How mission-driven policies challenge traditional research funding systems

The science push rationale

Up until the 1980s, the dominating research policy rationale prescribed governments to provide universities with institutional funding for research with few strings attached (Martin 2003) or to channel funding through academically oriented research councils (Rip 1994; Sörlin 2007; Aagaard 2017). The policy objectives first and foremost found their rationale in the linear science push model that emerged out of the Vannevar Bush (1945) report Science: The Endless Frontier (Godin 2006). It rested on an underlying belief that if governments allocate money to basic research, societal benefits will eventually, but unpredictably, materialize and contribute to increased welfare and long-term economic growth (Cohen, Nelson and Walsh 2002; Schot and Steinmueller 2018). The science push linear model of innovation was further cemented by the successful application of chemistry and physics to war efforts during World Wars I and II, as well as by the rise of ‘Big Science’ during the interwar years, all of which opened up for additional funding and greater autonomy in basic science (Kline 1995).

Several authors have described this model as the ‘traditional social contract for science’ (Van der Meulen 1998; Martin 2003). It involves extensive reliance on the internal mechanisms of science for quality assurance, significant individual and organizational discretion, and high, but largely unspecified, expectations that academic advancements will eventually create societal value (Aagaard and Mejlgaard 2020). Theoretically, the rationale also rests on economic research highlighting technological change as the main factor behind growth (Solow 1957) and stressing a market failure where private companies lack incentives to invest sufficiently in research (Nelson 1959).

Overall, this rationale prescribes a clear division of labor between different actors. On the one side, public science is expected to seek advancement of knowledge without considering potential societal value. On the other, the private sector, is expected to transform the findings into innovations (Schot and Steinmueller 2018). Another key characteristic is that society should not interfere with the direction of research. Rather, the direction should solely be determined by internal priorities based on the perception that the self-organizing character of science automatically directs individual researchers towards the most promising and important topics (Polanyi 1962).

While this rationale, in particular, was dominant for university research from World War II until the 1980s, some of the underlying ideas have seen a revival in the last two decades in the form of strengthened excellence orientation (see, e.g., the establishment of ERC and national equivalents).

The market-oriented rationale

Although the science push rationale never disappeared, the underlying policy ideas became increasingly challenged from the 1960s and onwards. Where the traditional social contract provided basic researchers with great autonomy, the emerging policy rationale implied that in return for public funds, scientists should be held more directly accountable and should be guided towards addressing research problems of industrial and social relevance (Gulbrandsen and Smeby 2005). Initially, the science push model was supplemented by a demand pull model that emphasized the role of market demands (rather than internal priorities in science) in driving technological innovation (Godin and Lane 2013). This shift in perspective was brought about by increasing political dissatisfaction with the lack of direct and easily measurable pay-offs from investments in basic research (Wise 1985; Pavitt 2001).

The view was not only that a turn towards a global knowledge and innovation economy was taking place (Stehr 1994), but also that the linear model was too simple as a foundation for funding decisions (Kline and Rosenberg 1986; Aagaard 2017). In particular, a new understanding of the dynamics by which innovation occurs began to challenge the linear science push rationale and accentuated the need to consider feedback mechanisms and interdependencies. Universities therefore began to be perceived as key organizations that should contribute to national wealth creation by linking their work closely to the needs of the economy (Martin 2003; Etzkowitz and Leydesdorff 2000).

This market rationale comes in various forms. What is highlighted here can first and foremost be perceived as an exponent of the ‘innovation systems’ thinking of the 1990s (Lundvall 1992; Nelson 1993) stressing the need for strengthening networks, collaboration, and co-production to increase and accelerate the uptake and commercialization of science and to make universities themselves more entrepreneurial and professional. Expected results are more market-oriented outputs from universities (e.g., in the form of patenting and licensing of research outputs and spin-out companies) as well as broader effects on private firms’ innovation, turnover, growth in employment, and, ultimately, competitiveness. With this rationale, the previous idea of market failure was supplemented by ideas of institutional and interactional or ‘systemic’ failure as a barrier for productive interactions and positive societal impact (see, e.g., Bleda and del Río 2013). Hence, the clear separation of tasks between public science and private companies from the science push rationale was abandoned.

Instead, the market-oriented rationale promoted the view that useful knowledge is generated through interaction among actors in national, regional, technological, or sectoral innovation systems. To the extent that the direction of research should be influenced through funding, it should be based on strategic assessments of medium- and long-term commercial potential. In relation to the question of how to fund research, this rationale has placed the responsibility for funding in dedicated agencies and/or strategic funding instruments that emphasize public-private collaboration.

