Working paper 5: Demand for revision of framework conditions
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Working paper 5: Demand for
revision of framework
conditions
Demand for revision of framework conditions 1Content
Preface.................................................................................................................................................................. 3
Introduction ....................................................................................................................................................... 4
1. Labour market framework conditions ......................................................................................... 7
1.1 Many rules and regulations create barriers in the labour market ................... 7
1.2 Framework conditions on the labour market have a negative effect
on growth opportunities in the Nordic countries..................................................... 9
1.3 Need to optimize framework conditions ....................................................................11
2. Work well-being conditions ............................................................................................................13
2.1 Overall well functioning regulation ...............................................................................13
2.2 Psychosocial work well-being should be on the agenda .....................................14
2.3 Overall administrative duties seen as a barrier ......................................................15
2.4 Need for simplification of rules and regulation regarding work
well-being...................................................................................................................................16
3. Educational and research framework conditions.................................................................19
3.1 Educational and research framework conditions creates barriers
for many companies ..............................................................................................................19
3.2 Newly educated candidates lack “basic” skills necessary to work in
an SME .........................................................................................................................................21
3.3 Need to encourage cooperation on research and development ......................24
3.4 Effects of state sponsored initiatives are unclear ...................................................25
4. Industrial policy framework conditions ....................................................................................28
4.1 Overall well-functioning policy, administrative duties pointed out
as a challenge............................................................................................................................28
4.2 Unclear effects of participating in state sponsored initiatives .........................30
4.3 Membership of clusters varies between the Nordic countries – but
is valued a critical success factor ....................................................................................32
5. Appendix: Methodology ....................................................................................................................36
2 Demand for revision of framework conditionsPreface
This paper is written as a part of the project “Nordic growth sectors”
which is a project commissioned by the Nordic Council of Ministers. The
project's purpose is to provide new knowledge on how the Nordic coun-
tries can support (and benefit from) new high growth areas through
improving framework conditions in the labour market, educa-
tion/research and industrial policy. The project aims at stimulating
knowledge sharing between the Nordic countries. In addition, the pro-
ject covers the field of nano technology as a special case.
The project is organised as a consortium of partners from all the Nordic
countries. The partners are: Damvad, Oslo Economics, Jari Kuusisto and
Martin Meyer (University of Vaasa, SC-Research), The Norwegian Work
Research Institute, Gunnel Hensing (University of Gothenburg), Per
Kongshøj Madsen (prof., Aalborg University) and SINTEF (The Founda-
tion for Scientific and Industrial Research at the Norwegian Institute of
Technology).
As one of the outcomes of the project, five working papers are produced:
- Working paper 1: Framework conditions for high-growth
industries in the Nordic countries
- Working paper 2: The competitive job creators
- Working paper 3: Demand and supply of labour in the
competitive job creators
- Working paper 4: Work well-being in the competitive job
creators
- Working paper 5: Demand for revision of framework conditions
This paper (working paper 5) looks into companies’ and organisations’
view on the framework conditions for policies of education and re-
search, labour market, work well-being and industrial policy.
The paper is organized as follows; the first pages provide a short intro-
duction to the paper as well as a summary of its main findings. Chapter 1
investigates the labour market framework conditions, while chapter 2
takes a closer look at policy aimed at ensuring work well-being. Chapter
3 examines the educational and research framework conditions and
chapter 4 looks at industrial policy. Where relevant, cases from the nano
technology sector will be provided.
Demand for revision of framework conditions 3Introduction A key element in supporting growth companies in the Nordic econo- mies is to provide appropriate framework conditions. In the past 15 years, the Nordic countries have had a low productivity performance, which means that it becomes increasingly difficult to sur- vive in international competition and to finance future prosperity1. The industrial structure in the Nordic countries has historically been chang- ing over time replacing existing growth industries by new ones. Such shifts will continuously impact the framework conditions providing the best possible foundation for growth. The challenges that the Nordic countries are faced with, implies that it may be necessary to continuous- ly ensure the future framework conditions, or simply to adapt them to today's needs. This paper identifies challenges and barriers, as experienced by compa- nies, policy makers and organisations, related to the four policy areas in focus for this project. Thus, the paper presents the specific demand com- ing from companies and organisations when interviewed about the framework conditions which companies in the Nordic countries face. This does not necessarily mean that nothing is done already on these areas or that the problems and solutions pointed at in the paper can be generalised to all companies and countries. The paper concludes the following: Labour market policy There seems to be several barriers in the labour market in the Nordic countries having a negative effect on growth. The level of wages stands out as the largest barrier uncovered in the survey. Furthermore, the issue of dismissal protection played a rather large role in the interviews. In general there was support for a rather low level of protection, but also awareness of the dilemmas, when it comes to protecting employees with a higher risk of leaving employ- ment, e.g. the older workers. ────────────────────────── 1 This is shown in for example OECD Economic Outlook and OECD Economic Surveys, www.oecd.com 4 Demand for revision of framework conditions
Regulation of shift work and working hours is regarded to be outdat-
ed according to some of the interviewees. They argue for an approach
more in line with the need of a modern workplace.
There also seems to be a need to optimise the labour market framework
conditions by reducing the administrative burdens of the companies.
The need to reduce the restrictions and the administrative costs on the
recruitment of foreign workers is also emphasized.
