Tài liệu THE ROLE OF UNIVERSITIES IN REGIONAL INNOVATION SYSTEMS - A NORDIC PERSPECTIVE pdf

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THE ROLE OF UNIVERSITIES
IN
REGIONAL INNOVATION SYSTEMS
- A NORDIC PERSPECTIVE
Jan-Evert Nilsson (ed.)
To be published by CBS Press, Copenhagen
2004-10-01
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Table of contents
Preface 4
Sammandrag 5
1. Regional systems of innovation 8
Dynamics of capitalist economies 8
The role of public policy 9
National systems of innovation 10
Regional system of innovation 13
The new production of knowledge 14
Triple Helix 16
The regional impact of universities 18
The role of universities in regional innovation systems 19
2. Higher Education in the Nordic Countries 22
Denmark - a controlled expansion 22
Finland – increased focus on fields with growth prospects 25
Iceland – one dominant university 28
Norway – three waves of reforms 30
Sweden – crisis generated growth 35
National strategies and political circumstances 41
3. Regions with an old large comprehensive university 43
The battle for a university 43
The regional context 44

University of Aarhus 47
The University and the region 51
Social networks and engaged networkers 57
Conclusion 59
4. Regions with small comprehensive universities 61
The regional context 61
Background and early history 63
Growth paths 68
Interaction with the surrounding society 71
University, government and industry interactions 78
Conclusion 87
5. Regions with comprehensive technical universities 90
The regional context 90
Background and growth of the universities 92
University, government and industry interaction 96
Building Triple Helix partnership 105
Regional impact of universities reconsidered 110
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6. Regions with university college with technical education 112
The genesis of the institutions 112
The regional context 114
The building of a university 115
University, government, and industry interaction 125
Regional impact 133
Conclusion 137
7. Region with comprehensive mini university 139
The regional context 139
The background for founding UNAK 140
Growth patterns 141
University, industry and government interaction 146

Regional impact 146
Conclusion 148
8. The role of university in regional innovation systems 150
The academic community 150
Regional impact of the universities 155
Elements in the regional systems of innovation 160
The universities’ role in the innovation system 162
The importance of the university in systems of innovation 165
Policy implications 166
9. References 173
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Preface
This report is the outcome of the collective effort of nine scholars, who have
been engaged in a on the “The Role of University in Regional Innovation
System”. The project has been possible thanks to the financial support from
the Nordic Industrial Fund – Centre for Innovation and Commercial Devel-
opment. The Nordic Industrial Fund has shown great interest in the project
and has made valuable comments. We would like to thanks for the financial
support enabling us to engage in this work.
The ideas of this report have evolved through a number of project meetings
over a two-year period. The project group has discussed the chapters of the
report in this process, and all co-authors have contributed to the entire report.
There have been a division of labour within the group. Thus, the first chapter
was written by Jan-Evert Nilsson, and Åke Uhlin, collaboration with Peter
Arbo, Heikki Eskelinen, Kent Nielsen and Jan-Evert Nilsson did the work on
chapter 2. Kent Nielsen has written chapter 3 and Peter Arbo and Heikki Es-
kelinen chapter 4, Morten S. Dahl, Bent Dahlum and Håkan Ylinenpää chap-
ter 5, Jan-Evert Nilsson and Åke Uhlin chapter 6, and Ingi Runar Edvardsson
chapter 7. The final chapter was written by Jan-Evert Nilsson, who also has
done the main editorial work and were responsible from co-ordinating the

project.
Jan-Evert Nilsson
Peter Arbo
Morten S. Dahl
Bent Dahlum
Ingi Runar Edvardsson
Heikki Eskelinen
Kent Nielsen
Åke Uhlin
Håkan Ylinenpää
Karlskrona, Tromsø, Aalborg, Akureyri, Joensuu, Aarhus, Luelå
October 2004
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Sammanfattning
Det är en allmän uppfattning att det mogna industriländerna är på väg att
omvandlas till kunskapsekonomier i vilka universitet och högskolor förutsätts
spela en viktig roll för den ekonomiska tillväxten. Universitet och högskolor
ses som en viktig resurs för att skapa ett konkurrenskraftigt näringsliv. OECD
har länge förordat aktiva insatser för att skapa nationella innovationssystem
som ett viktigt element i innovationspolitiken. Finland började tidigt med att
utveckla en sådan jnnovationspolitik och Sverige följde efter i slutet av 1990-
talet i samband med att Verket för innovationssystem etablerades.
Teoribildningen om nationella innovationssystem utvecklades ursprungligen
av nationalekonomer för vilka nationen av tradition upplevs som den rele-
vanta geografiska enheten. Studier av innovationssystem i olika länder anty-
der att det finns fler än ett innovationssystem i ett land. Det finns såväl funk-
tionella innovationssystem, som i vissa fall överskrider nationsgränser, som
regionala innovationssystem som är koncentrerade till en del av landet.
Syfte och metod
Syftet med denna studie är att studera vilken roll universitet och högskolor

spelar i regionala innovationssystem. Med innovationssystem menas det sys-
tem av privata och offentliga aktörer som främjar utvecklingen av, utvecklar
och bidrar till spridningen av ny teknik och nya företag.
Metoden som används är en praktikfallsmetod. Nio universitetsregioner i de
fem nordiska länderna har valts ut. I dessa görs en studie av på vilka sätt uni-
versitetet/högskolan påverkar den ekonomiska utvecklingen i regionen. I de
flesta sker det genom att regionens utveckling sedan universitetet eller
högskolan grundades följs. Vi har valt att studera andra eller tredje vågens
universitet, dvs i huvudsak sådana som etablerats i samband med den stor
utbyggnaden av högre utbildning som skett under efterkrigstiden.
Skälen för etableringen av de nya universiteten har varierat över tiden. Un-
der1950- och1 1960-talet var etableringen en integrerad del av uppbyggnaden
av den nordiska välfärdstaten. Syftet var i första hand att säkra tillgången av
kvalificerad arbetskraft till den växande offentliga sektorn. Under 1970- och
1980-talen började universitet och högskolor i allt högre grad betraktas som
motorer i den industriella utvecklingen. Argumentet att det nya universitetet
eller högskolan skulle bidra till att stärka konkurrenskraften i regionens
näringsliv eller bidra till en modernisering av näringslivet blev allt viktigare.
Synen på universitetens roll fick avgörande betydelse för utformningen av de
nya universiteten och högskolorna. Vilken roll enskilda universitet och
högskolor spelat i det regionala innovationssystemet återspeglar i hög grad
vilken typ av universitet som utvecklats i regionen.
Universitetens regionala effekter
Etableringen av ett universitet har förhållandevis stora direkta lokala ekono-
miska effekter, då utbildningen förutsätter att studenterna kommer till uni-
versitetet. Storleken på den direkta effekten varierar beroende på univer-
sitetens storlek mellan 3000 anställda och 22 000 studenter och 130 anställda
och 900 studenter. Hur betydelsefull denna lokala effekt är bestäms i sin tur
av regionens storlek. Medan regionen med det största universitetet har 645
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000 invånare, har den med det minsta endast har 27 000 invånare. Det största
och det minsta universitetet i undersökningen förefaller sålunda vara av
samma relativa betydelse.
Den andra slutsatsen som kan dras av undersökningen är att karaktären på
den regionala effekten är beroende av typen av universitet som finns i re-
gionen. En avgörande skillnad är om universitetet har en teknisk fakultet eller
inte. De universitet och högskolor som saknar teknisk fakultet påverkar den
regionala utvecklingen i första hand genom att de bidrar till en generell
höjning av utbildningsnivån i regionen. Huvuddelen av dem som utbildar sig
vid dessa universitet har sin arbetsmarknad inom den offentliga sektorn. De
regionala effekterna på den industriella utvecklingen av denna typ av univer-
sitet är begränsad. För universitet med en teknisk fakultet är situationen an-
norlunda. Rund flera av dessa universitet har det vuxit fram ny produktion
inom dynamiska teknikområden, Under 1990-talet skedde tillväxten i första
hand inom IT-området.
Det är universitetens utbildning inom teknikområdet snarare än forskningen
som fungerar som drivkraft i den industriella omvandlingen. Universitet och
högskolor med en teknisk inriktning levererar unga, ambitiösa och kvalifi-
cerade personer till företag som arbetar på expansiva marknader. Nyckeln till
stora regionala effekter är sålunda att universitetet och högskolan erbjuder
utbildningar inom teknikområden som kännetecknas av hög tillväxt och en
stor långsiktig tillväxtpotential. Utbildningar inom datavetenskap, elektronik,
telekommunikationssystem, programvaruteknik etc. är exempel på områden
som uppfyllde detta krav under 1990-talet. På detta sätt avgör universitetets
eller högskolans utbildningsportfölj hur stor regional tillväxtpotential som ett
universitet kan erbjuda. Ju fler utbildningsprogram inom teknikområden vars
utveckling leder till en stark ökning i efterfrågan på arbetskraft desto bättre
förutsättningar för stora regionala effekter. Den långsiktiga utmaningen blir
under dessa omständigheter att få till stånd en fortgående förnyelse eller ut-
vidgning av portföljen med utbildningsprogram. Sker inte detta finns et en

