1
THE ROLE OF UNIVERSITIES
IN
REGIONAL INNOVATION SYSTEMS
- A NORDIC PERSPECTIVE
Jan-Evert Nilsson (ed.)
To be published by CBS Press, Copenhagen
2004-10-01
2
Table of contents
Preface 4
Sammandrag 5
1. Regional systems of innovation 8
Dynamics of capitalist economies 8
The role of public policy 9
National systems of innovation 10
Regional system of innovation 13
The new production of knowledge 14
Triple Helix 16
The regional impact of universities 18
The role of universities in regional innovation systems 19
2. Higher Education in the Nordic Countries 22
Denmark - a controlled expansion 22
Finland – increased focus on fields with growth prospects 25
Iceland – one dominant university 28
Norway – three waves of reforms 30
Sweden – crisis generated growth 35
National strategies and political circumstances 41
3. Regions with an old large comprehensive university 43
The battle for a university 43
The regional context 44

Regional impact 146
Conclusion 148
8. The role of university in regional innovation systems 150
The academic community 150
Regional impact of the universities 155
Elements in the regional systems of innovation 160
The universities’ role in the innovation system 162
The importance of the university in systems of innovation 165
Policy implications 166
9. References 173
4
Preface
This report is the outcome of the collective effort of nine scholars, who have
been engaged in a on the “The Role of University in Regional Innovation
System”. The project has been possible thanks to the financial support from
the Nordic Industrial Fund – Centre for Innovation and Commercial Devel-
opment. The Nordic Industrial Fund has shown great interest in the project
and has made valuable comments. We would like to thanks for the financial
support enabling us to engage in this work.
The ideas of this report have evolved through a number of project meetings
over a two-year period. The project group has discussed the chapters of the
report in this process, and all co-authors have contributed to the entire report.
There have been a division of labour within the group. Thus, the first chapter
was written by Jan-Evert Nilsson, and Åke Uhlin, collaboration with Peter
Arbo, Heikki Eskelinen, Kent Nielsen and Jan-Evert Nilsson did the work on
chapter 2. Kent Nielsen has written chapter 3 and Peter Arbo and Heikki Es-
kelinen chapter 4, Morten S. Dahl, Bent Dahlum and Håkan Ylinenpää chap-
ter 5, Jan-Evert Nilsson and Åke Uhlin chapter 6, and Ingi Runar Edvardsson
chapter 7. The final chapter was written by Jan-Evert Nilsson, who also has
done the main editorial work and were responsible from co-ordinating the

spelar i regionala innovationssystem. Med innovationssystem menas det sys-
tem av privata och offentliga aktörer som främjar utvecklingen av, utvecklar
och bidrar till spridningen av ny teknik och nya företag.
Metoden som används är en praktikfallsmetod. Nio universitetsregioner i de
fem nordiska länderna har valts ut. I dessa görs en studie av på vilka sätt uni-
versitetet/högskolan påverkar den ekonomiska utvecklingen i regionen. I de
flesta sker det genom att regionens utveckling sedan universitetet eller
högskolan grundades följs. Vi har valt att studera andra eller tredje vågens
universitet, dvs i huvudsak sådana som etablerats i samband med den stor
utbyggnaden av högre utbildning som skett under efterkrigstiden.
Skälen för etableringen av de nya universiteten har varierat över tiden. Un-
der1950- och1 1960-talet var etableringen en integrerad del av uppbyggnaden
av den nordiska välfärdstaten. Syftet var i första hand att säkra tillgången av
kvalificerad arbetskraft till den växande offentliga sektorn. Under 1970- och
1980-talen började universitet och högskolor i allt högre grad betraktas som
motorer i den industriella utvecklingen. Argumentet att det nya universitetet
eller högskolan skulle bidra till att stärka konkurrenskraften i regionens
näringsliv eller bidra till en modernisering av näringslivet blev allt viktigare.
Synen på universitetens roll fick avgörande betydelse för utformningen av de
nya universiteten och högskolorna. Vilken roll enskilda universitet och
högskolor spelat i det regionala innovationssystemet återspeglar i hög grad
vilken typ av universitet som utvecklats i regionen.
Universitetens regionala effekter
Etableringen av ett universitet har förhållandevis stora direkta lokala ekono-
miska effekter, då utbildningen förutsätter att studenterna kommer till uni-
versitetet. Storleken på den direkta effekten varierar beroende på univer-
sitetens storlek mellan 3000 anställda och 22 000 studenter och 130 anställda
och 900 studenter. Hur betydelsefull denna lokala effekt är bestäms i sin tur
av regionens storlek. Medan regionen med det största universitetet har 645
6

