, data on
impact of key elements of the system is scarce and scattered across different
institutions, which makes a systematic assessment difficult.
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APPENDIX B: EUROPEAN INNOVATION SCOREBOARD
2019: DENMARK
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APPENDIX C: CASE STUDY: THE WELLCOME TRUST
The Wellcome Trust is a private charitable foundation dedicated to improving
health for all (https://wellcome.ac.uk).
The Constitution of the Trust outlines its objectives:-
1. To protect, preserve and advance all or any aspects of the health and
welfare of humankind and to advance and promote knowledge and
education by engaging in, encouraging and supporting: (a) research into
any of the biosciences; and (b) the discovery, invention, improvement,
development and application of treatments, cures, diagnostics and other
medicinal agents, methods and processes that may in any way relieve
illness, disease, disability or disorders of whatever nature in human
beings or animal or plant life
2. To advance and promote knowledge and education by engaging in,
encouraging and supporting: (a) research into the history of any of the
biosciences; and (b) the study and understanding of any of the
biosciences or the history of any of the biosciences.
The Trust is funded by an endowment portfolio of ~£26B, which is managed by
an experienced investment team. The returns generated at present provide an
income of ~£1B per annum to be spent on research and strategically important
areas. The Wellcome trust is, therefore, the largest Foundation in Europe in terms
of funding. Its funding for researchers is split into streams:-
•
A primary fund
which funds applications in responsive modes, offering
grants across biomedical science, population health, medical innovation,
humanities and social science, and public engagement.
A reserve fund
which is used to fund long-term research leading to change
within 5-10 years to make a real difference in areas of strategic importance,
e.g. antimicrobial resistance (https://wellcome.ac.uk/sites/default/files/call-
action-antimicrobial-resistance-2018-report.pdf)
•
Development of Wellcome Trust’s strategic research agenda
This is done in consultation with a range of different stakeholders, and the Trust,
through its independence, can fund things very flexibly in line with different
strategic requirements and across geographies. However, it always funds in line
with the Wellcome Trust’s mission. An example was the funding of the Sanger
Centre and the human genome project at a time when this was very early and
not being funded to a significant degree by other funders. This led to capacity
building in genomics within the UK and demonstrated the importance of this area.
This has now been followed by significant government investment in, for
example, the 100K genomes project and really catalysed the whole area of
genomics.
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The Trust is not there to fund areas as a substitute for government funding but
can drive government to fund important areas by adding to available government
funding. For example, in the late 1990s, it was clear that there was a need for
significant funding for infrastructure renewal in UK universities. The Trust made
funds available which were matched by government and became the Joint
Infrastructure Fund. This demonstrated that such funding was important and
made a significant difference to universities' research capabilities. At this point,
the Wellcome Trust funding was reduced, and government supplied the necessary
funding via a Higher Education Funding stream.
Influence of the Trust on the Government Research Strategy and that of
other funders
The Trust has an ability to think long term and work with other funders when the
Government, by its very nature, is more focussed on short-term priorities. It can
partner with other funders and also influence how they fund, for example, even
when the Trust contributed a relatively small amount of funding, it was able to
influence the construction, design and mode of working of the DIAMOND light
source so that the facility answered the needs of a broader research community.
In terms of innovation, the Trust has been involved in driving new funding
models, for example, helping to create the optimum environment for the
Bioscience Catalyst campus at Stevenage adjacent to GlaxoSmithKline.
The Trust also has a strong influence on training and skills and frequently takes
the lead in shaping thinking, for example, they were the first to move to 4 years'
funding for PhDs, which is now common policy in the UK Research Councils;
driven thinking around the role of IP and outputs and inputs of research funding.
The Trust works with government and other funders to shape and lead policy, for
example, in open access and bringing the patient voice to the table.
In terms of working with other Foundations, the Trust is part of the Hague group
of European Foundations and does have discussions with them on common
themes. In the past, they have had conversations with the Novo Nordisk and
Carlsberg Foundations. Most recently they have been in discussion with the Novo
Nordisk Foundation on data science skills.
Lessons for Denmark from the Wellcome Trust
•
While each Foundation is very different and its way of working is dependent
on its mission and charter, the Wellcome Trust appears nimble among the
Foundations and Charities in terms of how it builds its strategy and the
flexibility of its funding modes.
The Trust actively engages with a wide range of stakeholders to set its
strategy and is, in fact, undergoing a consultation at present on its future
priorities and mechanisms of funding.
The Trust uses co-funding with other funders and government to shape the
innovation ecosystem in the UK. This has led to significant capacity building
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•
•
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in areas of strategic importance and allowed a longer-term perspective than
government alone can provide.
•
The Trust plays an active role in driving policy and influencing thinking across
government and other funders.
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APPENDIX D: KEY CHARACTERISTICS OF SELECTED PEER COUNTRIES
Country
Strategic focus
Governance
Agency organisation
Funding models
Finland
Dual approach to foster cross-
sectoral business ecosystem and
SME growth. University-industry
collaboration,
digitalisation,
various platforms (e.g. data), and
intangible value creation are
considered key enablers.
Top-down approach where
the Prime Minister's Office,
the Research and Innovation
Council and ministries define
broad priorities, in
coordination with a limited
number of agencies, public
research organisations and
think-tanks
A recent consolidation of
agencies under the virtual
Team Finland organisation.
Business Finland (a merger
between Tekes and Finpro)
is the main innovation policy
agency and covers RDI
funding, export and FDI
promotion.
Roughly half of all
funding is assigned to
thematic areas and
programs. Academy
of Finland provides
grants for basic
research, Business
Finland provides
grants, soft loans,
matchmaking and
internationalisation
services.
