FINLAND: Universities the key to innovation

Universities are the key players in constructing Finland's knowledge-based economy, according to the report of an international evaluation of the nation's innovation system. The report says that while there is relatively high investment in higher education R&D, and that Finland is well-endowed with researchers, research output relative to inputs as measured by publications is low.

The evaluation found that inefficiencies are created by three levels of 'fragmentation' of the public research sector. First, research is organisationally fragmented into three types of institutions: universities, polytechnics and other public research institutions. Second, these organisations are spatially fragmented by being spread across the country. Finally, research is fragmented into relatively small units.

Apart from reducing the extent of this fragmentation, the main challenges were seen as increasing the quality of university research, increasing the extent of internationalisation and tackling the problem of 'late graduation'.

Finnish students are late starters and, by working part-time during their studies, many further delay their academic progress. Government welfare is relatively generous on the surface but for many students (especially those in expensive Helsinki), it provides insufficient funds by way of grants and loans to survive without working as well.

On average, Finns do not graduate until they are 28 years old. One reason is that universities run their own admissions tests and some students apply several times before gaining entry to and eventually completing their preferred programme.

Little use is made of final secondary school examination results and this omission builds systemic inefficiency into the university admissions process. In 2008, the share of new university students who matriculated the same year was only 29%.

Not usually mentioned as a reason for delayed graduation is the universal conscription requirement for young men, some time between the ages of 18 and 28. Each year, some 27,000 men start their national service stint of six, nine or 12 months and many are eventual higher education students. The study delay for someone opting for 12 months' national service might be as much as two years, depending on their intake date.

The evaluation panel was chaired by Professor Reinhilde Veugelers of the Katholieke Universiteit Leuven in Belgium and included five other international academics from America, Austria, Britain, Italy and Sweden, as well as eight from Finland.

Their report says the most pressing and timely challenge is to increase the quality of research which would be best achieved by providing relatively autonomous universities with appropriate incentives through transparent funding rules. It suggests a suitable funding formula for universities based on a distribution of 55% for teaching, 35% for research and 10% for strategic initiatives.

The panel was highly supportive of Finland's ongoing university reforms and noted that polytechnics should be seen as important actors in the higher education system with their strong regional and applied role. But to streamline the sector, the panel recommended a clear division of labour between universities and polytechnics.

This is an interesting observation because most Finnish polytechnics have started to describe themselves in English as 'universities of applied sciences', a move that seems certain to blur the differentiation between polytechnics and universities. Neither the government nor the 'real' universities support this name change.

* The report, Evaluation of the Finnish National Innovation System, can be downloaded here.

* Dr Ian Dobson, an Australian scholar based in Finland, is editor of the Australian Universities Review