University Reform in Finland 10th Baltic Seminar of University Administrators 14 May 2009 Ilkka Turunen Special Government Advisor Ministry of Education, Finland

Priorities in Finnish Higher Education, Research and Innovation Policies Structural development of HEIs Action Plan on Structural Development adopted in February 2008 Aalto University in the field of technology, business and art and design; private foundation (foundation capital: public 500 Meuro + private donations 200 Meuro) New Universities Act National infrastructure policy Strategic Centres of Excellence in STI (Energy and Environment, Forest Cluster, the Metals and Engineering Cluster, the Information and Communication Industry and Health and Well-being ) Research career system Internationalisation of HEIs Reform of sectoral research National innovation strategy

Structural development of higher education According to the Government Programme, structural development will continue The reform forms part of the European higher education reform Communication of the European Commission "Delivering on the Modernisation Agenda for Universities: Education, Research, Innovation" of May 2006 Development targets for higher education recommended in the thematic OECD review: Internationalisation, clearer institutional missions and positions, and diversification of the funding structure

Structural development of HEIs - main objectives Enhance the HE network in order to create more prominent institutions with higher standards Ensure the quality and effectiveness of HEIs research and teaching Allocate resources to top-level research and strategic priority areas Strengthen the role of HEIs within the innovation system Improve the prerequisites of HEIs to cooperate with foreign partners and to compete for international research and other funding Strengthen the adult education function of HEIs Safeguard the availability of skilled workforce in changing operating environment Improve the position of HEIs in the international education markets Diversify the funding base of HEIs Improve HEIs attractiveness as a competitive employer in order to recruit the best personnel

The Finnish HE system An extensive network of institutions covering the whole country all institutions internationally oriented with special regional features University sector 20 research universities, including Universities of Arts Student enrollment 170 000 all institutions are run by the state Polytechnic sector (established in the mid 1990s) 26 institutions Student enrollment 110 000 Regional development tasks Bachelor degrees (vocational and professional degrees) (Professional) Master’s degrees The whole HE system provides study places for 65-70% of a age group Tuition free system

Vision 2020 No more than 18 polytechnics Intake in youth education 22,500 Flexible and profiled higher education units and structures Strong and dynamic interaction with the region and with the world of work Well-established, high-quality R&D in priority areas No more than 15 universities Intake 17 500 Strong units and profiles; clear priorities in research Internationalisation and world-class research Four to five strategic university-polytechnic alliances Secured access to education and diverse education provision in the area Joint R&D and stronger (regional) impact

The Finnish university network

Polytechnics

Universities Bill

Aims of the university reform In order to give the universities a stronger financial and administrative status, they will be made independent legal persons and supplied with sufficient capital. As legal persons, the universities will be better equipped to respond to their own needs and to the expectations of society than as State accounting offices. As legal persons, the universities will be better able to operate with the surrounding society. Universities will be able to pursue their own human resources policies, geared to their specific features, independently of government human resources policy.

Means - status as legal persons The universities are legal persons separate from the State, either as corporations under public law or foundations under the Foundations Act. Corporation under public law (public university) A legal person under the Universities Act whose organs and their functions are laid down in legislation. Foundation under private law (foundation university) A legal person under the Foundations Act which is assigned the university mission in the Universities Act.

University organs - public university The statutory organs of a university under public law are the board, rector and university collegiate body. The board decides on the main aims of the activities, the strategy and the principles governing the steering of operations and adopts the university regulations governing the organisation of the university. The board is responsible for the finances of the university. Half of the board members are elected from amongst three different groups in the university: professors, other teaching and research staff and other personnel, and students Half of the board members must be persons external to the university elected by the university collegiate body. The chairperson of the board is elected from amongst the external members.

