Chapter 3. Governance, Strategy and funding in the HERI System

Following Portugal’s accession to the European Economic Community in 1986, essential governance functions of the HERI system were formalised and strengthened. However, Portugal system is still characterised by a crowded and fragmented strategic policy framework. No single HERI strategy and little horizontal co-ordination mechanisms within government help guide public investment in research and innovation activities and ensure the effectiveness and efficiency necessary to achieve the country’s high ambitions in this policy domain. Moreover, funding allocation processes at agency level result in the dispersion of research resources and limit the alignment of the higher education, research, and innovation system to national development goals.

    

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Note by Turkey: The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.

Note by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.

3.1. Introduction

The ability of individuals, teams and institutions engaged in education, research and innovation activities to perform their roles effectively is influenced to a considerable extent by the strategy and funding environment in which they operate. Out of the five broad features that characterise effective higher education research and innovation (HERI) systems (see 8.4.Annex A), two are particularly important when considering the strategic and funding environment:

  1. 1. Setting clear objectives and stable and predictable rules and policy frameworks is important because: i) through the process of collective objective-setting, they can allow stakeholders and public authorities to develop a shared understanding of objectives and agree on priorities and ii) they provide higher education and public research institutions and their innovation collaborators with clarity and predictability about national priorities and resource commitments in the mid- to long term. To be effective, these strategic orientations and policies have to be developed in close collaboration with those whom they affect or who benefit from them. They should draw on insights from those on the ground with specific expertise and society more generally. If done well, inclusive policy-making and strategy-setting can help build a greater sense of shared ownership of ideas and priorities. Effective education, research and innovation strategies provide clear guidance, while allowing room for innovation and initiative, and provide a framework of action or parameters within which other actors are authorised to take decisions.

  2. 2. Sufficient and predictable resources and appropriate incentives for good performance and accountability are necessary to support achievement of overall goals and priorities in system-level strategies. The mid-term predictability of resource levels is a key precondition for those planning higher education, research and innovation activities. This is especially true for research activities where long time horizons and the accumulation of knowledge often make sustained investment important to achieve real progress. International experience shows that strategies without committed resources commensurate with their ambitions have only limited influence. The way resources are allocated is also of paramount importance: alongside effective funding allocation mechanisms, funding agencies themselves need clear objectives and sufficient autonomy to allow them to achieve these efficiently, effectively and accountably.

As in other countries, strategy and funding are tightly intertwined in Portugal. In recent years the limited availability of funding has made it harder to make bold policies. Competition between ministries for limited resources has also made co-ordination around common strategic goals harder to achieve. Arguably, the lack of a clear strategy – as well as fluctuations in the level of public funding available – has made it harder to invest effectively and efficiently.

Although they cannot work in isolation, policy makers hold primary responsibility for creating the strategic and funding environment outlined above. Against this backdrop, the Review considers three key questions in this section:

  1. 1. To what extent is there evidence of a clear, coherent and open national strategy to guide the further development of higher education, public research and innovation actors in Portugal while leaving sufficient autonomy for these actors to define their respective plans, experiment and learn?

  2. 2. Are the governance arrangements and processes in place in Portugal sufficient to allow effective co-ordination and steering of higher education, public research and innovation policy, in line with the national strategy?

  3. 3. Are adequate resources made available for public investment in the higher education, research and innovation systems and are effective organisations and resource allocation procedures in place to ensure that available resources are used with the necessary accountability, efficiency and effectiveness in order to successfully implement the national priorities?

3.2. Context

This section provides contextual information on the three tightly intertwined issues of i) the strategic decision-making bodies and processes relevant to higher education, research and innovation (strategic governance); ii) the resulting strategic orientations produced (strategy) and; iii) the allocation of funding to HERI activities (funding).

3.2.1. Strategic governance of higher education, research and innovation

The formalisation of the rules, structures and organisations governing higher education, research and innovation in Portugal started later than in other EU countries. Following Portugal’s accession to the European Economic Community in 1986, essential governance functions, such as horizontal co-ordination between parts of government, advisory bodies, dedicated planning, budgeting and evaluation functions were formalised and strengthened, often in order to comply with governance principles required for the implementation of European funding programmes.

Formal policy-making bodies

The Ministry of Science, Technology and Higher Education (Ministério de Ciência, Tecnologia e Ensino Superior) (MCTES) has responsibility for higher education, public research and science-based innovation activities, as well as the dissemination of scientific and technological culture and international co-operation in these fields (Government of Portugal, 2015a). Primary responsibility for business innovation policy lies with the Ministry of the Economy (Ministério da Economia). As in many countries, support to knowledge transfer, including collaborative applied research, is shared between these two ministries. Important prerogatives are also in the hands of the Ministry of Planning and Infrastructure (Ministro do Planeamento e Infraestruturas), which is in charge of the management of the EU Structural and Investment Funds. Other ministries are in charge of research activities under their respective sectors (health, defence, agriculture).

As discussed in Chapter 1, Portugal has created agencies outside the established structures of government ministries to implement different aspects of research and innovation policy, as well as a highly independent quality assurance agency for higher education. In Portugal, as in several OECD countries, research and innovation agencies are not purely focused on implementation, but also play a role in setting policy. Both the Foundation for Science and Technology (Fundação para a Ciência e a Tecnologia) (FCT) and the National Innovation Agency (Agência Nacional de Inovação) (ANI) have played important role in the development and monitoring of the main strategies in their respective areas. They also set policy de facto through the decisions they take about the allocation of funds to different activities. Currently, the FCT still has a formal role of policy co-ordination in its mandate.1

Strategic advice and horizontal co-ordination

With the progressive development of human capital, research and innovation policies in the 1990s, there have been irregular attempts to set up dedicated co-ordinating or advisory bodies at the higher level of the system.2 These bodies, as is often the case in other countries, did not survive changes of government or the end of the Structural Funds programmes they served.

Two councils were created by the previous government (2011–2015), respectively covering innovation and research policy areas, both chaired by the Prime Minister. The National Council for Entrepreneurship and Innovation (Conselho Nacional de Empreendedorismo e Inovação) (CNEI) was created in 2011 as a forum for representatives of various sectors of the system to provide strategic orientation for innovation policy. Composed of high level researchers, the National Council for Science and Technology (Conselho Nacional de Ciência e Tecnologia) (CNCT) was created soon after, in 2012, to deliver advice on priority research areas and strengthen inter-ministerial co-ordination of science, technology and innovation policies, with a view to develop “medium and long term policies and national strategies” (Government of Portugal, 2011). The current government has not used these two councils, but, in 2016, relaunched a body that had nominally existed since 2007, the Co-ordinating Council for Higher Education (Conselho Coordenador do Ensino Superior) (CCES). It is chaired by a renowned Professor in Physics, with appointed experts and representatives of FCT, A3ES, the Directorate-General of Higher Education (DGES), the Council of University Rectors (Conselho de Reitores das Universidades Portuguesas) (CRUP), the Council of Polytechnics (Conselho Coordenador dos Institutos Superiores Politécnicos) (CCISP), the association of private higher education (Associação Portuguesa de Ensino Superior Privado) (APESP) and students’ organisations.

The growing significance of European Structural Funds as a source of funding for research and innovation-related activities has led to the establishment of dedicated management entities and co-ordination bodies to oversee implementation of the Funds in these fields. In the current funding period, the “research” and “innovation” co-ordinating bodies have been integrated to govern COMPETE 2020, the national Operational Programme for Competitiveness and Internationalisation (Government of Portugal, 2014a). In addition, an Inter-ministerial Commission for the co-ordination of the Partnership Agreement (CIC) has been created, headed by the minister in charge of the regional development, along with several functional networks, in areas such as research and innovation, regional economic development, smart specialisation and science, technology and innovation support.

The Portuguese Smart Specialisation Strategy – formulated as a pre-condition for European funding – has its own comprehensive governance structure, with a co-ordinating council and an executive committee in charge of the strategic and operations aspects of the strategy respectively (Government of Portugal, 2014b). Both bodies gather a wide range of representatives of the different parts of the HERI system. The CNEI and CNCT also formed part of the governance structure of the Smart Specialisation Strategy, as consultative bodies for the Co-ordinating council.

Public consultations

Public consultations occur periodically in the course of the policy cycle or within the framework of specific initiatives in the field of higher education, research and innovation, such as the development of new strategic documents. This was for instance the case of consultations ahead of the ‘Commitment to knowledge and science’ (Government of Portugal, 2016a), the National Plan for Science and Technology in 2017 or when preparing the Scientific employment initiative. One of the broadest consultations recently conducted in Portugal aimed to develop the Smart Specialisation Strategy. In line with EU guidelines (European Union, 2013), the process relied on significant foresight and analytical work, as well as extensive consultations with relevant stakeholders at national and regional levels. At the national level, FCT led the inter-departmental working group in charge of the co-ordination of the assessment of the Portuguese national research and innovation system (FCT, 2013). Based on this thorough diagnostic exercise, consultations of the research and innovation community were then held in order to identify the national comparative advantage of Portugal in science, technology and its economy. National workshops conducted in 2013 focused on themes such as industry and production technologies and mobility, space and logistics and other initiatives (thematic workshops, surveys, etc.) and were conducted in each Portuguese region (FCT, 2017a).

MCTES also occasionally creates expert groups to contribute to the design of new policy. This was the case in 2016, in the lead-up to the evaluation of the R&D units and Associated Laboratories by FCT. More systematically, the FCT, Ciência Viva – the agency in charge of science and technology culture – and the Parliamentary Committee for Education and Science conduct a cycle of annual conferences, where the main stakeholders of the HERI gather to discuss relevant policy agendas and initiatives. The ‘Ciência 2017’ conference, for instance, lasted three days and discussed issues such as the National Digital Skills Initiative, scientific diplomacy, cancerology and Collaborative Laboratories. FCT also has a regular procedure of consultation of the scientific community on relevant regulatory changes (Ciência 2017, 2017).

Finally, the Laboratory for Public Participation is a pilot initiative launched in January 2017 by MCTES in collaboration with Ciência Viva in order to stimulate the engagement of relevant stakeholders (including citizens, businesses, and civil organizations) in research and innovation agenda-setting. It was planned that these "open platforms for brainstorming and debate", either virtual or conducted via workshops, would be supplemented by a participatory budget, whereby up to 1% of the FCT 2017 budget should have been earmarked for the implementation of new projects and research agendas resulting from these consultations (MCTES, 2017a).

Foresight and policy evaluation

The most comprehensive and numerous policy or programme evaluations in the fields of education, research and innovation in Portugal are those carried out to meet the requirements of European Structural Funds. Evaluations conducted in the framework of national policy are very infrequent.