The mission-driven rationale

However, also the market-oriented rationale has become challenged over time. In particular, it has been argued that the lack of directionality and its focus on economic effects have created new problems and that current societal challenges can, at least partly, be linked to technological innovation with unintended side effects (e.g., Weber and Rohracher 2012; Diercks, Larsen, and Steward 2019). In other words, a strong market orientation may lead to societally undesirable priorities if not balanced against other considerations (Kallerud et al. 2013). There was also growing agreement that the market-oriented rationale was not sufficiently effective in fostering solutions to complex problems in society (e.g. Schot and Steinmueller 2018). In recent years, a different policy rationale has therefore been (re-)introduced seeking more explicitly to enable research to contribute to tackling societal challenges through, for instance, politically defined ‘missions’.

While there may be many interdependencies and overlaps between societal and economic objectives, a key difference between the market-oriented rationale and the mission-driven rationale is that the latter involves much more direct steering of efforts towards specific objectives based on broad societal needs rather than narrow economic objectives indirectly steered by market demands (Diercks, Larsen, and Steward 2019). Mission-driven policy approaches therefore entail a strengthened effort by policymakers to shape the direction of scientific and technological advance (Weber and Rohracher 2012). Hence, with this rationale, the role of the state is changing from primarily supporting connectivity and learning within systems to shaping the direction and coordination of research and innovation activities.

This shift is most clearly expressed in the recent mission-driven policies of the European Union, addressing grand societal challenges and the UN Sustainable Development Goals (Mazzucato 2018). These policies define specific areas of societal concern and seek to tackle societal challenges such as food security, energy, and climate. Hence, the main objective of the emerging rationale is not to enhance national competitiveness but rather to solve global challenges (although the two objectives are often seen as complementary). Similarly, the main concern is not market failure or systemic failure but rather directional failure (Chataway et al. 2017). This directionality is expected to be based on social choices rather than economic potential (Schot and Steinmueller 2018). Finally, the mission-oriented rationale also differs in its emphasis on collaboration and division of labor both within the academic system and between the academic system and society. Broadly speaking, societal challenges are perceived as too complex to be addressed by single disciplines. Similarly, the perception is also that societal challenges cannot only be solved though collaboration between public science and private companies but requires multiple types of actors negotiating with different motivations and priorities towards social choices (Kallerud et al. 2013). This includes non-governmental organizations, philanthropic foundations, and social entrepreneurs, which are expected to catalyze innovation and, hereby, address problems that are insufficiently targeted by governments or the market (Kallerud et al. 2013).

The emerging mission-driven rationale not only distinguishes itself from the science push and the market-oriented rationales, but also from traditional mission-driven research policies of the 1950s to 1980s. These policies were typically characterized by goals determined by single government institutions, often fully funded and implemented by independent, dedicated agencies such as the Defense Advanced Research Projects Agency (DARPA) or NASA and centered on well-defined objectives requiring solutions of a scientific or technological nature. However, since challenges today are of a different nature to the challenges that inspired the Apollo program and the Manhattan Project, modern missions need to take new forms and should be funded differently (Nelson 1977; Ulnicane 2015; Boon and Edler 2018). Among other things, funding is expected to come not only from one dedicated agency, but rather from a variety of public and private sources targeting all research actors and the whole value chain of research (Mazzucato and Semieniuk 2017).

Mission-driven policies are closely interwoven with the notion of challenge-driven policies. Indeed, they are often used interchangeably, with challenges seen as the driving force for the formulation of missions (see, e.g., Mazzucato, Kattel, and Ryan-Collins 2020). However, we observe a change in the way in which policies are named and described since the beginning of the century: A shift from the introduction of challenge-oriented policies by the EU, and subsequently by several countries, to a more recent shift towards mission-driven policies, again pioneered by, among others, the EU but also seeping into national policy development.

Key characteristics of the three policy rationales are summarized in Table 1.

The implication of mission-driven policies for research funding institutions

From the historical institutionalist perspective, it can be argued that traditional research funding systems largely adjusted to the introduction of the market-oriented rationale through a process of layering. This resulted in funding systems where the science push and market-oriented rationales could co-exist side by side but implemented through separate funding bodies or distinct funding instruments. This separation is observable in many countries and, such as in the EU research funding system, as exemplified by the division of labor between the European Research Council and the Horizon Framework Program.

In many countries, as in the EU, different independent funding organizations with distinct missions clearly linked to one of the two rationales have been established. As we will show in the empirical analysis, this is the case in Denmark. In other countries, such as Norway, we find a more unitary research funding system in which the traditional separation between predominantly science-oriented and market-oriented rationales is still present internally in the form of dedicated programs and instruments linked to one of the two rationales.