University organs - public university The rector leads the day-to-day operations of the university, presents matters to the board, sees to the implementation of the board decisions and decides on the hiring of personnel. The rector is elected by the board. The qualification requirements for the rector are a doctorate degree, competencies and professional skills required to discharge the duties and proven leadership skills. The university collegiate body is an organ composed of the university community as a whole. The university collegiate body determines the number of members in the board to be appointed and its term of office; elects the external board members and approves the board members elected by the university community; relieves a board member from his/her duties; selects the university auditors; approves the financial accounts of the university; and decides on the board members' and the rector's freedom from liability.

University organs - public university The units set up for research and teaching in a university under public law have multi-member administrative bodies, which have the representation of the university community groups. In its regulations the public university determines independently its organisation, its organs dealing with academic matters and procedures.

New Universities Act will change Autonomy will strengthen: universities will have an independent legal status (corporations under public law or foundations under private law) Universities will take the place of the State as employers: civil-service employment relationships will become contractual employment relationships Community relations will strengthen: half of the university senate members (including the chairman) will be persons “external” to the university community (professors, other personnel, students) defined in the act Greater latitude with finances: donations, income from capital and business activities New universities: Aalto university (HUT, HSE, UIAH), University of Eastern Finland (universities of Kuopio & Joensuu) and the new Turku University (University of Turku, TSE) Performance agreement procedure will be lighter Charging tuition fees on a trial basis for separate master’s programmes from students from outside the EU/EEA

The proposal will not change The freedom of research, art and education Self-government and academic decision-making Research and higher education remain as the main tasks of the universities The State will guarantee core funding, taking into account the development of costs; external financing will not decrease State funding Education leading to a degree will continue to be free of charge Students will continue to be regarded as full members of the university; they are automatically members of the students’ union and are represented on the governing bodies.

Timetable of the university reform The Government has submitted its Bill to Parliament in February 2009. The reform is projected to take effect on 1 August 2009. After this, the public universities may organise and set up the new organs of the legal person. The current operations of universities as state accounting offices will stop on 31 December 2009. The personnel and students transfer to the new universities on 1 January 2010.

Innovation performance 2008 Colour coding matches the groups of countries: green are the innovation leaders, yellow are the innovation followers, orange are the moderate innovators, blue are the catching-up countries. Average annual growth rates as calculated over a five-year period. The dotted lines show EU performance and growth.

Global Innovation Scoreboard 2008 Finland, Sweden, Switzerland, Japan, the US, Singapore and Israel are the global innovation leaders. The group of next-best performers includes Germany, Denmark, Netherlands, Canada, the UK, Republic of Korea, France, Iceland, Norway, Belgium, Australia, Austria, Ireland, Luxembourg and New Zealand. The group of follower countries includes the Hong Kong, Russian Federation, Slovenia, Italy, Spain, Czech Republic, Croatia, Estonia, Hungary and Malta. The group of lagging countries includes Lithuania, Greece, China, Slovakia, South Africa, Portugal, Bulgaria, Turkey, Brazil, Latvia, Mexico, Poland, Argentina, India, Cyprus and Romania.

Finnish innovation system/policy SWOT STRENGTS Education Commitment & continuity Co-operation & competition Industry share of R&D investments Proactive and client-oriented public innovation services (funding, expert) Public R&D funding with strong incentives for co-operation and risk-taking WEAKNESSES Small absolute volumes in R&D (3,5% GDP = 5,5 bn €, < 1% global R&D) Dependence on global developments Low foreign direct investments Low international researcher mobility Small number of growth-oriented enterprises Small venture capital volumes for start-up and early growth-phases OPPORTUNITIES More coherent and strategic national policies (foresightinsightpolicy) Stronger focusing of public R&D resources Going beyond “industrial innovation”: Promotion of innovation in private and public services Market-pulled innovation stimulation Active participation in major EU R&D programmes and platforms Going beyond EU: Active linkage with global innovation hotspots THREATS Dominance of one sector (ICT) and one company in business R&D Risk of declining business R&D expenditure Businesses increasingly move their operations abroad, including R&D Loosing focus: Participation in too many projects with scarce resources

GOVERMENTS REPORT ON INNOVATION POLICY Sent to Parliament in October 2008 Contains the views of the government as to the future development of (knowledge-based) broadly defined innovation activities Focus on demand- and customer-driven innovations Ministry of Employment and the Economy occupies a key role in preparing the implementation phase The Science and Technology Policy Council was renewed to a Research and Innovation Council The Parliament debated on the Report in March Evaluation of the Finnish National Innovation System to be completed in autumn 2009.

