STIMULATING INDUSTRIAL INNOVATION FOR SUSTAINABILITY:
AN INTERNATIONAL SURVEY FOCUSED ON TECHNOLOGY
SWEDEN
Marie Edholm, M.Sc., Anders Wigren, Ph.D. (Bohlin & Strömberg, Sweden)
TABLE OF CONTENTS
1. INSTITUTIONAL CONTEXT/BACKGROUND.................................................................1
1.1. Swedish background ..............................................................................................1
1.2. National Innovation System - factors related to sustainability...............................1
1.2.1. Who does what in Sweden .............................................................................2
1.3. Industrial profile.....................................................................................................4
1.4. Policy framework ...................................................................................................4
1.4.1. Sustainable development................................................................................4
1.4.2. The new Environmental Code........................................................................5
1.4.3. Public R&D on Environment and Sustainable Development ........................6
1.5. Interaction of government with industry................................................................6
2. CLASSIFICATION OF POLICY INSTRUMENTS.............................................................8
2.1. Background of the programs/ initiatives ................................................................8
2.2. Role of Government...............................................................................................8
2.3. Type of support/instruments ..................................................................................8
2.3.1. Environmental taxes.......................................................................................8
2.3.2. Subsidies ........................................................................................................9
2.3.3. Environmental management systems .............................................................9
2.3.4. Overview ........................................................................................................9
2.4. Modalities of contracting .....................................................................................11
2.5. Internal organization, management structure of the program ..............................11
2.6. Focus on specific industrial sector .......................................................................12
2.7. Methods to assess effectiveness ...........................................................................12
3. SPECIFIC EXAMPLE PROGRAM DESIGN CHARACTERISTICS ...............................13
3.1. Programs/projects.................................................................................................13
3.1.1. The Commission on Environmental Technology.........................................13
3.1.2. Environmental and Energy Technologies (STEM) ......................................15
3.1.3. Local Investment Programs..........................................................................15
3.1.4. Environmental Management Systems ..........................................................17
3.2. Other projects .......................................................................................................17
3.2.1. NUTEK’s Program within the Technical FoU.............................................17
3.2.2. Other Nutek activities ..................................................................................18
3.2.3. Public Procurement ......................................................................................19
4. INTERVIEWEES ................................................................................................................20
1. INSTITUTIONAL CONTEXT/BACKGROUND
1.1. SWEDISH BACKGROUND
The Swedish National Innovation System (NIS) is characterized by internationalized research;
industrial orientation towards resource-intensive industries; rapid adoption of new techniques;
high expenditures on education; and a relatively costly financial system.
Large authorities aided by small ministries dominate the governmental part of this system.
The authorities are independent units which task is to carry out the plans of the government,
but also to initiate relevant projects of their own, aiming at a specific goal. Most of the
competence is allocated to the authorities rather than the ministries.
Sweden has come quite far in developing sustainability within the environmental field, with
international measures. The Swedish policy is to develop environmental sustainability in
every field, not bounded to specific branches. That means that Sweden has embedded the
environmental questions in nearly all political aspects.
Decentralization and sectorization are important features of Swedish environment policy.
Environmental consciousness is to permeate all official decisions that may affect health or the
environment. Central, regional and local authorities are to monitor compliance with this
requirement in the sectors for which they are responsible.
1.2. NATIONAL INNOVATION SYSTEM - FACTORS RELATED TO
SUSTAINABILITY
The knowledge-production in the Swedish innovation system is fairly heavily geared towards
the life sciences and much less focused on technology. In addition, by international
comparison Swedish patenting is high, though the trend over the last decades has been weak.
Most innovation is found in knowledge-intensive manufacturing and service firms.
Swedish government R&D funding is high by international comparisons, although the major
part of Swedish R&D is financed by business firms. Government R&D funding is
concentrated on higher education organizations. Sweden spends 3,85 % of GNP on R&D1,
which is more than any other country within OECD. The expenditures of the R&D have
increased substantially over the last decade: 3,85% of GDP or about 7 000 million Euro in
fixed prices (index 1991).
The R&D expenditure by sector of performance (all figures from 1997) was: Enterprises
74,8%, Universities 21,4%, Authorities 3,5% and private, non-profit organizations 0,1%. The
R&D expenditure as a percentage of GDP by sector of performance was: Enterprises (all
figures in 1997) 2,88%, the public sector 0,96%.
The expenditures concerning innovation activities in 1996 was for all Enterprises in Sweden
in total 8,2% of GDP2.
The Swedish R&D-performing system rests on two pillars: large manufacturing firms and
universities. Research institutes represent a very small part of the Swedish R&D system.
1 R&D expenditure as a percentage of GDP 1997. Source: Statistics Sweden
2 This figure includes other factors than included in the “pure” R&D figures. The factors included in
this figure (8,2% of GDP) is: internal and external R&D, machines, extern technology, industrial
design, education, and market introduction. Source: Statistics Sweden
SWEDEN-1
Swedish industrial R&D activities are dominated by about ten large R&D-intensive
multinational manufacturing groups in high-tech and medium high-tech industries. In terms of
human resources, considerable innovation resources are found in the R&D-intensive
multinational manufacturing groups and also, to a large extent, in knowledge-intensive
business service firms.
The Swedish public R&D funding system is quite complex. It is made up of a rather large
number of different kinds of organizations, of which the newest and financially strongest are
formally independent foundations.