To a large extent, both types of systems have upheld this separation between the two rationales and pursued their objectives more or less independently of each other. However, the distinction is not entirely clear-cut. For instance, scientific excellence is typically invoked as one of the assessment criteria, also in market-oriented programs. Struggles between proponents of either rationale have to a large degree been about balances, displacement, and differential growth (see, e.g., Aagaard 2017 for an example of this development in a Danish context). However, although separation between the rationales has been the norm in many systems, the lack of integration has often been viewed as a problem. The attempt to establish effective coordination of the public research effort has therefore been a continuous concern for most governments over the years, but the general impression is that coming to grips with this task has been difficult (Skoie 2000).

In contrast, the main argument of this paper is that the emerging mission-driven rationale cannot be institutionalized separately if it is to succeed in its aims. This rationale demands a strong state-led directionality that cuts across the whole value chain of research and innovation, targets many different research performers, draws on multiple funding sources, and is based on broad social choices. It therefore depends on a more holistic, system-wide coordination, where different research areas, research types, and research projects all contribute towards the same ultimate goals. Accordingly, a general characteristic of modern mission-driven approaches is that they attempt to address what Weber and Rohracher have named ‘policy coordination failure’ (2012). This failure is attributed to lack of policy coordination across different systemic levels; lack of horizontal coordination between research, technology and innovation policy, sectoral policies, and cross-cutting policies; and lack of vertical policy coordination between ministries and implementing agencies.

However, even if we restrict our focus to the research part of this wider system, it is clear that missions require a high degree of coordination. It is necessary to build a diverse but also coherent portfolio of projects and to make a continuous effort to evaluate the contribution from individual projects to the mission objectives in order to re-direct funding to other activities if necessary (Mazzucato 2018). This portfolio management approach is an argument for more proactive and flexible management of funded projects in which the managing organization relies on in-house capabilities to balance the risk of wasting resources on futile projects with the risk of writing off their unexpected value (Mazzucato 2018a).

Hence, where the market-oriented rationale could be layered unto and pursued largely separately from the science push rationale, the mission-driven rationale requires a more holistic funding approach where different elements are considered more as parts of a greater whole and coordinated as such. This leads to an increased demand for coordination and portfolio management. Rather than displacing institutions developed to serve science- and market-oriented rationales, mission-driven policies require existing research funding institutions and instruments to be adjusted to relatively high degrees of directionality in research funding and to new aims (e.g., aiming for broader societal effects rather than the realization of economic impacts). This is also likely to have implications for the criteria used to assess and select projects for funding. For instance, instruments that deploy mission-driven policies would likely include an assessment of the ability of proposed projects to contribute to solutions to a given societal challenge or mission, in addition to conventional assessment criteria related to, for instance, the scientific excellence and potential socio-economic impact of the proposed research (Normann et al. 2022).

A shift towards the mission-driven rationale is also likely to require new means. This includes an increased need for coordination across actors and policy areas and portfolio management of grants within given thematic missions, as stated earlier. To a large extent, the mission-driven rationale must be integrated in already existing research funding systems – including institutions that have evolved to serve the science push rationale as well as those that deploy market-oriented instruments – and to provide both old and new funding instruments with a common direction. It also includes an increased need for funders to follow up on funded activities, monitoring their progress and contributions towards targeted societal missions in order to perform actual portfolio management (Normann et al. 2022).

In historical institutionalist terms, we therefore argue that what is required is (at least partially) a conversion of funding systems, where the existing institutions are re-directed to new purposes (Hacker 2004). However, these requirements of conversion may challenge institutions that have for long evolved to serve other policy rationales. Thus, the implementation of the mission-driven rationale may lead to tensions, symbolic implementation, or even resistance from engrained funders. In the following, such theoretically expected tensions are explored in two illustrative case studies of the Danish and Norwegian research funding systems.

Ethics

All respondents were informed of the aims of the study and the ways in which their personal data would be processed. Written informed consent was obtained from respondents.

Given that the study is based solely on interview data and the limited sensitivity of the data collected, the level of risk for human participants was deemed to be relatively low. As such, the authors did not apply for approval of the study from the university’s ethics committee.

Selection of countries

The overall PROSECON project focuses on three countries: Denmark, Norway, and the Netherlands. However, in this specific study, we only compare Denmark and Norway. As argued by van der Meulen and Rip (1998), the intermediary level of funding organizations is populated differently in different countries, and this ‘ecology’ is likely to influence the direction, outcomes, and impacts of conducted research. The path dependency of these ecologies is also likely to influence the way in which new rationales become integrated in existing systems. In this study, we therefore selected the two most differing countries: Denmark, with a funding system consisting of multiple funding bodies with distinct aims and mandates, and Norway, with a broad and unified research council.

Data

In this study, we restrict ourselves to an examination of the main public funding bodies operating at a national level, thus excluding domestic private funders and supranational funders. In addition, we focus on dedicated research funding organizations only, thus excluding research funding instruments in government ministries and agencies.

