Background information

The Research Council of Norway (NFR) is a strategic funding agency for research activities, as well as an important supplier of input into research policy for the government, the central government administration and the research community.

NFR is responsible for promoting basic and applied research and innovation. This is done by managing research funds and by giving advice to the authorities on research policy, including through proposals for a research budget in the state budget.

NFR was established in 1993 by merging five different previously established research councils.

The Research Council’s services are available to all companies that are already involved in or wish to conduct research activities.

Content of measure

A number of NFR activities are aimed at companies. They include, among others, innovation projects initiated by companies, an industrial PhD project, and the setting up of networks. In the case of innovation projects, the Research Council will finance up to 50% of the costs involved. Funding is also available for the commercialisation of findings.

The Research Council offers a wide range of activities, from start-up help to funding for more advanced research projects, network-building and centre schemes (establishment and operation of specially designated centres of research like The Centres for Research-based Innovation scheme).

Its activities include:

• Support for innovation project.
• User-driven innovation projects, which include some 80% of the industry-oriented research projects receiving Research Council funding.
• Tax deduction scheme - SkatteFUNN - where all types of companies may apply for a tax deduction for costs related to research and development.

Use of measure

NOK 11,9 billion (€1,153 million) was allocated to research and innovation by the Research Council in 2019.

The Norwegian Research Council was reviewed in 2017 . The expert committee underscored a positive development in Norwegian research, measured in publications and citations, and that the Research Council in general fullfills its role in a good way. 

The Research Council was also evaluated in 2012 - A Good Council? Evaluation of the Research Council of Norway.  The evaluation shows that user-directed Research & Development (R&D) instruments are useful to increase business expenditure on R&D. It leads to industrial innovation (enough of which is economically successful to generate significant private returns), generates important knowledge and capability spillovers and leads companies (especially smaller ones) to want to do more R&D. The private and public returns to industrial R&D are both high. While it could be argued that state funding of industrial R&D will crowd out private investment and induce companies to invest in the wrong things (‘picking winners’), the evidence shows the opposite. NFR-funding ‘crowds in’ private investment; the private returns induced are about the same as companies get from their own investments in R&D and the societal returns are higher. The fiscal incentive is a useful way to help small companies begin to do more R&D, generating high private returns but limited externalities. As companies’ R&D expenditures rise, NFR’s selective approach becomes more appropriate because it increases externalities, it can support agglomeration (including around national priorities) and it avoids the problem that larger companies tend to free ride on tax incentives.

In the 2017 review, the expert committee recommended a less complex grant system and a more exclusive focus on improving the quality of research, arguing that the Council had too many and diverse goals. Several changes have since been implemented to achieve this. This includes changes to the organisational structure, a reorganisation of application procedures and deadlines, a common procedure for evaluating applications across programmes, and new evaluation criteria focused on excellence, impact and efficiency of implementation. 

The overall impression of the 2012 evaluation was that NFR is very good at reacting to defined needs and ‘serving its customers’, but the NFR did not score so high when it comes to being proactive. The NFR probably needs other mechanisms than what they have today in order to be proactive, including the ability to conduct diagnostic and prospective studies, fund small-scale, promising developments on its own initiative and consider explicitly addressing high-risk and interdisciplinary research. If these elements are strengthened, the NFR's ‘change agent’ role could be stronger.

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Trade unions Employers' organisations Company / Companies Local / regional government Public employment service	National funds Regional funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Employer organisations and trade union confederations may be involved in advisory committees, such as those set up for specific programmes.

Views and reactions

Unknown

Sources

• 10 September 2012: Evaluations of the Norwegian Research Council 2012 (www.regjeringen.no)
• 07 February 2017: Review of the Norwegian Research Council 2017 (www.regjeringen.no)
• 28 October 2022: The Research Council of Norway (www.forskningsradet.no)