Not enough additional funding for all

Text terhi hautamäki images samuli siirala english translation marko saajanaho

Pivotal. Historic. Exceptional. These were the words used by the parliamentary RDI Working Group and its Chair, Member of Parliament Matias Mäkynen to describe the decision in 2021.

For once, all of the parliamentary parties were in agreement. They committed to increase research and development funding on a long-term basis, across government terms. The decision gave the scientific community hope – research is obviously valued, so clearly this means proper funding will follow.

The working group set up by Sanna Marin’s government proposed the Act on Research and Development Funding to allow Finland to increase R&D funding to four percent of the GDP by the year 2030. The government would provide a third of the additional funding, and the private sector would invest the remaining two thirds.

The Act on Research and Development Funding entered into force during Marin’s term, but the allocation of additional funding was left to Petteri Orpo’s government. Their multi-year plan was published in June.

280 million more annually

In this year’s budget proposal, the government will spend 2,6 billion euros on research and development funding. This is approximately a 280 million euro increase compared to the previous year. Government funding is to be increased by 280 million euros per year until 2030.

In the Act on Research and Development Funding, government funding is tied to the proportionate growth of private funding. If private funding falls short of expectations, the government can reduce their funding or redirect it in a manner estimated to increase private funding.

The total consists of permanent and temporary additional funding. Some decisions have been made in the past or resulted from the budget proposal in the spring, others come from the multi-year public finance plan or will be decided at a later date.

The attached charts show the increases from the spring’s budget proposal and the public finance plan.

The most public funding by far comes through Business Finland, and this amount grows year by year. Part of the funds are allocated via the Academy of Finland and as the national counterpart for EU projects.

Additional funding has also been directed to the Doctoral Education Pilot, for example. Temporary funding will be provided for a new supercomputer and research centres’ post-doc programme.

Earmarked funding

For now, basic funding for university research does not see an increase. A large portion of the additional funds has plenty of competition between parties.

Academy of Finland President Paula Eerola is happy with the main policies. She has been involved in the working group and is also a member of the Research and Innovation Council led by the Prime Minister. Eerola finds competition beneficial to science.

As responsibilities increase, staff numbers dwindle due to the government’s productivity programme.

The Academy of Finland would, however, have preferred more of an emphasis on higher education institution research for longer-term effects that would also help improve society.

“The emphasis is now on Business Finland and short-term effects.”

Eerola notes that Business Finland receives additional funding as a single total, but the funds received by the Academy of Finland are earmarked in various ways. The Academy was already allocated more money on flagships and infrastructure and proofs of concept, i.e., research application and pre-commercialisation.

Next year, the Academy will also receive additional funding for specific themes: clinical research, wellbeing services counties’ R&D, and bioeconomy.

“All the money is well targeted, and we have highlighted these targets ourselves. However, some of them are fairly small packages. There is a bit too much earmarking to limit our actions. It would be more effective and sensible from a research standpoint if the funding came as larger totals”, Eerola says.

Smaller, more limited applications are also relatively more work for the Academy. As responsibilities increase, staff numbers dwindle due to the government’s productivity programme.

Free science gets crumbs

Professor of Cancer Biology Jukka Westermarck from the University of Turku is critical of the science policy in Finland. He does not shower the multi-year RDI plan in praise.

“During the Marin government, revolutionary science policy was made by committing to additional funding at the parliamentary level. The important job of the Orpo government is to spend this money wisely. Unfortunately, that does not seem to be the case thus far,” he says.

The extra funds are directed heavily towards business and predetermined programmes while universities do not receive a single euro for free research. By 2027, Business Finland funding will exceed the combined R&D funding of all universities in Finland.

The current government R&D funding for universities is slightly over 799 million euros, and Business Finland currently grants approximately 566 million euros. According to the Ministry of Finance’s estimation, Business Finland will grant over 900 million euros in 2028 whereas government R&D funding for universities is expected at roughly 800 million.

”The situation is absurd. We are already hearing Business Finland has got so much money they don’t know what to do with it. There are not enough high-quality projects.”

Jukka Westermarck, Professor of Cancer Biology, University of Turku

“The situation is absurd. We are already hearing Business Finland has got so much money they don’t know what to do with it. There are not enough high-quality projects.”

Westermarck thinks business R&D work needs support. He himself has founded a startup based on his research and applied for Business Finland funding.

“This relationship should still make sense. To have something to apply, you need science first. There may be accumulated deficit on the business side, and extra funding helps with that. But once than thirst is quenched, strong support for basic research should be next.”