European Structural Funds programmes require ex ante, mid-term and ex post evaluations and have different scopes according to the specific needs perceived and overarching EU evaluation guidelines. Higher education, research or innovation funding initiatives have generally been covered as part of wider evaluations of whole Operational Programmes rather than been the object of dedicated evaluations.3

Some evaluations conducted outside the framework of European Structural Funds programmes have also taken place. For example, the 2012 evaluation by the Academy of Finland of the well-funded academic partnerships with American universities including MIT and Carnegie Mellon University (Academy of Finland, 2012) examined the cost-effectiveness of these initiatives. The evaluation of the FCT by a panel of international experts in 2015 (FCT, 2015) was undertaken in reaction to criticism of the FCT following the 2013 review of R&D units and Associated Laboratories.

Foresight is not extensively used to guide policy decision-making in Portugal. Two of the main foresight initiatives were carried out during the preparation of the Smart Specialisation Strategy and at the occasion of the Portugal 2030, both of them closely related to the implementation of the European Structural Funds.

Figure 3.1. Main recent strategies and plans related to higher education, research and innovation
picture

3.2.1. Strategic orientation for HERI

Over the last two decades, policymakers in many OECD countries have drawn on advisory groups, public consultation exercises and foresight work to develop various forms of national innovation strategy. In most cases, these have been broad in scope, covering innovation, research, entrepreneurship and aspects of higher education. In Portugal, the actors and processes described above have also produced a number of strategic documents that have sought to guide public investment in higher education, research and innovation.

Overview and typology of strategic documents relevant to HERI

Successive governments in Portugal have adopted a number of strategic documents aiming to guide the national higher education and research and innovation activities. These documents differ according to their scope (overarching or specific to certain thematic areas), time horizon (annual or multi-annual) and institutional nature (related to EU policy processes or related to national policy). Based on this simple typology, Figure 3.1 distinguishes four main types of strategic documents relevant to HERI in Portugal.

National overarching strategic documents

The 1976 Portuguese Constitution establishes the basic framework for the definition of the national strategies and plans. Each incoming government sets out its key policy objectives at the start of its term in the Programme of the Constitutional Government (Programa do XXI Governo Constitucional 2015-2019) (Government of Portugal, 2015b) and then provides a more detailed programme of work in the Major Options of the Plan (GOP), which is initially approved for the period of the legislature and then updated annually in conjunction with the state budgetary process.

The Programme of the Constitutional Government is a general political statement of the initial ideas of the government in all policy areas. The current Programme includes a specific priority on innovation (covering issues related to science, scientific culture, innovation and internationalisation of enterprises) and an agenda for modernising and diversifying higher education within a broader "priority to people".

Table 3.1. Programme of the 21st Constitutional Government 2015-2019: objectives for higher education, research and innovation

Research and innovation priorities

Higher education priorities

  • Increasing competitiveness of researchers and research units

  • Stimulating employment of high skilled people in academic and private sector

  • Strengthening the institutionalisation of the HERI system

  • Directing funds to researchers / units with existing relevant competencies

Adjusting policies to smart specialisation)

  • Widening and democratising access to higher education.

  • Providing higher education institutions with greater financial stability and autonomy to promote quality, diversification and regional engagement.

  • Creating conditions for employing new teaching and specialist staff in institutions.

  • Improving successful completion rates.

  • Promoting the internationalisation of higher education

  • Creating internship programmes for students to promote their future employability.

Source: Government of Portugal (2015b), Programa do XXI Governo Constitucional 2015-2019, https://www.portugal.gov.pt/ficheiros-geral/programa-do-governo-pdf.aspx.

The GOP, updated annually, complement the Government Programme by providing strategic guidelines for economic and social development policy. Among the 35 policy domains for government action initially included in the GOP for the 2016-2019 period, three of them are directly related to the research, innovation and higher education policy areas (Government of Portugal, 2016b): innovation and internationalisation of firms; modernisation of higher education and; enhancing investment in science and technology and democratising innovation.4

National strategic documents in HERI policy fields

The GOPs are supplemented by documents providing more precise guidance and priorities related to research, innovation and higher education. The Commitment to Knowledge and Science Agenda, adopted by the government in 2016, established detailed priorities for the period 2016-20 and provided a mandate to MCTES to undertake further consultations with higher education institutions (Government of Portugal, 2016a). Following these consultations, a July 2016 agreement between the rectors of public HEIs and the government (Government of Portugal, 2016c) committed to 25 initiatives, including measures to support the modernisation of polytechnics, promote digital skills and incentivise high-skilled employment through fiscal measures.

The Commitment to Knowledge and Science also proposed the creation of a broad interministerial working group to set a multiannual financial framework to fund the various measures necessary to meet the GOP objectives. The group was to be composed of representatives from MCTES, finance, economy, environment, maritime affairs, planning and infrastructure and defence – as well as the Council of Rectors of universities, the Co-ordinating Council of Polytechnics, FCT and ANI. To date, this working group has not been created and no multiannual financial framework has been put in place.

The GOP update for 2017 included the preparation of a National Plan for Science and Technology. This strategic initiative, led by FCT in co-operation with ANI and Ciência Viva, was issued in June 2017 (MCTES, 2017b). The document consists mainly of 14 thematic agendas,5 developed by dedicated expert groups composed of researchers, policy makers and industry representatives. A bottom-up participatory approach is clearly apparent in the document, which relies to a large extent upon the views expressed in each thematic group. Considerations regarding the international context also occupy a prominent place in each agenda. An initial proposal for a new knowledge strategy for Portugal to enable European convergence by 2030 has also been developed recently (MCTES, 2017c; 2017d).

On the innovation side, the main national strategy is the Industrial Development Strategy for Growth and Employment (Estratégia de Fomento Industrial Para o Crescimento e o Emprego) 2014-2020 (EFICE) developed in 2013 by the Ministry of Economy (Government of Portugal, 2013a). The area of entrepreneurship and R&D, one of the strategic axes, is centred on the promotion of co-operation between science and industry. It includes measures to strengthen R&D and innovation in line with the Smart Specialisation Strategy and set up a new dedicated governance system for innovation policy (with a dedicated agency, strategic intelligence resources, think tanks and policy experimentation platforms).

Even more recently, the Council of Ministers adopted a new Innovation Strategy 2018-2030, partly based on the aforementioned Portugal knowledge strategy for European convergence (MCTES, 2017d, Government of Portugal, 2018). This strategy covers research and innovation, and is to be implemented by the ANI. It sets ambitious, though sometimes vague, objectives and targets pertaining to higher education, R&D and economic performance (Table 3.2). To achieve its ambition, this strategy briefly presents eight strategic axes, including the increase in R&D or entrepreneurship, and links these to existing programmes (Start-UP Portugal, INCoDe.2030, Interface programme, etc.).

A number of thematic strategies in other policy fields also include an objective or axis dedicated to research, innovation and higher education. Many of them serve primarily to guide the use of European Structural Funds, such as the National Strategy for the Sea 2013-2020 (Government of Portugal, 2013b) and the Strategy of the Ministry of Agriculture and Maritime Affairs for Research and Innovation in Agro-food and Forestry 2014-2020 (Government of Portugal, 2014c). Other strategies are cross-sectoral or horizontal, such as the National Digital Skills Initiative (INCoDe.2030), launched in 2017 (Republic of Portugal, 2017a), the 2016 Policy for the Internationalisation of Higher Education and Science and Technology (Government of Portugal, 2016e), developed by MCTES and the Ministry of Foreign Affairs, and the 2016 StartUP Portugal strategy for entrepreneurship.

Table 3.2. Main objectives of the 2018-2030 Innovation Strategy

Indicator

Target

Reference value

R&D intensity (GERD/GDP)

1.8% of GDP by 2020

3% by 2030 (1/3 expenditure and 2/3 of private expenditure)

1.3% in 2016

Higher education enrolment for people aged 20

60% in 2030

42% of 20 year-olds in 2016/17

Higher education graduation for people aged 30 -34

40% by 2020

50% by 2030

35% in 2016

Digital skills

European leadership level by 2030 (access and use of the Internet, digital business and skill development, etc.)

-

Exports of goods and services

50% of GDP by 2025, with an improvement of the technological balance of payment

40% in 2016

Venture capital

Catching up with European average

-

Foreign direct investment

Reinforce Portugal’s attractiveness for FDI

4.8% of GDP (net inflows)

Source: Government of Portugal (2018) Resolution of the Council of Ministers n.º 25/2018, Official Journal, 1.ª série – N.º 48 – 8 March 2018.

Overarching strategies and programmes related to EU requirements

Like all EU countries, Portugal has to comply with obligations related to the rules governing European monetary union, including fiscal and economic policy monitoring by the European Commission and fellow member states undertaken through the annual European Semester process. Against this backdrop, the current Stability Programme developed by the Ministry of Finance presents the main macroeconomic trends and derives objectives for the mid-term (2016-21), along with a multi-year budget plan, with a view to guaranteeing sound public finances and making progress towards the Europe 2020 objectives (Republic of Portugal, 2017b).

It is complemented annually by a National Reform Programme (NRP), which presents the specific initiatives to be implemented (new schemes, reforms, programmes, etc.) to achieve these targets, in line with the objectives defined in the GOP. The 2017 NRP includes three main new initiatives: the scientific employment initiative, the Programme for the Modernisation and Valorisation of Polytechnics and the Interface Programme (Government of Portugal, 2017a). Annexes to the NRP set out each year the progress in the execution of these initiatives.

Strategic documents in the HERI policy fields related to EU requirements

The European Structural and Investment Funds (ESIF) are a main source of financing for the National reform programmes in Portugal, in particular in the area of research and innovation. The overarching objectives and lines of action guiding the allocation of these funds in the current funding period (2014-2020), reflecting overall priorities agreed at EU level, are set out in the Portugal 2020 Partnership Agreement between the Government of Portugal and the European Commission (European Commission, 2014).

The precise objectives, monitoring indicators and allocation mechanisms for Structural Funds are described in Operational Programmes at national level – for broad, cross-cutting policy areas – or at regional level. The current national operational programmes most relevant to research, innovation and higher education are the Competitiveness and internationalisation (COMPETE 2020) and Human Capital Operational Programmes (Programa Operacional Capital Humano - POCH) (respectively financed mainly with the European Regional Development Fund and the European Social Fund). Regional programmes also contain priority axes relevant to innovation.