Finally, dismissal protection is assessed as a mid-size barrier by all firms
– and with a tendency for non-growth companies to be the most con-
cerned.
Regulation of work well-being
According to many interviewed companies and organisations, present
laws and regulations regarding work environment and work well-being
are relevant and up to date, and the overall regulation is well func-
tioning. However, even though the rules and regulation are targeting
the right areas and protecting employees in the right way, companies
find that the overall amount of administrative duties in connection with
work well-being regulation is a barrier to their further growth.
Furthermore, interviewees argue that rules and regulations have fo-
cused mainly on worker safety, the physical environment and health and
that there is a need to develop the psychosocial work environment poli-
cy framework. Thus, there seems to be a need to focus more on poli-
cy concerning the psychosocial work environment related to e.g.
stress on the work place.
Easier rules and regulations and information that are easy to access
and understand are wanted by many companies. According to the
interviews with companies, the rationale behind some of the rules and
regulation is not possible to understand which makes it demanding to
fulfill the obligations.
Education and research
The results from the survey indicate that companies across the Nordic
countries in general are not positive towards educational and re-
search policy. While not on average being “very negative” the compa-
nies in all countries, whether growth company or not, perceive the edu-
cational and research policy to have some degree of acting as a barrier in
them. Furthermore, some interviewed companies find that newly edu-
cated candidates from university are lacking the “basic” skills need-
ed to work in an SME.
Demand for revision of framework conditions 5Moreover, interviewees find that there is a general need in all the Nordic countries, to encourage more cooperation between compa- nies and research institutions. Industrial policy Companies across all countries consider the overall amount of admin- istrative duties as one of the biggest challenges regarding industrial policy, and do not point to specific barriers related to industrial policy in the Nordic countries. Most companies noted that they have been able to grow and develop by following the current rules and regulations. Methodology The paper is based on a series of interviews with companies, organisa- tions and policy makers in each of the five Nordic countries. In addition to this, two surveys - one of companies and one of employees in growth sectors – have been conducted in Sweden, Norway, Denmark and Fin- land.2 Furthermore, a register based analysis of the competitive job crea- tors has been performed. The appendix paper presents the methodology used in more detail. Glossary In the following, the paper operates with a central definition: Growth companies The term “growth companies” is used when reporting results from the survey and interviews. The growth companies are found through the survey performed among companies in the Nordic countries, and segmented according to sector, size and geography based on the register based analysis performed. This is done to be able to target the areas with a high amount of growth com- panies. Companies having experienced a growth in the number of em- ployees in their country during the last three years are defined as growth companies. Furthermore, the interviewed companies are all se- lected on the basis of their growth, hence all being growth companies. ────────────────────────── 2A growth sector is defined by have a density of competitive job creators higher than 20 per cent within a certain geographical area, a certain industrial sector and a certain company size. 6 Demand for revision of framework conditions
1. Labour market framework
conditions
This chapter analyses the labour market framework conditions which
growth companies face, given changes in the underlying structures on
the labour market and the special needs which growth companies may
have.
These changes in the underlying structures of the labour market consti-
tute some of the most important challenges to growth companies.
Politicians can try to either counterbalance, change, or exploit these
changes to create better framework conditions for the growth compa-
nies.
1.1 Many rules and regulations create barriers in the
labour market
Several of the companies and organisations interviewed pointed to
challenges stemming from many rules and regulations concerning vari-
ous aspects of the labour market, such as labour law, shift work, work
environment etc.
Interviewees argue that there is an example regarding regulation of shift
work and working hours. Current regulation of shift work and working
hours is developed based on the conditions in the traditional industrial
sectors. Today’s service providers, and especially those within the health
and care sector are of the opinion that these regulations are out of date
and need a more “practical” design in order to fit the challenges on to-
day’s labour market.
In some interview cases, firms had positive remarks stating that public
authorities have improved in servicing the firms. An example was with
respect to pension and sickness schemes and transfer of payment. The
company found that the regulations were previously more time consum-
ing and difficult to handle, but have now been improved to be more
manageable and less time-consuming.
Demand for revision of framework conditions 7Both interviewed companies and organisations mention the difficulties concerning international recruitment of workers, especially from out- side the European Union. They argue that there are barriers with respect to recruiting and maintaining employees from abroad. One field for im- provement suggested by the interviewees is creating a better system to recognise formal qualifications obtained abroad. Some companies in the interviews find the system designed for larger companies having the sufficient infrastructure and resources. Most respondents stressed the importance of further education and training for all educational levels. Furthermore, a need for a more flexi- ble and open approach to education as part of an Active Labour Market Policy (ALMP)3 was mentioned. As part of the efforts to combat youth unemployment and improve the vocational skills of the young, the use of dual training systems4 was mentioned as an interesting strategy. Many respondents among the organisations commented on the role of job security and dismissal protection, which is an area where some dif- ferences are found between the Nordic countries. In general there was support for a rather low level of protection, but also awareness of the dilemmas, when it comes to protecting employees with a higher risk of leaving employment, e.g. the older workers. However, too strict regula- tion of dismissals reduces mobility and creates a dual labour market, which also hampers employment of young persons and could be a factor creating more youth unemployment. The impression from the inter- views is that there is a support for a low level of job dismissal protection combined with a reasonable social security system protecting the affect- ed individual. Finally, some employer’s organisations and companies also stressed the lack of economic incentives to work, due both to high marginal tax rates and unemployment benefits. ────────────────────────── 3 Active labour market policies (ALMPs) are government programmes that intervene in the labour market to help the unemployed find work. Many of these programmes grew out of earlier public works projects de- signed to combat widespread unemployment in the developed world during the interwar period. 4 A dual training system is a training modality that combines theoretical and practical training. It is called dual training because learning takes place alternately in two venues: the school or training center and the company. 8 Demand for revision of framework conditions
1.2 Framework conditions on the labour market have
a negative effect on growth opportunities in the
Nordic countries
A number of the observations mentioned above are also found in the
data from the survey presented in figure 1 and 2.