Six important technology policy areas have been addressed and discussed:
• Coordination of different policy areas
• Focus on innovation clusters
• Key role of the higher education sector
• Competence as an essential innovation resource
• R&D-intensive groups as a key knowledge base
• Improved coordination of public R&D funding
The ministries distribute about 100 million Euro per year on different projects aimed at
developing sustainable environment. The principal funders in the field of promoting
innovation in the industry are the following:
• Swedish National Board for Industrial and Technical Development (NUTEK)
• The Swedish National Energy Administration (STEM)
• Swedish environmental protection agency (SNV)
• Branch research institutes (Wood and Agriculture council and building research council
will merge to the council of environment, agriculture and spatial planning in 2001)
P arlim en t
C ou n cil of state
M in istry of
F in an ce
M in istry of
E n viron m en t
M in istry of
E d u cation
M in istry of
In d u stry, E m p loym en t
an d C om m u n ication s
S wed isch
E n viron m en tal
P rotec tion A g en cy
(S N V )
R esearch in st
S w ed ish N ation al B oard
for In d u strial an d Tech n ical
D evelop m en t
(N U TE K )
C h em icals
in sp ectorate
U n iversities
Th e S w ed ish N ation al
E n erg y A d m in istration
(S TE M )
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A g ricu ltu re
W ood &
A g ricu ltu re
R esearch in st
O th er M in istries
O th er A g en cies,
e.g . M istra
Figure 1-1: Swedish National Innovation System related to sustainable development
1.2.1. Who does what in Sweden
Direct government allocations to environment protection efforts have in recent years totaled
around 0.5‰ of the national budget. The EU contributes a further EURO 120,000. In
addition, the Government finances environment protection measures by means of general
subsidies and charges. In 1999, the Government will be spending some EURO 1,000 million
on environmental improvements. National programs for adapting the agricultural, traffic and
energy sectors to environmental requirements will account for most of the expenditure along
with local investment programs.
The Ministry of Environment is responsible at central government level for environment
protection, nature conservancy, air and water quality, biological diversity, ecocycle programs,
waste management, building and physical planning, chemical control, nuclear power safety
programs and radiation protection. It also administers certain financial incentives in the
environment policy field.
SWEDEN-2
Swedish Environment Protec t ion Agency
The Swedish Environment Protection Agency, founded in 1967, is the central administrative
agency for environment protection and nature conservancy. Its task is to coordinate and
further Sweden's efforts in this field at both national and international level. It does so by
compiling and disseminating environmental knowledge and by proposing new targets,
strategies and controls for policy programs. One of its more important tasks is providing a
basis for future environment policy by evaluating programs undertaken and monitoring the
state of the environment, for instance via an environmental data register. It is also required to
implement policy decisions by the Government and the Parliament, in close collaboration
with other government agencies, county authorities, local authorities, the business community
and voluntary organizations, etc.
Nutek
Bringing trade and industry closer into line with environmental requirements is one of the
tasks of the Swedish National Board for Industrial and Technical Development (Nutek). This
agency develops methods suitable for SMEs, and gives advice to stimulate improvements in
energy efficiency, cleaning facilities, decontamination and oil-clearing, recycling and
materials testing, as well as environmental management programs for companies.
The tools Nutek uses are separate R&D projects and uniting R&D efforts which Nutek funds
and organizes. Nutek funds R&D efforts at Universities and industry research institutes on the
condition that private firms cooperate and give as much economic and human support.
Nutek´s goals is to establish cooperation and networks according to the national innovation
system.
The effects of the efforts of Nutek can be described in terms of a chain of effects. The
immediate results is that the R&D efforts is performed at the universities, institutes and
enterprises. Cooperation, networks and the knowledge diffusion is incorporated in the
programs. The result of that, in terms of knowledge and experiences, is to be utilized in the
industry. After a while the direct effects of the Nutek-projects will fade, as other factors will
effect the development.
STEM
The Swedish National Energy Administration is partly responsible for ensuring that the
supply and use of energy is environmentally sustainable. Its other tasks include developing
alternative sources of energy as well as low-energy systems and appliances.
Local Authorities
County administrative boards represent the environmental interests of central government in
each respective region. They have a wide range of tasks relating to permit applications,
regulations, supervision and evaluation, etc., especially in respect of environmentally harmful
activities, and are responsible for providing regular reports on the environmental state of the
region concerned.
Local authorities have supervisory powers in many spheres. They are also responsible for
developing and pursuing national environmental quality goals in their planning–together with
residents in the area, associations and others who are locally affected–and translating them
into concrete local goals and action programs. Municipal expenditure in the environmental
field is dominated by waste and sewage management.
Swedac
Environmental certification and accreditation of laboratories, inspection bodies, etc., is the
responsibility of Swedac, which examines whether such operations are run in accordance with
SWEDEN-3
national and international standards. Swedac also authorizes environmental auditors for the
European Commission’s Eco-Management and Audit Scheme (Emas) and reviews public
procurement.
Swedish Institute
The Swedish Institute (SI) is a public agency entrusted with disseminating knowledge abroad
about Sweden and organizing exchanges with other countries in the spheres of culture,
education, research and public life. The Swedish Institute has about 110 employees. In its
work, SI should promote Swedish interests and contribute to economic growth, employment
and cultural development in Sweden.
Through the central government budget, the Swedish Institute receives appropriations of
about 17 million Euro (2000). The Institute also has special assignments primarily for
cooperation between Sweden and some of its Baltic Sea neighbors - northwestern Russia,
Estonia, Latvia, Lithuania, Poland and Ukraine.
1.3. INDUSTRIAL PROFILE
There are relatively a few large enterprises and many small or medium sized enterprises
(SMEs) in general. The industrial sector in Sweden is dominated by services. Over the last
decades there has been a rapid growth in knowledge intensive business services. The Swedish
manufacturing sector is large by international comparison; it is dominated by a few large
R&D-intensive multinational groups. Swedish high-tech and medium high-tech industries are
fairly large by international comparison. Large raw material-based industries are another
important feature of the industrial structure in Sweden.
Technology-based firms in Sweden have increased in number in the last decade. Knowledgeintensive business services are dominant among such firms. New firms in Sweden are to an
increasing extend service firms. Among such firms the proportion of knowledge-intensive
services is also increasing. About 5% of all new Swedish firms are spin-offs; however, of all
technology-based firms in Sweden, spin-off firms represent as much as 16%.
High-growth firms represent about 10% of total business employment in Sweden, and the
highest proportions of such firms are found in knowledge-intensive manufacturing and
service industries.
