Denmark’s cross-border knowledge flows are ‘poor’ – DFiR

The flow of knowledge both ways across Denmark’s borders is surprisingly poor compared to comparable countries, according to a new analysis by the Danish Council for Research and Innovation Policy or DFiR.

In the report the council has used eight indicators to investigate how Danish research and innovation interact with the world.

The council found it surprising that Denmark, on the knowledge parameters examined, interacts less with the world than a number of other small economies that are often compared to Denmark – and that it is below the average for OECD countries.

Notably, of biggest concern is the reduction in the proportion of foreign investments in research and innovation in the period 2007-15.

In the executive summary the council reports: “Science-based knowledge – produced, funded and applied – is increasingly growing on a global scale. This is due to the fact that knowledge is the foundation of growth and prosperity, thus contributing solutions to global challenges.

“Research and development (R&D) are increasingly dependent on interaction in the global economy. Competition to have the strongest and most innovative research environments is international. If Denmark is to keep abreast continuously in the global competition, Danish research must interact with the best international research environments for high-quality knowledge, highly skilled people and R&D funding.”

R&D world interactions

The council set out to examine the state of international Danish R&D interaction. The preconception of the council was that it would be at a very high level, taking into consideration the fact that Denmark is a small, open and highly developed economy with a strong R&D base as well as a high level of R&D investment.

On behalf of DFiR, the consultancy group Højbjerre Brauer Schultz identified eight indicators for cross-border knowledge transaction:

• The technological trade balance.
• Direct investments in R&D operations.
• Financing of R&D from foreign country sources.
• Mobility for scientific staff at the highest levels.
• Mobility for international students.
• Mobility for PhD students.
• Patent applications for inventions developed in an international collaboration.
• Universities co-publication internationally.

Three areas were included in the analysis:

• Economic resources, such as financial streams (buying and selling) of knowledge to and from Denmark;

• Human resources, such as knowledge workers, scientists, PhD students and students who are internationally mobile;

• Cooperation, such as international knowledge movements where there is no real transaction crossing borders.

On the basis of the set of indicators measuring Denmark’s import and export of knowledge, the council aimed to develop Denmark’s balance of knowledge. Knowledge is defined as “financial resources related to R&D coming into or leaving Denmark” and “international mobility of knowledge workers (scientists, PhD students and university students)”.

The council pinpointed that the focus should be on the cross-border knowledge transaction. This transaction indicates the ability of Danish R&D to interact with the rest of the world.

The most worrisome indicator examined was the proportion of foreign countries’ investment as percentage of all R&D expenditure. Compared with other countries, the top countries were Israel with 52%, Lithuania 46%, Slovakia 40%, Czech Republic 31% and Iceland 28%, while this proportion was only 6.5% for Denmark. Moreover, the percentage had declined from 9% in 2007.

DFiR quickly learned that the requested data does not exist to a sufficient quality to provide a true and fair picture of the situation. However, data does give us insight into cross-border knowledge transactions, which has not been the focus of the Danish R&D policy until now.

Statistical lacunae

On the basis of data and analyses, DFiR concluded that it is worrying as well as surprising that:

• The level of Danish interaction in the international knowledge economy appears to be relatively low. This is especially the case considering that Denmark has a small, open and highly developed economy and, by international comparison, a very strong R&D base.

• Over a period of time, the growth of Danish cross-border knowledge interaction has become weaker, compared to the OECD average growth and a number of other small, strong and open economies. Denmark is falling behind.

• The relatively low and decreasing level of international R&D investment in Denmark and especially in Danish enterprises should lead to serious consideration.

• Statistics Denmark has not published data for Danish companies’ international purchase of R&D since 2014. It is important to be able to follow comparable indicators of the cross-border transactions into Denmark and out of Denmark. Such a balance can be an indicator for understanding whether Danish R&D has sufficient quality and relevance.

• Regulation works. Where demands for internationalisation are incorporated into the general framework conditions for Danish R&D, there is a high level of internationalisation. More PhD students from Denmark receive part of their PhD training abroad than is the case for the average OECD PhD students.

International participation to be strengthened

On the basis of data and analyses, DFiR argues that it is a national responsibility to strengthen the international position of Danish R&D through active international participation.

It says there is a need to assess and investigate why – within areas of importance – Denmark experiences a decreasing level of cross-border R&D interaction, as pinpointed in DFiR’s initial analysis.

“There is a need for a concerted effort to strengthen cross-border knowledge exchange. It is a common responsibility to which many players of Danish R&D and society do not pay sufficient attention,” DFiR argues.

It says Statistics Denmark should resume registering and publishing data for the purchase and sale of R&D services between Denmark and abroad. This should allow for the comparison of international R&D investment into Denmark with Danish R&D investment abroad.

It also argues that incentives play an important role. “When developing national rules and regulations for Danish R&D and higher education, elements of internationalisation should be incorporated. It must be the premise that internationalisation is a means of gaining quality, relevance and highly valued networks,” the report says.

Chairman of DFiR, Professor Jens Oddershede, told University World News: “It is surprising that Denmark as a small, open economy with a strong research performance does not do better for the indicators we have examined, both with respect to the current performance and the development in the indicators over the last few years.”

He said the findings are a warning sign that Denmark “must do more” to develop its international ties and relations in the future if it is to maintain a high level of R&D in both the public and private sector.

“The coronavirus crisis does not make internationalising easier, so the prospects for an immediate improvement in the Danish performance for the indicators we have examined might not be so good. However, it the long run an increase in the internationalisation of Denmark’s R&D is a must.”

Sylvia Schwaag Serger, deputy vice-chancellor of Lund University and former director of Vinnova, questioned the choice of countries used for comparison with Denmark in the report. She told University World News it would have been more relevant to compare Denmark with countries that have seen a similar increase in R&D spending in recent years (for example, Austria, the Netherlands, Switzerland, Germany or Norway).

Also, it would perhaps have been more relevant to compare student and PhD mobility with the other Nordic countries, Netherlands, Austria and Switzerland, she said.

“Thus, I’m not totally convinced by some of their analysis or comparisons or data, but overall I think they make some relevant observations and points and their overall findings are also compatible and supported by our findings when we evaluated the Innovation Fund Denmark and concluded (on page 50) that it has had too strong a national focus.

“I think here one would find that comparable agencies or actors in Sweden (Vinnova), Norway (Research Council of Norway) or Finland have a stronger international orientation.”