A first observation is that almost all of the framework conditions in
question are assessed as having more or less negative effects on the
growth opportunities of the companies, both for growth and non-growth
firms. Also, there are many similarities across the four Nordic countries,
when it comes to the assessment of the barriers for both growth compa-
nies and non-growth companies.
The high level of wages stands out as the largest barrier uncovered in
the survey. Companies in Finland value this to be the largest barrier
among all the Nordic countries, where the Swedish companies on aver-
age value it to be a smaller barrier.
Looking closer at the specific barriers, the regulations of special rights of
female employees (figure 1), anti-discrimination legislation (figure 2)
and early retirement schemes (figure 2) are all conceived as minor bar-
riers in all the Nordic countries. An interesting exception is non-growth
Swedish firms finding the special rights of female employees as a major
barrier (figure 1). Finnish companies, on the other hand, find regulations
of female rights to be an asset for growth.
The regulation of sick leave and related benefits is seen as a relatively
large barrier by both growth and non-growth companies in the four
countries. This is confirmed by other analyses where e.g. newly estab-
lished Danish companies find that administration of sick leave is a barri-
er to growth.5
As mentioned above, the issue of dismissal protection played a rather
large role in the interviews. In the data from the survey protection of
employees against dismissals is assessed as a mid-size barrier by all
companies. There is a tendency for non-growth companies to be the
most concerned. In line with the usual ranking6 of the Nordic countries
with respect to job security, Swedish firms express the largest concerns
──────────────────────────
5 ”Nem vækst – om nye og mindre virksomheders møde med det offentlige”, Økonomi- og Erhvervsministeriet,
2010
6 Madsen, PK. & Berglund, T. (2010). 'Nordic labour market and welfare systems from a flexicurity perspec-
tive.' in Berglund, T. (red.), Labour Market Mobility in Nordic Welfare States København: Nordisk minis-
terråd., s. 37-60
Demand for revision of framework conditions 9for the level of dismissal protection. Other analyses point at the same
conclusion and find that the Swedish companies consider labour market
regulations as their largest barrier.7
Administrative duties are also – in line with the interview data – given a
rather large role as a barrier in the survey by both growth and non-
growth companies, especially in Sweden and Denmark.
Figure 1: Companies’ perception of challenges related to labour market frame-
work conditions, average score for challenges
2
1
0
Sweden growth company
Norway non-growth company
Finland growth company
Norway growth company
Denmark growth company
Denmark non-growth company
Finland non-growth compnay
Sweden non-growth company
-1
-2
-3
-4
-5
The level of wages and related costs (pensions etc.)
The regulation of working hours and shift work
The regulation of sick leave and related benefits
The regulation of worker immigration (access to foreign labour)
Regulation regarding special rights of female employees (e.g.
maternity leave)
Note: Question: What is your perception on the following framework conditions related to labour market
policy (and collective agreements)? Please answer on a scale from ÷5 to +5. A negative score implies that the
framework condition in question is assessed as a barrier to the growth of the company.
──────────────────────────
7 ”Småföretagens regelbörda och Irritationstoppen 2009” Företagarna
10 Demand for revision of framework conditionsFigure 2: Companies’ perception of challenges related to labour market frame-
work conditions, average score for challenges
2
1
0
Sweden growth company
Norway non-growth
Denmark non-growth
Finland growth company
Denmark growth
Norway growth company
Finland non-growth
Sweden non-growth
company
-1
compnay
company
company
company
-2
-3
-4
-5
Anti-discrimination legislation (age, sex, ethnicity etc.)
Early retirement schemes.
The overall amount of administrative duties related to labour
issues (Licences, social contributions etc.)
Protection of employees against dismissals (e.g. length of
notice periods)
Note: Question: What is your perception on the following framework conditions related to labour market
policy (and collective agreements)? Please answer on a scale from ÷5 to +5. A negative score implies that the
framework condition in question is assessed as a barrier to the growth of the company.
1.3 Need to optimize framework conditions
The main impression from both the interviews and the survey is the
need to focus on labour market framework conditions with respect to
the administrative burdens of the companies and the restrictions on the
recruitment of foreign workers. The level of labour costs is a major bar-
rier for further growth for many companies reported in interviews and
surveys, but of course also a significant success for the population wel-
fare.