uppenbar risk andelen utbildningsprogram inom teknikområden med snabb
tillväxt inte minskar över tiden.
I diskussionen av universitetens effekter på den regionala industriella ut-
vecklingen läggs förhållandevis stor vikt avknoppningarna från universitet
och högskolor. En föreställning är att forskningen vid universitetet eller
högskolan skall generera resultat som kan ligga till grund för företagse-
tableringar. Ofta relateras i detta sammanhang till erfarenheterna från Silicon
Valley, där studenter och forskare vid Stanforduniversitetet har etablerat
välkända företag som Hewlett-Packard, Adobe, Silicon Graphics, Sun Micro-
system och Cisco. Avknoppningar från de studerade nordiska universiteten
är inte lika vanligt förekommande som i Silicon Valley. Nästan inga av
avknoppningsföretagen har vuxit och utvecklats till stora globala företag. Det
förefaller som om den institutionella strukturen i de nordiska länderna däm-
par omfattningen på den entreprenöriella aktiviteten och hämmar tillväxten i
de avknoppade företagen. Detta bidrar till att reducera universitets och
högskolors potential som en källa till nya företag.
Viktigare än som källa till avknoppningar är universitetens och högskolornas
bidrag till att öka attraktiviteten hos regionen som plats för lokaliseringar.
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Universitet och högskolor, särskilt de med teknisk fakultet, utgör en attrak-
tion för expansiva företag som överväger ny- eller omlokaliseringar. Alla de
studerade nio universiteten har bidragit till att nya verksamheter lokaliserats
till regioner. Vilka typer av verksamheter som attraheras av ett visst univer-
sitet beror bland annat på universitetets egenskaper. Styrkan i den attrak-
tionskraft som ett universitet representerar bestäms också av hur många an-
dra universitet med ett jämförbart utbildningsutbud som det finns. Ju färre
sådana universitet som finns desto större dragningskraft utövar universitetet.
Universitet som attraktionskraft innebär att universitetens lokalisering utövar
ett starkt inflytande över var expansiva verksamheter inom dynamiska tek-
nikområden lokaliserar sin produktion. Därför bestäms den regionala effekt

som denna kraft ger upphov till i u stor utsträckning av förekomsten i landet
av sådana verksamheter. I de studerade fallen illustreras detta av den stora
betydelse Ericsson och NOKIA spelade för expansionen i ett antal univer-
sitetsregioner i Sverige och Finland. Ericssons och NOKIAs expansion ska-
pade stora regionala effekter i ett antal regioner. Samtidigt bidrog dessa uni-
versitets och högskolors förmåga att förse företagen med kvalificerad arbetsk-
raft till att en fortsatt expansion i företagen var möjlig. I Danmark och Norge
som saknade stora globala telekomföretag var universitetens attraktionskraft
svagare.
Policyrekommendationer
Analysen av universitets och högskolors roll i regionala innovationssystem
visar att de under vissa omständigheter kan spela en central roll i en regions
ekonomiska omvandling. Universitetens huvudsakliga roll är att förde expan-
siva företag inom nya dynamiska teknikområden med kvalificerad arbetsk-
raft. Universiteten främjar på detta sätt framväxten av ett nytt näringsliv i re-
gionen. Ett universitet som kontinuerligt förmår utveckla utbildningsprogram
inom nya dynamiska teknikområden kan sålunda permanenta sin roll som
förnyare av regionens näringsliv. Den regionala effekten av et sådant univer-
sitet bestäms emellertid också av hur väl företag i det egna landet förmår ut-
nyttja den nya teknikens möjligheter. Utan Ericsson och NOKIA skulle de re-
gionala effekterna av Universitetet i Uleåborg och Blekinge Tekniska
Högskola blivit betydligt mindre.
Ovanstående illustrerar storleken på de regionala effekterna av ett universitet
eller högskola avgöras av en kombination av planerade insatser, kritiska bes-
luta fattade utanför regionen och lyckliga omständigheter. En framgångsrik
politik bygger sålunda på att en rad olika beslutsfattare oberoende av varan-
dra fattar de ”riktiga besluten”. Komplexiteten i situationen gör att
möjligheterna att planmässigt bygga ett framgångsrikt regionalt innova-
tionssystem är begränsade. Politiska insatser måste därför ges en mer generell
inriktning. Uppgiften blir att ge de institutioner om ingår i det regionala in-