In order to use the ESIF 2014-20 more efficiently, national and regional authorities across Europe were asked to develop Smart Specialisation Strategies based on their respective comparative advantages, as well as emerging opportunities and market needs at national and regional levels. Against this backdrop, the Portuguese National Strategy for Smart Specialisation (ENEI) was developed in 2014, following extensive consultations (Government of Portugal, 2014b). The national priorities were presented in 15 broad priority themes (health, tourism, etc.) along five thematic axes. As shown in Table 3.3, some Smart Specialisation priorities were identified as relevant to several regions, in particular those related to oceans (maritime resources and infrastructure, blue economy, Maritime – bio-sustainability, fisheries), digital technologies (digital growth, ICT, enabling technologies), tourism and natural resources (agro-industry, food industry, forestry).6

Table 3.3. Regional priorities identified in the Portuguese Smart specialisation strategy

Regions

Regional priorities for Smart Specialisation

Norte

Health and Life Sciences; Territory and Tourism; Maritime Resources and environment; Culture, Fashion and Creativity; Enabling Technologies; Mobility and Environmental Industries; Digital Growth

Lisbon and Vale do Tejo

Tourism; Blue Economy; Cultural Industries/Art/Communication Technology; Engineering; Biotechnology; Advanced services

Centro

Agro-industry; Blue economy; Tourism; ICT; Materials.

Alentejo

Quality of Life; Blue Economy; ICT; Stones; Agro and Forestry; Food industry; Logistics and mobility; Heritage and territory; Renewable Energies

Algarve

Renewable energies; Blue economy; Tourism; Culture; Maritime Infrastructures; Fisheries

Acores

Blue Economy; Food industry; Infrastructures

Madeira

Agro-food; Maritime – Bio sustainability; Energy and climate change; ICT; Tourism

Source: Government of Portugal (2014a), Estratégia de Investigação e Inovação para uma Especialização Inteligente (EI&I), November 2014 version, www.poci-compete2020.pt/admin/images/ RIS3_Nacional_ENEI_Especializacao-Inteligente.pdf.

Using European and national funds, the Portuguese government expected to mobilise up to EUR 1 billion to implement the Smart Specialisation Strategy in the period 2014-20. The alignment with this strategy is mandatory in the implementation of Portugal 2020 investments in research and innovation and is a priority in other areas, such as the support to SME competitiveness.

3.2.2. Funding of HERI activities

Overall budget process

MCTES manages the bulk of the funds allocated for higher education and research activities, while the Ministry of Economy is in charge of the funds to support innovation in businesses and intermediary bodies, such as technology transfer and innovation centres. While the budgets of different government bodies are approved on an annual basis, they are embedded within the framework of multi-annual budgetary planning, which defines ceilings on expenditure for each policy area, defined in budgetary programmes. Both the multi-annual and annual budgetary processes are designed in accordance to, respectively, the GOP and its annual updates (see above).

The multi-annual budget framework is submitted to the Parliament when a new government takes office and covers the following four years. It is updated each year for the four subsequent years. The annual budget cycle starts with the finance ministry providing an indicative spending envelope to each ministry in August, as a preliminary annual funding amount for the following year. Each ministry uses this to plan its allocation of spending for the upcoming fiscal year. Further to negotiations on this basis, by mid-October, the annual budget law proposal is submitted by the government to Parliament for review. This is then approved by the end of November, frequently with only a limited number of amendments (OECD, 2015b).

The Budget law is structured around thematic programmes. Most research and higher education activities are included in dedicated ‘financing programmes’ (Financing programme 10: ‘Science, technology and higher education’) (MCTES, 2017e). The budget for support to business innovation in firms and intermediary organisations is presented in a distinct programme (Financing programme 15: Economy) (Ministry of Economy, 2016). These financing programmes correspond to a large degree to the scope of activities of their respective line ministry, and the different budget items relate to institutions (agencies, HEIs, etc.) rather than actions. For the MCTES, the financing programme does include a breakdown of the FCT budget into its main lines of action, including advanced training, scientific employment, projects, etc. (Government of Portugal, 2016f).

The Budget Law only presents an initial allocation to each programme, the real budgets are regularised ex post, on the basis of actual expenditures. These can be somewhat different, especially for research and innovation since most funds are allocated competitively and real spending levels therefore depend on the uptake of calls and the nature of the responses. Since the rates of EU co-financing depend on the type and regional location of the beneficiaries, the significant contribution of Structural Funds can also generate discrepancies between planned and real expenditures. Finally, during the crisis and up to 2016, the government reviewed and cut part of the budgetary allocation to HEIs during the course of the year. In July 2016, MCTES committed to abandon this practice in exchange for HEIs agreeing to a solidarity mechanism, whereby any HEI facing a financial deficit will be supported through a loan granted by other HEIs in their sector, to be reimbursed over the following years.

The initial budget for higher education and research (Programme 10) amounts to EUR 2.7 billion in 2018, an increase of 5.6% relative to 2017, due mainly to the additional budget allocated to the FCT to cover additional costs related to the employment of post-docs resulting from implementation of Law 57/2017 (see Chapter 6. Doctoral training). State laboratories are another relatively important research budget component, although their planned expenditures are not included in Programme 10, but in the budgetary programme of their respective line ministries. For most ministries other than MCTES and the Ministry of Economy, the State laboratories under their purview represent the bulk of their research effort (a total of EUR 132 million in 2005, EUR 139 million in 2015).7 These budgets are, however, not entirely spent on research activities, as these institutions also have other public service missions. The funding of knowledge transfer, collaborative research and innovation in Programme 15 (EUR 1.6 billion in 2017) is mainly funded by Structural Funds. The funding of knowledge transfer, collaborative research and innovation in Program 15 (EUR 1.6 billion in 2017) is funded by Structural Funds. It includes most of ANI's annual budget (EUR 12 million), as well as part of IAPMEI's (EUR 649 million). The funds allocated to AICEP to support business innovation, under the authority of the Ministry of Foreign Affairs, are not included in either of these programs. Between November 2015 and June 2018, AICEP Portugal Global approved business innovation project contracts, involving a total investment amount of EUR 1 760 million, with a total incentive amount of EUR 636 million.

Table 3.4. Main higher education, research and innovation initial budgets, 2018
In million Euros

Ministry

Budget items

National

ESIF funds

Total

MCTES

FCT (functioning and investment)

356

148

504

Higher education (universities and polytechnics’ block funding, and social support)

1 777

313

2 090

Ministry of Economy

Support to knowledge transfer, collaborative research and innovation

512*

512*

Ministry of Defence

Support to defence R&D

9**

9**

Various ministries

State laboratories

137*

2*

139*

Note: * 2015, **2017.

Source: MCTES (2017b), Plano Nacional de Ciência e Tecnologia, 2017-2020, Initial terms of reference for discussion, June,, Science, Technology and higher education, Budgetary Programme 10, Proposal of State budget for 2018, October, explanatory note.

ESIF account for an increasing share of the overall budget for research and innovation. While ESIF funding was estimated at about 21% of the national research and innovation budget during the previous generation of ESIF (QREN, 2013) (JRC, 2016; 2017), it currently represents about a third (Portugal 2020, 2014-2020) according to our estimations (Box 3.1). If national co-funding is taken into account, the total amount of funding directed through ESIF instruments represents about half of all public support to research and innovation. This gives an indication of the proportion of public spending on research and innovation that is governed by EU cohesion policy decision processes and regulations.

Box 3.1. Structural funds and HERI activities in Portugal

Portugal 2020, the current Partnership Agreement between Portugal and the European Commission, defines the principles that govern the use of European Structural and Investment Funds (ESIF)1 in Portugal for the period 2014-2020, in line with the European goals agreed in the Europe 2020 Strategy. The total estimated ESIF allocation to Portugal for the period 2014-2020 is EUR 25.8 billion (representing a potential total investment of EUR 32.7 billion with national co-financing). The programming and implementation of Portugal 2020 is organised through 16 operational programmes (six national and 10 regional programmes). Most funds dedicated to research and innovation and to higher education are directed through the COMPETE 2020 and POCH operational programmes at national level.

For 2014-2020, the amount of ESIF funding for research and innovation activities (excluding higher education) amounts to EUR 3.6 billion (EUR 513 million/per year and about 20% of total ESIF in Portugal). The share of EU share of ESIF investment currently accounts for about 15% of total spending on R&D in Portugal (GERD). This ratio positions Portugal in an intermediary position, less dependent on ESIF funds for R&D investment than Latvia, Estonia or Poland, but more dependent than Spain and Italy. The EU share of ESIF represents about a third of total public funds dedicated to research and innovation support in Portugal. Total ESIF investment, including both EU and national co-funding, represents 23% of the GERD and 49% of the public support to research and innovation.

Figure 3.2. Share of EU co-financing of ESIF 2014-2020 dedicated to research and innovation in the GERD and share of EU co-financing in ESIF
picture

Note: For instance, in 2017, the Instituto Nacional de Investigaçao Agraria e Veterinaria (INIAV) received EUR 29.6 million from the Ministry of Agriculture, the Laboratorio Nacional de Energia e Geologia EUR 17 million from the Ministry of Economy and the Instituto Nacional de Saúde Dr. Ricardo Jorge, EUR 28.5 million from the Ministry of Health. These budgets items are included in different budgetary programmes.

Source: European Commission (2018), Open Data Portal for the European Structural Investment Funds, https://cohesiondata.ec.europa.eu. (Accessed on 12 March 2018)

The importance of ESIF for HERI activities is even higher when one considers research and innovation in a broader sense. Support to the competitiveness of SMEs and to educational and vocational training, two themes with strong impact on the country’s innovation capacity have been allocated, respectively, around EUR 8.5 billion and EUR 5.2 billion for the period 2014-2020 (compared to EUR 3.6 billion for research and innovation).

Government funding of higher education and academic research

One of the key characteristics of the Portuguese HERI system is the existence of parallel systems for organising and funding higher education and research activities, although these activities are closely intertwined.

Figure 3.3. Main sources of income for education and core activities in public universities and polytechnics
Figures for 2016 in EUR million and % of total HEIs’ revenues
picture

Note: This graph does not include funding allocated to research, development and innovation.

Source: Based on MCTES (2017b), Plano Nacional de Ciência e Tecnologia, 2017-2020, Initial terms of reference for discussion, June, http://www.fct.pt/agendastematicas/index.phtml.en.

Regarding education and other core operations (infrastructure, staff salaries), institutional funding for public HEIs in Portugal is delivered through basic funding allocated on an historical basis, accounting for 74% of HEIs’ basic revenues in 2016 (Figure 3.3). The mechanisms for allocating core funding to institutions are discussed in detail in Chapter 4. HEIs also receive funding to support the social services they provide to students (including catering services and accommodation), while students receive social support directly via grants awarded according to social criteria.8 The other sources of revenues of public HEIs are the fees paid by students (23% of public HEIs’ revenues in 2016) and some private funding originating from supply of accommodation, meals, rentals, etc. A3eS, the accreditation agency, does not intervene directly in the funding of HEIs. However, through its accreditation of study cycles, it indirectly influences the number of students institutions can enrol, which in turn affects the income from fees.