1.4. POLICY FRAMEWORK
Technology policy in Sweden is an institutionalized policy area on its own. For this reason,
coordination of policy measures within a range of different policy areas, in relation to
technology policy goals, innovation policy goals and goals for economic growth, is of
primary importance.
1.4.1. Sustainable development
Environmental policy during the last decade or two has concentrated on formulating
objectives and designing instruments to avert threats like depletion of the ozone layer, the
greenhouse effect, acidification etc. Although Sweden has made satisfactory progress in
solving – or at least mitigating – the most serious environmental problems, many of these
environmental threats remain. Previous errors must also be corrected. Modern environmental
policy is basically about what needs to be done in continuing this work.
More attention is therefore being paid to lifestyles, consumption patterns and community
organization and planning. This means that environmental policy – or a policy on ecologically
sustainable development - must be closely linked to economic and social developments.
SWEDEN-4
The objective of sustainable development comprises ecological, social and economic aspects.
These three aspects are interdependent and must strike a careful balance if the objective is to
be achieved. Ultimately, the aim is to assure present and coming generations the prospect of a
bright future and good quality of life. Use of the term ‘ecological sustainability’ emphasizes
the ecological dimension of sustainable development.
In the Statements of Government Policy for the last three years the Government has stated
that the work of converting Sweden to ecological sustainability must continue and be speeded
up. Sweden must pioneer efforts to achieve ecologically sustainable development. The aim is
to hand over a society to the next generation in which the major environmental problems have
been solved. In order to avoid a situation where pollution and depletion of natural resources
and ecosystems affect the living environment and prosperity of future generations, the
Government has declared three objectives for turning Sweden into an ecologically sustainable
society:
• Protection of the environment — To reduce environmental impact to a level that does not
exceed the environment' s natural capacity to deal with it.
• Sustainable supply — To conserve the long-term productive capacity of forests, soils and
water resources, and to use a higher proportion of renewable raw materials.
• Efficient resource utilization — To use energy and other natural resources much more
efficiently than we do today.
In order to ascertain what is required and to be able to follow up the objectives, ten authorities
have been commissioned by the Government to define the objectives more clearly in the form
of targets, action programs to achieve them and systems for following them up. The proposals
were submitted to the Government on 1 October 1999.
Even if membership has not resulted in any immediate improvement in our indigenous
environment, Sweden' s presence in the European Union along with that of two other
newcomers, Austria and Finland, has strengthened the position of the environmentallyminded member states. In several areas where Sweden is and has been a leading force, its
environment policy has been used as a model for common rules or inspired the EU to further
efforts. Examples include restrictions on chemicals, strict rules on exhaust controls for motor
vehicles, anti-acidification measures, and taxes and charges both on harmful substances,
including fossil fuels and cadmium, and on emissions of carbon dioxide, sulfur and nitrogen.
1.4.2. The new Environmental Code
One important instrument is the new Environmental Code. A new Environmental Code came
into force in Sweden 1 January 1999. The overall objective of the new Environmental Code is
to guarantee people a good, healthy environment, now and in the future. It replaces 15
separate environment laws that have sometimes conflicted with one another, which has made
the rules difficult to grasp and to implement properly.
The new law brings together a range of fundamental demands regarding all environmentrelated activities, whether private, public or commercial. The Environmental Code also
declares that nature is intrinsically valuable in its own right and that mankind is responsible
for managing it properly.
The detailed rules to be incorporated in the new Code are still being worked out. The
responsible authorities will be issuing provisions as they are completed.
The New Environmental code includes the following for example:
• Principles enshrined in law (i.e. Polluter Pays Principle; PPP)
• Environmental quality standards
SWEDEN-5
•
•
•
•
•
•
•
Environmental impact assessments
Protection of valuable natural environments
Environmentally hazardous activities
Chemical products and biotechnological organisms
Waste
Tougher penalties
Economic incentives
The rules of consideration in the Environmental Code apply to all environment- related
activities, regardless of whether or not a permit is required. One important feature is the
reversal of the burden of proof. This means that in the event of any environmental damage
being caused, it is up to whoever caused it to prove that due consideration was shown in
accordance with the rules.
If an action may be harmful to health or the environment, the Code requires great caution to
be exercised. Such cases may involve additional treatment of sewage water, a ban on garden
waste-burning at certain times, the erection of anti-noise barriers, extra care in the
management of chemicals, reduction of the number of livestock on a farm, or tour operators
being required to inform customers about the right of common access to the countryside.
Anyone pursuing a commercial activity is to use whatever technology is best for the
environment, as far as this is financially possible. Public authorities may insist that a planned
facility be moved elsewhere if the chosen location is sensitive to emissions, if natural assets
may be destroyed or if the site is too close to housing. The same applies in the case of
expansion plans for existing facilities as well as to license/permit reviews.
1.4.3. Public R&D on Environment and Sustainable Development
Globally, rapid technological advances play a vital role for ecological sustainability, or may
do so in the future. New technologies, for example in the field of more efficient use of energy
and other resources and treatment and recycling technologies, are crucial to progress towards
greater ecological sustainability. Knowledge about organization, behavior and values also
plays an important part.
In 1998 the Government instructed the Council for Planning and Coordination of Research, in
cooperation with the Swedish Environmental Protection Agency, to study the need for
knowledge about and research on sustainable development. In its report Research for
Sustainable Development – a National Strategy, the Council proposes that the responsibility
for financing research on sustainable development should be shared by practically all research
financiers and should be included in the concept of social relevance.
In the light of these studies, the Government proposed in the 2000 Budget Bill an increase of
6 million Euro in the appropriation for environmental research for the year 2000 and 12
million Euro for each of the years 2001 and 2002. One of the reasons given for the increased
appropriation for environmental research is the need to obtain data for the purpose of
achieving the environment quality objectives and for the preparation of environmental quality
standards that may be introduced pursuant to the provisions of the Environmental Code.
These funds are to be used primarily for research on environmental effects and environmental
toxicology, but also to finance the central government share of the research being carried on
by IVL Swedish Environmental Research Institute Ltd., which is being cofinanced by private
industry.
