State Secretary Karin Yrvin

Speech for the members of Eurotech

2 april 2006

On behalf of the Norwegian Government, let me welcome you all to Oslo and the combination of late winter and early spring that we have here at this time of the year.

It is my pleasure to meet and join you all for this dinner. Research and technology organisations in Norway play an important role in Norwegian research. And they keep Norwegian research in tune with international research.

You have had a busy afternoon session. I am sure that Unni Steinsmo and Ernst Kristiansen have given you a good presentation of SINTEF’s perspective to the issues you have discussed.

And you will get to know SINTEF even better tomorrow. We are proud of Norway’s largest research institute, its high international standing and its strong relations with universities as well as industry.

Let me spend a few minutes on a presentation of the Norwegian Government’s views on our research institutes, how they transfer knowledge to society and industry.

Firstly, a short historical recap: During the past fifty years, Norway has built up a large research institute sector. In the early years, it played an important role in the period of active industrial development that followed World War II. Our research institutes participated in establishing sound technological foundations for industries in which Norway already had a strong position, like the maritime industry and other industries, especially those linked to hydropower.

With the development of our petroleum activities, another area for industrial research quickly developed. Our institutes played a major role in establishing Norway as a world technology leader in petroleum.

Environmental challenges posed by energy issues have more recently become another area to receive particular attention in Norway. The capture and storage of CO ₂ is a challenge of prime importance to our petroleum activities, and one of the specific present target areas of the Government.

The need for knowledge in Norwegian industry and society has evolved a lot since our research institutes were established. They are facing a more complex and at the same time less obvious set of demands. An external review of the Norwegian institute sector was ordered for the latest White Paper on Research, which was put forward last year.

The review examined some assertions made about our institutes – that the large size of our institutes created obstacles for cooperation, or the companies’ purchases of research services from institutes suppressed the companies’ own research.

The research institute sector is relatively large in Norway, compared to most European countries. However, our scientific and technological institutes, in particular, are heavily involved in research networks with universities as well as with companies, domestically as well as internationally. And they provide services of high international quality. This is proven by the high success rate of these institutes in the European Framework Programme for Research. The review clearly concluded that our institutes did not create obstacles for cooperation between industry and academia.

The other assertion was that such cooperation was detrimental to the companies’ own in-house research. The review also concluded that such a relationship could not be substantiated.

In order to understand this better, let me say something about some recent changes:

Under the previous government in 2001, a tax deduction scheme for companies’ research expenditures, called Skattefunn, was introduced. At the same time, the direct funding of user-oriented industrial research was reduced. The idea was that the tax deductions would serve the same purpose.

But a substantial part of these grants normally ended up in the institutes as purchases by industry of research services from institutes. When Skattefunn was introduced, many companies chose to perform more of their research and development in‑house.

However, it soon became clear that the quality of research financed through Skattefunn was not the same as for user-oriented research funded by our Research Council. Gradually, the previous government’s funding of user-oriented research was slowly restored to a level closer to the 2001 level. And the new Government has gone well beyond that level in the present budget for 2006, still keeping the Skattefunn scheme.

Why did we keep Skattefunn? Our experience has been that Skattefunn provides an easier access to the world of research. More Norwegian companies than ever before are now involved in R&D.

So, it appears that the problem of too little in-house research in companies is not caused by the presence of research institutes. The problem was rather caused by a missing link before such outsourcing even became an option. Now, Skattefunn is providing such an early access.

The challenge is to help companies move up from that entry point to more demanding research and development activities.

On this basis, last year’s White Paper on Research introduced several measures. The objective is a strong institute sector. Some of these measures are:

• Increased basic grants to the technical/industrial and environmental institutes.
• Further development of cooperation between universities, university colleges and research institutes.
• New guidelines for government funding of research institutes will be proposed. They shall include a regime for basic grants to the institutes.

Why do we see basic grants as being particularly important? We must be aware that a very competitive environment has been established for our technical/industrial institutes. Their basic grants constitute only seven percent of their income. This, I believe, is much lower than for most comparable institutes elsewhere in Europe. Several international studies have shown that such dependency on industry has contributed to developing strong relations between institutes and industry.

However, this policy may have been pushed a little too far. Modern technical and industrial research requires advanced research facilities. These are expensive not only to establish, but also to maintain and run. With their limited basic financing, our institutes had to include such expenses in the price they charge for giving access to their facilities. This has been a price that only industry could afford. For academic research, the price was too high. This has led to the facilities being under-utilised and used to less ambitious research activities than desirable.

This is one reason why the Government has decided to increase allocations to our scientific and technological research institutes by 25 percent in this year’s budget.

We clearly wish our research institutes to remain major players in a future of increased research intensity. Some international reports have sited “the Nordic model” with such institutes like SINTEF, as an example of how institutes can contribute to achieving the European three percent of GDP target.

Tomorrow, you will be received by SINTEF in one of their newest and foremost research facilities, the Minalab. I had the pleasure to visit the Minalab a few months ago, and can tell you that you have something to look forward to! It demonstrates the close relationship between an institute like SINTEF and several partners:

• On the one hand SINTEF and the university: Minalab is located within the Oslo university campus.
• On the other hand SINTEF and industry: The Norwegian micro­electronics industry has participated in designing the Minalab, and is now an active user of the facility.

But this is tomorrow’s programme. Now let me conclude and invite you to raise your glasses for a toast to the future of European research and technology organisations!