ACTA UNIVERSITATIS UPSALIENSIS Uppsala Studies in Economic History, 81 Cover photograph by Magnus Eklund Magnus Eklund Adoption of the Innovation System Concept in Sweden Dissertation presented at Uppsala University to be publicly examined in Hörsal 2, Ekonomikum, Kyrkogårdsgatan 10, Uppsala, Thursday, September 27, 2007 at 10:15 for the degree of Doctor of Philosophy. The examination will be conducted in Swedish. Abstract Eklund, M. 2007. Adoption of the Innovation System Concept in Sweden. Acta Universitatis Upsaliensis. Uppsala Studies in Economic History 81. 158 pp. Uppsala. ISBN 978-91-554-6943-6. In 2001 Sweden founded the government agency of VINNOVA, named after the OECD-endorsed innovation system concept. Criticising the common assumption that countries are passive and uncritical recipients of the approaches promoted by the OECD, this dissertation tries to show that Swedish actors were in fact very active and strategic as they contributed to the national adoption of the concept. With inspiration from conceptual history and Quentin Skinner’s analysis of the rhetorical use of concepts, this study focuses on the research funding reform process between 1995 and 2001, investigating how actors trying to defend the contested institution of sectoral research used the innovation system concept to rhetorically legitimise their project. To compare these uses with earlier ways of discussing innovation in Sweden, the innovation debate that arose in relation to the industrial crises of the 1970s and 1990s has also been studied. It was found that the early Swedish innovation debate had paid little attention to the university sector. When Research 2000 in 1998 proposed that researcher-dominated research councils should be given control over sectoral research funding, a coalition in favour of industrially relevant research mobilised to protect its influence over research funding. The concept was now appropriated and used to rhetorically reframe the universities as part of a system with the main function of promoting innovations. By using the concept it was also possible to draw on the legitimacy offered by the OECD and science. Keywords: conceptual history, Quentin Skinner, innovation system concept, innovation thinking, VINNOVA, OECD, Sweden, research policy, research funding reform, Research 2000, sectoral research, university autonomy, industrial policy, industrial crisis Magnus Eklund, Department of Economic History, Box 513, Uppsala University, SE-75120 Uppsala, Sweden © Magnus Eklund 2007 ISSN 0346-6493 ISBN 978-91-554-6943-6 urn:nbn:se:uu:diva-8167 (http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-8167) Printed in Sweden by Elanders Gotab, Stockholm 2007 Distributor: Uppsala University Library, Box 510, SE-751 20 Uppsala www.uu.se, [email protected] Table of Contents List of Organisations.......................................................................................7 Acknowledgements.........................................................................................9 Chapter 1. Introduction.................................................................................11 Adopting the Innovation System Concept in Sweden .............................15 The Approach of Conceptual History......................................................17 Research Questions..................................................................................21 Contribution to Existing Literature..........................................................24 Use of Sources.........................................................................................27 Outline of the Study.................................................................................30 Chapter 2. Emergence of the Innovation System Concept ...........................31 Innovation Thinking Around 1960..........................................................31 Economic Crisis and New Innovation Thinking .....................................34 The OECD and the Emergence of the Innovation System Concept ........36 Chapter 3. Industrial Crises and the Early Swedish Innovation Debate .......44 Interpreting the End of the Golden Age ..................................................45 Bengt-Arne Vedin and the Entrepreneurial Inventor...............................47 Charles Edquist and the Social Science-Informed Innovation Policy .....57 Innovation Thinking as a Critique of the Welfare State ..........................66 Innovation Thinking within STU and NUTEK .......................................71 Managing Networks and Absorbing Generic Technology .................72 Co-Evolution Between Policy and Research......................................79 Conclusions .............................................................................................82 Chapter 4. Research Funding Reform and the Innovation System Concept .....85 Increased Polarisation in the Swedish Research Policy Debate ..............89 Reforming the Research Funding System ...............................................92 Sectoral Research Under Attack: Research and Money (1996)...............93 Reactions to Research and Money......................................................98 Sectoral Research Under Attack: Research 2000 (1998) ......................101 Reactions to Research 2000 .............................................................106 Saving Sectoral Research: The Third Round of Investigation ..............119 Reactions to Wigzell and Flodström ................................................125 Institutionalising a Two-Track System..................................................130 Conclusions ...........................................................................................134 Chapter 5. Conclusions...............................................................................137 References...................................................................................................147 List of Organisations Agency for Technical and Industrial Development NUTEK (Närings- och teknikutvecklingsverket) Board for Technical Development (Styrelsen för teknisk STU utveckling) Center for Business and Policy Studies (Studieförbundet SNS näringsliv och samhälle) Federation of Private Enterprises (Företagarnas FR riksorganisation) Federation of Swedish Industries (Sveriges industriförbund) SI Industrial Institute for Economic and Social Research IUI (Industrins utredningsinstitut) Industry Committee (Industrikommittén) Royal Academy of Engineering Sciences (Kungliga IVA ingenjörsvetenskapsakademien) Swedish Council for Research and Planning FRN (Forskningsrådsnämnden) Science Policy Advisory Board (Forskningsberedningen) Swedish Employers Confederation (Svenska SAF arbetsgivareföreningen) Swedish Governmental Agency for Innovation Systems VINNOVA (Verket för innovationssystem) Swedish Research Council (Vetenskapsrådet) VR Swedish Trade Union Confederation (Landsorganisationen) LO 7 Acknowledgements Writing a dissertation can be a hard and lonely task, but thankfully several persons have made my job easier through their competence and support. Because of them, I have written a much better book than I otherwise would have been able to, but all the remaining flaws are of course my own respon- sibility. Throughout my time as a Ph.D. student, Lars Magnusson served as my main supervisor. Always encouraging me to make bold choices, he has given me the freedom to try my own wings as a scholar. With his feeling for the pace and rhythm of a text, he was of great help in improving the read- ability of my study. Mats Larsson, my assistant supervisor during the first years, is a careful reader and the door to his office is always open to his stu- dents, whether they want to discuss research or just chat. I can only regret that I did not make use of his services as much as I should have. His succes- sor, Dan Bäcklund, was just the person I needed to help me finish my dis- sertation. Critical enough to come up with alternative interpretations to the ones I was trying to make, he was also constructive enough to help me find ways to refute those alternatives. Thoughtful and with a sharp mind, Dan has been an exciting discussion partner and not just a supervisor. Although not officially supervising me, Ylva Hasselberg took an interest in my work early on and has provided me with several helpful comments for which I am very grateful. Likewise, I want to thank Maths Isacson and Kersti Ullenhag for reading and constructively criticising my manuscript. Lynn Karlsson also deserves mentioning for proofreading and improving my English, as well as Malin Jonsson and Johanna Värlander for helping me with typing during the last crucial months, when I could not use a computer because of shoulder pains. Besides my colleagues at the Department of Economic History, several persons provided me with help. Being part of the Centre for Research on Innovation and Industrial Dynamics (CIND), I have been fortunate enough to participate in a multidisciplinary environment involving economic geog- raphers and business economists. Funding my research, CIND also func- tioned as an intellectually dynamic setting where I could try out my ideas. Anders Malmberg, director of the Centre, was always ready to read my manuscripts or offer advice, even during periods of heavy workload. When I on two occasions presented versions of this study at my department’s semi- nar, Ulf Sandström and Bo Persson served as external commentators. Their close reading and vast knowledge about Swedish research policy greatly 9 helped to improve