1.5. INTERACTION OF GOVERNMENT WITH INDUSTRY
The strategy of pioneering ecologically sustainable development and combining it with
economic growth makes great demands on economic policy and assigns a key role to
SWEDEN-6
industry. An essential condition for success us that industry recognizes the commercial
advantages of early adjustment and the fiscal incentives are designed in such a way as to
encourage the development of products with an environmental and resource-efficient profile.
Furthermore, it is necessary to promote market demand for environmentally sound and
resource-efficient products, for example by raising consumers’ awareness and ensuring that
public procurement meets stringent environmental criteria. Encouraging and enabling
households to assume greater responsibility for the environment and resource management is
very important.
The driving forces behind adjustment to ecological sustainability in industry are legislation,
fiscal incentives and market forces, such as consumer demand for environmentally sound
products and services. The Government’s task is to create an appropriate framework in the
form of legislation, rules and other instruments and through various initiatives to support and
stimulate voluntary and market-oriented measures.
According to Lars Rekke, State Secretary at the Ministry of Industry, Employment and
Communications, Sweden has no tradition of "negotiated agreement" which means that new
laws and regulations usually have strong support among different interest groups. However
Sweden makes use of a kind of negotiated agreement in the field of extended producer
responsibility. In Sweden such question must be run through the New Environmental Code.
Though, Sweden will start using more of negotiated agreements, for example concerning
pollution agreements with the industry. Still the industry representatives participate actively in
the preparation of regulations as well as in developing research activities. The development of
new programs is usually very closely linked with industry needs. In the decision making
process organizations, enterprises and private persons have the opportunity to react on the
task brought up.
SWEDEN-7
2. CLASSIFICATION OF POLICY INSTRUMENTS
2.1. BACKGROUND OF THE PROGRAMS/ INITIATIVES
The international background of the Bruntland report was an important step towards
implementing sustainable development in the overall society; to look for opportunities to be
able to create a sustainable development.
Also the Rio convention from 1992, where the focus was laid on economic, environmental
and social development was an important step. The approach of the local Agenda 21 fitted
very well into the Swedish tradition and culture. Sweden has independent communities which
plays an important part in the Swedish system. It did not take long for the communities to act
and to implement the agenda 21 program into the culture of the communities.
Furthermore in the Amsterdam treaty it says that all decisions shall aim at stimulate
sustainable development.
The social-democrat program in Sweden has focused a lot on social questions and also the
economic questions and growth. Now, our Minister of Environment, Kjell Larsson, has said
that the environmental questions must be lifted up to the same level as the other questions.
Therefore Sweden puts a lot of effort in this field, because it has became an important part of
the political program. Another important reason and background of the initiatives by the
Swedish Government and authorities are factors as increasing population and the climate
problem in the world demands a change in how resources are utilized in the long run.
2.2. ROLE OF GOVERNMENT
The Government in Sweden has different roles concerning sustainability. The main roles are
cooperator, initiator and interventionist. The Government provides assistance, in addition to
other forms of support. The Government also supports development of technology for
sustainability and it manipulates through taxation, subsidies etc.
2.3. TYPE OF SUPPORT/INSTRUMENTS
2.3.1. Environmental taxes
Fiscal instruments such as taxes, fees and subsidies are being used to various extent. The use
of fiscal incentives is gradually being developed. The use of fiscal instruments is discussed
about because it causes ineffectiveness. Higher taxes on energy or not is a big question in
Sweden at the moment.
The Tax Switching Committee stated in its report Taxes, the Environment and Jobs (SOU
1997:11) that fiscal incentives have proved an effective means of addressing and reducing
environmental threats. The Committee presented several general principles and
recommendations for the process of enhancing the environmental profile of the tax system.
It was announced in the 1999 Spring Finance Bill that an important objective of the
continuing deliberations on taxes was to enhance the environmental profile of the tax system.
Appropriate cross-sectoral measures can stimulate more efficient use of resources, reduce
adverse environmental impacts and contribute substantially to efforts to achieve ecologically
sustainable development. Increased revenue from environment-related taxes can be used
mainly to reduce other taxes, especially income and payroll taxes, which should promote
employment.
SWEDEN-8
The Government intends at a later stage to present proposals to reduce the taxes on
environment-friendly vehicles. Changes will enter into force on July 1 2000, ex post facto
from January 1 2000, for passenger cars and light goods vehicles with a maximum reference
weight of 1,305 kg that meet the new exhaust emission standards for environmental class 1.
It is important that the design and pace of the increase in environment-related taxes should be
adjusted to the situation in other countries. Steps must be taken to secure the competitiveness
of Swedish industry in the future.
2.3.2. Subsidies
The Government has initiated a review of subsidies that have the effect of deterring efforts to
achieve ecologically sustainable development. The Swedish National Audit Office was
instructed to carry out a study, in cooperation with the Swedish Environmental protection
Agency, of the effects of various subsidies on ecologically sustainable development. Its report
has already been presented (Report 1998:6).
One example of subsidy within the energy policy is that the inhabitants can apply for
economic support by 25-35% of the total cost when converting from electric heating to
district heating. Maximum amount subsidy is about 8400 Euro.
2.3.3. Environmental management systems
The implementation of environmental management systems is under way both in industry and
public administration. Sweden is top ranked in the world concerning implementation of
environmental management systems.
2.3.4. Overview
Table 2.1 below shows different programs initiated by the Government and authorities,
focused on stimulating sustainability. The most important programs will be described in
further detail in the following chapter.
Table 2-1: Programs on Sustainability Initiated by the Government and Authorities
Name of instrument
and Coordinator
The Commission on
Environmental
Technology
Environmental and
Energy Technologies
(Stem)
Description
The Commission on Environmental Technology
program was assigned the task of stimulating the
development and facilitating the procurement and
introduction of environmentally sound products,
processes, and technologies designed to be compatible
with ecologically sustainable development.
The Environmental Technology Commission has
hitherto received about 5 million Euro for promotion of
adjustment to ecological sustainability and programs for
SME development, innovation and growth.