Via publicly available documents from within each country, we identified the key public funders responsible for the allocation of competitive research funding. We mapped their aims, main characteristics, and key funding instruments in order to identify the funding bodies responsible for the main public mission-driven research funding instruments in each country. The selected funders are, for Denmark, the Independent Research Fund Denmark (IRFD) and the Innovation Fund Denmark (IFD), and, for Norway, The Research Council of Norway (RCN).

For each country, interviews with both administrative staff employed in the selected funding bodies and members of the boards were undertaken. All the interviewed board members were external, that is, not employed by the funding body but appointed to their role on the board. These interviews provided first-hand insight into the history, day-to-day management, and ongoing internal assessment and adjustment of the selected instruments. Five interviews were undertaken with representatives from IRFD and IFD, while three interviews were undertaken with RCN staff and board members.

The interview guide was developed by the authors for the purposes of this study and can be found in the Extended data (Norn et al. 2022). The guide was not validated through pilot testing but designed as a semi-structured interview guide, allowing the authors to adapt interview questions to the experiences and expertise of the respondents.

The aim of the interviews was to collect data on the funders’ perspective on their mission and overall aims as well as their role within the national research funding system. The interviews also explored the extent to which targeting efforts and mechanisms were determined by external actors (e.g., policymakers who allocate funding to be distributed by the funder) and the extent to which they were decided upon by the funders themselves. We also asked about issues related to coordination and portfolio management. This study in particular builds on the latter, but also draws on the remaining issues as background information.

Finally, a background interview was undertaken with two academic scholars with great insight into European research funding systems and focusing on general challenges in relation to coordination of funding bodies or instruments and portfolio steering. In addition, we interviewed three representatives for the Dutch national research council, NWO, focusing on similar funding instruments. Although this paper focuses on the Danish and Norwegian cases, insights into the Dutch funding system contributed to the background knowledge for this present study.

Interviews were undertaken during the COVID-19 pandemic. Due to travel and transport restrictions, all interviews were undertaken and recorded using Microsoft Teams. Two of the authors performed the interviews, and both these authors participated in all interviews. Interviews were subsequently transcribed by a research assistant, and data analysis was performed by the authors.

The interviews were conducted in early 2021. As such, the Danish government’s introduction of a green mission-driven research policy in late 2020 had not yet been implemented, while, as previously mentioned, a formal mission-driven policy was still under development in Norway. As such, the timing of the interviews allowed us to capture experiences and practices surrounding the implementation of the former generation of challenge-driven funding instruments in both countries, on the cusp of a transition to next-generation mission-driven instruments. The interview guides can be found in Extended data (Norn et al. 2022).

Denmark

Background

Since the late 1960s, Denmark has had a traditional, academically oriented research council system, which, in spite of various reforms, has remained relatively unchanged in its basic structure. In addition, a ‘Centers of Excellence’-oriented funding organization was established in 1993 in the form of the Danish National Research Foundation (DNRF). The basic institutional funding configuration supporting the science push rationale has thus been rather stable over time.

The implementation of more market-oriented objectives, on the other hand, has been much more shifting and unstable. The first large-scale attempts to stimulate economic and wider societal impact came in the 1980s based on the emerging policy belief that industrial growth should be based on technologies such as information technology, biotechnology, and materials science (Aagaard 2011; Grønbæk 2001). This led to a strong growth in earmarked strategic program funding over the following years – mainly administered in special committees outside of the existing research council structure. During the 1990s, many of these long-term programs were replaced with more short-term and more narrowly defined programs. As a consequence, many strategic research areas have thus been lacking long-term stability and an overall strategic direction.

In 2001, a new Danish government initiated a restructuring of the public research funding system. The traditional academic research councils were subsumed under a new umbrella organization, the Independent Research Fund Denmark (IRFD), and three new market-oriented research funding organizations were established alongside the science push part of the system (consisting of IRFD and DNRF). The new market-oriented funding organizations included the Council for Technology and Innovation (established in 2002), the Strategic Research Council (established in 2004), and the Advanced Technology Foundation (established in 2005). This layering strategy subsequently opened up for differentiated growth, leading to displacement in favor of the market-oriented funders. In 2013, these three funding organizations were merged into a united organization labelled Innovation Fund Denmark (IFD). The result was a research funding system with a sharp demarcation between funders relying on the science push rationale and funders with a clear market-oriented rationale.

Current system

While the basic structure remains unchanged, this sharp demarcation has become a bit more blurred recently. On the one hand, IRFD has – in addition to its core mission to support and promote responsive mode research – been given the responsibility to fund politically defined thematic research from 2018 and onwards. On the other hand, IFD is more explicitly asked not only to support entrepreneurship, partnerships, and technologies that can be translated into viable businesses and stimulate growth and employment, but also to focus on solutions to key societal challenges and broader societal effects. A policy expectation has been that IFD needs to move from a one-by-one funding approach towards a more strategic and coherent allocation of funding.