Switzerland
Based on thinking that innovation
is the task of industry, not the
state, hence, limited state
funding, mainly for public
institutions in basic research and
limited state intervention in the
innovation process. Public sector
provides training, connections
with international markets,
networking.
Bottom-up approach funded
by business mainly.
Government intervention is
limited to providing funding
for basic research and some
networks.
Innosuisse is an
independently run agency
that has an external Board,
an Innovation Board that
cover renowned experts
across different areas of
innovation and is evaluated
by the revision unit of the
government regularly.
Majority of funding is
private, most public
funding is attributed
to public research
institutions for basic
research. Funding of
public-private projects
is possible.
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Country
Strategic focus
Governance
Consensus-based approach.
Ministries define societal
challenges and missions in
close consultation with
stakeholders. Research and
innovation agendas defined
by (triple-helix-based) top
teams.
A consensus-based
Agency organisation
Funding models
Netherlands
Be among the top five knowledge
economies in the world by
maintaining supportive
frameworks for innovation and
entrepreneurship. Threefold
approach: (I) providing generic
benefits for innovative industry
(tax schemes); (II) stimulating
the provision of risk capital (seed
capital policy, Dutch Venture
Initiative);(III) promoting public-
private collaboration (top sector
approach).
Compared to the
NWO provides grants
for basic research
and
RVO (an agency of the
Ministry of Economic Affairs)
is the central ‘gateway’ for
entrepreneurs. Research
council NWO
(an
targeted approach of innovation
policy, the approach of science
policy is more bottom-up and
horizontal, aiming for top-class
science, global impact, close
connections to society and being
a breeding ground and harbour
for talent. Collaboration is one
of the key features of science
policy, including collaboration
between science and industry.
approach is also taken in
science policy, with
consultations that involve
universities, RTOs and
industry, but also non-
profit organisations and
citizens. This led to a
national research agenda
(NWA) that contains a
diverse set of 25 research
areas (‘routes’) for
scientific breakthroughs
and solutions for society.
Another example is the
‘sector plans’ in which
universities coordinate
their activities, partly by
means of strengthening
the (unique) profile of
individual universities, and
by increasing cooperation.
independent agency
reporting to the Ministry of
Education, Culture and
Science)
covers a large part
of the funding of academic
research. NFIA is
responsible for FDI
promotion.
combinations of
basic research and
applied research (by
means of open and
thematic calls and
prizes).
RVO provides
business-oriented
services and schemes
(incl. vouchers,
matchmaking,
services in capital
provision, etc.). The
ministries provide
lump-sum
contributions to
universities, RTOs etc.
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Country
Strategic focus
Governance
Agency organisation
Funding models
Research funding is
based on the Haldane
Principal that research
funding should be
allocated by
researchers not
politicians. Knowledge
Exchange in
universities is funded
from Research
England by the
£250m p.a. Higher
Education Innovation
Fund. Universities are
rewarded for impact
through the Research
Excellence Framework
£1Bn “QR” funding
stream
Need to add the
Industrial Challenge
Fund here where
money to UKRI was
assigned to fund
priority areas of the
industrial strategy
The 2017 UK Industrial Strategy
calls for the UK to become the
world’s most innovative economy
through an increase in R&D spend
from 1.7% to 2.4% of GDP by
2027
Within that are (currently) 4
Grand Challenges:
•
AI & Data
Ageing Society
Clean Growth
Future Mobility
UK
•
•
•
Top-down objectives and
incentives with bottom-up
delivery. The Government
sets out its overall
objectives and incentives,
but universities as
autonomous institutions
develop their own individual
delivery strategies.
and sector deals in aerospace, AI,
automotive, construction, creative
industries, life sciences, nuclear,
offshore-wind and rail.
https://www.gov.uk/government/
publications/forging-our-future-
industrial-strategy-the-story-so-
far/forging-our-future-industrial-
strategy-the-story-so-far
UKRI (UK Research and
Innovation) brings together
the research funding
councils with Research
England, both of which are
Higher Education facing, and
InnovateUK, which is
business facing. The
devolved administrations of
Northern Ireland, Scotland
and Wales have their own
arrangements in place of
Research England.
The state-owned British
Business Bank increases
access to funding for SMEs
up to £25m revenue as a
fund of funds for financial
institutions.
Business innovation is
supported by grants and
loans from InnovateUK and
finance from the state-
owned British Business
Bank.
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ON THE PHONE OR BY E-MAIL
Europe Direct is a service that answers your questions about the European Union.
You can contact this service
– by freephone: 00 800 6 7 8 9 10 11 (certain operators may charge for these calls),
– at the following standard number: +32 22999696 or
– by electronic mail via: http://europa.eu/contact
Finding information about the EU
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KI-AX-19-012-EN-N
Denmark is among Europe’s innovation leaders, with a strong science base, high
overall investments in R&D activities, and particular strengths in a range of fields.
While this position is under no immediate threat, this review finds Denmark failing
to fully leverage its strengths and to adjust to a changing global innovation
landscape. The review recommends a number of specific changes – evolving the
role of particular parts of the Danish innovation system, enhancing the
coordination across them, and adding particular new features. More importantly,
however, the review suggests a broad-based effort to create an overarching
Danish innovation strategy, and an institutional architecture to underpin it. The
lack of such an integrating structure has left the Danish system perform below
its potential, despite good or even excellent performance in individual parts.
Filling this gap promises significant rewards but will take strong political will
beyond one ministry.
doi: 10.2777/603976
ISBN: 978-92-76-11921-0