novationssystemet rimliga förutsättningar för sin verksamhet samt att skapa
ett system av incitament som belönar vissa typer av handlingar.
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1. Regional Systems of Innovation
The 1970s marked the end of a long period of high economic growth. The
growth rate was halved in the OECD countries and unemployment rised. Ini-
tially the reading of the history of the 1970s was that “…the most important
feature was an unusual bunching of unfortunate disturbances unlikely to be
repeated on the same scale, the impact of which was compounded by some
avoidable errors in economic policy” (McCracken et al. 1977;14). The conclu-
sion was that the immediate causes of the new economic problems could be
understood in terms of conventional economic analysis. The expert group
could “… see nothing on the supply side to prevent potential output in the
OECD area from growing almost as fast in the next five to ten years as it did
in the 1960s…. Whether it is achieved or not will depend heavily on our abil-
ity to obtain a desirable level and structure of final demand and the accompa-
nying distribution of income without arousing disruptive conflicts, which ex-
acerbate inflation (MacCracken et. al. 1977:16). The expert group expressed a
strong belief of the strength in a well-balanced Keynesian economic policy.
The authorities were expected “… to steer demand along the relatively nar-
row path consistent with achieving a sustained recovery”(MacCracken et.
Al.1977:19). The lower limit was set by the need for a rate of expansion suffi-
cient to encourage a recovery in investment and the upper limit by the point
at which a rapid increase in aggregate demand would re-ignite inflationary
expectations. According to established theory the great policy challenge was
to fine tune the economy so it could pass safely in the narrow strait between
economic stagnation and high inflation.
Dynamics of capitalist economies
Looking back we can see that the experts were wrong. This unusual bunching
of disturbances was indeed the start of something new quite different from

the fast stable growth of 1950s and 1970s. The old theory was an inappropri-
ate tool for understanding the new economic situation. The growth rate in the
OECD-countries was reduced from 5,6 per cent per year in the 1960s to 3,7 per
cent in the 1970s, while inflation rate increased from 3,7 per cent to 8,6 per
cent. The OECD countries became trapped in a situation of stagflation, which
made Keynesian economic policy look obsolete.
Researcher started to look for alternative perspectives, both genuinely new as
forgotten old ones. One of the reinvented perspectives was the Kondratiev
cycles. Based on historical data the Russian economist Nikolaj Kondratiev
claimed the existence of long waves of an average of about 50 years in the
capitalistic economy(Nilsson 1987). The Kondratiev-perspective, which was
considered interesting and relevant in the 1930s, became reinvented in the
1970s(Mandel 1972 and Shuman & Rosenau 1974). In the 1980s it became
popular to interpret the economic stagnation as a down turn in he Kondratiev
cycle. The OECD economies were in a situation similar to the one in the 1920s
and 1930(Freeman 1984).
Christopher Freeman at Science Policy Research Unit at University (SPRU) of
Sussex was one of the most active researchers applying a Kondratiev-
perspective. He had noted that “… the upswing of the long waves involves a
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simultaneous or near-simultaneous explosive burst of growth of one or sev-
eral major new industries and technologies”(Freeman et. al 1982:80). The up-
swing gets its power from some generic innovation, which can be used in a
large number of new products and processes. The technology diffusion proc-
ess includes a significant element of innovations. Under certain circumstances
will such a generic innovation initiate a cumulative growth process main-
tained by the growth of new industries, which need further process innova-
tions to make use of economy of scale when production volume expand. The
multiplier effects of the innovation-based growth further strengthen the
growth process.

Freeman considered the beginning upswing made possible by changes in the
technoeconomic paradigm, which included “… a combination of interrelated
product and process, technical, organisational an managerial innovations,
embodying a quantum hump in potential productivity for all or most of the
economy and opening up an unusually wide range of investment and profit
opportunities. Such a paradigm change implies a unique new combination of
decisive technical and economic advantages (Freeman & Perez 1988:47-48).
Freeman argued that each technoeconomic paradigm was based on a key
factor and he saw microelectronics as the key factor in the coming fifth Kon-
dratiev upswing. The diffusion of new technologies of wide applicability is
capable of impairing a substantial upthrust to the growth of the economic
system, creating many new opportunities for investment and employment
and generating widespread secondary demands for goods and services.
The strength of the upswing depends on the growth potential of the new
growth industries. Over time, however, these new technological systems
mature and their investment and employment consequences end to change.
The upswing continues until a disturbing lack of labour initiate a wage infla-
tion spiral. Fast increasing wages are met by increased prices and/or reduced
return on investment. Growing pessimism and reduced financial resources
obstruct the innovation activities and reduced the diffusion of innovations.
The long economic wave is reaching its peak, as was the situation in the 1970s.
In this phase of the long wave Freeman considered the role of public policy as
crucial.
The role of public policy
The researchers at SPRU combined a conviction about the existence of long
waves in the world economy with a strong belief in the prospect of national
governments to manage economic development. They considered public sup-
port to enhance the growth of new technological systems and support to new
technologies as important means to recreate a period of fast growth in mature
industrial countries. They anchored their believe in earlier experiences of re-

covery from depression as well as from more recent Japanese experience.
They proposed three types of public initiatives. Firstly, government should
encourage corporations to develop and ake up radical innovations. In certain
phases of economic development such investments can play an decisive role.
The downswing of a Kondratiev cycle represented a gestation period when a
patient public policy of support, encouragement, experiment and adaptation
was considered to be extremely important(Freeman et. al. 1982:192). Public
support should primarily be allocated to explorative R&D, which can be un-
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dertaken by groups of corporations because the direct commercial value of
the findings normally is small.
Secondly, government should support the diffusion of radical innovations. In
the early stages of radical innovations do not have big economic effects. Ini-
tially the market for such innovations is small, which make these innovations
less interesting for corporations. Only large-scale diffusion can have such ef-
fects. Public policies for developing new markets and stimulate the diffusion
of such innovations is a way to stimulate growth. The researchers underlined
especially the need for such measures in sheltered or highly concentrated
sectors of the economy like public service production and national monopo-
lies. These sectors are not subject to international competition, which may be
unwilling or unableto promote the adoption of readical new technologies.
Thirdly, they identified a need for public support to stimulate import of for-
eign technology in areas where radical innovations had been developed in
other countries. Japan’s import of new technology in microelectronics from
the U.S and their use of it in consumer electronics is a standard case when it
come to the economic potential of an import strategy. The relevance of such
an import strategy is inversly proportional to the size of the nation. The
smaller the nation is, the bigger the chance that radical innovations are devel-
oped outside the nation.
What the SPRU-group achieved was to move focus from short-term demand

oriented policies to long-term supply side policies aiming at structural
change. Their policy proposals still focused on isolated measures and they did
not discuss the implementation ofn the policy. The concept of national sys-
tems of innovation has not yet been formulated. It was was introduced by
Christopher Freeman some years later, who became inspired of what he had
experienced at tour to Japan
National systems of innovation
Christopher Freeman used the concept national systems of innovation for the
first time in 1987 in his analysis of economic development in Japan since the
Second World War (Freeman 1987). In the term innovation system he in-
cluded the network of institutions in the public and private sector whose in-
teractions initiate, import, modify and diffuse new technologies. By focusing
on the innovation system he moved the perspective from single entrepreneurs
and corporations to a network of institutions. The innovation system was seen
as the breeding ground for innovations. Freeman considered the design of
the innovation system as the single most important policy issue. Thus he now
moved the attention from means to the creation of a system of institutions.
Freeman was inspired by what he saw in Japan. According to Freeman Japans
national system of innovation differed in certain aspects from other industrial
countries. Freeman pointed at four important differences. Firstly, Japan had
a Ministry of Industry and Trade (MITI) which played a more proactive role
than corresponding ministries in other countries. Secondly, the system in Ja-
pan was characterized by a close cooperation between government and cor-
porations. Thirdly, the Japanese school system was characterized by the fact
that a large share of the youth studies science and technology in upper secon-
dary school. Finally, Freeman pointed at a number of social conditions,
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mostly related to the labour market, which made Japan open to technological
change.
Freeman considered the strong links between government and industry as an