These expectations were further reinforced when the Danish Government in September 2020 launched a new green transition research strategy with four concrete missions: carbon capture, green fuels (e.g., Power-to-X), climate-friendly agriculture and food production, and re-use and reduction of plastic waste (The Danish Government 2020). The strategy states that the government will support dialogue and collaboration among the central actors within the green transition sectors – including research funding organizations, the higher education and research institutions, and the private sector – to establish a clear direction and a more coherent effort across the whole value chain from basic research to commercialization. However, the policy instructions do not lay out more precisely how coordination and portfolio management can take place in relation to funding of this mission-driven research.

A new funding instrument, InnoMissions, was introduced to support this transition towards green missions, which builds on, but extends, the former main instrument of IFD, ‘Grand Solutions’. Indeed, both IFD and Grand Solutions were created as by-products of a national innovation strategy introduced in 2012 that formally defined societal challenges as the aim of research and innovation policy (The Danish Government 2012). Alongside the development of IFD, the thematic funding instruments of IRFD were introduced. Thus, the current shift towards green missions in Danish research and innovation policy builds on almost a decade of experience with challenge-oriented research funding instruments.

A recent report (Wohlert et al. 2021) offered recommendations for the implementation of a Danish mission-driven policy on green energy, underlining, among other things, the need to involve a broad range of societal actors to increase the likelihood that outputs from funded activities will be developed into effective technologies and approaches to mitigating the effects of climate change and supporting a green transition. The authors also call for increased and more effective coordination across relevant ministries and funding bodies. Similarly, an expert group reviewing the Danish science and innovation system pointed to the need to strengthen coordination across actors and instruments in the Danish system (European Commission 2019). Indeed, the authors of this report argued that such coordination was key to achieving innovation aims in Denmark but that past reforms had focused on minimizing the need for coordination instead of bolstering increasingly important links between actors and activities in the research and innovation system.

Norway

Background

Norway established three research councils during the late 1940s, devoted to industrial needs and technological development, agriculture, and academic research, respectively. A council devoted to fisheries was added in 1972, while a fifth devoted to applied social sciences was established in 1987. By the late 1980s, Norway thus had a structure with a mixed but separated set of academic, technological development, and innovation-oriented councils. However, a perceived lack of coordination, excess administration, and lack of integration between basic and applied research led to a merger of the five councils into the broad and unitary Research Council Norway (RCN) in 1993 (Skoie 2000). The aim was to develop a comprehensive, simple, efficient, and well-coordinated funding organization to facilitate integration of basic and applied research and to foster interdisciplinarity (Skoie 2000). Hence, the new council was not merely to be an umbrella organization for councils attached to four different ministries and building on different policy rationales. It was to be a fully integrated council under one ministry (the Ministry of Education and Research) with an entirely new internal structure.

From the beginning, RCN was divided into six non-disciplinary operational divisions, all integrating both basic research and innovation, but after an evaluation of the council in 2001 (Arnold et al. 2001), it was reorganized into three broader divisions. A main reason was that RCN still reproduced the fragmentation of its predecessor organizations. Furthermore, having 16 ministries providing it with funding and instructions without having significant internal ‘strategic’ resources made it difficult to fulfill stakeholders’ expectations and also created a heavy organizational and administrative load. However, many of these problems persisted, and RCN was therefore reorganized again in 2010. The new organization addressed the need for thematic and disciplinary expertise at the division board level and allowed RCN the possibility to strengthen its position in relation to the generation of national research and innovation strategies.

Current system

Throughout this period, RCN has stood out in a comparative perspective as one of the broadest and most unified national research councils in Europe. Unlike most other research funding agencies, RCN covers all research disciplines and sectors, including support of research-based innovation. A large share of all public R&D funding is channeled through RCN via a number of instruments, ranging from centers of excellence, infrastructure, and large thematic programs to business-oriented and user-driven projects. The Ministry of Research and Education and the Ministry of Trade, Industry and Fisheries are the most important contributors to RCN’s budget, but RCN administers funding from a total of 15 ministries.

However, until recently, the different historical institutional backgrounds were still mirrored in the structure of the funding programs. Rather than fully integrated, it was a layered system, grounded in vastly different legacies and ways of thinking. According to critics, the result was too much silo thinking with ministries funding research only within their specific area of policy. This was also stated in a 2012 evaluation that highlighted difficulties with the coordination of research and innovation policy at the national level, stressing that a national strategy for research and innovation should be more than the sum of what 16 ministries want. In the same evaluation, it was stated that the responsive mode funding was to a large extent fenced off from the rest of the system. This science push part of the system was described as an ‘aggregation machine’ – responsively funding proposals but not with RCN acting as a change agent (Technopolis Group 2012).