uppenbar risk andelen utbildningsprogram inom teknikområden med snabb
tillväxt inte minskar över tiden.
I diskussionen av universitetens effekter på den regionala industriella ut-
vecklingen läggs förhållandevis stor vikt avknoppningarna från universitet
och högskolor. En föreställning är att forskningen vid universitetet eller
högskolan skall generera resultat som kan ligga till grund för företagse-
tableringar. Ofta relateras i detta sammanhang till erfarenheterna från Silicon
Valley, där studenter och forskare vid Stanforduniversitetet har etablerat
välkända företag som Hewlett-Packard, Adobe, Silicon Graphics, Sun Micro-
system och Cisco. Avknoppningar från de studerade nordiska universiteten
är inte lika vanligt förekommande som i Silicon Valley. Nästan inga av
avknoppningsföretagen har vuxit och utvecklats till stora globala företag. Det
förefaller som om den institutionella strukturen i de nordiska länderna däm-
par omfattningen på den entreprenöriella aktiviteten och hämmar tillväxten i
de avknoppade företagen. Detta bidrar till att reducera universitets och
högskolors potential som en källa till nya företag.
Viktigare än som källa till avknoppningar är universitetens och högskolornas
bidrag till att öka attraktiviteten hos regionen som plats för lokaliseringar.
7
Universitet och högskolor, särskilt de med teknisk fakultet, utgör en attrak-
tion för expansiva företag som överväger ny- eller omlokaliseringar. Alla de
studerade nio universiteten har bidragit till att nya verksamheter lokaliserats
till regioner. Vilka typer av verksamheter som attraheras av ett visst univer-
sitet beror bland annat på universitetets egenskaper. Styrkan i den attrak-
tionskraft som ett universitet representerar bestäms också av hur många an-
dra universitet med ett jämförbart utbildningsutbud som det finns. Ju färre
sådana universitet som finns desto större dragningskraft utövar universitetet.
Universitet som attraktionskraft innebär att universitetens lokalisering utövar
ett starkt inflytande över var expansiva verksamheter inom dynamiska tek-
nikområden lokaliserar sin produktion. Därför bestäms den regionala effekt

novationssystemet rimliga förutsättningar för sin verksamhet samt att skapa
ett system av incitament som belönar vissa typer av handlingar.
8
1. Regional Systems of Innovation
The 1970s marked the end of a long period of high economic growth. The
growth rate was halved in the OECD countries and unemployment rised. Ini-
tially the reading of the history of the 1970s was that “…the most important
feature was an unusual bunching of unfortunate disturbances unlikely to be
repeated on the same scale, the impact of which was compounded by some
avoidable errors in economic policy” (McCracken et al. 1977;14). The conclu-
sion was that the immediate causes of the new economic problems could be
understood in terms of conventional economic analysis. The expert group
could “… see nothing on the supply side to prevent potential output in the
OECD area from growing almost as fast in the next five to ten years as it did
in the 1960s…. Whether it is achieved or not will depend heavily on our abil-
ity to obtain a desirable level and structure of final demand and the accompa-
nying distribution of income without arousing disruptive conflicts, which ex-
acerbate inflation (MacCracken et. al. 1977:16). The expert group expressed a
strong belief of the strength in a well-balanced Keynesian economic policy.
The authorities were expected “… to steer demand along the relatively nar-
row path consistent with achieving a sustained recovery”(MacCracken et.
Al.1977:19). The lower limit was set by the need for a rate of expansion suffi-
cient to encourage a recovery in investment and the upper limit by the point
at which a rapid increase in aggregate demand would re-ignite inflationary
expectations. According to established theory the great policy challenge was
to fine tune the economy so it could pass safely in the narrow strait between
economic stagnation and high inflation.
Dynamics of capitalist economies
Looking back we can see that the experts were wrong. This unusual bunching
of disturbances was indeed the start of something new quite different from