important feature of the successful Japanese national system of innovation.
The government made technological foresights to identify new technologies
with expected radical economic consequences. Among the identified promis-
ing technologies MITI selcted some, which were supported financially in dif-
ferent forms to stimutate the use of foreign technology and the development
of new Japanese technical solutions. In addition the government was respon-
sible for the access to relevant infrastructure, of which he educational system
was considered to be of special significance.
In this description of the Japanese system of innovation Freeman applied a
combination of organisation and innovation theory to highlight the interac-
tions between the production system and the innovation process. Based on
this perspective Freeman concluded that the Japanese national system of in-
novation had some important competitive advantages. Japan show the change
of techno-economic paradigm which was considered to be vital part of con-
temporary structural changes in the world economy(Freeman 1988).
Freeman´s interest in industrial policy in Japan was typical for the 1970s and
1980s. At this time Japan was an outstanding exception in a world economy of
sluggish economic growth. In the 1970s and 1980s the average annual eco-
nomic growth in Japan exceeded the average of the OECD-countries by 35 per
cent and the EU-area by 45 per cent. One popular explanation of the Japanese
success was the industrial policy and MITI’s strategic role(Johnson 1982). Ja-
pan’s role as a model supported the idea, that national industrial policy could
be an efficient tool to stimulate growth. The ppromotion of major new tech-
nological systems and of productivity growth based on technical change was
considered as an important means to help restore the economic health of the
mature industrialized countries.
The great fascinatrion with Japanese industrial policy largely disappeared in
the 1990s, when the economic growth rate declined and became lower than in
the OECD- and the EU-average. The Japanese miracle was over for this time.
Instead the country was used as a warning example. Tnow it was focused on

how the lack of structural reforms may result in permanent recession (The
Economist 2001). In the public debate attention was moved from innovation
policy to the institutional structure of the country.
However, the preoccupation with national systems of innovation survived the
Japanese miracle. The theory was brought forward by a group of Danish re-
searchers, who combined the idea of systems of innovation and interactive
learning (Lundvall 1992). Their point of departure was that innovation should
be regarded as a gradual and cumulative process and that interactive learning
and collective entrepreneurship are fundamental to the process of innovation.
Interactive learning was something different from knowledge production at
the universities and private R&D laboratories. The researcher acknowledged
that scientific activities and technical change had been brought closer together
and increasingly become interdependent (Lundvall 1992). The capability to
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innovate cannot longer be assessed in isolation from efforts in science, re-
search and development. Neverthelsess, they emphasised that R&D activities
were not the only innovation source. Instead they underlined the role of rou-
tine activities in production, distribution and consumption as input to the
process of innovation. The experiences of workers, production engineers and
sales representatives formed the basis for corrections and improvements.
Hence learning by doing, learningf by using, and learning by interaction feed-
back into the process of innovation (Lundvall 1992). When bottleneck prob-
lems are met and registered in production, or in the use of products, the
agendas of producers change, affecting the direction of their innovation ef-
forts.
From the central role given to routine activities in the learning processes fol-
lowed that innovation must be rooted in the prevailing economic structure.
The Danish researchers concluded that the areas where technical advance take
place, primarily are those where a firm, or a national economy, is engaged in
routine activities. Thus, each national system of innovation is rooted in a na-

tional system of production. By underlining the importance of existing eco-
nomic structure innovations was portrayed as a cumulative processes of mar-
ginal changes. The conditions for radical change and fast movement from one
trajectory to another were then left unexplained.
Based on this assumption about the sources of relevant knowledge, existing
structure of production and the institutional set-up exert a strong influence on
innovation processes in a country. Institutions are built because they offer
stability in a world characterised by innovative activities, where uncertainty is
an important aspect of economic life. In this case institutions refer to routines,
guiding everyday actions in production, distribution and consumption, and
different notions of change patterns, like paradigms and technological trajec-
tories.
Lundvall et al.notice the inherent conflict between the institutional structure
as a stabilizing factor and the need to adapt to new technologies. A stabilizing
institutional structure with its rigid habits and routines and rigid pattern of
interaction inside and between organisations hurts the ability of an economy
to introduce and diffuse new technologies, What is needed in such cases is a
flexible institutional system, which strengthen the technical learning ability of
the economy in a period of radical technical change. They concluded that the
capability of national economies to learn abou, adapt and change their instiu-
tional frameworks is important for the development of their international
competititveness. Institutional learning became the key word for success
(Johnson 1992).
The conclusion represent a big challenge because changing he institutional
system of a nation is neither an automatic nor a costless process. Institutional
structures are not formed by design. Normally institutional change is incre-
mental and slow reflecting the inertia of the many informal and culturally
transmitted elements in the institutional set-up (North 1990).
When institutions are seen as routines guiding everyday action, they become
more lcultural variables than political ones. They turn out to to the outcomes

of long and complex historical processes. Looked upon in this way institu-
13
tions are culturally determined. Normally economists use the term institu-
tions for political determined conditions. Property rights, laws and regula-
tions and infrastructure like educational system are referred to as important
institutions influencing the economic development of a society(North 1990).
Richard R. Nelson’s studies of the US-system of innovation are an example of
such an approach. Here it is focused on the combined public and private
character of technology and the role of, respectively, private firms, universi-
ties and government in the system of innovation (Nelson 1987; Nelson 1988).
If institutions are assumed to be the product of a complex historical process
the opportunities fpr public policy-making become an open question. The role
of politics may change over time and will differ between different countries.
If, on the other hand, institutions are formed by political decisions, public
policies by definition have a central role in fostering economic development.
It is obvious that system of innovation is a concept with different meaning for
different authors. Some researchers define it in a narrow sense including only
organisations and institutions that influence the technological capabilities of a
nation. The studies undertaken by Richard R. Nelson in the 1980s are two ex-
amples. Others define the concept broader and include all parts and aspects of
the economic structure and the institutional set-up affecting learning, search-
ing and exploring. Lundvall and his colleagues claim they represent this per-
spective.
One problem with broadening the definition of a system of innovation is that
the problem of delimiting the system increases. In Lundvall (1992) this prob-
lem is addresses by saying that determining which institutions to include in
an analysis must be based on a historical investigtion as well as on theoretical
considerations. They also conclude that in different historical periods different
parts of the economic system may play a more or less important role in the
process of innovation. One major weakness with such a broad definition is