A suggestion from the interviews was to create easier access to infor-
mation about regulations, e.g. a hotline for employers. Especially, more
information should be targeted to SME’s, who are often not aware of the
possibilities of e.g. receiving economic support to further education of
Demand for revision of framework conditions 11the employees. Furthermore it was suggested that authorities should focus on the administrative costs put on the employers. On-going moni- toring hereof could be recommended. Finally the issue of the framework conditions for improving the skills of the workforce was mentioned frequently in the interviews concerning labour market framework conditions. This topic is covered in more de- tail in chapter 3 below. 12 Demand for revision of framework conditions
2. Work well-being conditions
This chapter focuses on working environment and work well-being and
the roles these play as obstacles and/or facilitators of growth.
2.1 Overall well functioning regulation
Most interviewed companies are of the opinion that present laws and
regulations regarding work environment and work well-being are rele-
vant and up-to-date.
Preventive measures are considered to be important and the regulation
of health and safety has broad support. Examples mentioned in the in-
terviews are regulation for worker protection and shielding preventing
accidents. The same goes for the regulation of limits for chemical expo-
sure for workers. In Norway the offshore industry has been in front with
a high focus on health and safety at work (HSE). This focus is also
adapted by many on shore companies. A systematic approach is men-
tioned as an appropriate and relevant way to work with work environ-
ment to promote work well-being.
It was mentioned in the interviews that some of the current rules and
regulations regarding work well-being can be conceived to be designed
and developed to fit larger companies rather than smaller companies.
Furthermore, some consider the system a bit stiff and difficult to under-
stand and follow at first, but that experience with the system makes it
easier.
Interviewed organizations highlight that good work environment and
work well-being can be an important issue for competitive means. For
example, having a good work environment can contribute to attracting
the best-skilled workers.
Even though the main impression from the interviews is that regulation
of work well-being is considered to be well functioning, there are room
for improvement as discussed in the next chapters.
Demand for revision of framework conditions 13Case: Nanotechnology and the work well-being conditions
The interviewees with nano companies identified two challenges that
are specific for nanotechnology and the work well-being. These chal-
lenges are related to the limited knowledge in this developing field.
Currently there are two challenges. Firstly, the need to do research on
chemical substances, nanoparticles and materials to investigate if they
pose threats to humans or to the environment. This should include long
term studies. Subsequently laws, standards and regulations must be
updated if necessary. Secondly, there is a need to disseminate new
knowledge and to ensure that the industry is following the regulations.
In particular it may be challenging for a small company to comply with
the legal obligation to inform the workers about risks, when new
knowledge is constantly developing. However, similar challenges can be
found in most industries and are not specific to nanotechnology. As one
interviewee said: "One should investigate and take precautionary
measures regarding all new technology, and not look at nanotechnology
as being very special".
2.2 Psychosocial work well-being should be on the
agenda
As mentioned in working paper 4, stress is conceived as a problem
among employees in the Nordic countries. In relation to this it was men-
tioned in the interviews that rules and regulations have focused mainly
on worker safety and the physical environment and health and that
there is a need to develop the psychosocial work environment policy
framework.
An on-going reduction of traditional physical industries and increase in
knowledge industries in the Nordic countries supports the need to focus
on stress and other psychosocial factors.
It was furthermore mentioned in the interviews that even though there
is a general need for regulation of the psychosocial environment, it is
difficult to handle these issues in law regulation. For example, it was
mentioned that it is a challenge to evaluate the case and effect of stress
problems on the work place. In the interviews it was, moreover, men-
tioned that changes has to be done in the company, by for instance
changing company culture, designing incentive structures to improve
working environment, and demonstrate that better work environment
give better results.
14 Demand for revision of framework conditionsOrganisations were overall satisfied with rules and regulations but ar-
gue for the need of better policy framework regarding psychosocial
health. Furthermore, organisations argue that a mixture between regula-
tions, counselling and voluntary agreements is to be preferred. Authori-
ties have an ambition to simplify rules and provide information that is
clear and easy to understand.
2.3 Overall administrative duties seen as a barrier
Figure 3 below, presents the results from the survey regarding
framework conditions concerning work well-being.
The companies were asked to rate several regulations of work well-
being on a scale from -5 to 5. A negative score implies that the frame-
work condition in question is assessed as a barrier to the growth of the
company.
The overall amount of regulations seems to be the biggest challenge in
all countries, and regardless of growth and non-growth company. Danish
companies have the lowest score among the Nordic countries. Finland
seems to differ positively, where the perception is less negative com-
pared to the other Nordic countries. Norway and Sweden is close behind
Denmark. This finding has been confirmed by other studies, where com-
panies indicate that they spent a significant part of their time on admin-
istrative burdens rather than on developing their business. Danish com-
panies especially point to administrative burdens when filling out work
well-being plans and strategies.8
Regulation of safety and health is a regulation actually scoring positively
in several countries and overall, safety regulations have the highest
score in all the Nordic countries. The regulations scores positively in
both Sweden and Finland and in Norway and Denmark the regulation is
conceived to be the least negative, almost neutral. There seems to be
insignificant differences in the results for growth and non-growth com-
panies.
Another interesting finding is that regulation of standards for work en-
vironment is assessed as a positive regulation in both Sweden and Fin-
land. Finnish non-growth companies also find regulation of industrial
democracy to be a positive regulation. Danish companies rate the overall
amount of administrative duties related to occupational health the low-
──────────────────────────
8 “Tidskrævende indberetninger koster vækst i virksomhederne”, DI Indsigt, Januar 2012
Demand for revision of framework conditions 15est among all the Nordic countries, closely followed by Norwegian com-
panies.
