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

2. 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

3. 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

4. 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

5. 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
all institutions are run by the state
Polytechnic sector (established in the mid 1990s)
26 institutions
Student enrollment
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

6. 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
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

7. The Finnish university network

8. Polytechnics

9. Universities Bill

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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

16. 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.

17. 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.

18. 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.

19. 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.

22. 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

23. 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.

24. 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

25. 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

26. Expanding innovation activities: new interactions between players and functions.

27. 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.

28. 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

29. 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)

30. 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 ; 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

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