that it may become somewhat artificial to try to describe and analyse a na-
tion’s innovation system as something separable from its economic system
more broadly defined.
Regional system of innovation
The focus upon national systems in the research literature reflects the fact that
national economies differ regarding institutions, the structure of the produc-
tion system and the degree of cultural homogeneity of the nations. For
economist the nation is by tradition the natural geographical unit because the
policies and programmes of national government, the laws of a nation, and
the existence of a common language and shared cultural identity define an
inside and outside that can broadly affect how technical advance proceed
(Nelson 1993).
However, countries differ in the degree of cultural homogeneity. In some
cases the heterogeneity of countries make it unclear where to locate the bor-
ders of national system of innovation. “Multinational” countries like Belgium,
Canada and Switzerland are examples of such heterogeneous countries, in
which regions neither have a common language or share a cultural identity. In
such countries it might be more relevant to focus on regional systems of inno-
vation.
14
But how relevant is it to talk about regional systems of innovation in ho-
mogenous nations? Do regions represent distinct systems of innovation? At
one level of analysis regional systems of innovation have much in common
with national system in terms of their mutual components and the nature of
interactions between elements in the system. Each region has a distinctive
system when it comes to the institutional arrangements and economic struc-
ture. However, the differences between regions in a nation differ between dif-
ferent types of states. In a federal state like Canada the regional system of
innovation in Ontario differ distinctly from the innovation system in Qubec
(Wolf & Gertler 1998; Latouche 1998). In a unitary state like Finland it is more

difficult to identify distinctive regional features in the systems of innovation
(Schienstock et al 1998). This raises one important question. How big can the
overlap between the national and regional system of innovation be before the
regional system of innovations lose its relevance?
One answer to this question is that it is just academic. Systems of innovation
have both a horizontal and vertical dimension. Each geographic level has its
own system, but this system is also linked to other geographical levels. Nor-
mally, processes of innovations transcend administrative borders. Technical
impulses may come from abroad, the innovative ideamay be developed in a
national institutional context, and the technical problems that obstruct the
realisation of the idea may be solved locally. In this way innovation systems
become systems with several geographical layers.
Jeremy Howells argues that a regional analysis may add another layer in a
system perspective on innovation (Howells 1999). He identifies at least four
overlaid innovation system – sub-regional, regional, national and interna-
tional level. At the lowest geographical level there are sub-regional innovation
systems. Because geographical distance, accessibility, agglomeration and the
presence of externalities provide a strong influence on innovation, the sub-
regional level is an important arena for innovations. The regional level has
much in common with national system, but this level should not just be
viewed as one layer down from national systems. Regional systems of inno-
vation are increasingly being framed within an international arena.
The links between sub-regional, regional, national and international systems
of innovations imply hat analyses should include actors and institutions at all
four levels. The importance, though of different actors and institutions may
change over time and vary between regions.
The new production of knowledge
The systems of innovation approach was developed by economist as a re-
sponse to a new economic situation, in which slow economic growth in-
creased the attention paid to innovation. Learning is one of the key concepts

in this approach. Lundvall stresses the importance of experienced based
learning focusing on he everyday experiences of workers, production engi-
neers and sales representatives. However, he acknowledges that scientific ac-
tivities and technical change have become more closely linked (Lundvall
1992).
15
Other researchers focus on the stronger interdependencies between knowl-
edge production and innovations. The role of science in the society has
changed. Gibbons and his colleagues (1994) argue that science has become
central to the generation of wealth and wellbeing and can no longer be re-
garded as an autonomous space clearly demarcated from other parts of soci-
ety. The growth of knowledge industries is one driving force in the erosion of
the demarcation between science and society. Novel knowledge institutions
like high tech companies, management consultancies and think tanks are
challenging universities and research institutes. The new institutional ar-
rangements of institutions of higher education have led to the adoption of
more effective managerial models. Contrary to the old universities, they have
no collegial government inhibiting strategic planning. Tough choices are not
stopped by the need to achieve consensus.
According to Gibbons et al this is just the beginning of a radical change. In the
future most organisations have to become learning organisations, in order to
develop their human and intellectual capital. This will make tkem increas-
ingly dependent upon the knowledge system to operate efficiently. The
emerging of a knowledge society also means, that an increasing number of
social and economic activities will include research components. Organisa-
tions will trade knowledge products, employ knowledge workers and become
learning- and-searching organisations.
The massification of higher education provides the base from which knowl-
edge industries emerge. For knowledge industries the knowledge itself is the
commodity traded. The universities provide a continuous flow of trained per-

sonnel for industry, raising the general level of familiarity with science and
technology throughout society. The numbers of sites, including research as
professional activity, are increasing.
Gibbons et. Al. (1994) assert that science has transformed from Mode-1 to
Mode-2 science, from an academic mode to a mode, where knowledge is gen-
erated in the context of application. Mode-2 science is characterized by trans-
disciplinarity and wide social distribution. The latter refers to the diffusion
over a wide range of potential sites of knowledge production and different
contexts of application or use. Knowledge production becomes part of a larger
process in which discover, application and use are closely integrated.
Traditionally science has always spoken to society in the sense that it has pro-
vided a continuous flow of new ways of conceptualising the physical and so-
cial world. But now society speaks back to science. New knowledge is pro-
duced in more complex contexts of contemporary society. This contextualiza-
tion of science is reflected in shifts in the research agendas and how research
priorities are set.
One manifestation of this transformation of the industrial society to a knowl-
edge society is the new demands put on universities. Universities are now
expexted to contribute to the international competitiveness of nations, stimu-
late wealth creation and support the growth of sustainable development. In-
novation is seen as the key factor to achieve all this. An unrestrained belief in
innovation has grown up and successful innovation is currently assumed to
require knowledge and skills not only of the natural science but also the social
16
sciences and the humanities (Nowotny et al. 2001). In this way knowledge
production transcends disciplinary boundaries. Scientific fields are fused and
the traditional university structure of faculties and departments that has cre-
ated and sustained these divisions become less relevant. The changing land-
scape is manifested in the making of economic development a core functio of
the university in addition to teaching and research.

The new requirements reflect the growing of complexity of society. It is in-
creasingly difficult to distinguish between the domains of the state and the
market, between culture and mass media, between public and private arenas.
Contemporary society is typically characterized by the blurring of categories
like the state, market, science and culture. The demarcation between public
and private spheres, with the state as the guardian of the former, has been
eroded. Part of this erosion, such as the privatisation of traditional public
services and utilities like health care, schools and post and telecommunica-
tions was deliberate. Other changes like the devolution of budget responsi-
bilities to agencies and the creation of internal markets within the public sec-
tor were less deliberate.
The role of the university has changed in this process. Universities have taken
over more vocational forms of higher education and research, as a contrast to
science. Wile science represents the disinterested search for new knowledge,
the systematisation of knowledge and the teaching of it, research focuses on
the innovative potential of discovering the unknown and bringing it to reali-
zation through a consciously designed and intentional process of innovation.
In this process the distinction between research and teaching shows signs of
eroding.
Triple Helix
After the Second World War the linear model of innovation, presenting a
stepwise process rom basic research via applied research to product devel-
opment and new production, becamethe frame of reference when looking at
the role of science in the innovation process. The model, which was based on
experiences during the war, became a truism among physical scientists who
argued that major advances in technology were dependent upon basic re-
search. These assumptions were built into the science policy legislation in
many countries after 1945 (Layton 1977). The line of reasoning was that basic
research leads to new knowledge, which creates the fund from which the
practical applications of knowledge are drawn. New products and processes