The program for conversion and development of the
energy system involves long-term investment in
research, development and demonstration of new
energy technologies. The program will run for seven
years up to 2004. The budget is about 1 050 million
Euro.
SWEDEN-9
Type of
support/Instrument
Working methods and
advice
The tools used by the
Commission include
requirement
specifications,
competitions,
technology
demonstrations and
technology
procurement.
Local Investment
Programs (Ministry
of Environment, local
authorities)
The purpose of the program is to increase the pace of
adjustment to sustainable development and to help to
create new jobs. Aid will be granted to municipalities
whose investment programs are considered to make a
substantial contribution to adjustment. Aid for this
program for the period 1998-2002 will be 778 billion
Euro in total.
Environmental
Environmental management systems establish
Management System systematic environmental activities on the basis of
(Ministry of
well-defined guidelines and objectives, for example in
Environment,
central policy documents, integration of
Municipalities,
environmental concerns into day-to-day activities, a
County Councils)
clear division of responsibilities, and routines for
monitoring and results accounting.
Environmental
Overall main goals of Swedish environmental policy
Quality Objectives
has been developed over the last few years.
(The Government and These quality objectives, together with the new
Parliament)
Environmental code and the Environmental
management system the Swedish Government think
they have a strong tool to be able to effect the society
towards a sustainable development.
Nutek´s program
Eighty-four technical programs were in progress in
within the technical
1999. The contribution of NUTEK is mainly directed
FoU (Nutek)
to strengthen the cooperation between the universities,
the industrial research institutes and the companies.
The strategic goal of NUTEK is to establish
cooperation and networks, according to the view on
the national system of innovation. According to this
view, the programs shall early in the FoU-process
contribute to the creation of interactive learningprocesses between the different actors. Thereby new
products and techniques will develop which will
strengthen the Swedish industry’s international
competitiveness.
Public Procurement
Taking environmental concerns into account in
(Ministry of
connection with public procurement opens great
Environment,
opportunities for encouraging the production of
Municipalities,
environmentally sounder products and services.
County Councils)
This means that the combined efforts of public
purchasing authorities can persuade suppliers and
producers to produce environmentally sounder
products by stipulating environmental conditions in
tender procedures. The Government has instructed
about 100 government authorities and agencies to
introduce environmental management systems.
Environmental
In September 1998 the Government decided to
Exports and
allocate 1,4 million Euro to the Swedish Trade
International Trends Council for implementation of a three-year program
(The Swedish Trade designed to promote exports of environment-related
Council)
products and services in priority areas within the
framework of regional policy. The program focuses on
technology and services for control of emissions into
air, water and sewage, as well as waste management.
Many SMEs operate in these sectors.
SWEDEN-10
Project funding
No subsidies or
funding, only advice
and information.
NUTEK is subsidizing
the universities’ and
industrial research
institutes’ participation
in the projects.
Project funding.
R&D on
Environment and
Sustainable
Development
(Council for Planning
and Coordination of
Research, Swedish
Environmental
Protection Agency)
The Government proposes in the 2000 Budget Bill an
increase of 6 million Euro in the appropriation for
environmental research for the year 2000 and 12
million Euro for each of the years 2001 and 2002. One
of the reasons given for the increased appropriation
for environmental research is the need to obtain data
for the purpose of achieving the environment quality
objectives and for the preparation of environmental
quality standards that may be introduced pursuant to
the provisions of the Environmental Code.
Industry and
The aim of this program is to make small and medium
Environmental Work sized enterprises networking with larger enterprises and
(Nutek)
to distribute research reports to small and medium sized
enterprises. The larger enterprises are interested in
getting high quality products from the small and
medium sized distributors as well as from the larger
ones.
Industrial Research in This project is a formalized cooperation between 14
Sweden (Nutek)
different institutes. The aim is to provide a formalized
platform where smaller enterprises region wise, can
collect competence, contacts etc.
Environmental
oriented product
Policy (Ministry of
Environment)
Project funding from
the Government, cofinanced by private
industry.
Project funding and
provision of advice.
Nutek will finance a
chief executive officer,
but every institute
provides personnel
resources to a certain
extent.
Environmental oriented product policy is all about
what production oriented environmental strategy
Sweden is going to have. This includes a strategy for
product standards and environmental labeling. In this,
the Nordic countries are cooperating. A report has
been written, which became finished in January 2000.
2.4. MODALITIES OF CONTRACTING
Generally, the programs launch a public call for proposals to which enterprises and/or
research institutes respond. The enterprise leaves a specification with the funder and they
decide whether to accept their idea or not. However, only parts of the projects get funding, the
initiator is paying for the remainder. The programs can leave some money unused if there is
not enough proposals of good quality. The project proposals are usually evaluated at the end
of the project or at half time (depending on the size of it) or sometimes it is evaluated quite
some time after it has finished. The evaluation can be done by the funder, by the appropriate
authority or by a private company.
Completely new technologies are most often being funded to 100 % by the public sector.
Market introduction is only partly financed by the public sector, to about 30%. Fundamental
technical development is being funded very differently. For example environmental technical
exports is funded by 40% by the Government and the rest by the company itself.
2.5. INTERNAL ORGANIZATION, MANAGEMENT STRUCTURE OF THE
PROGRAM
In general, during the project, the required reporting is minimal. The companies very often do
not need to give any public information of the project except some proof of the conducted
work. All though all such programs that are being funded by public finance, the belonging
evaluation is official.
During last years, more attention has been paid on dissemination activities and networking of
information providers and users. Programs usually include at some level seminar activities
where the results from different projects are presented at a program level.
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2.6. FOCUS ON SPECIFIC INDUSTRIAL SECTOR
The transport sector is an example of an area in which systemic solutions are needed in order
to control environmental impacts. In addition to reducing emissions to a minimum or reducing
energy consumption in various means of transport, there is a need to intensify cooperation
between car manufacturers, operators and planners in municipalities and the growing IT
sector. But above all, a concerted effort is needed in order to use the available resources – not
in the least economic resources – as efficiently as possible.
