The impact of the government’s reduced funding for innovation

When the autumn budget was presented in October 2023, we saw drastic reductions in funding for the innovation agency Vinnova. The effects of this were immediately noticeable and many of SISP’s members have had to revise their activities in both staff and projects. The consequence of this is a direct reduction in support for innovative small and medium-sized enterprises, as well as a deterioration in the conversion of existing industry, where science parks have an important function.

Södertälje Science Park is one of the SISP members that has been affected. When they had planned to scale up the successful Production Angels project and were ready to roll it out nationally, they had to scale down instead. To understand the consequences of how the government’s autumn budget affects, among other things, Swedish production, parts of the Committee on Enterprise and Innovation visited Södertälje Science Park on 24 April.

“We think that the government lacks a plan to strengthen Swedish innovation. We see how the reduced funding to Vinnova means that Swedish startups are directly affected and we also see how other countries are investing heavily in strategies for innovation”

Aida Birinxhiku, Member of Parliament (S) and Member of the Enterprise Committee

“We are making this visit because we believe that the government lacks a plan to strengthen Swedish innovation. The reduced ambitions and the reduced funding will jeopardise Swedish competitiveness and production. This will in turn mean that we will lose both jobs and growth for Sweden. We see how the reduced funding to Vinnova means that Swedish startups are directly affected by, for example, having to seek both support and capital abroad, thereby losing intellectual property rights to other countries that are happy to receive them. We also see how other countries are investing heavily in innovation strategies, such as our neighbouring country Finland, which now has a broad political consensus and has formulated a very ambitious parliamentary initiative,” says Aida Birinxhiku, Member of Parliament (S) and member of the Committee on Enterprise and Innovation.

Collaboration with SMEs crucial for the transition

The visit started with a short history lesson about Södertälje Science Park by the park’s CEO, Robert Kingfors, who is also a board member of SISP. After that, Anna Olshäll, Manager External Cooperation and Strategic Projects within Production & Logistics at Scania, talked about the importance of Södertälje Science Park for both the large companies and the smaller ones. Scania and AstraZeneca in Södertälje account for 12% of Sweden’s exports. Despite this, they, like the entire manufacturing industry, face major challenges, but also opportunities. To facilitate cooperation with smaller manufacturing companies, Scania has become involved in Produktionslyftet, a national programme and partnership with a national and regional structure that started in 2007, in which around 300 companies have so far participated.

“SMEs are the backbone of Sweden’s welfare. We have a great need to work closely and together with them, as this provides a combined force to improve and innovate.”

Anna Olshäll, Manager External Cooperation and Strategic Projects, Scania

“SMEs (small and medium-sized enterprises) are the backbone of Sweden’s welfare. We have a great need to work closely and together with them, as this provides a combined force to improve and innovate. The value of supporting Swedish SMEs is very high! Political decisions that support innovation and continued industrial development within Sweden’s borders make the country stronger. By providing the conditions to ensure that we have access to relevant skills, the manufacturing industry will have a long-term and sustainable competitiveness and thus be more resilient and ready for a changing future” says Anna Olshäll.

Sustainable production for Swedish competitiveness

Robert Kingfors told us more about Södertälje Science Park, which is home to SuPr, the national node for sustainable production, which brings together industry, academia and public actors to collaborate on sustainable production. The Science Park’s mission is, among other things, to initiate, facilitate and run projects and developments in this profile area. This includes making Sweden’s and the Stockholm region’s industrial companies visible and supporting them as an engine for jobs and development and, not least, preserving Swedish innovations and start-up companies in Sweden. The visitors also heard about the Production Angels project, which supports startups with sustainable and innovative products to scale up from prototype to production. So far, 249 startups have received support, saving the companies SEK 90 million in shortened lead time on the way to a production phase. It has also created 708 new jobs in Sweden and developed the skills of 41 business coaches from 28 incubators around the country.

“Production Angels prepares start-ups and builds bridges to Swedish small and medium-sized manufacturers. As a consequence of Vinnova’s budget cuts, the project is now on hold and the national roll-out is cancelled”

Robert Kingfors, CEO, Södertälje Science Park

“Unfortunately, Produktionsänglar is one of the projects that we now have to reduce to a minimum at very short notice as a result of the withdrawal of government support that we previously received through Vinnova. Industrialisation and scaling up of production is often called the “valley of death” for hardware startups and there is very little financial and practical support in the critical phase. Production angels prepare the start-ups and build bridges to Swedish small and medium-sized manufacturers. It also helps to build regional ecosystems where start-ups and manufacturers collaborate and do business, supported by the local innovation system. As a consequence of Vinnova’s budget cuts, Production Angels is now on hold and the national roll-out is cancelled”, says Robert Kingfors.

Message from Södertälje

Visitors took away the following messages from Södertälje Science Park:

• We need to review the higher education and research system
• Circular economy for a strong industry requires increased collaboration and committed intermediaries to be successful
• Sweden is lagging behind! From an AB Sweden perspective, we need effective support for the innovation ecosystem with national backing, otherwise we risk becoming too local and regional. And losing international competitiveness.