Proposed major overhaul of research funding system

A major overhaul of Sweden’s system for funding research and innovation is on the cards. It will see all competitive public funding channelled through three new authorities instead of 20 existing agencies.

The three proposed new authorities, which are expected to “better meet future demands and challenges”, are: the Swedish Science Agency, the Swedish Agency for Strategic Research, and the Swedish Innovation Agency.

Together, the three agencies will have a workforce of 714 and a combined budget for research and innovation activities per year of SEK17.7 billion (US$1.6 billion).

It is proposed that the Swedish Science Agency will have a workforce of 270 full-time equivalents and an annual budget of SEK8.2 billion; the Swedish Agency for Strategic Research will have a workforce of 344 full-time equivalents and an annual budget of SEK7.8 billion; and the Swedish Innovation Agency will have a workforce of 100 full-time equivalents and an annual budget of SEK1.7 billion.

The proposals are the outcome of a year-long national inquiry into research and innovation funding initiated by the government in June 2022 and led by Ingrid Petersson, former director-general for the Swedish Research Council for Sustainable Development (Formas). The final report of the inquiry was launched on 10 October.

The review committee was comprised of eight experts from Swedish ministries and a reference group made up of stakeholder representatives from the science community, students, science academies, business representatives and non-governmental organisations.

The final report of the committee will be sent to higher education institutions and stakeholders for comment and will be prepared for parliament in 2024.

Research investment patterns

Sweden is among the top five countries in the world in respect of its national R&D investment as a share of GDP, and it is ranked as one of the most innovative countries in the world. Over the last 20 years, public investments in R&D have doubled in fixed prices.

Government funding of research, development and innovation currently amounts to more than SEK40 billion (US$3.74 billion) per year. This is the highest investment in research among the Nordic countries; Norway invests SEK26 billion and Denmark SEK36 billion.

Almost half of the Swedish funding is transferred to higher education institutions as block grants. Much of the remaining amount has up until now been allocated through five key agencies, four of which will be completely dismantled, according to the proposals.

The five key agencies include: Formas, which funds basic and needs-oriented research in the environment, agricultural and built environment fields, with a 2023 budget of SEK1.87 billion; the government agency under the Swedish Ministry of Health and Social Affairs (Forte), which funds basic and needs-oriented research in the working life, welfare, and public health fields with a 2023 budget of SEK0.87 billion; the Swedish Research Council, which funds research in all scientific fields with a 2023 budget of SEK8.09 billion; and the Swedish Governmental Agency for Innovation Systems (Vinnova), which funds needs-oriented research and the creation of effective innovation systems (with a budget of SEK3.41 billion in 2023).

External research funding at the Energy Agency (Energimyndigheten) with a budget of SEK1.46 billion in 2023, will also end. However, the Swedish National Space Agency will continue with its operations unchanged.

According to the proposals, competitive public funding should be allocated through one of the three new agencies and all other agencies that allocate funding to research and innovation through competitive calls, will end those activities, and their funds will instead be distributed, and administered by the Strategic Research Agency.

The report highlights the complexity and the degree of fragmentation of funding agencies and notes that international research and innovation policy has developed in what it calls three, distinct generations giving rise to different “organisational responses”.

These organisational responses include a large range of agencies, from the Swedish Social Insurance Agency to the Swedish International Development Cooperation Agency and the Geological Survey of Sweden.

Losing ground

The committee’s analysis suggested that the quality of Swedish research has not kept pace with the country’s actual level of investment in R&D. The committee found that Sweden is losing ground in relation to similar countries, both in terms of the quality of scientific publications and groundbreaking research.

In addition to relatively low research quality compared with the invested resources, the committee identified five other problems with the system. These include failure to sufficiently address societal challenges; the inability of the funding system to adapt to rapid social changes; a complex and heavy administration; and blurred division of roles and mandates among public funding agencies.

The committee also highlighted the lack of proactive initiatives, and unclear and suboptimal decision-making and funding processes for research infrastructure.

The committee’s report noted the need for a system of competitive public funding that was “outward looking” and could provide support for Swedish organisations to collaborate with the best universities and innovation hubs around the world.

Upon presentation of the final report, Petersson told Tidningen Curie that the new system would streamline research grant applications and reduce bureaucracy. “According to our calculations our proposal will lead to 300 working years at higher education institutions being made available for research instead of applying for funding and writing reports.”

She said that one of the main objectives of the work of the inquiry has been to present a structure that facilitates accountability where the present system has deficiencies.

“To whom is the government going to direct itself if the research is not excellent and does not offer the solutions society needs? In the present system it is difficult to know who has the responsibility for when the research funding does not [succeed] since the different agencies are overlapping each other. In the structure we propose this will be easier,” Petersson said.

Stakeholder responses

IKEM, the organisation representing innovation and chemical industries in Sweden, said in a press release on 11 October that the proposal was a step in the right direction.

“The committee proposes a modernised system and new approaches for the governmental funding. This is a welcome and important step forward for Swedish industry,” Lena Svendsen, who is responsible for research and innovation policy at IKEM, said.

“Todays’ system which has some 20 different funding agencies is not transparent and has overlap and lacunas. The business sector is responsible for almost three quarters of the investments in Swedish research and development, but the government investments are nevertheless an important catalyst for how the business sector places their investments,” Svendsen said.

Professor Ole Petter Ottersen, former rector of the University of Oslo and the Karolinska Institute in Stockholm and now acting secretary-general of the Guild of European Research-Intensive Universities in Brussels, told University World News it was the right time to have a careful look at the Swedish funding system.

“Like all other institutions and organisations, funding bodies must adapt to changes and new challenges, and many years have elapsed since the current funding system was established.