In a knowledge-based society, universities and university colleges play an increasingly
important part in bridging the gaps between society, industry and citizens. By developing new
ideas and playing a more active part in ensuring that they are implemented and developed,
universities can become an active partner in community planning.
An essential condition for achieving ecologically sustainable development is therefore to
improve coordination and collaboration between different sectors and players. This will help
to achieve solutions that are sustainable in ecological, social and economic terms. The
conflicts of objectives and interests, and the effects of various measures, must be reported to
decision-makers and the public at an early stage of the planning and decision-making process.
It may be necessary to further develop impact assessments, whether strategic long-term
assessments or assessments of individual projects.
2.7. METHODS TO ASSESS EFFECTIVENESS
All major organizations such as different ministries, will be evaluated by the national
evaluation organization (RRV). These evaluations have given recommendations for future
developments and for types of instruments that should be supported.
At the program level, there is usually an evaluation and/or final program report after a
program is finished covering basic indicators describing the projects (money allocated,
number of projects and companies involved etc.). An intention is that the evaluations would
be done by outside contractors.
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3. SPECIFIC EXAMPLE PROGRAM DESIGN CHARACTERISTICS
3.1. PROGRAMS/PROJECTS
3.1.1. The Commission on Environmental Technology
The Commission on Environmental Technology (also called the Delegation) was appointed in
September 1996. It is formally an Agency of Government, with delegated power to take
decisions to spend taxpayers money. The Delegation comprises a committee of industrialists
and public servants with a record of interests and capability in environmental issues.
The program was assigned the task of stimulating the development and facilitating the
procurement and introduction of environmentally sound products, processes, and technologies
designed to be compatible with ecologically sustainable development. The measures taken by
the Commission will increase the competitiveness of Swedish industry and thus create new
employment. The overall objective of the Delegation was defined in this strategy as to
“Contribute to sustainable development of society”.
One of the Delegation’s main tasks is to find methods facilitating and accelerating the
marketing of new environmentally sound technology and testing methods. The commission
therefore focuses on the demand side. Much of its work is devoted to formulating, together
with users of various products and technologies, the functional requirements that should be
met by environmentally sound products. It also analyses the potential environmental gains. In
this spirit of experiment the Commission uses a range of different tools and project types to
broker relationships between demand and supply.
The Delegation would pursue the following goals:
• Stimulating the commercialization of products, processes and systems which resolve
significant environmental problems.
• Reducing the “time to market” for environmentally adapted products, processes and
systems
• Increasing the sales of environmentally adapted products, processes and systems
• Raising the competitiveness of Swedish industry, and thereby increasing employment.
Based on these goals, the Delegation chose to focus on four areas:
• Transport
• Construction
• Food and agriculture
• Soil remediation
In addition the Delegation also includes a limited amount of effort in “horizontal” projects
which straddle several areas.
The Environmental Technology Commission has hitherto received about 5 million Euro for
promotion of adjustment to ecological sustainability and programs for SME development,
innovation and growth. The 2000 Budget Bill3 proposes that a further about 1,2 million Euro
be allocated to the Commission for the year 2000 to enable it to continue and develop its
assignment4.
3 Gov. Bill 1999/2000:1, expenditure area 24, Industry
4 Gov. Bill 1999/2000:1, expenditure area 24 Industry
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Budget Allocation 99-06-30 (4,7 Mln Euro)
Project
Management
Soil Remediation
Secretariat
Information
Energy efficiency
projects/Energy
saving
Transport
Construction
Food &
Agriculture
Figure 3-1: Allocation of Budget between Activities
Figure 3.2 shows the overall structure of the Environmental Technology Commission Work
Process, from idea to action.
Generate and
Test Project
Idea
•
•
Generate idea
Test idea
Define
Demand
Requirements
•
•
•
Stimulate
Supply
Identify a real or
‘proxy’ customer
Consult endusers,
suppliers and other
stake-holders
Write requirements
specification
•
•
•
•
Define incentive(s) for
suppliers to comply with
requirements
specification
Invite suppliers to
participate in test(s)
Evaluate supplier bids to
participate
Conduct test(s) and
evaluate results
Stimulate
Market
•
•
•
•
Demonstrate
conforming products
Publicize conforming
products
Link with procurement
or demand
Link with regulation
and norms
Figure 3-2: Overall Structure of the Environmental Technology Commission Work Process
This program has a quite special role in the innovation system as an innovation agent focused
on a key, social part of the innovation process, rather than on producing new knowledge or
things. Perhaps for this reason it also succeeds in involving some people and organizations in
the innovation process who are not otherwise much involved. A key aspect of the program is
to intervene in the “imitation” stage of the product’s life cycle, when many alternative
inventions are eliminated through competition. Unlike the inventor who laces a bet on a single
idea, this program is normally betting on a process for finding the best idea.
This program has established a position and an image on the “funding market”, partly serving
people and organizations outside the circle of “usual suspects” who often dominate programs.
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There has been an evaluation of the project so far. According to the evaluation it is too early
to see many project impacts in practice. The more successful projects promise environmental
benefits. They have more uncertain links to future economic and employment benefits.
3.1.2. Environmental and Energy Technologies (STEM)
The program for conversion and development of the energy system involves long-term
investment in research, development and demonstration of new energy technologies. The
program will run for seven years up to 2004. The budget is about 1 050 million Euro.
The purpose of investing in research, development and demonstration of new energy
technologies is to achieve a sharp increase within the next 10-15 years of the production of
electricity and heat from renewable energy sources and development of commercially
profitable technologies for more efficient use of energy. The horizontal objectives of energy
research are to establish scientific and technological know-how and competence in the
universities and university colleges and in industry for development and conversion of the
energy system in accordance with the parliamentary resolution of 1997. Energy research must
contribute to the establishment of stable conditions for competitive industry and to renewal
and development of Swedish industry. The research will also help to broaden cooperation on
energy, the environment and the climate in the Baltic Sea region.
