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The Swedish National Innovation System 1970-2003 - Vinnova

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3 <strong>Innovation</strong> Policy Challenges<br />

<strong>The</strong> analysis in the present study has identified<br />

considerable potential and strengths in the <strong>Swedish</strong><br />

national innovation system. However, a general<br />

innovation system challenge in Sweden is to improve<br />

the impact of these internationally favourable conditions<br />

on long-term innovation, economic and job creation<br />

competitiveness of the <strong>Swedish</strong> economy.<br />

<strong>The</strong>refore, this study raises a number of important<br />

innovation policy challenges for Sweden. <strong>The</strong>se<br />

challenges need to be addressed in a national innovation<br />

policy strategy for Sweden. Such a strategy would<br />

not only need to address the right issues, it also needs<br />

to design and establish an implementation strategy<br />

that covers and generates synergies between different<br />

administrative policy areas and bodies at both national<br />

and regional levels. <strong>The</strong> major innovation policy<br />

challenges could be grouped in five categories, which,<br />

however, are all interrelated and should therefore be<br />

addressed within the same general innovation policy<br />

framework:<br />

• Start-up, innovation and growth in knowledge-intensive SMEs<br />

• Improved supply, use and mobility of human resources<br />

• New regime for user-producer public-private partnerships<br />

• Increased volume and impact of mission-oriented research<br />

• Centres of excellence for research and innovation<br />

Start-up, innovation and growth in knowledgeintensive<br />

SMEs<br />

One important challenge to <strong>Swedish</strong> innovation policy<br />

is how to improve incentives and support structures<br />

that would generate increased value added through the<br />

establishment of R&D-based SMEs. Industrial renewal<br />

through start-ups and growth in small, innovationbased<br />

firms has been a weakness of the <strong>Swedish</strong> national<br />

innovation system.<br />

<strong>The</strong> weakening <strong>Swedish</strong> basis of the large industrial<br />

groups in Sweden, together with the limits to public<br />

sector expansion, have made it important to increase the<br />

rate of knowledge-intensive start-ups and high-growth,<br />

innovative SMEs in Sweden. Moreover, since small firms<br />

generally show higher rates of radical innovativeness<br />

than larger ones, the rates and growth of knowledgeintensive<br />

SMEs should be critical to <strong>Swedish</strong> innovation<br />

system renewal.<br />

Improved supply, use and mobility of human<br />

resources<br />

Another important challenge to <strong>Swedish</strong> innovation<br />

policy is how to secure a large enough future supply<br />

of highly qualified people to the <strong>Swedish</strong> labour force,<br />

together with improved use and mobility of existing<br />

human resources. In the recent decade, increasing labour<br />

market problems related to demography, job creation and<br />

use of the labour force have made labour market issues<br />

one of the most important challenges for improved<br />

innovation and economic growth in Sweden.<br />

Human resources are the most important resources<br />

in innovation and production. <strong>The</strong>refore, an effective<br />

supply and use of qualified human resources is essential<br />

to the long-term competitiveness of innovation systems.<br />

Inefficiency of national innovation systems in relation to<br />

human resources could hardly be compensated for in a<br />

long-term perspective by other innovation and growth<br />

policy measures.<br />

New regime for user-producer public-private<br />

partnerships<br />

A third important challenge for <strong>Swedish</strong> innovation<br />

policy is to find new routes to replace the old national<br />

innovation system regime, which in terms of technological<br />

and scientific performance has been quite efficient.<br />

Replacement is, however, inevitable and necessary, since<br />

the foundations of the old regime have been irreversibly<br />

outdated, due to international developments and the<br />

considerable deregulations of sectors that have<br />

historically formed an important basis of that regime.<br />

A new public-private partnership regime should<br />

be based on the need for improved innovation in the<br />

<strong>Swedish</strong> public service sector which, by international<br />

standards, is large. <strong>The</strong> relative size of this sector in<br />

Sweden makes public sector innovation critical for<br />

<strong>Swedish</strong> economic competitiveness. At the same time,<br />

the size and high quality standards of this sector make<br />

it a potentially strong vehicle for generating effective<br />

leveraging demand for both radical and incremental<br />

innovation and production in both new and existing<br />

businesses in Sweden.<br />

Increased volume and impact of mission-oriented<br />

research<br />

A fourth important challenge for <strong>Swedish</strong> innovation<br />

policy is how to increase the volume and impact of<br />

the <strong>Swedish</strong> research system on innovation in both<br />

the business sector and the public sector. <strong>The</strong> <strong>Swedish</strong><br />

research system has by international standards focused<br />

relatively little on mission-oriented research, which<br />

could be a threat to future developments as regards<br />

the location of and efficiency in industrial innovation<br />

activities in Sweden. Sweden also needs to improve the<br />

impact of the <strong>Swedish</strong> research system on innovationbased<br />

start-ups, innovation in existing SMEs and<br />

innovation in public organisations.<br />

<strong>The</strong> <strong>Swedish</strong> research system, which has been<br />

highly based on curiosity-driven university research, has<br />

been efficient in supporting innovation in large R&Dintensive<br />

industrial groups, primarily through flows of<br />

people with a higher education. However, it has been<br />

relatively inefficient in supporting start-up innovation,<br />

innovation in SMEs and public sector innovation. At<br />

the same time, innovation and growth in these latter<br />

THE SWEDISH NATIONAL INNOVATION SYSTEM <strong>1970</strong>–<strong>2003</strong> 9

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