Universities and polytechnics do not formally receive institutional funding to perform research activities. However, the core funding to HEIs provided by MCTES also supports research, not least through the payment of the salaries of the academic staff that also perform research and the maintenance and construction of buildings and facilities used by this staff. In 2015, 75% of teaching staff (accounted in FTE) in public universities were integrated in a FCT R&D unit or associated labs (DGEEC, 2017a).9 The total salaries of the academic staff in public HEIs also involved in research represented about EUR 635 million in 2015 (MCTES, 2017a).

Figure 3.4. Sources of annual income for research activities in HEIs and research institutions, latest annual data available, 2015-2017 (in EUR million)
picture

Note: this graph is an attempt to match financials stocks (aggregates) and flows (funds allocated). Depending on data availability, the financial flows refer to different years between 2015 and 2017. These differences as well as their various origins explain the residual gaps between the flows and the aggregates (HERD, GOVERD).

Source: based on MCTES (2017a), Science, technology and tertiary education in Portugal – Perspectives for 2030, Background report to the OECD joint-review of Science, Technology and Tertiary Education in Portugal, draft document, Ministry of Science, Technology and Higher Education; and OECD (2018d).

This represents about half of the total resources (national and European, financial and in-kind) allocated to the research institutions. Depending on the specific arrangements they have with the HEIs to which they are more or less closely integrated, R&D units and associated labs pay overhead fees to the universities or polytechnics.

Some limited institutional funding for research is distributed directly by the FCT to R&D units and associated labs, which are affiliated to one or more HEI. This multi-year block-funding for research is awarded competitively, following regular national research assessment exercises. It accounts for about 6% of the total resources allocated to the research institutions. It is considered by the government as research seed funding (MCTES, 2017a). The bulk of public funding for research is therefore allocated through competitive funding, which includes project-based funding (project grants, individual grants, contracts and fellowships awarded to research students and researchers, from national and EU sources) and institutional funding awarded on a competitive basis directly to the research units.

Despite a significant budget decrease since 2011 (from EUR 465 million in 2010 to EUR 367 million in 2016), FCT remains the main source of research funding in Portugal. It was responsible for disbursing 39% of public funds allocated to R&D on average between 2007 and 2014 (FCT, 2017b). However, R&D units and associated labs increasingly rely upon competitive EU funds, either originating from structural funds or from framework programmes.

Table 3.5. Main sources of income for research activities in public research institutions*

2011

2016

 

EUR million

%

EUR million

%

FCT research ‘block funding’ to R&D units and associated labs

108

15%

77

10%

FCT grants, contracts and fellowships (including international co-operation and infrastructure)

285

40%

280

38%

EU Structural Funds

79

11%

95

13%

European Framework Programmes

51

7%

80

11%

Other sources of funding (provision of services to industry, health, etc.)

190

27%

205

28%

Total

713

100%

737

100%

Note: * Data excludes state laboratories.

Source: MCTES (2017a), Science, technology and tertiary education in Portugal – Perspectives for 2030, Background report to the OECD joint-review of Science, Technology and Tertiary Education in Portugal, draft document, Ministry of Science, Technology and Higher Education.

State laboratories are affiliated to different line ministries (economy, health, etc.) and receive direct funding from these ministries on a historical and per capita basis. In the last decades, their role as research performers has decreased very significantly following structural reforms such as mergers and integration into HEIs. In 2015, they received EUR 137 million for their research activities and represented 6% of the GERD (down from 15% in 2005).

Funding for researcher training and scientific employment (PhDs and post-doctoral positions) accounts for about half of funds allocated by the FCT (61% in 2003; 50% in 2010 and 43% in 2016). The allocation of block funding to R&D units and associated laboratories accounted for less than a fifth of the FCT budget (15% in 2003, 25% in 2010, 18% in 2016), as well as competitive project funding (22% in 2003, 25% in 2010, 15% in 2016).

Box 3.2. FCT block funding allocated to research institutions

Since 1996, the FCT has provided multiannual block funding to research centres following assessment of their achievements by an expert panel involving foreign peer researchers. This block funding comprises a base component, determined by structural features such as the number of PhD holders, and a strategic component which results from the peer assessment. Although the methodology has evolved over time, the last assessment exercise conducted between 2013 and 2015 marked a significant shift in approach, which was controversial in the Portuguese scientific community. The evaluation procedure was criticised for a perceived lack of transparency and the choice of indicators used (in particular its reliance on bibliometric indicators).

The amount of block funding transferred to R&D units and associate labs (in total and on average per researcher) varies strongly between years and cycles of multi-annual funding (Figure 3.5). The funds allocated also differ widely between research institutions. The last cycle of funding resulted in a strong concentration of funding: the 20 R&D units receiving the highest levels of funding obtained more than 50% of total allocated funding.

Figure 3.5. FCT block funding allocation to R&D units and associated labs, total amount (left axis) and average funding per researcher (right axis).
picture

Source: Fundação para a Ciência e a Tecnologia (2017d), FCT database, http://www.fct.pt/estatisticas/unidades/index.phtml.pt (accessed on 15 January 2017).

Financial support to business innovation

Direct funding of innovation activities is highly and increasingly dependent on European structural and investment funds, mainly allocated through the operational programme COMPETE 2020, which is itself informed by the national Smart Specialisation Strategy. However, public funding represents only a limited share of the total expenditure on innovation in Portugal, since innovation activities are mostly self-financed by companies (89.7% in 2015).

Figure 3.6. Main sources of income for innovation activities 2014-2017
In million euros
picture

Note: This graph is an attempt to match financials stocks (aggregates) and flows (funds allocated). Depending on data availability, the financial flows refer to different years between 2014 and 2017. These differences as well as their various origins explain the residual gaps between the flows and the aggregates (BERD, HERD, GOVERD).

Source: based on MCTES (2017b), Plano Nacional de Ciência e Tecnologia, 2017-2020, Initial terms of reference for discussion, June,www.fct.pt/agendastematicas/index.phtml.en and OECD (2018d).

The direct public financial incentives to innovation have experienced a similar downward trend as those dedicated to academic research. However, the financial incentives have been restored and even increased in 2016 due to the opening of a large call for ANI’s mobilising projects (Projetos Mobilizadores).

The funds for innovation are allocated competitively by three agencies: ANI, IAPMEI and AICEP via a comprehensive set of financial instruments (R&D projects, demonstration projects, mobilisation projects, R&D vouchers, etc.).10 The beneficiaries, mainly businesses, can apply to most of these instruments as part of a team of partners (co-promotion projects) or as individual organisations (individual projects). In most cases, co-promotion projects are dealt with by ANI, while IAPMEI is in charge of the individual project applications. AICEP only manages one instrument related to the financing of innovation: the investment contract scheme (RCI). Other initiatives called collective actions (Sistema de apoio a ações coletivas) aim to support other type of actors in the system, in particular to strengthen knowledge transfer.

Portuguese innovative firms also benefit from a generous indirect funding system via the SIFIDE tax incentive scheme, in place since 1997. Over the last 10 years, as in many OECD countries, Portugal has increased its reliance on tax incentives for R&D. The relative importance of tax incentives has, however, logically decreased during the crisis years, as businesses have reduced their R&D expenditures and, along with these, their fiscal reduction claims on these expenditures. In 2015, the latest year available, fiscal incentives accounted for 76% of total public support for R&D and represented 0.1% of GDP (OECD, 2018a).

3.3. Assessment

In Portugal, there has been a multiplication of national strategic plans and priorities, which lack an overall sense of coherence and a clear prioritisation of objectives. As a result, research and higher education activities are weakly connected to established national goals. In an environment where public resources are limited, there have been limited attempts to engage in the difficult process of prioritising and targeting resources to create critical mass in areas where the country’s research and higher education systems can excel. In essence, Portugal lacks a single and integrated strategic framework covering and creating a shared vision for the whole HERI system. Such a framework is conceived here not as something imposed top-down by government, but rather as a roadmap to guide activities and investments that reflects the ideas, suggestions and priorities of different stakeholders in the system. It should therefore follow extensive consultations with both the research and business innovation communities.

In addition to mixed messages, another consequence of the multiplicity of strategies and plans, many of which lack dedicated funding, is the instability of the funding framework, which is loosely connected to strategic orientations and subject to short term political interference. The Review team met with several hundred stakeholders across Portugal, many of them performing at a high level. However, they report that the national policy and funding environment in which they work is characterised by significant and unpredictable fluctuation in funding levels and unstable funding methodologies. Funding should therefore be more clearly linked to a strategic framework, the efficiency of spending evaluated against it. The overall HERI governance structure also needs improved horizontal policy co-ordination between ministries and more efficient vertical co-ordination between ministries and agencies.

Policy issue 3.1. There is no overarching and coherent national strategy to guide the system in the mid to long term

If well-designed, a national HERI strategy can serve several purposes:

  • First, it articulates the country’s vision regarding the contribution of higher education, research and innovation activities to its chosen social and economic development path. The strategic framework currently in place in Portugal falls short of achieving this function. There is no single integrated HERI strategy, but several strategies. There is a clear divide between those related to research and innovation, reflecting the silos in which the ministries in charge of these policy fields operate. The distinction between the national strategies and those related to the programming of ESIF further adds to the confusion and, therefore, to the dilution of the influence of these strategies as authoritative strategic documents to which institutions, researchers and businesses could orientate their activities. Moreover, different strategies overlap in some areas and sometimes contain different and conflicting goals.

  • Second, it can set priorities for public investment in these activities, identify the focus of government reforms and include provisions for regular updates. The objectives and targets of national strategies in Portugal are often purely aspirational, without clear connection to resourcing commitments. EU-related strategies are associated to multi-annual ESIF funding, but are programming documents more than strategic documents. Furthermore, there is little formal, integrated monitoring of strategies that would make it possible to follow their implementation, and few evaluations to inform their revision.

  • Third, since the added value of a strategy often stems as much from the process of creating it as from its results, strategies can engage a broad range of stakeholders, from the research community, funding agencies, business, and civil society to regional and local governments in policy making and implementation. While Portugal has made significant progress in involving and engaging stakeholders in strategy development and policy-making, consultation and engagement processes often remain confined to specific communities associated to the different ministries (academic research, business firms, etc.). Most importantly, the deliberative processes, although improving, have not yet succeeded at achieving their most important goal, i.e. contributing to build a stable consensus about priorities for research, innovation, and higher education.