are founded on new principles and new conceptions, which in turn are devel-
oped in basic science. From the point of view of this perspective technology
was applied science.
From this point of view technology is applied sciece. However, when the lin-
ear model of science-technology relations has been applied to historic cases
studies it has often failed. The invention of the transistor is a famous example.
Unquestionable, the invention involved science in rather fundamental ways,
but it cannot simply be explained as an application of proceeding advances in
science (Gibbons & Johnson 1970). The invention of the transistor was
fpremised on basic research but also gave rise to a number of new scientific
questions. The invention of the transistor indicated a spiral model of interac-
17
tion in both directions, with cooperative arrangements between university
and industry at various stages of research, development and innovation.
A combination of Mode-2 perspective, where knowledge production tran-
scends organisational boundaries, and the spiral model of interaction can be
seen as the foundation for the Triple Helix model (Leydesdorff & Etzkowitz
1998). As university becomes more dependent upon industry and govern-
ment, so have the latter become more dependent upon university. The Triple
Helix model implies that the paradigm of research in innovation studies has
incorporated a network mode. Innovation is seen as the result of a local inter-
action between university, industry and government. Triple Helix refers to
the movement toward a new global model for the management of knowledge
and technology. Henry Etzkowitz identifies four stages in the rise of triple
helix dynamics (Etzkowitz 2002).
1. Internal transformation in each of the helices. Universities play a new
role in society. They are not only training students and conducting re-
search, but are also making efforts to put knowledge to use. The new
university elides the traditional boundaries between academia and in-
dustry. Strategic R&D alliances among companies and governments

taking the role of venture capitalists are parallel developments.
2. Influence of one helix upon another. Secure rules of the game for the
disposition of intellectual property encourage the spread of technology.
3. Creation of a new overlay of trilateral networks and organizations
from the interaction among the three helices. One important task for
such groups is to fill gaps in an innovation system by “brainstorming”
new ideas.
4. A recursive effect of these triple helix network, both on the spirals from
which they emerged and the larger society. The capitalization of
knowledge transforms both the way that academic scientist view the
results of their research and the role of the university in relation to in-
dustry and government. The knowledge base and its role in innovation
are explained in terms of changing relationships between university,
industry and government.
The interplay between the three spheres can be seen in different ways. Uni-
versity, industry and government can be interpreted as three separate institu-
tions. The institutionally defined Triple Helix is premised upon separate aca-
demic, industrial and governmental spheres and the knowledge flow among
them. In this cases interaction take the form of contacts over defined organ-
isational boundaries and is mediated by organisations such as industrial liai-
son, technology transfer, contract offices and office of external relations. An-
other perspective is to include the fact that the three institutions in addition to
performing their traditional functions, each assumed the role of the others,
with universities creating research parks or performing the role as a local in-
novation organizer.
The Triple Helix-models are conceptual models, which are used for analysing
the interaction between university, industry and government. The models are
open and give no guidance on how to establish a successful interaction be-
tween the three spheres. It just tells us that all the three elements in the model
– university, industry and government –have to b involved in the interaction.

18
The models raises the question of how general solutions may be in practice.
Probably, there are several types of links between the three spheres, which
may constitute a successful interaction. The interaction may be determined by
the context. The characteristics of a successful Triple Helix in one region will
be of little relevance in another region. The Triple Helix-models are primarily
a heuristic approach to be used in the study of historical cases.
The regional impact of universities
Triple Helix addresses the question of which factors determine the regional
impact of a university. Different researchers focus on different factors when
the try to answer this question.
Some researchers focus attention to the regional context and refer to the size
of the region or the regional economic structure. The hypothesis is, that large
regions with existing high-tech industries offer better conditions for substan-
tial regional impact. An American statistical study show a positive correlation
between change in the resource flow to a university and the size of the high-
tech sector in regions with more than one million inhabitants (Varga 1988).
One possible conclusion from this analysis is that public investment in uni-
versities in metropolitan regions with more than one million inhabitants and
with a large high-tech sector will have a larger regional payoff than invest-
ments in universities in other regions. However, it is an open question if the
identified correlation also reflects a causal relation. If the relation is a causal
one a second question deserves attention.
Are the results from a statistical analysis of US regions relevant also relevant
for other countries? If that is the case there are only three regions in the Nor-
dic countries – the Stockholm region, the Copenhagen/Malmö region and the
Helsingfors region, which fulfil the conditions i. e. having a population larger
than one million people and a large high-tech sector. The conclusion based on
the U.S study would be that the governments in Denmark, Finland and Swe-
den concentrate public resources to university to these three regions. For

Norway and Island the message is that the lack of large metropolitan regions
make it impossible to take advantage of the full growth potential of a univer-
sity.
Another hypothesis is that the size of the regional impact of a university pri-
marily reflects the characteristics of the university. Researchers who formu-
late this hypothesis usually refer to the impact of universities like MIT and
Standford. These two universities are wellknown for their close cooperation
with industry and for a large number of spin-offs (Dorfman 1982). A compari-
son of the regional impact of the two neighbouring universities MIT and Har-
vard strengthen the impression that factors internal to the universities do
matter. So one hypothesis could be that the interaction between university,
industry and government is strongly influenced by internal characteristics of
the university.
A third alternative is that the impact of a university reflects how the profile of
the university corresponds with the profile of the economic structure of the
region. The hypothesis is that such a correspondence open up for transfer of
knowledge from the university to the industry. The similarities in competence
and experiences make an interactive learning possible. Vargas’ results stress-
19
ing the correlation between regional impact and the size of the high-tech in-
dustrial sector support such a perspective. From this point of view a univer-
sity primarily has an impact on the region’s existing companies.
However, the argument can alos be turned the other way, claiming that uni-
versities primarily contribute to economic development in areas which are not
yet exploited by industry. Universities are producing new knowledge
That can be used both in established production and in the creation of new
production. The economic potential of new knowledge might be biggest in the
latter case. The growth of the minicomputer industry in the Boston region in
the 1960s and the internet industry in Silicon Valley in the19990s are two rele-
vant examples. From this point of view the lack of correspondence between

the profile of the university and the industrial structure of the region become
important. The knowledge profile of the university should be directed to-
wards knowledge areas where knowledge advancements can lay the founda-
tion for new production and future growth.
The role of universities in regional innovation systems
I this book we will analyse the role of universities in regional innovation sys-
tems. We do so by studying nine Nordic regions with a university. We have
chosen regions outside the largest metropolitan areas in each of the five Nor-
dic countries. By that choice we announce that we do not focus on the impor-
tance of the region’s size as an aspect of the regional impact of universities.
Our focus is on the role played by the universities in different regional inno-
vation systems and the impact of the universities on regional development.
The seletion of regions has been guided by the ambition of studying regions
with universities of different age and structure. In the sample there is one
university founden in the 1920s, one in he 1950s, one in the 1960s, three in the
1970s, two in the 1980s and one in the 1990s. The age of a university may be
relevant for three reasons. Firstly, the circumstances under which the univer-
sity was founded and the role it was extpected to play in the region may dif-
fer. In many years a univesity was primarily considered to be an educational
institution producering qualified labour to the public sector. The view that the
university may represent a potential engine of regional growth was not actu-
alized until the end of the 1960s. Secondly, the time when a university is
founded may also exert influence of its structure and specialization. Thirdly,
you may assume that the age of a university has an influence on the regional
impact. Older universities tend be larger and large and old universities can be
expected to show greater regional impact than young and small universities.
We do not define the system of innovation a priori. Our point of departure is
the universities in the selected regions. The issue is to explore the role of the
universities in the economic transformation of the regions and in their re-
gional systems of innovation. By taking the universities as our point of de-