“Now with a view from Brussels, I see the need in countries and regions alike to ensure sufficient funding of research aimed at finding effective solutions to pressing global challenges and the need to safeguard and bolster investments in fundamental, curiosity-driven science,” he said.

“Many of the solutions to the current challenges will emanate from fundamental research and this must not be subordinated to short-term objectives.

“Competitive, high quality, curiosity driven research – which according to the proposal will be the responsibility of the Science Agency – is essential for societal development and is also the platform for much-needed innovations – social as well as technological,” he added.

Ottersen said any revisions to the system should be made in an inclusive process and an international outlook was needed. “As far as I can see the current evaluation adheres safely to both of these principles.”

Ottersen said he also hoped the new funding system will take into account the “urgent need” to re-establish sufficient investments in development research and collaborations with the Global South.

“The richness of perspectives that we get through co-operation with the Global South adds quality to our research and education and is a prerequisite for tackling climate changes and other global challenges. If we were ever in doubt, the COVID-19 pandemic demonstrated our interconnectedness and the need to collaborate internationally,” he said.

“It might be a good idea to restructure the Swedish research and innovation funding system aside from basic funding to institutions.

“As the chief investigator says herself, the current system has some overlaps and smaller sums of money are distributed via many different agencies, which does not necessarily meet future needs in a proper way,” Dr Agneta Bladh, former chairperson of the Swedish Research Council, who chaired the internationalisation investigation in Sweden in 2018-19, told University World News.

“The largest current funding body is the Swedish Research Council, covering all academic fields, but also funding national and international infrastructure. Except for the infrastructure, most of the funds are allocated after applications from the researchers themselves without any specific directives. The largest sum is allocated to the natural science and engineering fields, followed by the medical field.

“However, governments over the years have given some directives to prioritised areas also to the Swedish Research Council. This has led to specific calls outside the normal pattern, giving higher administrative costs. This experience says that significantly reducing the number of small funding bodies could lead to lower administrative costs if the calls are broader and more open,” said Bladh.

“It is, however, a risk that smaller areas will be identified by the government even in the future, instead of supporting wider areas as the global challenges identified.

“The future of our societies is very much dependent on fundamental research and the free search for new knowledge. We must remember that researchers are part of our societies and are not acting isolated from it and show confidence in their ability, especially in a high-quality competition of funding.

“It is very important that the capacity among researchers be encouraged and the top-down demands for certain areas are restricted to have full flexibility in a rapidly changing society,” she explained.

Bladh said the opportunity for increased international collaboration was promising. “However, the international research community is also changing with many new good research nations, so how the collaboration pattern is developing in a responsible way is very important,” she said.

Clear demarcations between organisations

Mats Benner, professor in science policy studies at Lund University School of Economics and Management, and past member of the Swedish Government’s Research Advisory Board (2009-10, 2015-16), said the committee had worked in a transparent and thorough manner.

“The outcome is impressive in many ways, with a coherent proposal with clearly defined demarcations between the proposed organisations,” he said.

Benner, who co-authored a 2012 paper analysing bibliometric data on research impact and excellence which compared Sweden with Denmark, Finland, the Netherlands and Switzerland and identified a sub-optimal quality in Swedish research, said: “What may be lacking still is a more clearly stated raison d’etre of why this entire exercise in reorganisation must be done.

“Although it [the report] makes obligatory references to societal challenges and innovative research, it is briefer on why these predicaments would lead to this specific structure.

“A few related and unresolved items stand out. The Strategic Research Agency will be a very complex organisation with a plethora of patrons to serve; the risk is of course that it will be overburdened with internal processes and fail to properly address the societal issues it was established to meet. In short, it risks becoming less strategic than expected.

“The fact that the proposed Innovation Agency mostly deals with near-market activities risks leaving industrially relevant research in the cold to the detriment of Sweden’s many industrial sectors. What is also absent is comprehensive analytical function, something Sweden has been lacking for quite some time.”

Benner said these caveats notwithstanding, it is likely that at least some of the proposals will be implemented.

“The government has not gotten off to a great start with quite a few mishaps in higher education and research policy and needs to produce some signs of activity. The reorganisation might be just that.

“Solid as it is, the report could have been stronger and more cohesive in these troubled times to fully live up to its promise to make Swedish research both more relevant and internationally visible,” Benner said.

Hans Ellegren, permanent secretary-general of the Royal Academy of Sciences in Stockholm, said the problem with the inquiry’s proposal is the “underlying idea of a need for greater control of Swedish research”.

In his blog of 11 October, Ellegren said: “The research must become more ‘strategic’. The large Authority for Strategic Research must, among other things, with its own investigative skills at civil servant level, formulate portfolios of areas that the higher education institutions must research through the funds allocated by the authority. This means an increased focus on challenge- and mission-driven research, instead of increased scope for unconditional and researcher-initiated research.”

Using the concept of word searches, Ellegren said the report showed a bias towards strategic research and innovation rather than quality and excellence.

He said an analysis showed that the word ‘strategic’ appears in the report around 500 times, compared with the “excellence” which only appears 21 times.

“Even the word ‘quality’ does not come close to ‘strategic’: 143 times ‘quality’ is mentioned. In contrast, even ‘strategic’ pales in comparison to ‘innovation’: more than 800 times the latter word is used in the investigation. It is certainly possible to nuance the picture through more refined word searches, but the bias towards strategic research and innovation rather than quality and excellence seems obvious,” he wrote.

Ellegren later told University World News: “That the benefit to society will increase through governance of the research that for the time … is regarded as ‘strategic’, I believe, is an error in thinking. Would climate change have been listed as a strategic priority area … some decades ago? Most probably not. The reason why we today have such good knowledge about the anthropogenic effects upon climate is due to the basic research undertaken bottom-up in open competition through the years by excellent researchers.”