The multiplicity of national agendas and plans stemming from different parts of the system does not create a consistent strategic framework

There is no clear, overarching and shared national strategy in place to provide a vision and guide the higher education, research and innovation system and its contribution to Portugal’s development. Several strategic documents coexist, at different levels and covering various components of the system (research, innovation). They also belong to different institutional processes, either national or related to the strategic steering of European policies in Portugal (in relation to the EU Stability Programme or Cohesion Policy). Portugal has therefore no single specific national strategy documents for higher education, research and innovation, comparable to those developed in several other OECD countries (Box 3.3).11 Stakeholder discussions leading to consensus and prioritisation have not taken place adequately, government policy instruments – such as research and institutional funding – are not guided by national purposes and teaching, research and innovation-performing institutions within the country – universities, polytechnics, research units, intermediary organisations and business firms – lack a clear and stable framework within which to act. The coexistence of several distinct strategies has also led to multiple, sometimes inconsistent, messages and goals. Regarding spending targets, for instance, the strategy sets an R&D intensity target (GERD/GDP) of 1.6% in 2020, 2% in 2025 and 2.5% in 2030, while R&D intensity targets are 2.7% in 2020 in the EFICE strategy and 3% in 2030 in the recent 2018-2030 Innovation Strategy.

Box 3.3. The Long-Term Plan for Research and Higher Education 2015-2024 in Norway: an effective tool for both prioritisation and horizontal policy co-ordination

The Long-Term Plan for Research and Higher Education 2015-2024 (LTP) was launched in 2014 by the Norwegian government following a number of stakeholder consultations and inter-ministerial negotiations led by the Ministry of education and research. It covers research, innovation and, to a lesser extent despite its name, higher education policy. The LTP had proved effective to improve Norway’s capacity for both priority setting and horizontal co-ordination in the context of highly sectorial policy.

  • Priority setting: the LTP is built around three overarching government objectives: developing research communities of outstanding quality; enhancing competitiveness and innovation; and tackling major societal challenges. It also includes specific objectives in priority areas (seas and oceans, climate environment and energy, public sector renewal, enabling technologies). While the LTP has a ten year perspective for designing longer term avenues in broad terms, it includes a more precise four-year plan with financial commitments. It is revised every four years.

  • Horizontal co-ordination: The planning process for the LTP involved high-level government meetings and summits, followed by intense interactions in a number of inter-ministerial working groups and other negotiations and hearings. These consultations fed into the strategy process and allowed for the formulation of the thematic priorities. During its implementation, the LTP also allows inter-ministerial co-ordination, for instance via the LTP interdepartmental groups set up within the different priorities ahead of budget negotiations and during annual high-level LTP workshops.

The LTP is considered a significant first step to improve prioritisation and policy co-ordination, and is expected to push these aspects further in its 2018 revisions. Its four year cycle offers the government the opportunity to add more concrete structural and programme-style policy activities to the LTP from 2018 onwards, without changing the plan’s general orientation.

Source: OECD (2017a), OECD Reviews of Innovation Policy: Norway 2017, OECD Publishing, Paris, http://dx.doi.org/10.1787/9789264277960-en.

Regarding national strategies specifically, the government’s overarching work programme provides little strategic direction for higher education, research and innovation policy. Recent versions of the GOP, for example, have contained a variety of one-off policy measures in the fields of higher education, research and innovation, focusing increasingly on support to innovation, but with virtually no thematic or sectoral priorities.

The recent medium- and long-term vision for the Portuguese HERI system, structured along 14 thematic research agendas (MCTES, 2017b), has added to an already long list of strategic documents. Although this document marks a change in relation to the ‘neutral’ (i.e. not explicitly prioritised) research policy traditionally in place in Portugal, it remains provisional and no information is available on how it will be used to guide research funding allocation. As for the new knowledge strategy for Portugal (MCTES, 2017d), although a laudable initiative, it appears to be a package of on-going and new flagship measures initiated by the MCTES (scientific employment, CoLABS, GoPortugal, Atlantic International Research centre, etc.) to be financed via additional funding from the European Investment Bank (EIB). Regardless of the intrinsic relevance of each of these initiatives, it seems clear that this document – still informal at this stage – falls short of the overarching strategy needed to provide a vision and stable inter-ministerial framework to guide the future development of the HERI system.

The 2018-2030 Innovation Strategy adopted by the Council of Ministers in March 2018 is a positive development as it covers the research and innovation policy fields and sets economic development targets, although not always precise. However, the document is very short and broad, being only available as an annex to a resolution of the Council of Ministers. Apart from referring to already existing programmes and initiatives, it does not provide information on actions and resources. These features make it unlikely that the Innovation Strategy will provide either the overall vision or the roadmap of future actions. It could however, if implemented and monitored,12 be useful as an inter-ministerial co-ordination tool.

Strategies and plans guiding Structural Funds allocation do not compensate for the lack of a national strategy.

The design and implementation of policy initiatives and actions foreseen in the Major Options of the Plan in the HERI policy fields are increasingly influenced by the strategies and plans related to the provision of the Structural Funds. However, the latter only imperfectly compensate for the lack of a national strategy.

The most influential strategic documents guiding the allocation of the COMPETE 2020 funds during the period 2014-20 is the national Smart Specialisation Strategy. Smart Specialisation is conceived as a means to allow EU countries and, especially, regions to develop and consolidate new specialities or activities based on their comparative advantage (Foray, 2014). However, as in several other countries, the Portuguese Smart Specialisation strategy has proved difficult to implement and the overarching strategic principles have been difficult to translate in practice into a smart specialisation policy (Maroulis and Reid, 2017). Even more fundamentally, this strategy is too narrow and connected to the allocation of structural funds to provide a comprehensive vision for the development of higher education, research and innovation. Moreover, it is not clear how policy initiatives in the field of higher education and research have been, in practice, aligned with the goals of the Smart specialisation strategy.

Existing strategies are insufficiently supported by monitoring, evaluation and foresight

The analytical and intelligence base for strategy setting in higher education and STI policy in Portugal is comparatively weak. Pressure on public spending has limited capacity to develop additional analytical capacity in the MCTES or its dependent agencies. In the wake of the crisis and ensuing fiscal consolidation reforms, the ministry has lost a significant part of its policy analysis capacity. Moreover, the limited co-ordination between government departments means that research and analytical capacity are not shared or pooled.

The lack of a budgetary function that would consolidate all appropriations for research and innovation in the National Budget (as it exists in many other countries) is also detrimental to the strategic steering of Portuguese authorities. The current annual budget for R&D is limited to the remit of MCTES’ interventions, while relevant expenditures from other ministries (related to the State Laboratories for instance, or the funding of IAPMEI to support entrepreneurship) are not or only partly accounted for. The government budget appropriations for R&D (GBARD), calculated for the sake of international comparisons, cannot be used for ex ante strategic steering of the research and innovation policy, as they are also reconstructed ex post and, furthermore, imperfectly comply with the international standards set by OECD (OECD, 2015a).13

There are few evaluations of previous or existing policy initiatives to develop an evidence base that could guide the design or re-orientation of policy initiatives. Besides a few exceptions, all evaluations are conducted in the framework of the structural funds governance and, as such, suffer from the same limitations as the programmes they focus on: they are often procedural, centred on execution issues rather than results and impacts, and lack the strategic dimension that could help guide future policy actions.

Recent initiatives demonstrate progress in stakeholder engagement

Although it is too early to assess whether these mark a breakthrough compared to past practices, several recent policy formulation initiatives have relied on a bottom-up participatory approach and could be considered good practices. The 2014 Smart Specialisation Strategy, adopted in 2014, was based on significant analytical work and wide stakeholder consultations to identify strengths and challenges of the system at regional and national levels. The 2017 National Plan for Science and Technology involved extensive consultations with various stakeholders in 14 areas to develop thematic research agendas.

The Laboratory for Public Participation launched by MCTES in collaboration with Ciência Viva, could also be instrumental to allow the participation of stakeholders in higher education, research and innovation policy. Even more innovative is the participatory budget mechanism launched in 2017. Citizens throughout the country chose 38 projects, among which eight in the areas of Science, Scientific Culture and Technological Innovation. A competition was then organised by FCT and Ciência Viva which selected R&D units, higher education institutions and private non-profit institutions to implement the winning proposals in these areas.

Policy Issue 3.2. The capacity to develop an overarching strategy and set priorities is hindered by insufficient co-ordination across government

The absence of an overarching national strategy, and more generally the weak priority setting tradition in Portugal, is in part linked to a lack of horizontal policy co-ordination, i.e. the mechanisms that ensure coherence of decisions between policy areas. A lack of co-ordination between research and innovation policies is compounded by the lack of a high-level advisory body.

Policy silos hinder horizontal co-ordination

Portugal has expanded the number of institutions involved in its HERI system since the beginning of the 1990s. Despite the increased number of bodies involved in the system, there is a clear division of responsibilities between the different policy-making and funding organisations. This is particularly the case in the higher education and research areas, where the MCTES is the main policy-making body and the FCT the main policy implementation agency. The latter concentrates most of the research funding instruments, including funding to individuals, advanced training, research projects, infrastructure and internationalisation.

However, there is a lack of horizontal co-ordination between government departments and policies dealing with higher education, research and innovation and between these departments and those responsible for broader economic, social and regional development policies. The fact that political responsibility for science and technology has not historically been the responsibility of the same minister as higher education (under the Minister of Education) or innovation (under the Minister of Economy) has had long-lasting effects on the co-ordination of relevant policy initiatives.

Even when the policy domains of science and technology and higher education were brought together in a single ministerial portfolio, the original boundaries between higher education and research policies remained. This appears clearly, for instance, in the co-existence of two distinct advisory councils, the CCES and the CNCT, in charge of higher education and research, respectively. This situation has sometimes led to a duplication of efforts, inconsistent measures and a lack of co-ordination between distinct funding streams, notably for research and higher education. While public funding of education is allocated to public HEIs, public funding for research activities is allocated directly to distinct research units, hindering the development of institutional profiles by HEIs which have little strategic leverage on research activities.

As in many countries, the divide is even more prominent between research and innovation policies. MCTES is responsible for higher education and science and the Ministry of Economy is responsible for support to the demand of knowledge in firms and entrepreneurship. This separation is also reflected at the level of implementation agencies, with the FCT funding academic research, ANI funding collaborative research led by industry, and IAPMEI and, to a lesser extent, AICEP, supporting business innovation and entrepreneurship. The joint participation of the MCTES (via the FCT) and the Ministry of Economy (via IAPMEI) in the joint board overseeing of ANI theoretically allows for some co-ordination between the two ministries in the area of innovation. Interviews conducted among agency staff and members of its governing bodies tend to show that this hybrid governance of ANI has in practice had little effect on bridging the gap between research and innovation policies. The lack of co-operation between the two ministries and limited formalisation of the vertical relationships between the ministries and the agencies does not allow this channel of co-ordination to work effectively.

Another divide lies in the fact that some other ministries have direct competence in the area of R&D, in particular via the State Laboratories under their direct control. However, this fracture is attenuated by the fact that some state laboratories are jointly co-ordinated with the MCTES and the sector has been significantly reduced in recent years.