This type of criticism eventually led to a major reorganization of RCN beginning in 2019. Most importantly, RCN established 15 portfolio boards under a single executive steering committee. Each portfolio board is responsible for making investments within a specified but relatively broadly defined thematic area. They are also responsible for monitoring investments within their respective portfolio area when investment decisions are made by other portfolio boards. Moreover, the portfolio boards advise the CEO of RCN on overall holistic follow-up of the portfolios within their area of responsibility and manage the budget funds they are allocated by RCN’s board.

With regard to the introduction of a mission-driven policy, Norway has not yet decided on concrete missions. It has, however, outlined a framework and formulated the principles on which a mission-driven approach should build as well as sought recommendations for the design of a Norwegian mission-driven innovation policy (Larrue 2021a; Normann et al. 2022). The ambition is to establish clearly directed missions that mobilize along the whole value chain of research and innovation, to utilize existing R&D instruments, to take advantage of active portfolio management to ensure stronger interaction across instruments, and to have a consistent and coherent coordination (Forskningsrådet 2020).

Within Norwegian research policy, targeting research at addressing societal challenges has long been a central rationale, which is why more targeted missions in a formal mission-driven policy would not represent a departure from prior policy objectives (Normann et al. 2022). This challenge-driven focus has been implemented in RCN in instruments such as the ‘Collaborative Projects to Meet Societal and Industry-Related Challenges’. The recent reorganization of RCN into portfolio boards was intended to strengthen the existing ability of the council to deliver on policy aims of promoting research that can deliver solutions to societal challenges.

A recent research report presents recommendations for the Norwegian implementation of mission-driven policies and emphasizes the importance of mobilizing a broad set of actors across sectors and policy areas and the demands that this places on the ability of central institutions to coordinate mission-driven activities (Normann et al. 2022). Moreover, the authors of the report argue that the Norwegian system is hampered in this regard by a lack of tradition and mechanisms for coordination across ministries and sectors – particularly beyond the research funding system – although it has strong traditions for coordinating research funding within sectors (a similar conclusion is presented in Larrue 2021a). The same report suggests that mission orientation will require more portfolio management and follow-up monitoring of granted projects than practiced today in RCN.

From challenge- to mission-driven policy instruments

As described above, both the Norwegian and Danish research funding systems have until recently been characterized by a rather sharp separation between programs or funding organizations based on the science push rationale on the one side and programs or funders adhering to the market-oriented rationale on the other. Despite important differences in organization (separated funding organizations vs. a unitary research council), the two funding systems may both be described as layered entities with limited integration across the two traditional rationales.

As mentioned earlier, although a societal challenges perspective has been implemented in research funding in both national systems in recent years, a formal mission-driven approach has only recently been introduced (in Denmark) and is still under consideration (in Norway). As such, examining experiences in both countries with challenge-driven research funding instruments, and how these have been institutionalized, provides a window into the challenges likely to be faced in the implementation of the next generation of mission-driven policies, which will come with strengthened expectations of coordination and portfolio management, and which we turn our attention to in the next section.

Increased directionality in research funding

Mission-driven policies involve a high degree of directionality in research funding, as funding is allocated to the pursuit of specific, politically prioritized missions.

One of the main challenges mentioned by the interviewees, related to the expectations of increased coordination at the project level and more active portfolio management at the strategic level, has to do with a perceived trade-off between directionality and quality. There is a general concern across all interviewees that increased directionality (which per definition narrows the calls) may harm the scientific quality and perhaps also the impact of the research investments. All interviewees thus emphasize that they do not only work actively to influence the political formulation of call texts to make sure that they are formulated as broadly as possible, but also subsequently seek to interpret them as broadly as possible.

IRFD is a good example of this approach. First of all, IRFD seeks to stay as close as possible to the political formulation of themes and to avoid additional narrowing of calls. They strive to allow as many researchers from as many disciplines as possible to apply as well to give individual researchers a large degree of freedom in terms of motivating their project within the call. It was stressed that this approach is not a matter of disagreement with the priority of the politicians but that it was chosen out of a genuine concern for the quality. However, the IRFD representatives stress that the most important part of this work takes place before rather than after the political formulation of the call texts. Here, they try to influence the political process as much as possible to avoid narrow thematic priorities.

Also, IFD has traditionally tried to interpret not only the specific call texts, but also their legal basis as broadly as possible, and even to have an open call once a year. However, this has become increasingly difficult as almost all of their funding is now tied to green transition research and, often, to quite specific technologies. The interviewees from IFD sees this as an important constraint and fears that it will reduce the impact of the investments. In particular, they highlight the fact that the open calls have normally been a tool for filling in the holes between thematic calls and that these calls have enabled them to also support high-quality proposals that fall outside or in-between calls.

