Funding of RDI 2018: RDI investments drop below the national goal

The amount of money used on research, development and innovation has dropped dramatically in the Tampere Region during this decade. R&D expenditures decreased by as much as 12.9% in the latest statistical year of 2016. Across the country, the average decrease was just 2.4%. In 2016, MEUR 672.2 in funds was invested in RDI activities in the Tampere Region. Five years earlier, the region’s investments in RDI were in the billions.

It has been set as a national and EU-level strategic goal for the RDI investments to exceed 4% of the gross national product generated in the area. Tampere Region has had a strong traditional brand as a hub of RDI activity in the country, which has been clearly evident based on the investments within the region. At the highest level, the research and development in the Tampere Region stood at 7% in relation to the GDP. The relative position of the region in terms of RDI activities has weakened, and the level has dropped below the 4% GDP target as a result of reduced R&D investments.

The share of research and development expenditures of the gross domestic product has been in a steady decline over the course of this decade. Based on advance information, Tampere Region’s RDI/GDP dropped to 3.7% in 2016. The reason for this can be found in both proportional variables: the region’s R&D expenditures decreased significantly whereas the product of the region increased. For the ratio to have remained within the 4% frame, the research and development costs should not be decreased past MEUR 725. However, the 2016 statistics reveal a total amount of MEUR 672.

The Tampere Region’s relative position within the country has weakened significantly, since R&D expenditures in the most important reference regions have either increased or evened out. In the latest statistics, there was a notable change in the emphases between regions with Northern Ostrobothnia overtaking the Tampere Region in terms of R&D expenditures. Northern Ostrobothnia’s rise stems from R&D investments in the business sector, which decreased very clearly in the Tampere Region in 2016 (-19.8%).

In the Tampere Region, R&D expenditures in the private sector have been dwindling for quite some time now. Companies’ investments have dropped to less than half of the level preceding the recession in 2008. At the same time, however, there are hopes that the corporate sector will generate high-quality product development, bold experimentation and new innovative companies. Without the proper financial investments, the creation of innovations is very difficult. By spending on RDI activities, we can maintain and modernise the innovation ecosystem, which entails competent labour as well as the appropriate equipment and infrastructure. We should consider where we want to draw the line: when will investments drop so low in relation to the size of the business sector that it is no longer realistic to expect any significant innovations to be generated?

The institutes of higher education have claimed their position in the application processes for the most sought-after funding types

The institutes of higher education in the Tampere Region have increased their R&D investments, and the activity of this sector has slightly compensated for the overall situation within the region. In 2016, institutes of higher education spent MEUR 180.3 on RDI activities (+7.2%; Statistics Finland). Based on the information provided by the Tampere3 universities, 2017 was an even better year, as it saw an increase in the total funding from the Academy of Finland and Business Finland (+36%; particularly due to Academy funding), private funding (domestic and foreign; +8.6%) as well as EU and other international funding (+14.0%). Tampere3 has been very successful in securing sought-after funding from private financiers and international sources, and the university community has continued to elevate its research profile.

More Business Finland funding was also received by companies and the municipal sector, in addition to institutes of higher education. Business Finland’s funding granted to the Tampere Region (a total of MEUR 52.8) increased by 9% in 2017. The majority went to businesses (2017: MEUR 40.2; +6%). The funding received by institutes of higher education stood at MEUR 12.0 (+23%), and the municipal sector received MEUR 0.5 (+57%). Despite the positive development in the Tampere Region, Business Finland funding is increasingly focused on the Uusimaa region, based on a comparison between regions.

In the public sector, the total R&D expenditures have decreased over the long term, but far less than among companies. In 2016, the R&D investments in the public sector saw a slight increase (0.5%). Public bodies in the Tampere Region spend an approximate MEUR 40 on RDI activities each year.

Outlook of the Tampere Region in the Horizon 2020 programme

The Tampere Region is one of the leading areas in terms of the amount of EU Horizon 2020 funding granted to Finland. The Tampere Region receives the second highest amount of Horizon 2020 funding in the country, more than 7% of the national total. Institutes of higher education, in particular, have been successful in the application processes for financing. Overall, the H2020 programme has allocated as much as MEUR 51.5 in funding to the Tampere Region since the beginning of the programme period in 2014. The majority of this amount, MEUR 31.3, was granted to institutes of higher education. In fact, TUT is fifth on the list of organisations that receive the most H2020 funding. Companies and public actors in the Tampere Region have also gained significant benefits from the EU framework programme.

Summary of recipients of Horizon 2020 funding in the Tampere Region since 2014:

66 entries by an institute of higher education (MEUR 31.3 in total)
- 49 x Tampere University of Technology (EUR 24,903,954)
- TUT is fifth on the list of organisations that receive the most funding
- 13 x University of Tampere (EUR 6,272,383)
- 4 x Police University College (EUR 1,253,954)

55 entries by companies (MEUR 15.7 in total)

10 entries by public bodies (MEUR 4.45 in total)
- 7 x City of Tampere EUR 3,815,882
- 2 x Pirkanmaa Hospital District EUR 397,950
- 1 x Council of Tampere Region EUR 161,188

1 entry by an organisation (EUR 775,000, Tampereen elokuvajuhlat ry)

The funding is divided as follows between the pillars of the H2020 programme:

- I Excellent science: EUR 14,352,551
- II Industrial leadership: EUR 18,147,719
- III Societal challenges: EUR 14,704,378
Spreading excellence: EUR 199,688
Science with and for society: EUR 501,600

Source: Tampere Region EU Office; bulletin 13 September 2018