The strategic and operational bodies that administer ESIF have also been criticised for a lack of co-ordination between related themes (competitiveness, human potential and territorial valorisation). These bodies include the dedicated high-level bodies for inter-ministerial and multi-level co-ordination as well as the Agency for Development and Cohesion and the Managing Authorities for the management of the relevant national and regional operational programmes. In response to this repeated and shared diagnosis, this dedicated ESIF governance structure in Portugal has evolved over time and significantly improved its horizontal co-ordination capacity, in particular since the adoption of NSRF (2007-2013), when research and innovation activities have for the first time been dealt with together within the same programme: COMPETE 2020. Further improvements in that direction were made in the subsequent generation of structural funds, Portugal 2020 (2014-20).

At the same time, as the research and innovation support initiatives are becoming more prominent in regional operational programmes, representatives of the Portuguese regions are members in these governing bodies or regularly meet with these. This facilitates multi-level governance against a backdrop of the growing challenge of vertical co-ordination among the European, national and regional levels.

There is no high level advisory body to foster horizontal co-ordination across ministry boundaries

While administrative and policy silos can be found in many countries, Portugal stands out due to its absence of clear formal institutional arrangements that could support high-level, cross-ministerial co-ordination, planning or decision-making. Traditionally, the main ministries in higher education, research and innovation were supported by advisory bodies (Órgãos consultivos), but these only had limited roles in practice. Currently, the two advisory bodies respectively in charge of research and innovation are the CNCT and CNEI. These two bodies were initially chaired by the Prime Minister, which gave them a stronger legitimacy and some transversal dimension, and their mandate included supporting inter-ministerial co-ordination of science, technology and innovation policies. However, under the current government, the two councils have met infrequently and they currently lack a clear mandate and plan of work. The CCES is de facto the only active advisory council to the MCTES and its contributions touch on subjects that go beyond the theme of teaching and learning, providing advises on issues pertaining to the mandate of the ‘dormant’ CNCT. However, the CCES meets infrequently, works mainly on the basis of specific demands from the Minister and has no budget or dedicated analytical or administrative staff to support its work. It therefore lacks the capacity to act as an independent advisory body which combines higher education, research and innovation.

The considerable volume of resources from European Structural and Investment Funds in Portugal dedicated to higher education, research and innovation means that the strategic and operational bodies to administer these funds are important actors in the strategic governance and implementation of policies in these fields. However, the governance structure set up for structural funds primarily ensures effective disbursement of funds in line with operational programmes, which have been agreed with the European Commission, and does not provide a strategic framework to guide HERI activities.

Policy Issue 3.3. The future role of State Laboratories in Portugal’s research system is unclear

Over the last 20 years, the importance of state laboratories in the Portuguese research system has been reduced, as staff numbers and budgets have fallen. Some state laboratories have been merged; others have become associated to universities. The state labs that remain active focus on servicing the knowledge needs of the state or wider society in areas such as weather forecasting, civil engineering, agriculture, energy and geology, nuclear technology, biological resources and health.

Despite these changes, state laboratories still received operating budgets from their parent ministries amounting to a total of EUR 139 million in 2015: a significant investment of public resources. However, there is no overall strategy guiding the work and future development of state labs and limited co-operation between them. Rigid staff regulations also hinder their ability to respond rapidly to changing requirements.

Many countries have reformed their government research sectors in recent years – either by significantly reducing or abolishing them or by changing the status of public entities to allow them to function more effectively. Several countries have also redirected part of their government research sector, notably in agriculture, environment, health and social sciences, to better address the systemic issues related to climate change, ageing, food security and other societal challenges. The ability of the government to steer research institutions, mainly through competitive funding incentives, is limited, especially when it comes to contributing to high-risk and system-transition projects. Addressing the mounting societal challenges might therefore require that the government preserves its own research capacity through government laboratories.

In Portugal, proposals for reform of the State Laboratories were made more than 10 years ago by an international working group (International Working Group on the Reform of the State Laboratories, 2006). However, the crisis meant that the recommendation to set a new strategic framework of the laboratories was never implemented and recent reforms have focused solely on cost-reduction. The role and future development trajectory for state labs in Portugal should be clarified in order to ensure public investment in these bodies is used effectively and their potential contribution to Portuguese science is realised.

Policy Issue 3.4. The resources allocated to higher education, research and innovation are not aligned to an overall strategy or the level of ambition of the government

Once an overarching strategic framework has been set, policy implementation comes down to the commitment of financial resources that are commensurate with the level of ambition and in line with the strategy in place. While government expenditures for HERI activities in Portugal have risen in the last two years, after a period of drastic budgetary restrictions, these funding increases appear far from sufficient to meet the very ambitious objectives related to European convergence recently set by the government (Government of Portugal, 2018). This goal would require multiplying public R&D expenditures by two and private R&D expenditures by four. Experience shows that setting R&D intensity targets that engage actors is a delicate process, where ambition and realism must be balanced. However, meeting the targets will call for more than an increase of public spending on TERI. In particular, it will also require changes in the structure of industry and the nature of the labour force (expanding R&D intensive sectors and increasing the number of highly skilled workers and researchers). Many countries have found it difficult to achieveR&D targets in the past (Sheehan and Wyckoff, 2003).

Of equal importance is the stability of the funding being allocated, so that HERI actors can plan their activities in confidence. Not only have funding levels in Portugal proved unpredictable, but funding methodologies and criteria change frequently, complicating planning and access to finance for research organisations and firms.

Finally, funding schemes should be accessible without disproportionate costs and administrative efforts. There was clear consensus during interviews in all parts of the system that the complexity of the management of the R&D funding programmes and the administrative burden for the applicants has increased significantly, notably due to the requirements related to ESIF co-financing. The increased efforts needed to participate in competitive schemes combined with decreasing success rates act as a deterrent to participation in public support programmes.

Drastic reductions of state funding for R&D, in contradiction with national and European spending targets

The crisis brought a sudden halt to the very strong and unprecedented increase of public and private R&D investment between 2000 and 2009. Gross R&D expenditures (GERD) that had reached the historical level of 1.58% of GDP in 2009 (above the R&D intensity of Greece, Ireland and Spain, for instance) decreased to 1.27% of GDP in 2016 (DGEEC, 2017b). While this is a slight improvement relative to the previous year (1.24% of GDP in 2015), this level is far below the R&D intensity set in the “National Digital Skills Initiative” INCoDe.2030 Strategy (1.6% in 2020, 2% of GDP in 2025 and 2.5% of GDP by 2030), the Industrial development strategy for growth and employment 2014-2020 (2.7% of GDP in 2020) or Portugal’s European 2020 national target (3% of GDP by 2030, of which two third should come from private sector spending). The latter objective is considered by the current government as a desirable scenario to ensure European convergence by 2030 (MCTES, 2017d; Government of Portugal, 2018).

Based on OECD long-term forecasts of the Portuguese GDP growth (OECD, 2018c), achieving this objective would require, if the private business sector bears two thirds of this R&D investment effort (which is currently not the case), a twofold increase in public expenditure and an increase of private expenditures by a factor of almost four (Figure 3.7).

This raises two main challenges:

  • It represents a level of growth of funding over a duration that Portugal has not previously achieved.

  • While such growth would be beneficial to the nation in theory, it would not consistently contribute to innovation and productivity growth if made using existing governing mechanisms and allocation processes. OECD experience shows that meeting ambitious R&D targets is far from being solely a financial challenge. Major reforms will be required to change the structure of industry and services, as well as to reform the governance of the public research sector.

Figure 3.7. R&D expenditures and R&D intensity 1982-2016 and simulation 2017-2030 of EU convergence scenario
picture

Source: OECD (2018b), MSTI database GDP long-term forecast. https://doi.org/10.1787/d927bc18-en (Accessed on 07 March 2018).

Instability of funding hinders the ability of HERI organisations to make ambitious mid- to long-term plans

While the agencies tasked with supporting innovation in businesses (ANI, IAPMEI, AICEP) have been somewhat shielded from budget cuts by their reliance on structural funds resources, the FCT budget was drastically reduced in the wake of the crisis, following an almost two-fold increase between 2005 and 2009. Although funding has now stabilised, this fluctuation has created instability for research and development organisations, reducing overall funding available and, through frequent changes to funding instruments, increasing the administrative complexity of obtaining funds. Moreover, as in several other countries severely hit by the crisis such as Spain (Cruz-Castro and Sanz-Menendez, 2016), budget cuts were not implemented following a strategic plan, but rather where it was politically and administratively most expedient to reduce expenditure, notably activities with shorter term budgetary commitments.

The funding rules and procedures have also changed frequently. Interviewees consulted during the Review complained about regular modifications to funding conditions, or the unpredictability of calls for proposals from FCT and ANI. While these changes reflect exceptional measures taken to reduce public spending, they also relate to the absence of a multi-annual funding framework of agencies and the limited autonomy of agencies in relation to their line ministries. Although the announced inter-ministerial working group (Government of Portugal, 2016c), which was supposed to develop a multiannual financial framework was not set up, the contracts signed in July 2016 between all the HEIs and the government that ensure the stability of funding can be considered a first step in the direction of a multi-annual HERI budget.

The EU and national procedures associated to the management of structural funds create a heavy administrative burden and limit flexibility

The ways in which EU Cohesion policy and domestic policies in a wide array of policy fields are co-ordinated differ according to countries (Polverari, Michie, 2011). Portugal has adopted an integrated approach, whereby the domestic and EU co-funded policies are co-ordinated through increased operational integration at the level of policy instruments. EU funds are frequently used to co-fund national policy instruments, such as the doctoral studentship programme run by the FCT. This close integration of EU funds and national policy activities was, in part, driven by the need for fiscal consolidation, meaning European funds were called upon to replace national funding.

Interviews with both FCT staff and applicants to research funding calls suggest that the integration of two different funding streams in single support instruments, with different rules and diverse conditions for eligibility (depending on geographical locations, types of expenditures and beneficiaries, etc.) has created significant operational and management difficulties. Portugal 2020, with a stronger regionalisation of the funding activities related to STI has opened new funding channels, but has also increased the management complexity of the R&D funding programmes and the administrative burden for the applicants.

Policy issue 3.5. Funding allocation processes at agency level are not adequate to implement national priorities

To have an effect, the research and innovation priorities set at the system level – by government in consultation with stakeholders – need to be translated into relevant activities on the ground. One key transmission belt of these priorities is the funding allocated by agencies.

A number of factors limit the ability of the FCT to translate national priorities efficiently into action. Inadequate institutional arrangements governing the relationship between the agency and its parent ministry (MCTES) and internal organisational issues also mean that the FCT lacks the autonomy to act effectively.