Figure 3: Companies’ perception of challenges related to framework conditions
regulating work well-being, average score for challenges; by country
2
1
0
Norway growth
Sweden growth
Norway non-growth
Denmark non-growth
Finland growth
Denmark growth
Finland non-growth
Sweden non-growth
company
company
company
company
compnay
company
company
company
-1
-2
-3
Regulations of standards for health and safety
Regulations of standards for work environment
Regulation of industrial democracy
Policy to ensure worker well being for immigrant
workers
The overall amount of administrative duties related
to occupational health
Note: Question: What is your perception on the following framework conditions related to work well-being)?
Please answer on a scale from ÷5 to +5. A negative score implies that the framework condition in question is
assessed as a barrier to the growth of the company.
2.4 Need for simplification of rules and regulation
regarding work well-being
With regards to the conditions of work well-being, some changes
were suggested by the interviewed actors. First of all, easier rules and
regulations and information that are easy to access and understand are
wanted by many companies. Furthermore, some companies suggest
having a service that could be contacted by the companies where ques-
tions regarding rules and regulations can be asked and where relevant
answers can be obtained. Another suggestion was tax deduction
16 Demand for revision of framework conditionsschemes that promote interventions to promote well-being. Finally, it
has been suggested to establish better ways of measuring and character-
ising employers with high standards for work environment, which could
be an incitement to work with occupational health promotion, and place
these issues at the strategic level of the companies.
Critical voices among the interviewed actors argue that rules sometimes
are difficult to understand, concerning both why they are there but also
regarding how to handle the rules. Sometimes it is not possible to un-
derstand the rationale behind rules and in those cases it is demanding to
fulfil the obligations. Reporting obligations in relation to sickness ab-
sence are considered bureaucratic and time consuming by interviewed
companies.
One example from the interviews with organisations is situations where
regulation and the distribution of responsibility for the workers welfare
become unclear. A sector where there is extensive use of subcontractors
was particularly mentioned. This is especially noticeable in the construc-
tion sector but also in service businesses where use of temporarily em-
ployed personnel organized by recruitment companies is commonplace.
It was mentioned by several interviewees that most of the laws and reg-
ulation in the Nordic countries is EU regulation. There is a constant need
to simplify and harmonise regulations nationally and within the EU and
there is extensive work being done to do so.
In summary, no major challenges or barriers were described concerning
the work well-being framework. Present rules and regulations were
considered relevant and well-functioning to support a company’s sys-
tematic efforts with work well-being. Moreover, the rationale behind
rules, in particular those considered complex and time consuming, need
to be explained which will increase the motivation to adhere. A general
simplification of rules is another important area for future development.
Demand for revision of framework conditions 17Case: Nanotechnology and the work well-being conditions The interviewees identified two challenges that are specific for nano- technology and the work well-being. These challenges are related to the limited knowledge in this developing field. Currently there are two chal- lenges. Firstly, the need to do research on chemical substances, nano- particles and materials to investigate if they pose threats to humans or to the environment. This should include long term studies. Subsequent- ly laws, standards and regulations must be updated if necessary. Sec- ondly, there is a need to disseminate new knowledge and to ensure that the industry is following the regulations. In particular it may be chal- lenging for a small company to comply with the legal obligation to in- form the workers about risks, when new knowledge is constantly de- veloping. However, similar challenges can be found in most industries and are not specific to nanotechnology. As one interviewee said: "One should investigate and take precautionary measures regarding all new technology, and not look at nanotechnology as being very special". 18 Demand for revision of framework conditions
3. Educational and research
framework conditions
This chapter touches upon the roles played by the educational and
research policy framework conditions as experienced by the growth
companies and organisations in the Nordic countries. Specifically, the
chapter addresses the identified main barriers that these companies
experience and their view on the framework conditions established to
support their growth.
3.1 Educational and research framework conditions
creates barriers for many companies
Initially, the following figure presents the companies’ answers re-
garding their experience with the current political framework conditions
in their country with regards to education and research policy. Specifi-
cally, the companies are asked to evaluate the following factors:
(Lack of) Access to public research
(Lack of) Access to public funding for research projects or other
collaboration with universities and/or research institutions
The educational system’s ability to supply candidates with rele-
vant skills and competencies
The educational system’s ability to supply candidates with rele-
vant practical experience (e.g. through internships, project col-
laboration etc.)
The companies are asked to evaluate whether they have a positive im-
pression of the framework condition (+5 means that the company is
very positive and consider the framework condition to facilitate the
growth opportunities of the company) or a negative impression (÷5
means that the company is very negative and consider the framework
condition to be a barrier to the growth opportunities of the company).
As can be seen in the figure, the companies across the Nordic countries
in general are not positive towards the four factors. While not on aver-
age being “very negative” the companies in all countries, whether
growth company or not, perceive the four factors as to have some degree
of acting as a barrier in them.