Freeman considered the beginning upswing made possible by changes in the
technoeconomic paradigm, which included “… a combination of interrelated
product and process, technical, organisational an managerial innovations,
embodying a quantum hump in potential productivity for all or most of the
economy and opening up an unusually wide range of investment and profit
opportunities. Such a paradigm change implies a unique new combination of
decisive technical and economic advantages (Freeman & Perez 1988:47-48).
Freeman argued that each technoeconomic paradigm was based on a key
factor and he saw microelectronics as the key factor in the coming fifth Kon-
dratiev upswing. The diffusion of new technologies of wide applicability is
capable of impairing a substantial upthrust to the growth of the economic
system, creating many new opportunities for investment and employment
and generating widespread secondary demands for goods and services.
The strength of the upswing depends on the growth potential of the new
growth industries. Over time, however, these new technological systems
mature and their investment and employment consequences end to change.
The upswing continues until a disturbing lack of labour initiate a wage infla-
tion spiral. Fast increasing wages are met by increased prices and/or reduced
return on investment. Growing pessimism and reduced financial resources
obstruct the innovation activities and reduced the diffusion of innovations.
The long economic wave is reaching its peak, as was the situation in the 1970s.
In this phase of the long wave Freeman considered the role of public policy as
crucial.
The role of public policy
The researchers at SPRU combined a conviction about the existence of long
waves in the world economy with a strong belief in the prospect of national
governments to manage economic development. They considered public sup-
port to enhance the growth of new technological systems and support to new
technologies as important means to recreate a period of fast growth in mature
industrial countries. They anchored their believe in earlier experiences of re-

oriented policies to long-term supply side policies aiming at structural
change. Their policy proposals still focused on isolated measures and they did
not discuss the implementation ofn the policy. The concept of national sys-
tems of innovation has not yet been formulated. It was was introduced by
Christopher Freeman some years later, who became inspired of what he had
experienced at tour to Japan
National systems of innovation
Christopher Freeman used the concept national systems of innovation for the
first time in 1987 in his analysis of economic development in Japan since the
Second World War (Freeman 1987). In the term innovation system he in-
cluded the network of institutions in the public and private sector whose in-
teractions initiate, import, modify and diffuse new technologies. By focusing
on the innovation system he moved the perspective from single entrepreneurs
and corporations to a network of institutions. The innovation system was seen
as the breeding ground for innovations. Freeman considered the design of
the innovation system as the single most important policy issue. Thus he now
moved the attention from means to the creation of a system of institutions.
Freeman was inspired by what he saw in Japan. According to Freeman Japans
national system of innovation differed in certain aspects from other industrial
countries. Freeman pointed at four important differences. Firstly, Japan had
a Ministry of Industry and Trade (MITI) which played a more proactive role
than corresponding ministries in other countries. Secondly, the system in Ja-
pan was characterized by a close cooperation between government and cor-
porations. Thirdly, the Japanese school system was characterized by the fact
that a large share of the youth studies science and technology in upper secon-
dary school. Finally, Freeman pointed at a number of social conditions,
11
mostly related to the labour market, which made Japan open to technological
change.
Freeman considered the strong links between government and industry as an