parture, this defines the relevance of different institutions. What you see de-
pends on where you stand. Thus the delimitation of the system is given by
our issue, which means that in different regions different institutions may
play various roles.
Based on existing knowledge of the cases we knew already from the begin-
ning that there were differences in the roles played by the universities. In fact,
20
the cases have been chosen in order to reflect this variation. Before presenting
the cases a short description of the policy-context of the Nordic countries is
givend. In chapter 2 we outline the higher educational policy and research
policy in the different countries.
The main part of the book (chapters 3 to 7) consists of the case studies of the
nine Nordic regions, where our aim is to understand the role the universities
have played in economic development and to identify explanatory factors.
The regions have universities of different age, size and profile. The Aarhus
region in Danmark has a large comprehensive university founded in the 1920s
(chapter 3). The university is the second oldest multi-faculty university and
the second largest located in the second largest city in Denmark.
The regions of Tromsø in Norway and Joensuu in Finland have rather small
comprehensive universities founded in the 1960s (chapter 4). The two univer-
sities were founded as part of a welfare state project with a strong commit-
ment to provide qualified labour to a growing public sector in regions with a
declining population.
The regions of Oulu in Finland, Luleå in Sweden and Aalborg in Denmark are
reasonable large comprehensive universities with technical faculty founded
between 1958 and 1974 (chapter 5). All three regions were similar in size and
structure with a dominating manufacturing industry at the time when the
universities were founded. The main reason for founding these local univer-
sities was to improve the competitiveness and growth of the existing industry.
Starting from about the same position the three universities and regions has

evolved to be different in their profile.
Karlskrona/Ronneby in Sweden and Vestfold in Norway got their university
colleges in the late 1980s and the early 1990s (chapter 6). While the university
college in Karlskrona/Ronneby was completely new the one in Vestfold was
an amalgamation and upgrading of two training colleges with their root in the
19
th
century. In both cases technical education represents a significant part of
the two university colleges.
In one way the Akureyri case has similarities to the Aarhus case. Akureyri is
the second largest region in Iceland, which got the third university in the
country in 1988 (chapter 5). From another point of view the differences are
dramatic. Population in Iceland is somewhat smaller than the population in
the city of AArhus. And the population in the Akureyri region is just one
tenth of the population in AArhus city. Obviously there is a significant differ-
ence in scale between Akureyri and Iceland and the other cases. The univer-
sity of Akureyri is a small-scale university, which, with six faculties, has the
same breath as a traditional comprehensive university in spite of the fact that
the number of students is small.
The case-chapters are followed by a comparative analysis of the regions end-
ing up in policy implications (chapter 8). Two general conclusions are drawn
from the cases. First, established universities always oppose each plan to
found new universities. Their standard argument is that the lack of experi-
enced academic staff will make it difficult to fill the academic positions in the
new university with qualified teachers and researcher. Secondly, new univer-
21
sities have a strong tendency to develop into a traditional multi-faculty re-
search based university. A university that initially was organised in a new
way normally ends up as traditional university. There is a strong thrift to-
wards the classical university model.

The comparison between the cases shows that universities may exert strong
impact on regional development, but the impact is rather local than regional.
The size and character of the impact varies between universities and regions.
While liberal arts universities mainly have impact on the public sector exert
universities with a technical faculty strong influence on industrial develop-
ment.
22
2. Higher Education in the Nordic Countries
The end of 1950s represents the beginning of thorough transformation of the
systems of higher education in all the Nordic countries. A growing number of
people applying for higher education forced an expansion of the system. This
growth reflected the fact that the share of young people searching higher edu-
cation increased as well as the large number of “baby-boomers” who
streamed in to the universities. This picture was identical in all the Nordic
countries. As a response to the increased pressure on the system of higher
education existing universities grew and new ones were founded. Again, this
was the general pattern in all the countries. However, the speed of the trans-
formation of the system and the way it was done differed between the coun-
tries.
Today the system of higher education in the Nordic countries consist of 31
multi faculty universities, 9 technical universities, 9 business schools, 14 arts
academies and 15 specialized university institutions. To this list can be added
39 university colleges and 30 polytechnics. In total, these institutions have
about one million students.
Denmark - a controlled expansion
The Danish university system consists of a total of 12 universities, varying
greatly in terms of size, subject areas and history. All Danish universities are
financed by the state, and, except for The Technical University of Denmark
and the Danish University of Pharmaceutical Sciences, are state-owned insti-
tutions.

Denmark’s first university was founded in Copenhagen in 1479, while the two
most recent additions were founded in 2001 and 2003. The universities of Co-
penhagen and Aarhus are the oldest and largest, and in 2001 had a combined
total of over 44,000 students and 4300 teaching and research staff, comprising
40% of all students and researchers. This marked concentration of university
places within Denmark is reinforced by the fact that Copenhagen and Aarhus
are simultaneously home to the two largest business schools, so that these
four institutions alone account for more than 60% of the country’s students
and research and teaching staff.
The University of Copenhagen remained alone until the 19th century, when
three specialist universities were founded, also in the Danish capital, namely
the Technical University of Denmark (1829), the Royal Veterinary and Agri-
cultural University (1856) and the Danish University of Pharmaceutical Sci-
ences (1892). These were in the early 20th century followed by the Copenha-
gen Business School (1917).
Nor until 1928 was Copenhagen’s total dominance of university education
broken, when the Danish provinces welcomed their first university in Den-
mark’s second city of Aarhus. For many years Aarhus University was the only
university outside the metropolitan area. It was conceived as a multi-faculty
university, with the individual faculties being gradually built up over the pe-
riod 1928-1954. And just as Copenhagen had its own Business School, so Aar-
hus also acquired a local Business School in 1939. Another 26 years elapsed
23
before Denmark’s third city of Odense was endowed with a university in
1965. This expansion relates to a rapid rise in the number of students, as from
the late 50’s to the late 60’s annual university intakes almost quadrupled, from
1443 students in 1956/7 to 5348 in 1966/67.
The swelling ranks of students can be seen as a result of the large cohorts of
young people born in the post-war years gradually reaching university age
and of the extension of the Danish welfare model, creating a stronger demand