Demand for revision of framework conditions 19Focusing on the Danish companies the figure shows that these experi- ence the four factors as a barrier to a slightly lesser extent than their Finnish and Norwegian counterparts. The growth companies evaluate access to public funding for research projects, access to public research as well as the educational system’s ability to supply candidates with relevant practical experience as the largest barriers to their growth, while the non-growth companies find that the educational system’s abil- ity to supply candidates with relevant practical experience is the largest barrier. Looking at the Finnish companies, it can be seen that these particularly indicate access to public funding for research projects as being a barrier regardless of whether the company is a growth company or not. The figure also shows that while the growth companies find that the educa- tional system’s ability to supply candidates with relevant practical expe- rience is a barrier, the non-growth companies find that there is a lack of access to public research for the company to use in its’ business devel- opment. In Norway, the growth companies find all four factors as being close to equally important barriers. The largest difference between the growth companies and the non-growth companies is that the non-growth com- panies to a lesser degree find that access to public funding for research projects is a barrier. The Swedish companies, whether being a growth company or not, find that the educational system’s ability to supply candidates with relevant practical experience is the biggest barrier. Moreover, the figure shows that the Swedish growth companies find access to public funding for research projects and access to public research as larger barriers than their non-growth counterparts. 20 Demand for revision of framework conditions
Figure 4: Companies’ perception of challenges related to framework conditions
regarding the national research and education policy, average score.
1
0
Norway growth
growth company
Norway non-growth
Sweden growth
Finland growth
Denmark growth
Finland non-growth
Sweden non-growth
Denmark non-
company
company
company
company
compnay
company
company
-1
-2
-3
(Lack of) Access to public research
(Lack of) Access to public funding for research projects or other
collaboration with universities and/or research institutions
The educational system’s ability to supply candidates with relevant
skills and competencies
The educational system’s ability to supply candidates with relevant
practical experience (e.g. through internships, project collaboration
etc.)
Note: Question: What is your perception on the following framework conditions related to education and
research policy? Please answer on a scale from ÷5 to +5. A negative score implies that the framework condi-
tion in question is assessed as a barrier to the growth of the company.
3.2 Newly educated candidates lack “basic” skills
necessary to work in an SME
Interviewed Danish growth companies find that they are most of the
time able to find candidates with the right skills and competences. How-
ever, the interviewed companies point out that candidates coming di-
rectly from universities are often naturally lacking practical working
experience and that they need to spend resources on bringing them up-
to-speed. The companies take different approaches to improve this and
one company founded their own school where they teach the newly
hired candidates the skills that they find the company needs. Another
company gives their employees two days per month where they are free
to spend time on what they want and provide them each with a budget.
The only criteria is that the time has to be spent on activities with a
Demand for revision of framework conditions 21learning perspective and that they have to take turns in giving lectures to their co-workers on what they spent their time on. Finally, other companies are providing their employees with on-going education, either through the company’s own courses, or through educa- tional institutions. Furthermore, interviewed SMEs find that the educa- tional institutions often educate the candidates to being able to work in larger organizations and companies while they will often not be educat- ed and prepared for the tasks which an SME face. In SMEs the challenge is that the employees will often be asked to perform a wide range of tasks, many of which will most likely not be within the specific educa- tional area of their studies at university and tasks which they do not have practical experience with. Interviews with Danish government and other organisations confirm the findings from interviews with companies. The interviewees from the organisations find that a potential barrier for growth is that there exists a lack of skilled workers and an oversupply of unskilled, and that there is a need to increase the qualifications and further educate these. This has to be done putting a focus and an emphasis on the needs of the compa- nies. Another point made by the interviewees is that they see a growing demand among Danish companies for highly specialised experts within certain skill areas and mention engineers within e.g. IT or electrical en- gineering as examples. Moreover, and with regards to education, the interviewees find that many Danish SMEs are facing a barrier concern- ing the skills of the employees that they hire. Thus, SMEs often face chal- lenges with “basic” issues concerning running the company such as ac- counting, strategy and marketing. They find that the candidates coming directly from university are either not expecting or interested in per- forming basic tasks or that they are not able to perform the tasks at all. The interviewees find that a solution to this challenge can be to increase the amount of practical experience the students receive at university, e.g. by making it easier to take internships or by making these mandato- ry. However, this has to happen without lowering the academic level of the education. Icelandic companies and organisations argue that the demographic limi- tation at times causes general problems for companies in finding espe- cially skilled employees, such as engineers, IT-programmers, candidates in natural sciences, etc. One way that companies try to overcome this barrier is by cooperating with universities on specialised courses rele- vant for the companies’ employees. Finnish interviewees (companies as well as organizations) indicate the necessity to change the focus at the educational institutions and provide the candidates with a higher degree of entrepreneurial skills as well as 22 Demand for revision of framework conditions
skills within innovation and creativity in general. Moreover, the Finnish
interviewees find that there could be a stronger focus on multidiscipli-
nary in the provided educations and suggest combining educational
skills to provide the market with stronger candidates. Examples given
are combinations of ICT skills and client management skills as well as
ICT skills combined with economic/business economic skills. In exten-
sion to this interviewees stress the importance of bringing businesses
and universities closer together in developing and improving the educa-
tional degrees in order to satisfy the needs of companies. Specialised
courses developed in cooperation between companies and universities
are suggestions to an outcome of this.
Interviews with Norwegian candidates have shown that there is and will
continue to be a lack of certain educational groups and mention in par-
ticular employees within the health sector (especially nurses), engi-
neers, teachers as well as skilled workers in general. A significant chal-
lenge for Norway is that the country is geographically widespread which
causes a lack of certain skill groups in especially the more remote areas.
