Research Council figures show that applied research is losing ground

search policy

Norwegian R&D spending in the past 10 years favors core R&D funds in business. A note from the Research Council states that the focus on applied research is decreasing significantly.

Despite clear goals for using more applied research in restructuring Norwegian business, spending development is going in the opposite direction. This was revealed in a note put together by the Research Council, in which they analyzed the development against the overarching goals of research policy: a more knowledge- and research-intensive industry and greater interaction between industry and research institutions.

To show how things are with the targets, the Research Council has compiled research and development spending in the university and college sector, the institute sector and business. The numbers are broken down into basic research, applied research and what the Research Council calls experimental development. This largely relates to development work in businesses that fall under the term Research and Development (R&D).

fall behind

Statistics show, among other things, that the institute sector lags behind in terms of importance when it comes to total research and development efforts in the Kingdom. In 2009-21, R&D spending grew by about 45 percent in both the business sector and universities and colleges. In the institutes sector, the same growth was 9 percent in the same period.

“The difference in R&D growth in the three sectors indicates a changing balance in national R&D between basic research, applied research, and experimental development. The emphasis on applied research is decreasing significantly,” the Research Council wrote in its note.

The man behind the recently released memo is Special Counsel Anders Hanneburg at the Research Council. Previously, he served for several years as Director of Science and Research System at the Research Council

– There is no doubt that the R&D balance in the Norwegian research system, from 2009 to 2019, has tended towards more basic research, more development and less applied research. Hanneburg says this is determined by the main responsibilities of the three research sectors.

Quite the opposite

Although the goal is more interaction and knowledge transferred to the business sector from the research sector, the figures for research and development procured from the business sector indicate quite the opposite. The Research Council states in its memorandum that business R&D is increasingly done internally and is dominated by development work. This can be computer software development or similar, carried out by company personnel or consulting services purchased. Much of the growth in commercial R&D consists of growth in research and development done by contract employees. Correspondingly, research purchases decreased from both the institute and the higher education sector at home and abroad.

“National research and development statistics show that in the business world’s use of money for research and development, purchases from research institutions decrease both in proportion and in real terms over the period,” says Anders Hanneborg.

In total, business purchases of research and development from institutes, universities and colleges in Norway will drop by 35 percent in the 2009-2019 period, according to a note from the Research Council.

Adds strategy

– What is required to change this development?

– I’m not the right person to answer that. The note will form part of a broad quantitative and qualitative knowledge base in this field, says Anders Hanneburg.

They received the note in the political leadership of the Ministry of Education. However, due to the winter break, Khrono was unable to contact directly, so their comment was emailed to them.

“The government is working on a strategy to increase business research and development and a letter to the Norwegian Parliament on the research system. With regard to this work, it would be natural to take a closer look at several areas, including the balance in the research system as outlined in the long-term plan for research and education A note from the Research Council is part of this work,” the Education Ministry wrote in a response to Chrono.

Reduce risk

The Managing Director of Noreen Research Alliance is Karina Hundhammer. Norin is made up of the Norwegian Institute for Water Research (NIVA), the Norwegian Institute for Air Research (NILU) and the Institute for Energy Engineering (IFE).

Hundhammer believes that there is much to do with the arrangement of means of collaboration in research projects which means that the business world reduces the use of applied research from the institute sector and the higher education sector.

– I think that some uses of the means should be directed towards reducing business risks through collaboration in such research projects. This is where the institute sector has played its part towards business, and statistics show that tools as created today lead to less sharing and collaboration when it comes to using the business world for research institutions, Hundhammer says.

stalemated

Another indicator of research policy in Norway is research and development efforts in the business sector as a percentage of GDP.

– Here, the target was 2 percent almost 20 years ago. But the 2% target is only an indicator target. The rationale is that increased research and development efforts should contribute to the development and restructuring of the Norwegian business. We need more high-productivity jobs when the petroleum industry is finally phased out… The numbers actually show that there has been little movement toward that goal in these 20 years, says Anders Hanneborg.

The facts here show that commercial R&D as a percentage of GDP has only grown from 1% to 1.1% since 2001.

“The R&D intensity of Norwegian business is much lower than in other Barometer countries, whether intensity is measured as R&D in percentage of GDP or as processing value in percentage of GDP,” says the note from Research Council.

More research on research and development

Although the share as a proportion of GDP is not at the level of the countries Norway compares itself to, there was a 44 percent growth in business use of R&D funds from 2009-2019.

But most of the spending goes into the “experimental development” category and less goes into research. In 2009, the percentage that went to research in business R&D efforts was 27 percent. Ten years later, that percentage had dropped to 21 percent.

In the note, the Research Council notes that this growth and shift in spending is related to the funding plan looking for the treasure. It gives companies a 19 percent tax rebate for funds they channel into development projects that meet requirements that would be defined as research and development according to the tax code. This has stimulated companies to invest money in research and development work.

The strongest growth was seen in the period 2014-2017. “It coincides with strong growth in SkatteFUNN’s portfolio of projects,” the note read.

More public support

The decline in business purchases of research services is occurring despite the fact that the public sector is increasingly putting money into the pot when R&D projects and business innovation are funded.

In the period 2009-2019, the real growth in public grants for research and development (including innovation) was 85 percent. However, spending money in the business world has been directed to research institutions to a lesser extent.

R&D funds are used by the business community to a greater extent in development such as IT services. This is growing strong. At the same time, we see that the percentage that is done with wage labor is also increasing. This may indicate that business development projects are of a time-limited nature, and are not more permanent activities such as where companies build themselves out of their R&D staff, says Anders Hanneborg.