“Illusion of greatness”

Westermarck is part of a flagship studying immunity at the University of Turku. However, he believes the added project funding for the Academy of Finland should not be exclusively tied to flagships and programmes. He does not think guidance from above helps modernise science and criticises the Ministry of Education and Culture for “an illusion of greatness”.

“Flagships and consortiums sound all well and good. They can certainly do some things better than individual research groups. However, science evolves through new ideas from researchers, when research groups are allowed to conduct riskier research and experiment without anyone determining and telling them what to do beforehand.”

Research focus points should be born from science. Science evolves when career paths work effectively: young researchers can advance their careers, go abroad, bring new ideas with them, and start their own lines of research. According to Westermarck, careers are hampered by the reduction of the academic researcher term to four years and doctoral degrees shrinking to three years in the pilot, without the necessary changes being made to support the postdoctoral stage.

“Since we have now decided to put this much money into RDI, we can strengthen the whole chain here. Let’s not waste a unique opportunity”, he wishes.

Benefits spread to society

Business Finland is satisfied with the additional funding and its points of emphasis. Newly appointed Director General Lassi Noponen says that leveraging taxpayer money via business investments is crucial to the four-percent goal. This goal requires cooperation between businesses and research.

“I do not see this as universities and businesses competing for resources. Both are important, and I think we are on a fairly balanced path”, Noponen says.

“At the same time, we must make sure the cooperation is genuine and not simply put together to obtain funding. I do not suspect this to be the case often. But the more genuine the cooperation is, the more its benefits spread to society.”

According to Noponen, Business Finland is able to channel the additional funding effectively. Extra challenge is offered by the fact Business Finland’s operational expenses are being significantly reduced at the same time.

”I do not see this as universities and businesses competing for resources. Both are important, and I think we are on a fairly balanced path.”

Lassi Noponen, Director General, Business Finland

Noponen believes strategic choices in R&D funding are mandatory in a small country like Finland. He thinks that where expertise already exists, that is where forthcoming breakthroughs are also likely.

“I am not concerned about the points of emphasis limiting expertise. Over time, the capacity of skilled people spreads across society as individuals switch jobs and businesses operate as partners and networks. To give you an autumnal metaphor, our job is to grow the mushroom spawn so good mushrooms pop up across different parts of society.”

With Business Finland receiving so much money, are they able to find enough uses for it? Is there enough research base and innovations in the business world?

Noponen reckons time will tell. He states businesses have potential for research and development, but they must be activated for more and better projects. Business Finland does this on a constant basis. “Just yesterday, we gathered a couple hundred people from businesses and research centres to our auditorium for our Flexible Energy Systems programme. Perhaps they will be inspired to apply for funding.”

Expert training is the key target

Aalto University professor Otto Toivanen studies innovation policy as an economist. He is happy about the government investing in research and development, but the implementation leaves something to be desired.

Innovations come from people. If business funding is rapidly increased during a talent shortage, the extra funding easily finds its way to higher salaries while the number of innovations may not increase. It would be crucial to invest in higher education and basic research and then start funding the private sector more.

“Now, we are doing the latter a lot and the former a little. R&D is based on having people capable of doing that work. They come from higher education, and not nearly all graduates are suitable for R&D work. Supply is limited.”

Toivanen is positive about the doctoral pilot, but suitable doctoral researchers are not in excess either. It is important for bachelor’s and master’s degrees to be funded and talented people to be enticed towards postgraduate studies. The key resource in training talented individuals to become doctors is the university staff guiding them.

”The doctoral pilot has a design flaw based on the idea of us having lots of extra capacity for doctoral education, with people capable of guidance just sitting there waiting and hoping for more students to show up.”

Otto Toivanen, Professor, Aalto University

“The doctoral pilot has a design flaw based on the idea of us having lots of extra capacity for doctoral education, with people capable of guidance just sitting there waiting and hoping for more students to show up.”

Toivanen runs the Helsinki Graduate School of Economics, which has hired twenty professors in six years. First, the size of the group able to provide guidance has been increased in order to grow doctoral education.

Solid innovation policy consists of many things: sensible intellectual property and effective competition policy, up-to-date bankruptcy laws and immigration policy – as well as quality education and basic research.

“Innovation policy does not simply mean handing out money for business R&D activities. That is an important part of innovation policy, but if you bodge the university and education system, even the best subsidies will not help much.”