The same concern is found in the Norwegian context, where also the portfolio boards seek to make calls as broad as possible. Here, it is also stated in relation to the thematic calls that although RCN requires the highest possible quality, there is a clear trade-off. Accordingly, the interviewees stated that when you narrow down the thematic calls, you have less competition and, potentially, lower quality. However, while this concern is also present in Norway, it comes across as less pronounced than in Denmark – perhaps because applications can be reallocated to other calls by the portfolio boards.

Aiming for broader societal effects

Mission-driven policies differ from their counterparts grounded in a market-oriented rationale by aiming for broader societal effects rather than the realization of economic impacts such as growth in productivity, turnover, or employment among private firms.

Interviewees mentioned that a more concrete challenge for an active portfolio steering is related to difficulties with formulating criteria that allow the funders to select projects based on how they fit into an overall portfolio. These difficulties are clearly linked to the trade-off described above. It was a general impression across the interviewees that coordination and steering may be possible in relation to the formulation of calls but that active portfolio management is very difficult in relation to the selection of specific projects. As stated in one of the expert interviews, if you consider using portfolio thinking in assessment or allocation decisions, you will immediately be asked to stick to the criteria described in the call. So, assessment panels can only take the overall portfolio of projects into account if the criteria for this are clearly spelled out beforehand.

There are also challenges in relation to the assessment of the formulated criteria, where broader impact or portfolio-oriented criteria are perceived as difficult to handle. Across most of the interviewees, it is stressed that scientific quality is often less problematic to assess than expected impact or fit with a mission-based strategy.

For IRFD, it is stated that there are no clear requirements as to how these impact statements are understood, evaluated, or weighted. In their thematic calls, they receive both very solution-oriented applications and basic research-oriented projects, and it is seen as difficult to determine the weights between project types in advance/as a generic form. In the same vein, the interviewees also highlighted that a good applicability dimension will never outweigh the scientific quality requirement. Only if projects are of identical scientific quality can other requirements be added to the overall assessment. It is academic quality understood as excellence or expected breakthroughs – not applicability potential – that is used to compare the different projects. Nonetheless, applicants have to account for the potential applicability perspective in their application for the thematic calls. For IFD, however, this trade-off is perceived somewhat differently. As stated by one of the interviewees, there is not necessarily full correspondence between what is good for science and what is good for society, but also here it is acknowledged that potential impact is difficult to assess – in particular when impact is viewed in a societal perspective rather than at a single firm level.

Also in the Norwegian interviews the same tension can be identified. Here, it is stated that it is the academic score of each project that constitutes the main criterion in the assessment. Additional criteria can be added in the call text. This could be that female PIs or hydrogen-related research should be prioritized. Hence, the opportunity to consider other criteria is present but only if it is included in the call description. In reality, however, this is difficult, and an interviewee mentioned that the portfolio board has had applications that they could not reject even though they did not really consider them appropriate. The reason was that they had not been sufficiently specific in their call description. Along the same lines, it is also underlined that the portfolio boards almost always follow the ranking of the projects from the administration and the assessment panels. The scores that the experts provide cannot be overturned or changed, so the boards have limited influence on the selection of concrete projects.

The assessment of projects according to RCN’s goals is still present but at another stage of the process. According to the interviewees, the most important function of the portfolio boards is to control the calls, that is, through portfolio planning. Here, they decide what portfolio should be prioritized and how calls can be angled in a given direction. This is where the thematic focus in the specific calls is decided.

New means of funding research

Mission-driven policies call for new, or rather reinforced, mechanisms for funding research, including an increased need for coordination among actors (because of the complexity of the missions addressed), portfolio management (to ensure that the total portfolio of activities funded by the individual funder and, ideally, across funders contribute, as a whole, to the pursuit of the given mission), and an increased need to follow up on funded activities (to monitor their progress and contributions towards the societal mission they are motivated by).

With regard to coordination and portfolio management, all interviewees expressed uncertainty as to how efficiently this can take place in practice across programs and funding organizations.

Not surprisingly, this challenge is perceived as most pronounced in a Danish context, where no mechanisms or traditions exist to ensure coordination across the research funding system as a whole, as confirmed by an expert panel review of the Danish research and innovation system (European Commission 2019). Hence, in a Danish context, it is not clear who should take this responsibility or how. As stated almost unanimously in the Danish interviews, there is no formalized coordination of who and what funding is provided for across the different funding organizations. While some forums for dialogue and coordination across the research funding system do exist, coordination within thematic areas is not on the agenda here.

Several interviewees did, however, state that a stronger political push for coordination is expected, just as portfolio management is expected to become increasingly important. Several interviewees also stated that achieving such coordination will pose a great challenge, since there is very limited experience to draw on in the Danish system. This is to a large degree perceived to be a result of having a system with clearly distinct funding organizations where no one holds any de facto cross-cutting responsibility and where no mechanisms provide oversight over the thematic distribution of funding.