Agencies mainly allocate their funding in a bottom-up way without explicit priorities

In recent years, intermediary funding bodies (agencies) have become more important in the Portuguese research and innovation system, while ministries have concentrated their activities on upstream co-ordination and policymaking tasks. In Portugal, the FCT has been an influential actor from the very early years of the development of the system. This role is formally acknowledged in the mission and responsibilities of FCT which include the “co-ordination of public science and technology policies”. However, to a large extent, the dominant approach, in the system as a whole and within FCT more specifically, has been bottom-up. Research proposals are selected based primarily on merit, without any ex ante prioritisation of research domains and disciplines. The severe budget cuts that the FCT has experienced since 2011 have further limited the scope to allocate additional resources to fields and projects identified as strategic priorities. Despite some formal linkages to the Smart Specialisation Strategy, funding allocation by the FCT occurs without any explicit and transparent prioritisation of research areas.

Although selection based on excellence is a feature of the most efficient research system around the world, the lack of explicit allocation criteria for the resources among thematic areas results in a scattering of resources, including those dedicated to innovation support (see Chapter 8. ). It also makes the overall process less transparent and accountable. Above all, it does not allow the government to support the transformation of the HERI system in line with national development goals, since the process of selection based on excellence naturally favours the strongest actors and areas, to the detriment of emerging ones, which is essential for the future diversification and knowledge-based growth of the economy.

The internal organisation of FCT hinders the co-ordination of the different funding instruments

The measures taken in response to the economic crisis in 2011 in the context of the Plan for reduction and Improvement of the Central Administration (Plano de Redução e Melhoria da Administração Central – PREMAC) also affected the organisational structure of FCT. The agency was integrated with two other independent agencies, the Agency for the Knowledge Society (UMIC - Agência para a Sociedade do Conhecimento) and FCCN (Foundation for the National Scientific Computing) (FCT, 2014). These mergers have further broadened an already wide portfolio of responsibilities, which has again rendered more complex the FCT’s operations as some of these activities have little synergies in research agencies’ traditional tasks. The evaluation of the FCT conducted by an international panel in 2015 recommended that the missions of the agency be reconsidered and refocused on its core competencies (FCT, 2015).

The FCT is structured in line with its portfolio of instruments (support to institutions, support to projects and programmes, advanced training, etc.) (FCT, 2017c). This traditional instrument-driven structure has some disadvantages and creates inefficiencies, the most important being the internal difficulties in co-ordinating the use of the different funding instruments and developing integrated strategies across the different research themes and communities. To alleviate these problems, some newly created funding agencies across Europe have adopted a different organisational model, structured around the successive stages of the funding process: application, evaluation, funding and monitoring (Box 3.4).

The framework within which FCT interacts with its line ministry and its beneficiaries hinders its autonomy to act effectively

The autonomy of implementation agencies is important for their efficiency and effectiveness in implementing the policies formulated at higher level. Numerous authors have documented that inter-organisational arrangements between implementing agencies and parent ministries based on clear mandates, an adequate degree of operational autonomy and strong accountability make it possible to (Eisenhardt, 1989; Sumo, van der Valk and van Weele, 2012):

  • Limit excessive political interference in day-to-day implementation of politically agreed programmes, hence promoting more credible and stable policy commitments, based on time longer time horizons.

  • Steer policy implementation by setting performance requirements, rather than the processes and resources to be used. Democratically elected governments must be able to give clear strategic guidance to the agency.

  • Allow more flexibility for the agency to adapt to and innovate in the way the service is delivered by the agency and.

  • Increase trawnsparency and accountability in policy implementation. The agency must have effective reporting systems in place to ensure the political level is informed about implementation progress and potential problems.

Good practices established in several countries include providing the agency with an appropriate status (e.g. a private company with majority ownership from the state that clearly distinguishes ownership and control); a formal process by which the ministry or ministries provide(s) a clear mandate to the agency (objective-based contracts, letters of assignment, etc.), which then has the autonomy to implement this guidance without unnecessary micro-management. This is not currently the case in Portugal, where there is no clear functional separation between the policymaking and policy implementation levels, in particular when it comes to research policy.

Box 3.4. Three examples of alternative organisational models for research funding agencies

Some newly created research funding agencies are structured around instrument implementation processes (application, evaluation, monitoring, etc.), shared by different funding instruments with the aim of providing consistent operational support throughout the whole process of funding decision and allocation. This is an alternative to the traditional organisational model of agencies, whereby divisions are dedicated to specific funding instruments, which makes it necessary to replicate the same implementation processes for each instrument.

The European Research Council (ERC) was established by the European Commission in 2007 in order ‘to encourage the highest quality research in Europe through competitive funding and to support investigator-driven frontier research across all fields, on the basis of scientific excellence’. Its governing body is an independent scientific council, composed of 22 eminent European scientists. The operations of the ERC are supported by the ERC Executive Agency, the ERCEA, which is in charge of implementation. The ERCEA has three overarching departments: i) scientific management; ii) grant management; and iii) resources and support. The scientific management department has five units, dedicated to process management and review, call and project follow up co-ordination; and the other three on one specific broad scientific areas (life sciences, physical sciences and engineering; and social sciences and humanities). The grant management department has four units. The first three are focused on specific grants and the fourth on audits and ex-post controls. Finally, the resources and support department has three units, dealing with IT and support services, human resources, and legal affairs and internal control.

In Poland, the National Science Centre (NCN) was created in 2011 with the aim of supporting basic research. Its executive agency (the NCN Office), under the aegis of the Ministry of Science and Higher Education, has departments in charge of research projects administration, project monitoring and analysis and evaluation. The Council of the NCN is a policy body consisting of 24 distinguished researchers from Polish institutions. They are in charge of electing the members of the proposal evaluation committees and appointing the NCN director and discipline co-ordinators.

In Spain, the (Sociedad de Artistas Intérpretes o Ejecutantes de España - AEI) was created in November 2015 to foster scientific and technological research in all disciplines through the competitive and efficient allocation of public resources, monitoring of the activities funded and their impact, and to provide assessment in the design of R&D public policies. It has a simple structure organised around two divisions: i) Programming, economic and administrative management; and ii) Co-ordination, evaluation and scientific and technological monitoring. The director of the agency oversees both divisions and reports directly to the president of the agency, who is highest authority on science and technology policy in Spain, the Secretary of State on Research, Development and Innovation.

Sources: European Commission (2016), ERCEA Organigramme, https://ec.europa.eu/info/sites/info/files/organisation-chart-ercea.pdf. National Science Centre of Poland (2018), NCN Organisational Structure, www.ncn.gov.pl/o-ncn/struktura?language=en. Ministry of Economy and Enterprise (2018), www.mineco.gob.es/portal/site/mineco/idi ( accessed in February 2017).

The current legal framework characterises FCT, as a “public institute with a special regime”, integrated into the state administration under the supervision and political direction of MCTES, with administrative and financial autonomy and its own property. However, in practice, external evaluators (FCT, 2015) and many of the public and private entities consulted in the course of this review highlighted the high dependence of the FCT on the Ministry and its low level of effective autonomy. The absence of a formal process for the ministry to convey strategic orientations and targets to its research agency undermines this necessary condition for an effective and transparent principal-agent relationship. MCTES provides policy guidelines to its agency (the last time in 2016), but these are closer to a general political declaration than to a set of clear objectives and instructions for the mid-term development of the FCT. Moreover, the appointment of the four FCT Council members by MCTES is potentially a source of instability and the head of FCT is also the Director General for Research at MCTES. Several research agencies, such as the French National Research Agency (Agence Nationale de la Recherche , ANR), are separated organisationally from their line ministry and are governed via four-year performance contracts negotiated between agency and ministry. The contract defines the objectives, actions (with a timeline) and monitoring indicators for the agency (ANR, 2016).

The independence of the FCT from the scientific communities represented in its Scientific Councils is undermined by the agency’s internal governance arrangements. These are characterised by fragmentation between disciplines and the absence of strong power at the strategic management level of the agency. While involvement of the main stakeholders is an essential attribute of good governance of research agencies, better alignment with the national objectives would require broadening the set of actors represented in the FCT advisory bodies. The FCT needs a governing body through which stakeholders, other than researchers represented in the Scientific Councils, could provide strategic advises to the Board. Currently, the FCT Advisory Body (Conselho Consultivo) limits its advisory activities to the area of scientific computation. This provides the main beneficiaries of the funding activities with a strong position inside the agency and hinders the possible reallocations of funding between disciplines according to evolving national priorities. It also runs the risk of capture by specific interests within the scientific community.

The creation of specific research agencies in specific fields can create additional co-ordination challenges and reduce funding efficiency

Portugal intends to create a dedicated agency to fund clinical and translational research (i.e. activities to create new therapies based on scientific research) in order to take better into account the specific features of this area (Government of Portugal, 2018; MCTES, 2017a). Although several countries have created distinct organisations which fund all or part of health R&D activities (as in Sweden, for instance), this approach is not without risk.

The Review Team was told by researchers in the health sector that FCT funding practices and policies have been poorly aligned to the timelines and outputs of clinical and applied research. Clinical researchers in medicine, for example, report that clinical research priorities are not adequately recognised within the FCT’s scientific panels and in its funding policies. While support to clinical and translational research and innovation is a positive step (along with the recently set up Clinical academic centres), the limited scale and scope of operation of this new agency could lead to additional fragmentation of the funding and priority-setting process. In addition, the efficiency of such a small agency is questionable given the unavoidable fixed costs its creation and management would involve. Other options building on a reformed FCT and improved co-ordination between MCTES and the Ministry of Health could be envisaged.

3.4. Recommendations

Recommendation on establishing an overarching national strategy

3.1. Adopt an overarching National Strategy for Knowledge and Innovation covering and providing clear guidance to higher education, research and innovation funding and steering organisations

Based on an appropriate bottom-up consultation and engagement process, a dedicated high-level task force should oversee preparation of a formalised National Strategy for Knowledge and Innovation for Portugal. This strategy should not only make it possible to set priorities in line with socially desirable goals, but also set a predictable and stable funding framework (see recommendation 4 below) and improve the co-ordination and communication among the main government bodies. This document should include:

  • A vision of how the Government wishes to see the Portuguese economy develop through innovation in the next decade, including identification of sectors with greatest growth and innovation potential.

  • An assessment of the broad skills and education attainment profiles, research capabilities and collaboration with firms and non-profit organisations that will be needed to support the development trajectory the government wishes to see.

  • An account of the regional and social dimensions of education, research, innovation, and on the prospects for the benefits of increased productivity and innovation to be shared.

  • An assessment of the capacity of Portugal’s higher education, research and innovation actors to support the nation’s innovation policy goals.

  • Identification of the overall funding levels that the nation’s higher education, research, and innovation actors are likely to need to achieve. The initial timeframe for the actions could be four years, with a broad multi-annual budget allocation attached.

  • Specification of procedures for monitoring progress against the goals for the strategy and for periodic revision of both global objectives and specific actions (after the initial four-year timeframe).