for university places and simultaneously building on a political desire for
equal education opportunities for all.
Up to the period of the first Universities Governance Act of 1970, the organi-
sation and function of the universities was based on traditional subject spe-
cialisation within faculties. The universities had two functions, research and
research-based teaching within the subject disciplines. In terms of leadership,
the university professors had almost absolute control within the sharply dif-
ferentiated subject disciplines – a kind of professorial “Divine Right”.
The main function of the multi-faculty universities in the 60’s apart from re-
search was the provision of a pool of employees for Denmark’s rapidly ex-
panding public sector, especially civil servants, local and county government
officers, doctors for the health service and teachers for the rapidly growing
upper secondary school sector – only a few of the classic university courses,
such as law, were directed towards employment in the private sector.
A comprehensive reform of the universities’ governance structure was first
embarked on after the international student demonstrations of 1968. This was
the time of the Danish Universities Act of 1970, which resulted in the creation
of collegiate bodies and staff and student representation. Rectors, Deans and
Heads of Institutes were now elected by university employees and students.
In parallel with this development, new trails were being blazed in individual
parts of the Danish university world in respect of research and teaching. The
classic university subject specialisation was challenged by cross-
discipliniarity, which on the teaching side entailed the replacement of indi-
vidual courses based on lectures by project-oriented group work. Prime mov-
ers in these experiments were the new university centres of Roskilde (1972)
and Ålborg (1974), which to a large extent had been established as part of the
revolt against traditional university methods (see e.g. Siggaard Jensen 2002).
The establishment of the new university at Odense and of Ålborg University
Centre can also be seen as a consequence of a new socio-economic recognition
that apart from knowledge creation, the universities had also a valuable con-

tribution to bring to regional economic development. In other words, the aim
was to ensure the development of the regions outside Copenhagen and Aar-
hus. Expansion of the university sector in terms of new universities and de-
partments has since the 70’s mainly taken place outside the two major cities.
However, the expansion of the university institutions in the late 60’s and early
70’s was far from able to cope with the high demand for university places. In
1960, 4% of each yearly cohort went to university while in 1970 the figure was
10%. This significant rise in student intakes led to total numbers of students
reaching the maximum of existing capacity. The lack of both universities and
24
of academic staff hence led to a flattening of the growth rate in the period
1970-80, and in 1977 a quota system for applications was introduced. These
quotas meant that, by the end of the 80’s, only 8% of each annual cohort was
being accepted at one or other of the universities. In the first years the quotas
applied only to the most popular subjects, but due to capacity problems and a
feared lack of employment opportunities for the many new graduates, during
the 80’s the entrance quotas were extended to practically all university
courses.
The quota systems, overwhelmingly dependent on grade averages achieved
in the upper secondary matriculation examination, meant that for the most
popular courses, such as medicine, psychology, political science and law, the
majority of those who had passed the matriculation examination were in real-
ity prevented from reading their preferred subject. University courses were
typically set at five years for a straightforward “Kandidat” (Masters level)
degree, but this guideline was regularly exceeded and the “eternal student”
was not an unknown phenomenon or problem.
During this period the democratic governance system remained largely unal-
tered until the coming into force of the new Universities Act of 1992, and in-
deed in part until the passing of the Universities Act of 2003. However, it
came to be recognised that the often slow and decentralised (democratic) de-

cision-making process could be a problem, especially in terms of adapting to
changes in the outside world. The universities could pursue their independ-
ent and insulated life, but adaptation to the rest of society – both regionally
and globally – was becoming more necessary as the service and knowledge-
based society developed, and as understandings of the universities’ role as a
more active and visible player in both production and dissemination of
knowledge gradually changed character during the 80’s.
A central element and subject of debate in connection with the Universities
Act of 1992 was hence the need to strengthen university management, with
the introduction of greater individual responsibility for financial management
at all levels of the university structure – Rector, Dean, Head of Institute. The
universities needed greater financial leeway and freedom to allocate state-
provided funds in response to independently selected priority areas. The
overall political aim was thus to secure greater efficiency in the universities
sector. As a result of the Universities Act of 1992 a number of instruments
were taken up in the late 90’s to give the universities a stronger management
capability. These included development contracts, entered into with the Min-
istry, laying down targets for ensuring renewal within research and teaching,
quality assurance of both research and research-based teaching and a higher
degree of self-governance. To give an example of the enhanced freedom and
economic self-determination, in 2001 the Technical University of Denmark
was given the status of a self-governing institution, with a Board predomi-
nantly consisting of external members and a Rector employed by the Board.
To highlight the universities’ new position and changed role in the Danish
knowledge system, the final aspect of the universities’ overall activities – the
teaching – was in 2001 transferred from the Ministry of Education to the
newly created Ministry for Science, Technology and Innovation. This measure
can be seen as the final stage of a process inaugurated in 1993, whereby first
25
research councils and then all research activities (1998) were gathered under a

single ministerial purview.
Meanwhile on the teaching side the university reforms involved an adapta-
tion to the British-American system, with the introduction of a new Bachelor-
Master-PhD graduation route (3 + 2 + 3). The overriding motive for the
teaching reform was the creation of a more flexible teaching system with op-
tions both for withdrawal after completion of the Bachelor degree and for a
possible subsequent change of direction. An additional benefit was the option
to include the growing international student exchange activity, hitherto im-
peded by incompatibility of education systems, in the system. Despite these
obvious advantages the change met with fierce opposition at most universi-
ties, and in 2003 it is still doubtful whether the withdrawal option and change
of direction is a real possibility in most university courses. At the same time,
the reforms dictated the introduction of a so-called “taximeter” system,
whereby the financing of individual universities and faculties was made de-
pendent on how many students were fed through the system. Funds follow
the student and universities’ finances have thus become dependent on how
many Bachelors, Masters and PhD’s are produced.
This change, combined with the higher subsidies in 1994-98 and the general
economic upturn, with good job opportunities for graduates in the burgeon-
ing knowledge services sector, led to a marked rise in student intakes and a
continuous growth in numbers of students and thus the production of Mas-
ters graduates throughout the 90’s. Hence the number of university students
rose by 20% from 1991 to 2001. This also means that around 17% of each an-
nual cohort of young people currently goes to university – a significant in-
crease over the 8% who did so in the late 80’s, see above.
In 2003 Denmark passed a new Universities Act. This legislation is a con-
tinuation of the basic principles of 1992, and can be interpreted as the final
reaction to the democratic decision-making processes of the 1970 Universities
Governance Act. The main aim of the new Universities Act is to preserve the
universities’ central place in the global knowledge society. The measures em-

ployed are clearly represented as a further strengthening of university man-
agement, with the election of a regular university board and employment of
Rectors, Deans and Heads of Institutes at all universities.
The main change compared to 1992 is that the universities will henceforth
take a far more active role in the knowledge dissemination process, which in
practice means closer cooperation with other institutions and enterprises in
the public and private sectors. This is stated explicitly in the Ministry of Sci-
ence Working Paper, which emphasises that
“The most essential change introduced by the new Universities Bill is that the
Bill extends and details the universities’ obligation to disseminate informa-
tion; this is known as the third pillar” (Ministry of Science, Technology and
Innovation, 2003).
Finland – increased focus on fields with growth prospects
Finland’s first university was founded in Turku in 1640. At the beginning of
the 19th century, it was moved to Helsinki, and it remained Finland’s only