No quantitative goals or deadlines have been set for the long-term measures. It will only be
possible to assess whether the objective of establishing relevant high-quality research have
been achieved when the individual research programs and projects have been achieved when
the individual research programs and projects have been completed. The Swedish National
Energy Administration intends to start evaluating ten of the programs in year 2000.
The Commission on Environmental Technology uses various tools and methods to stimulate
the development of environmental technology. The environment and environmental
technology are relevant to almost all sectors (the environment, education, industrial policy
etc.). In order to ensure an optimal rate of return on invested resources, this work has
concentrated on developing methods of stimulating technological development in four priority
areas: transport, contraction and housing, food and agriculture, and land remediation. The
tools used by the Commission include requirement specifications, competitions, technology
demonstrations and technology procurement.
In the area of responsibility of the EU’s Council of Ministers of Energy Sweden is
emphasizing the importance of ensuring that integration of the environment and sustainable
development into the energy sector includes measures that are cost-effective and flexible.
Examples of issues that should be given priority in the work of the Council during the autumn
of 1999 are the internal market for energy, renewable energy sources, more efficient use of
energy, research and development, and fiscal incentives and other fiscal measures.
3.1.3. Local Investment Programs
In 1997 Parliament passed a Bill5 proposing that funds be allocated to support local
investment programs for the implementation of sustainable development. Originally, 647
million Euro was allocated for the period 1998-2000. Subsequently, Parliament approved a
further allocation of 132 million Euro for these programs for 19996. Aid for the period 19982002 will thus total 778 million Euro.
5 Gov. Bill 1997/98:1, expenditure area 18, Committee Report 1997/98:BoU1, Parl. Comm. 1997/98:81
6 Gov. Bill 1998/99:1, expenditure area 18, 1998/99:BoU1, Parl. Comm. 1998/99:63
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The purpose of the aid is to increase the pace of adjustment to sustainable development and to
help to create new jobs. Aid will be granted to municipalities whose investment programs are
considered to make a substantial contribution to adjustment. The criteria specified for
eligibility for aid include the requirement that the measures will reduce environmental
impacts, increase the efficiency of the use of energy and other natural resources and promote
the use of renewable resources. The measures must also help to create new jobs.
The Government divided the grant application procedure into two rounds. In the spring of
1998, 42 municipalities were granted aid for the program period 1998-2000. In the spring
1999 the Government made grants to 47 municipalities for the period 1999-2001. The
municipalities expect the investment programs to have substantial effects on the environment.
They estimate that the investments will generate about 11,500 job in terms of annual labor
units (ALU) during the program period 1998-2001. The municipalities have further estimated
the environmental effects of each project for which a grant is made. Altogether, the
investment programs are expected to reduce the use of electricity and oil by 1.6 Twh per year,
which corresponds to the energy used to heat 60,000 detached houses. In addition, fossil fuels
and electricity, corresponding to 1 Twh, will be replaced by renewable energy sources.
Carbon dioxide emissions will be reduced by 1.2 million tons. This is the equivalent of taking
10 % of the cars in Sweden out of traffic. Natural environments that provide valuable habitats
for biological diversity will be preserved or restored on almost 1,500 hectares of land. On
average the projects have received about 30% investment subsidy.
A wide range of energy efficiency measures are also being implemented in the housing sector,
including more efficient ventilation systems and additional insulation.
One effect of local investment programs that have hitherto received support is a substantial
increase in the use of renewable energy sources, mainly in the form of conversion to bio-fuels
in district central heating plants and the use of compressed sawmill residue pellets in smaller
units, supplemented to a lesser extend by wind power and solar energy.
Conditions for support
After drawing up an investment program containing measures designed to reduce local
environmental problems and create employment, local authorities can apply for the requisite
funding. The program ought to have been prepared in close cooperation with local authority
residents, the business community, non-governmental organizations and other players at local
level. Though their primary focus must be physical investment, programs may also
incorporate adult education and public information activities related to investment objectives.
Those local authorities whose investment programs are deemed capable of promoting
ecologically sustainable development in an optimum way are awarded a share of the funds set
aside by the government. The support scheme is designed to focus investments so that local
authorities taking part can achieve discernible results. Important considerations in the
selection process include a holistic approach on the part of the local authority as well as the
programs potential in term of reducing environmental impact and creating employment.
Concerned to encourage the testing of new solutions, technologies and working methods, the
Government has refrained from specifying particular technical solutions or forms of
investment.
Altogether, 81 municipalities have been granted a total of EURO 440 million for local
investment programs in 1998 and 1999. Together with the investments made by the recipient
municipalities themselves, the total volume of investment will be EURO 2,035 billion, of
which EURO 1.52 billion are directly related to the environment.
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Traffic
Water & Sewage
Support measures
Waste
management
Nature
conservation/
Biological diversity
Industrial projects
Building projects
Multi dimensional
projects
Remedial
measures
Energy efficiency
projects/Energy
saving
Conversion to
renewable energy
resources
Figure 3-3; Breakdown of funding by type of project
3.1.4. Environmental Management Systems
Industry has pioneered the introduction of environmental management systems. Such systems
have already been established in many large and medium-sized industrial companies. Now,
the public sector – municipalities, county councils and central government authorities – have
also started introducing such systems. Environmental management systems establish
systematic environmental activities on the basis of well-defined guidelines and objectives, for
example in central policy documents, integration of environmental concerns into day-to-day
activities, a clear division of responsibilities, and routines for monitoring and results
accounting. In most cases, municipalities and county councils aim for ISO certification or
registration in accordance with the EU’s Eco Management & Audit Scheme (EMAS).
As mentioned above, environmental management systems are now also being introduced in
the Government Offices.
3.2. OTHER PROJECTS
3.2.1. NUTEK’s Program within the Technical FoU
Eighty-four technical programs were in progress in 1999. The contribution of NUTEK is
mainly directed to strengthen the cooperation between the universities, the industrial research
institutes and the companies. Normally, NUTEK is subsidizing the universities’ and industrial
research institutes’ participation in the projects.