The national Knowledge and Innovation Strategy should provide a clear framework to guide the internal strategies of implementing bodies and funding agencies under the MCTES and Ministry of Economy (such as the FCT and ANI), while leaving these bodies adequate room to devise the best policy tools and precise prioritisation of actions to achieve the overall goals. The Ministry of Planning and Infrastructures should also be involved to establish effective linkages with EU Cohesion Policy.

The timing of the Strategy should make it possible to set long-term orientations as well as actions required in the short- and medium term. Following the example of the Norwegian Long-term plan for research and higher education, a national strategy could have an eight to ten-year time horizon, with a rolling cycle of revision every four years. Another option, similar to the Spanish National strategy for research and innovation, would be to have an overarching strategy with an eight to ten year time horizon, with four-year research and innovation implementation plans providing more detail on specific objectives, defining the instruments, and funding, etc.

The timing of the Strategy should also be properly aligned with the ESIF programmes. The main orientations included in the new Knowledge and Innovation Strategy should be the basis for the development of the content of the next generation of Operational Programmes for EU Structural Funding for the period 2021-2028, in particular in the ‘competitiveness’ and ‘human capital’ areas.

Recommendations to strengthen national co-ordination

3.2. Establish a high-level task force at inter-ministerial level to take political responsibility for development of the shared national knowledge strategy, taking into account stakeholder input

Establish a task force at the inter-ministerial level bringing together, at a minimum, the Ministers for Science, Technology and Higher Education; Economy; and Planning and Infrastructure, to take responsibility for the development of the new national Knowledge and Innovation Strategy. Direct involvement of the Minister of Finance would be beneficial, providing the body with input with respect to macroeconomic and fiscal constraints.

The high-level task force with the initial task of developing and adopting the Strategy should be established for a fixed length, meeting formally every few months. A secretariat of policy and analytical staff drawn from respective ministries should support the task force.

While principally responsible for the development of the Strategy, the task force could be a first step toward a permanent inter-ministerial co-ordination council that would provide orientations of the higher education, research and innovation policies in a horizontal setting.

For a national knowledge and innovation strategy to be effective, it must be informed by the expertise and perspectives of those working directly in knowledge-intensive sectors of the economy and those who carry out research and education, taking into account the views of a wider range of relevant stakeholders.

To engage knowledge and expertise in the country – and to ensure a future knowledge strategy has wide support – the high-level ministerial task force should organise a wide-ranging consultation and engagement exercise, going beyond the sectoral consultations so far undertaken on elements of current strategy. Existing sectoral advisory groups, including the Co-ordinating Council for Higher Education can play a key role in convening stakeholders and providing input to this process. The secretariat supporting the task force should prepare a consultation document – equivalent to a green paper – outlining initial proposals and options for the priorities and action lines for a national knowledge strategy, to which stakeholders can react. The consultation exercise could involve a combination of moderated discussion events and written submissions. The process of preparing the consultation document, undertaking the consultation and collating input is likely to take at least 12 months.

3.3. Strengthen analysis, foresight and management capacity in government

The development and monitoring of a national strategy should be informed by accurate information on what is happening in innovation, research, and education, and by foresight on developments in the international economy and technology. To meet these needs, an analytic unit drawn from ministries responsible for the strategy’s development and implementation should be established. This unit should provide ministers a detailed report every two years. These reports should inform the process of periodic revision of the national knowledge and innovation strategy, every four years, for example. The monitoring of public expenditure related to the strategy would be facilitated by the creation of a specific budget category in national accounting protocols, consolidating spending on Higher Education, R&D and Innovation.

Recommendation to ensure the contribution of state Laboratories to the national strategy in HERI

3.4. As part of the renewed national knowledge strategy, define the future role of the state laboratories with a view to maximising their contribution to Portugal’s development and addressing societal challenges.

The development of the new national knowledge strategy (Recommendation 1) should include a comprehensive review of the role of the State Laboratories and the formulation of a clear development strategy for these bodies. Portugal can seek inspiration from other OECD countries in its efforts to steer and modernise its public research sector. In Spain, for example, state laboratories have been brought under the direct supervision of the ministry in charge of research and the researchers were integrated into a single research professional group in order to favour inter-organisational mobility. In Sweden, government research institutes have been transformed into non-profit companies and all their shares transferred to a common umbrella body, itself a non-profit company (RISE – Research Institutes Sweden). The role of the umbrella body is to maintain a dialogue with business and the co-owners, steer the RISE institutes, allocate strategic development funding, represent the institute sector in various contexts, lead the branding effort in Sweden and internationally and to evaluate the benefits and impacts of the state’s investment in RISE. Another option would be to established performance contracts for all the state laboratories.

Recommendation to ensure predictable and strategic funding environment for the HERI system

3.5. Use the Portugal Knowledge and Innovation Strategy to set a predictable funding environment for the nation’s higher education, research, and innovation system.

The analysis and advice of task force – based upon wide engagement across relevant Ministries within government and careful wide public consultation – should provide government, with the endorsement of Parliament, with an opportunity to establish a high-level, multi-year commitment of public funding in support of higher education and research. With this funding framework agreed, MCTES can deliver multi-year research funding through FCT and educational funding through its institutional subsidies in ways that predictable, aligned to national priorities, and at a level adequate to achieve needed reforms identified in the review.

While the Knowledge and Innovation Strategy would have a long-term time horizon, the funding framework linked to it would be for a shorter duration, such as four or five years. In Norway or Spain, for example, a national strategy contains a long-term perspective for and a mid-term rolling plan with financial commitments. The strategy is revised every four years for instance, adapting the long-term orientations as needed, and agreeing upon a new funding framework for the four years to come.

3.6. Reform the FCT, increasing its capacity to effectively balance national research priorities and the priorities of the nation’s scientific research communities.

The institutional arrangements between FCT and MCTES should allow the ministry to provide clear guidance and associated resources to the agency on a multi-annual basis and monitor the performance of the agency in implementing these orientations. Such arrangements could take the form, for instance, of multi-annual letters of assignment or performance contracts negotiated between FCT and MCTES, setting out clear objectives and planned resources in line with the national knowledge strategy.

The independence of FCT in the fulfilment of these objectives should be strengthened by institutional reforms such as the dissociation of the roles of Director General for Research Planning and President of FCT. More radical reforms could also be considered, including a change of the current ‘Public Institute’ status of FCT, which provides only limited administrative and financial autonomy, into a public Foundation status. The latter option would also increase its operational flexibility.

The capacity of FCT to put in place the necessary measures to fulfil the objectives assigned to it should be also strengthened by changes of its internal organisational structure to ensure increased autonomy vis-à-vis the scientific communities it funds. A key condition of this autonomy is a clear separation between the “scientific evaluation” bodies and the “decision making” bodies that assign the indicative allocations of resources per areas, instruments. Potential options include notably the creation of an FCT “General Advisory Council”, with a broader scope and stronger role than the current Conselho Consultivo, and changes to strengthen the FCT “Governing Board” (Conselho Directivo) with the appointment of additional members.

Wider autonomy vis-à-vis funded scientific communities should be complemented by a review of its scientific panel structure, to ensure that the FCT is capable of responding effectively to new knowledge needs, and to a range of research communities that are applied, clinical, or transdisciplinary.

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Notes

← 1. This has been the case since the early days of the Portuguese system, when the task of policy co-ordination was mainly handled by the FCT predecessor, i.e. the Junta Nacional de Investigação Científica e Tecnológica (JNICT), then under the tutelage of the Ministry of Planning (FCT, 2013; Brandão, 2017; Conceição P. and Heitor M., 2005).

← 2. For instance, the Higher Council for Science and Technology, created in the early 1990s to follow the requirements of the first generation of structural funds (inactive in 1995), the Higher Council of Science, Technology and Innovation between 2003 and 2005, and the Advisory Council for the Technology Plan and Inter-ministerial Committee for the Technology Plan in the mid-2000s.

← 3. For the 2007-2014 Structural Funds period, it was the case of the evaluations of the measures to support innovation and internationalisation (NSRF Observatory, 2013a) and poles and clusters (NSRF Observatory, 2013b).

← 4. The updated GOPs for 2017 and 2018 have streamlined the 30 main policies into six policy domains. (Government of Portugal, 2016e; 2017a).

← 5. The 15 areas are: agri-food, forests and biodiversity; Portuguese architecture;urban science and cities for the future; culture and cultural heritage; circular economy; space and earth observation; social inclusion and citizenship; industry and manufacturing; ocean; health, clinical and translational research; cyber-physical systems and advanced forms of computing and communication; sustainable energy systems; labour, robotisation and employment qualification in portugal; tourism, hospitality and leisure management.

← 6. A few Portuguese regions had already developed regional innovation strategies in the past twenty years to support the implementation of the EU cohesion policy. The Norte region in particular had developed in 1996 a Regional Innovation Strategy (RIS Norte, covering the period 1998-2001), the Regional Programme of Innovative Actions (NORTINOV, 2002-2004), the regional strategy Norte 2015 in 2006 (2007-2013); the Regional Innovation Plan 2008-2010 (an output of the Norte 2015 regional strategy). These initiatives paved the way toward the Norte 2020 strategy, which includes the Norte smart specialisation strategy (RIS3 Norte).

← 7. For instance, in 2017, the Instituto Nacional de Investigação Agrária e Veterinária (INIAV) received EUR 29.6 million from the Ministry of Agriculture, the Laboratorio Nacional de Energia e Geologia EUR 17 million from the Ministry of Economy and the Instituto Nacional de Saúde Dr. Ricardo Jorge, EUR 28.5 million from the Ministry of Health. These budgets items are included in different budgetary programmes.

← 8. It is important to note that the funding to support the social services is only known ex post since it is included without earmarking in the total amount of institutional funding that HEIs receive, which then decide upon its internal allocation.

← 9. In 2015, the share of teaching staff integrated in a FCT research institution is identical regardless of the career position of the teaching staff (full professor, associate professor or adjunct professor), but was far lower for Polytechnics (35% of FTE in average). Only three polytechnic institutions had more than 60% of their staff in a research institution.

← 10. The innovation support policy instruments are analysed in more details in the Chapter 8.

← 11. The Netherlands, Ireland, United Kingdom, Norway, Sweden, France.

← 12. ANI, in co-operation with IAPMEI, is in charge of producing on a biennial basis a National Innovation Report to present the country’s progress towards the strategy’s goals.

← 13. In particular, the large discrepancy between the government-financed GERD and the GBARD raises some questions about the accuracy of the GBARD. The GBARD as a percentage of GDP in Portugal (0.98%) is well above the level of the EU28 average (0.62%) in 2015. Another striking indicator is the share of R&D policy in the total government expenditure, which is highest in Europe (2.03%, to be compared with 1.36% for the EU28). Efforts are on-going in Portugal to revise these figures.

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