National Innovation Strategy a more extensive, broad based approach to innovation policy => horizontality non-technological and non-R&D based innovations => a shift of focus in the research agenda towards demand led and user driven innovation, service innovation, low tech innovations, learning by doing, using and interacting open innovation environment

Finland’s Innovation Strategy 2008 Drivers of change Globalisation  the most favourable operating conditions, competition for talent Sustainable development  climate chance, energy and raw materials New technologies  ICT, bio- and nanotechnology, huge potential Aging of population  Finland is one of the first countries to face reducing workforce volumes

Expanding innovation activities: new interactions between players and functions.

Finland’s Innovation Strategy 2008 Ten key sets of measures The central government’s corporate steering will be renewed for the purpose of becoming a worldwide pioneer of systemic reforms. Content-oriented and regional centres of innovation driving renewal will be formed in Finland. The financing and service system promoting growth entrepreneurship will be renewed into a clear entity, operating with entrepreneur and investor orientation. New competitive and market incentives activating enterprises and other communities in innovation on a broad basis will be created and exploited. The national ensemble of expert and financing services will be updated to meet the needs of demand- and user-oriented innovation activity. A learning environment motivating innovation on a broad basis will be developed for Finland. Finnish research and higher education system will be developed into an internationally competitive development environment for expertise and innovations. Personal taxation and other key factors essentially weakening Finland’s attractiveness will be revised to a competitive level. Finnish management training will be developed to meet international top standards. The strategies and operations of parties implementing innovation policy will be adapted so as to be in line with the basic choices of the national innovation strategy.

Higher education institution internationalisation strategy 2009-2015 Sets five primary aims for internationalisation: A genuinely international higher education community Increasing the quality and attractiveness of higher education institutions Promoting the export of competence Supporting a multicultural society Promoting global responsibility

Why now? (2007/2008/2009) A need for a change/adaptation (Challenge of China and other emerging economies; experiences from the recession in 1990s) Universities as a part of public sector =>The Finnish Competition State (New Public Management, budgeting by performance, assessment, managerial approach) Continuity: consolidation of profiles, structural development; centres of excellence, graduate schools, strategic research, national innovation system, Corporate Steering ("valtiokonserni") Consensus (further investment in education and R&D, STPC resolution 2005, STPC Reviews 2006 and 2008) Comparisons; rankings, league tables, "world class university", political peer pressure (MS, European Council, Commission) New types of networks: University rectors and civil servants (budget negotiations, steering)

Why now? (2007/2008) Interim Review of the Lisbon Strategy; reports (André Sapir 2003, Wim Kok 2004, Esko Aho 2006) => Universities, ERC, EIT, JETs, Broad-based Innovation Policy Commission's Communications on Universities 2003, 2005, 2006 Erasmus => Bologna => Education and Training 2010 and European Research Area OECD work on tertiary education 2004-2008; Finnish Country note 2006=> autonomy, internationalisation, broadening of financial base, private investments Education/Science Patriotism <=> competitiveness, self-confidence (benchmarks, Scoreboards, comparisons, PISA) New "blue-green" government (departure from "old"; market and customer driven innovation, creativity, excellence) Stimulus Aalto: repercussions of the idea and implementation of "private" innovation university Resources – increase in R&D budget Support of HEIs: University rector's Red Manifests gains of autonomy

ilkka.turunen@minedu.fi + 358 40 5664716 Thank you! ilkka.turunen@minedu.fi + 358 40 5664716