The interviewees indicate that this development has led to artificially
high wages acting as a barrier for growth among SMEs. As a solution to
these challenges the interviewees point at easing the barriers for hiring
foreign employees and being more open in hiring candidates with diver-
sified backgrounds (e.g. hiring candidates educated in arts to perform
administrative duties). Like in Denmark, SMEs in Norway are also lack-
ing candidates with the ability to perform the “basic” tasks a smaller
company is typically facing.
Among the interviewed Swedish companies and organisations, emphasis
is in general put on the need for the educational system to match the
demand of skills and competences from the private sector. Focus here is
partly on ensuring relevant educational profiles, but, as it was the case in
Denmark and Norway, many of the interviewed Swedish actors also
stress the need of preparing students for the actual work assignments,
they will be asked to carry out when graduated. Like in the other coun-
tries, this is considered particularly relevant with regards to employ-
ment in SMEs.
Among the Swedish organisations interviewed, many point to entrepre-
neurship as an important focal area for the educational system in Swe-
den. In addition to an increased focus on internships and courses in en-
trepreneurship, business administration etc., the entrepreneurial capa-
bilities of Swedish students (also Ph.D.-students) would in general,
according to the interviewees, benefit from a stronger mode of collabo-
ration between companies and the educational institutions. These find-
ings are to a high degree similar to what the Finnish interviewees have
suggested.
Demand for revision of framework conditions 233.3 Need to encourage cooperation on research and
development
This section looks at challenges and barriers to research and coopera-
tion between companies and universities/research institutions as expe-
rienced by interviewed organisations.
The interviewed Danish organisations find that cooperation on research,
development and innovation between universities/research institutions
and companies is important and should be encouraged. However, they
also indicate that such cooperation might be more relevant and suitable
in certain sectors e.g. life sciences. Interviewees find a need for engaging
more SMEs in research and development in cooperation with universi-
ties/research institutions and in connection with this focus on applica-
ble research outcomes.
In Iceland, interviewed organisations find that there is a general lack of
funding and support for research, development and innovation projects
and argue that an increased focus on cooperation between business and
universities/research institutions is important. One way to do this be-
sides increased funding, interviewees argue, is to change the incentive
structure of universities and researchers so that it pays off to initiate
cooperation.
The Finnish interviewees in general find that there is a need to increase
the usability of the research that is done so that it is more directly appli-
cable in businesses. This can be done by emphasizing on a closer rela-
tionship between researchers and companies as well as by encouraging
more cooperation between these actors. Furthermore, it is suggested
that the topics of research could be changed from being only technology
focused to having a stronger focus on business development issues for
growing companies.
The interviewed Norwegian and Swedish organisations stress the im-
portance of strengthening strategic research, thus making sure that pub-
lic funding for research is applied where the strongest potentials are
identified. The interviewees point at the need to be risk-taking and se-
lect the areas where it is believed that there is a strong position or
knowledge base that could form a basis for high-quality research. Final-
ly, Norwegian interviewees indicate a need for Norwegian universities
to compete more with international universities and not only with other
Norwegian universities, in order to increase quality.
24 Demand for revision of framework conditions3.4 Effects of state sponsored initiatives are unclear
One way of bringing universities and companies closer together is to
create initiatives where companies are encouraged to engage with uni-
versities/research institutions in research, development or innovation
projects. Examples of these could be the Norwegian program for re-
search in gene technology, FUGE9, or the Danish program for develop-
ment of new climate-friendly energy technology, EUDP10. The following
figure shows results from the survey conducted among companies in the
Nordic countries and focuses on whether the companies took part in
such state sponsored initiatives related to science and education.
The figure shows that most of the companies in the survey have not tak-
en part in state sponsored initiatives, and for Denmark, Norway and
Sweden the share is 70 pct. or above meaning that around 30 pct. or less
have participated. However, only 41 pct. of the Finnish companies have
not taken part in public sponsored programmes meaning that around 59
pct. did take part in programmes supporting science and education. As
such, Finland stands out, as more Finnish companies participated in
programmes.
Figure 5: Companies participating in state sponsored initiatives on education
and research
100%
74% 77%
80% 70%
59%
60%
41%
40% 30%
26% 23%
20%
0%
Denmark Finland Norway Sweden
No, the company has not participated in any state sponsored initiative
Yes, the company has participated in state sponsored initiatives
Note: Question: Has your company participated in any state sponsored initiatives related to science and
education in recent years, and what has been the effect?
──────────────────────────
9
http://www.forskningsradet.no/servlet/Satellite?c=Page&pagename=fuge%2FHovedsidemal&cid=1226993
493126
10 http://www.ens.dk/da-DK/NyTeknologi/om-eudp/Sider/Forside.aspx
Demand for revision of framework conditions 25Looking at the participating companies across countries it can be seen
that there is no larger variance to be seen when focusing on the effect of
these programmes and around 60 pct. of the participating companies in
each country find that the effect from participation was positive. The
Finnish companies are, however, slightly more positive than their Nordic
counterparts and to a lesser degree uncertain about the effects from
participation (15 pct. indicate this) when comparing to companies in the
other Nordic countries.
