Research at universities is largely funded through competitive calls, in which researchers compete with each other for funding. The idea is that this leads to better quality by funding the best applications and rejecting those of lesser quality. However, this has also created a system that is difficult to navigate, with significant costs and time being spent on the application and reporting process itself. Consequently, universities are finding it increasingly difficult to offer long-term conditions to employed researchers.
In 2024, SEK 55 billion was spent on research at universities, of which SEK 22 billion (40 per cent) was direct funding to higher education institutions. The remaining SEK 33 billion was channelled through competitive calls managed by government research councils and agencies, private foundations, EU programmes, and other Swedish and foreign non-governmental funders.
While we are very successful in attracting external competitive funding, working in a system with such a large proportion of external funding is also a great challenge. For KTH, approximately 64 per cent of funding is external and 36 per cent is direct. The current research and innovation bill, which is a very welcome initiative in itself, will provide an even greater proportion of funding to universities via external grants.
The large number of different funders also means that there are many different conditions regarding how the funds can be used and how they should be accounted for and requisitioned properly. As a result, the administrative burden of external funding tends to increase. One might also ask whether the additional quality that external funding brings is worth the extra costs created by the system. As economists would say, the marginal cost is probably higher than the marginal benefit today.
There are many conditions that are difficult to change, not least the question of the share of basic grants. However, this does not mean that the challenges should be overlooked. With the current research and innovation bill, the proportion of external funding will increase further. While the bill’s funding increases are welcome, they also present challenges for higher education institutions as we move towards 70 per cent external funding.
What can be done? Universities need to come together so that researchers can act jointly in slightly broader groups, sharing the financial burden and creating broader research agendas where different research groups can help each other, jointly creating financial goals and working systematically and in the long term. At KTH, we have a few such successful examples and are working to create more initiatives that foster a collaborative and cooperative climate that favours a long-term approach.
Funders can contribute by creating longer, more coherent programmes, with each funding decision being larger and more long-term. This would involve moving away from short-term project funding and towards longer programme funding. In the long term, the government could adjust the balance between external and core funding to create a more balanced relationship. The government may also need to amend the research councils’ regulations to allow for longer grants. This is essentially a reform aimed at improving the quality of research.