The interviews revealed that such coordination and portfolio management is only to a limited or no extent practiced within the individual Danish funding organizations. In IFRD, for instance, there is no portfolio management at all within thematic calls. As long as applications fall within the broad thematic area of a specific call, no further considerations of fit or complementarity play a role in the assessment or selection of projects. There is also very limited oversight of distribution of funding across different themes.

IFD practices some degree of internal portfolio management, but this has an informal character and is mainly used as a tool to support the board. However, interviewees stress that criticism presented in previous evaluations implies that IFD will work more actively and in a more formalized way with portfolio management in the future. IFD also makes some attempts at facilitating wider coordination within the green research and innovation system, but this is an added mechanism established by their own initiative and not part of a formalized mission approach. More specifically, IFD has created a sounding board to which they have invited key stakeholders and actors in an attempt to become an innovation hub in Denmark, albeit this type of initiative is still closely linked to the market-oriented rationale.

The Norwegian system in turn has some of advantages over its Danish counterpart with regard to coordination and portfolio steering. First of all, the unitary structure of RCN offers better opportunities to align the overall approach and to secure an overview of the overall distribution of funding. These opportunities have not least been strengthened recently with the introduction of the portfolio boards. Portfolio management at the board level comes in different forms, with both a long-term plan for the portfolio and an ongoing portfolio analysis. First of all, there are some portfolio considerations over time with 1-4 specific calls each year in addition to the ongoing calls. These are based on a regular portfolio analysis.

According to interviews, the portfolio boards were established to promote a more holistic way of thinking and to secure a better balance in the overall system, for instance, allowing for project proposals to be redistributed to other portfolio boards or programs. At least this is the case in principle. In practice, interviewees stated that the reorganization of RCN is still in a period of adjustment and learning and that historical institutional traditions and differences die hard, although they have been diluted in the current portfolio board setup. They stressed that the new organizational layer of the portfolio boards has been added to the traditional system and that it has not really found its final form yet.

Finally, the experts interviewed express uncertainty about how such a coordinated portfolio approach may play out in practice in a less mature context as the public research system (in contrast to, for instance, portfolio management in a private company).

Conflicting policy rationales

Another key challenge addressed by the funders interviewed relates to the perceived mission and identity of the funding organizations or specific programs. This is linked to the acknowledgement that a successful implementation of a mission-driven understanding of the mission-driven rationale will require the funders to partly rethink their role and mission. Many interviewees express a reluctance to do this, most pronounced by the responsive mode funders and most pronounced in Denmark, where the separation between individual funding agencies has also created a strong identity for each.

IRFD states that their responsibility for thematic grants was a result of an amendment of the law, where this task was added to their legal obligations. Initially, there was great resistance to this task as it was perceived as a tool to steer the direction of their funding, which was previously entirely fenced off from political influence. A part of this resistance also has to do with a perception of the political system as being unable to identify the right priorities. For example, an interviewee stated that once the political system knows what is important, the world of research has already known this for 10 or 20 years. Along the same lines, it is also stated that IRFD has always had a strong commitment towards their own brand, which is responsive mode, curiosity-driven research. The main focus has been to protect and secure sufficient funds for the independent researcher-initiated research – not to support thematic priorities. To strengthen the quality of Danish research is also still perceived as the most important part of their legal obligation.

A similar tension could be observed in relation to IFD. The amendment of the law that mandated IRFD to allocate thematic funding was actually a consequence of political dissatisfaction with the way in which IFD previously used their mandate. IFD felt that they were being constrained by very specific call texts and decided to interpret them more broadly. The rationale was that the narrow calls did not correspond with the reason for their existence. It was also stated that IFD has traditionally had a strong focus on the market-oriented rationale, which, in a Danish context, has been formulated with the slogan ‘from research to invoice’ (The Danish Government 2003). Here, the focus has mainly been whether it would be possible to create the right business case. However, the part with having to contribute to the solutions of great societal challenges did not take up much space. Assessments were primarily focusing on the single firm level and resulted in projects that may have been good for particular firms, but where the societal innovation potential would often disappear. However, it is also stated that this has improved recently.

More generally, it was also stated in the expert interviews that the research councils covered in this study were never designed to mimic, for instance, the strategic research councils in the US. They share few similarities with, for instance, DARPA or other organizations built to address specific missions. Hence, it is perceived as challenging to keep these councils working towards missions formulated at a higher policy level and targeting many different parts of the research system. The question from the experts is how to really identify such missions in a way so that you can use them to steer policy or funding allocation in a clear direction? Although the experts were positive towards the ambition, they were uncertain if it can really be done.

Data availability statement