From a theoretical viewpoint it could be expected that a large share of
companies self-reporting on the effects of participating in programs
where they are given funding would indicate a positive effect. In this
perspective, it may be seen as a surprisingly substantial share of the
companies in Denmark, Norway and Sweden reporting that they either
experienced no effects or that they are uncertain about the effects. Obvi-
ously, some companies may not yet have experienced the entire effect.
Given the theoretical expectation that almost all companies should an-
swer positively, results are not convincingly pointing to an effect of par-
ticipation.
Figure 6: The effects of state sponsored research and educational initiatives
estimated by companies
70% 67% 63%
62%
57%
60%
50%
40% 33%
28% 25%
30%
20% 15% 15%
10% 10% 11%
10% 2% 2%
0% 0%
0%
Denmark Finland Norway Sweden
Yes, the effect of the programme was positive
Yes, the effect of the programme was negative
Yes, but the programme did not have any effect
Yes, but we are not certain about the effect
Note: Question: Has your company participated in any state sponsored initiatives related to science and
education in recent years, and what has been the effect?
26 Demand for revision of framework conditionsCase: Nanotechnology and the education and research framework con-
ditions
Several of the interviewees are pointing at the need for high level exper-
tise and high level advanced equipment in order to foster growth of
nanotechnology related companies. This is not only a question about
educating entrepreneurs and technical staff for old and new companies,
but also to maintain state-of-the-art expertise at universities and insti-
tutes as a resource that can benefit the industry. An interviewee from a
large international enterprise pointed out that even though they have
several R&D units, they are nevertheless using experts at university labs
to perform advanced material analysis.
Many of the small start-up companies are using the clean rooms and
other equipment at nanotechnology research facilities. These facilities
exists in all the Nordic countries, but are organised in different ways.
Some have a status as national infrastructures and some do not. The
interviewees say that it is important to continue to invest in these labs,
because start-ups do not have the resources to invest in a wide spectre
of equipment, or the competence to run them. It is in general very ex-
pensive to run these facilities. User or rental cost can vary from 100 to
1500 Euro/hour depending type of equipment and the cost allocation
policy of the facility. The interviewees express different views on wheth-
er it is all right for the companies to cover this cost themselves or if spe-
cial measures should be introduced to cover parts of the cost for small
companies. This can be done by giving a basic grant to the facilities to be
used for new equipment and to support the running costs.
Demand for revision of framework conditions 274. Industrial policy framework
conditions
This chapter looks into industrial policy in the Nordic countries and
whether such policy is viewed as a barrier hindering companies to grow
and develop.
4.1 Overall well-functioning policy, administrative
duties pointed out as a challenge
In terms of industrial policy, Nordic companies across all countries
consider the overall amount of administrative duties as one of the big-
gest challenges according to the survey results (Figure 7).
All but Norwegian non-growth companies have identified this issue as
the biggest challenge, often followed by lack of access to government
funding or venture capital and tax credits. In Finland and Sweden the
lack of information about regulatory matters, relevant legislation and
government initiatives is viewed by respondents as another important
challenge, affecting both growth and non-growth companies in approxi-
mately equal measure. Companies view the lack of business support
activities as an issue of some importance, slightly less important than
the other issues mentioned but more important than IPR matters.
To Finnish companies, business support or the relative lack of it is con-
sidered as important as administrative burdens and access to fund-
ing/tax credits. IPR is considered an industrial policy challenge but one
where the need for optimising framework conditions is less pronounced
than in the other four cases. Growth companies in Finland and Denmark
see a greater need for improving IPR framework conditions than their
non-growth counterparts. While one can identify trends for growth and
non-growth companies at national level, such a clear cut picture of prior-
ities does not emerge at Nordic level.
28 Demand for revision of framework conditionsFigure 7: Companies’ perception of challenges related to industrial policy
framework conditions, average score.
1
0
Norway growth
growth company
Norway non-growth
Sweden growth
Finland growth
Denmark growth
Finland non-growth
Sweden non-growth
Denmark non-
company
company
company
company
compnay
company
-1 company
-2
-3
-4
(Lack of) Access to government funding /tax
deduction/venture capital
(Lack of) Public business support activities (counselling,
advice, networking activities etc.)
(Lack of) public information regarding legislation/regulation
and governmental initiatives
Intellectual Property Regulation (IPR)
The overall amount of administrative duties related to
industrial policy (tax, reporting to statistical bureaus etc.)
Note: Question: What is your perception on the following framework conditions related to the national
industrial policy? Please answer on a scale from ÷5 to +5. A negative score implies that the framework
condition in question is assessed as a barrier to the growth of the company.
Based on the interviews, the general impression is that there are few
significant barriers stemming from the industrial policy in the Nordic
countries, thus, most companies noted that they have been able to grow
and develop by following the current rules and regulations.
Even though the general impression from the interviews is that the
framework conditions are well functioning, some companies mentioned
that they experience administrative burdens in the form of filling out
different forms and reporting information to the government. In addi-
tion, there were interviewees mentioning that there should be more
support for funding and venture capital. Some companies add that the
regulations of import and export are barriers for them. Barriers related
to company taxes, and the need for lowering the level, was brought up
by a few candidates in the interviews as well.
Demand for revision of framework conditions 29You can also read