The condition for the subsidies from NUTEK is that the company itself must contribute with
at least 50 % of the total cost of the project, which as far as possible should cover the
companies own participation.
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The financing of FoU-projects is aiming at specific results in every case. The strategic goal of
NUTEK is to establish cooperation and networks, according to the view on the national
system of innovation. According to this view, the programs shall early in the FoU-process
contribute to the creation of interactive learning-processes between the different actors.
Thereby new products and techniques will develop which will strengthen the Swedish
industry’s international competitiveness.
The type of subsidy given is that scholars and postgraduate students at universities and
research institutes are financial supported for their cooperation, together with companies, in
the FoU-programs.
3.2.2. Other Nutek activities
New growing technologies
Programs within this field run by Nutek:
• Bio-processes in industry
• Environmental adapted electronic production
The overall goals are to build up knowledge and experience within the respective field, to
stimulate interdisciplinary efforts in close cooperation with industry, institutes and
universities and care for knowledge diffusion. In the long run the Swedish industry will
construct and produce new and better products and methods and encourage new enterprises to
compete on the market.
The most important role of the programs is to expand and increase the contacts between users,
researchers and manufacturers to build up unique Swedish competence within the respective
field to strengthen the competitiveness of the Swedish industry.
The budget for the bio process program (1997-1999) was about EURO 1,5 million per year.
During 1999, 27 projects and five pre studies have been funded. Researchers from two
different branch research institutes and a total of 23 university institutions are a part of this
program. Representatives from the industry are a part of all the programs except for one.
The budget for the electronic production (1997-1999) was about EURO 2 million. Seven
candidates for the doctorate and 15 enterprises are engaged.
Industrial processes and products
Programs within this field run by Nutek:
• Optimal packages
• Method for environmental adapted product development
The overall goal is to strengthen the research competence and develop specific methods
within the respective field, to stimulate the cooperation between different research groups as
well as between these groups and the industry and between SMEs respectively, and further, to
utilize the resources more effectively and create channels for networking and to inform SMEs.
The most important role of these programs are to utilize the increasing environmental interest
of the citizens and help the industry to adapt to these new demands. Further, to develop tools
and methods that can easily be used by SMEs, which operate on markets where the
competition will be strengthened by the production of environmentally sound products.
The budget for the Optimal packages program (1995-ff) was up until 1999 about EURO 1
million. 15 different projects are going on at the moment within this field. 15 researchers and
three candidates for the doctorate are engaged. In total 60 enterprises are part of this program.
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The budget for the product development program was up until 1999 EURO 2.5 million. 11
projects are running at the moment. In total 100 different SMEs are engaged in the projects.
3.2.3. Public Procurement
Taking environmental concerns into account in connection with public procurement opens
great opportunities for encouraging the production of environmentally sounder products and
services. Annual expenditure on public procurement (excluding defense procurement) amount
to at least 36 billion Euro, and government procurement accounts for about 12 billion Euro of
this total. This means that the combined efforts of public purchasing authorities can persuade
suppliers and producers to produce environmentally sounder products by stipulating
environmental conditions in tender procedures.
Sweden’s municipalities and county councils, in particular, are increasingly imposing
environmental conditions in connection procurement. Green procurement has made less
impact so far in central government, however, although a number of initiatives have now been
taken to introduce it. As mentioned above, the Government has instructed about 100
government authorities and agencies to introduce environmental management systems.
Within the framework of large-scale investment in environmentally sound product
development, the Government is co-financing an ecodesign project whose purpose is to use
ecological design to simulate the development of environmentally sound products in 14 small
and medium-size enterprises (SMEs).
In the Statement of Government Policy in the autumn of 1998 the Prime Minister invited the
motor vehicle industry to take part in cooperation on the development of environmentally
sounder vehicles. This cooperation will take place within the framework of the joint research
and development program that has been prepared during the year. The purpose of the joint
program is both to reduce the environmental impact of road traffic and ensure that Sweden’s
motor vehicles industry will continue to be competitive. In the Autumn Budget Bill the
government announced its intention to implement the program during a six-year period
starting on 1 January 2000. The Government will allocate EURO 60 million for this purpose
during the period. The program covers areas such as advanced combustion, hybrid and fuel
cell technology, weight reduction and the supply of know-how. In addition to motor vehicle
manufacturers, universities and research institutes, as well as subcontractors, are expected to
take part in the program.
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4. INTERVIEWEES
The following people have been interviewed:
NUTEK
Visiting address: Liljeholmsvägen 32
Postal address: SE-117 86 STOCKHOLM, SWEDEN
PH: + 46 8 681 91 00
• Göran Marklund – Head of Department, Swedish Innovation System
• Göran Uebel – Technical R&D concerning Environmental Technology
• Evy Jacobson – Head of Department, Technical R&D concerning Manufacturing and
Communications
Ministry of the Environment
Visiting address: Tegelbacken 2
Postal address: SE-103 33 STOCKHOLM, SWEDEN
PH: + 46 8 405 10 00
• Tony Clark - Head of Section, Division for Ecomanagement Strategies and Industrial
Co-operation
• Krister Nilsson – Political Adviser
Ministry of Industry, Employment and Communications
Visiting address: Jacobsgatan 26
Postal address: SE-103 33 STOCKHOLM, SWEDEN
PH: + 46 8 405 10 00
• Lars Rekke – State Secretary (to a large extent concerning energy questions)
• Maria Sandqvist – Head of section, Division for Energy and Primary Industries
Swedish Environmental Protection Agency
Visiting address: Blekholmsterassen 36
Postal address: SE-106 48 STOCKHOLM, SWEDEN
PH: + 46 8 698 10 00
• Eva Smith – Head of Department, Sustainable Development in Society
Mistra (Foundation for Strategic Environmental Research)
Visiting address:Gamla Brogatan 36-38
Postal address:SE-111 20 STOCKHOLM, SWEDEN
• Måns Lönnroth – Managing Director
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