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Why are we scrapping inexpensive and successful innovation funding initiatives?

Pictured here by divers in Lofoten, the Iceland scallop is a true delicacy. It has also become the focus of one of many innovative ideas that has achieved success thanks to seed funding from the Norwegian Regional Research Funds. Photo: Stein Johnson/Samfoto/NTB
Pictured here by divers in Lofoten, the Iceland scallop is a true delicacy. It has also become the focus of one of many innovative ideas that has achieved success thanks to seed funding from the Norwegian Regional Research Funds. Photo: Stein Johnson/Samfoto/NTB
The Norwegian government has decided to phase out the country’s Regional Research Funds. This is incomprehensible to those of us who have watched this initiative function successfully as a springboard for green innovation and transition in many small businesses.

Somewhat overshadowed by last year’s debate here in Norway about how we might match the massive green subsidies being offered in the US and EU, the prestigious American business magazine Forbes dug out a modern rags-to-riches story from Sunnmøre in mid-Norway.

Under the headline ‘Five Green Norwegian Companies To Watch’, the Forbes article tells the story of Ava Ocean, a seven-year-old business from Ålesund . With seed capital from the Norwegian funding system, the company has designed equipment for the environmentally-sensitive harvesting of shellfish in the Barents Sea, without disturbing seabed habitats.

The springboard for this innovative venture was a subsidy of one million kroner from one of Norway’s Regional Research Funds (RRFs).

Opening the door to research

The RRFs have achieved exactly what they were designed to do – acting as a ‘door opener’, enabling small businesses to access the research sector all across the country. Once in the fold, these companies learned that collaboration with the research community, both domestically and globally, is a useful tool in enabling transition.

But these doors once open are now being closed. The RRFs are being phased out with the stroke of a pen as part of the recently approved national budget.

This decision should be reason enough for regional and local politicians, as well as business leaders throughout Norway, to close ranks in support of the vital role that the RRFs have played. It should also cause reverberations on the various county benches in the Norwegian parliament.

Many of the innovations and inventions on which Norway’s future will depend saw the first light of day in small, start-up businesses.

Start-up assistance for the inexperienced

Due to a change in momentum in technology development, combined with the need to ensure that all business is ‘sustainable’, most companies face challenges that require the assistance of the research sector. In other words, a structured approach that makes it easier to work systematically with the unknown.

However, only very few small and medium-sized businesses have any experience of the world of research, which is why many of them never consult the research sector during their critical initial growth phases.

It is for this reason that the low-threshold service offered by the RRFs, based close to local businesses and research communities, has been instrumental in persuading industrial enterprises across the country to utilise research as a means of promoting innovation. In 2022 alone, as many as 243 projects received support from the RRFs.

Passing the acid test

The total annual budget for the RRFs is NOK 100 million. This is a small sum when compared to the rewards that the initiative offers businesses looking to boost their competitiveness as part of the green transition. Nor is it very large when compared to the subsidies offered elsewhere by the state to consolidate the green transition currently taking place here in Norway.

The analysts Oxford Research AS have reviewed all the RRF projects that were completed in south-eastern Norway in the period from 2010 to 2019. In its report, the company states the following:

“The acid test that demonstrates whether an RRF-funded project offers real benefit is whether its participants go on to implement similar projects in the future. The majority of respondents have in fact accomplished this (70 per cent of participants and 58 per cent of their business partners)”.

Habitat-sensitive shellfish harvesting

The Ålesund company Ava Ocean is just one of many examples of enterprises that the RRF initiative has helped to gain access to the Norwegian research sector.

Starting with an initial RRF-funded project in 2017, the company has worked its way through the grades. It has subsequently participated in more advanced projects, assisted by co-financing from programmes administered by the Research Council of Norway and Innovation Norway.

Here, in collaboration with SINTEF, the company has developed innovative fishing gear that uses a precise suction method to pluck individuals of the delicacy Iceland scallop from the seabed in the Barents Sea. It had previously been prohibited to harvest this particular scallop species because earlier technologies caused too much damage to seabed habitats.

The company now intends to sell the new equipment in both domestic and global markets, and to continue to harvest shellfish for export to the USA and Asia.

Sustainable concrete

As representatives of SINTEF’s regional subsidiaries, we have observed how the RRFs help to create green and commercially promising innovations in the northern Norwegian counties of Nordland and Troms where, to date, the business sector has invested the least amount of money in research and development.

In Mo i Rana in Nordland, for example, the RRF has contributed towards developing an innovation that may result in more sustainable concrete products. The context here is the global search for alternatives to traditional cements that bond the aggregates in concrete together. A preliminary project, funded by the RRF, succeeded in identifying the bonding properties of foundry slags.

Subsequent research, funded by the Research Council, has demonstrated that finely-granulated foundry slag, acting as a bonding agent, can replace up to 40 per cent of the cement used in concretes, and that it exhibits a carbon footprint that is 95 per cent lower than traditional cements. A large-scale pilot of this innovation will be commencing soon.

Blockchain technology quality assures fresh fish

The RRF has also had spectacular success in Troms, where the use of forgery-proof blockchain technology has provided data about how the fresh fish in your local supermarket arrives there. These data include documentation about whether the fish have been caught in compliance with prevailing quota regulations, and whether the cold chain has remained unbroken throughout the product’s journey to the supermarket.

This success is the result of RRF funding acting as a springboard for domestic and global research projects.

The RRFs promote research and development that in our experience would not have been carried out without funding. The Norwegian government’s strategy document ‘Green Industry Deal 2.0’ highlights how the expertise within the industrial sector is essential if the green transition is to be achieved. If indeed this is to happen, successful business funding initiatives must not be allowed to be phased out.

Bring back the RRFs!

This is our message to our national politicians: Bring back the RRFs! Small businesses need funding arrangements that make it easy for them to participate in research activities.

The use of public subsidies to support low-threshold initiatives such as the RRFs is an investment that will bear fruit.

This feature article was first published in the debate pages of the newspaper Nordlys, and in the newspapers Sunnmørsposten and Oppland Arbeiderblad.

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