how the lack of structural reforms may result in permanent recession (The
Economist 2001). In the public debate attention was moved from innovation
policy to the institutional structure of the country.
However, the preoccupation with national systems of innovation survived the
Japanese miracle. The theory was brought forward by a group of Danish re-
searchers, who combined the idea of systems of innovation and interactive
learning (Lundvall 1992). Their point of departure was that innovation should
be regarded as a gradual and cumulative process and that interactive learning
and collective entrepreneurship are fundamental to the process of innovation.
Interactive learning was something different from knowledge production at
the universities and private R&D laboratories. The researcher acknowledged
that scientific activities and technical change had been brought closer together
and increasingly become interdependent (Lundvall 1992). The capability to
12
innovate cannot longer be assessed in isolation from efforts in science, re-
search and development. Neverthelsess, they emphasised that R&D activities
were not the only innovation source. Instead they underlined the role of rou-
tine activities in production, distribution and consumption as input to the
process of innovation. The experiences of workers, production engineers and
sales representatives formed the basis for corrections and improvements.
Hence learning by doing, learningf by using, and learning by interaction feed-
back into the process of innovation (Lundvall 1992). When bottleneck prob-
lems are met and registered in production, or in the use of products, the
agendas of producers change, affecting the direction of their innovation ef-
forts.
From the central role given to routine activities in the learning processes fol-
lowed that innovation must be rooted in the prevailing economic structure.
The Danish researchers concluded that the areas where technical advance take
place, primarily are those where a firm, or a national economy, is engaged in
routine activities. Thus, each national system of innovation is rooted in a na-

of long and complex historical processes. Looked upon in this way institu-
13
tions are culturally determined. Normally economists use the term institu-
tions for political determined conditions. Property rights, laws and regula-
tions and infrastructure like educational system are referred to as important
institutions influencing the economic development of a society(North 1990).
Richard R. Nelson’s studies of the US-system of innovation are an example of
such an approach. Here it is focused on the combined public and private
character of technology and the role of, respectively, private firms, universi-
ties and government in the system of innovation (Nelson 1987; Nelson 1988).
If institutions are assumed to be the product of a complex historical process
the opportunities fpr public policy-making become an open question. The role
of politics may change over time and will differ between different countries.
If, on the other hand, institutions are formed by political decisions, public
policies by definition have a central role in fostering economic development.
It is obvious that system of innovation is a concept with different meaning for
different authors. Some researchers define it in a narrow sense including only
organisations and institutions that influence the technological capabilities of a
nation. The studies undertaken by Richard R. Nelson in the 1980s are two ex-
amples. Others define the concept broader and include all parts and aspects of
the economic structure and the institutional set-up affecting learning, search-
ing and exploring. Lundvall and his colleagues claim they represent this per-
spective.
One problem with broadening the definition of a system of innovation is that
the problem of delimiting the system increases. In Lundvall (1992) this prob-
lem is addresses by saying that determining which institutions to include in
an analysis must be based on a historical investigtion as well as on theoretical
considerations. They also conclude that in different historical periods different
parts of the economic system may play a more or less important role in the
process of innovation. One major weakness with such a broad definition is

difficult to identify distinctive regional features in the systems of innovation
(Schienstock et al 1998). This raises one important question. How big can the
overlap between the national and regional system of innovation be before the
regional system of innovations lose its relevance?
One answer to this question is that it is just academic. Systems of innovation
have both a horizontal and vertical dimension. Each geographic level has its
own system, but this system is also linked to other geographical levels. Nor-
mally, processes of innovations transcend administrative borders. Technical
impulses may come from abroad, the innovative ideamay be developed in a
national institutional context, and the technical problems that obstruct the
realisation of the idea may be solved locally. In this way innovation systems
become systems with several geographical layers.
Jeremy Howells argues that a regional analysis may add another layer in a
system perspective on innovation (Howells 1999). He identifies at least four
overlaid innovation system – sub-regional, regional, national and interna-
tional level. At the lowest geographical level there are sub-regional innovation
systems. Because geographical distance, accessibility, agglomeration and the
presence of externalities provide a strong influence on innovation, the sub-
regional level is an important arena for innovations. The regional level has
much in common with national system, but this level should not just be
viewed as one layer down from national systems. Regional systems of inno-
vation are increasingly being framed within an international arena.
The links between sub-regional, regional, national and international systems
of innovations imply hat analyses should include actors and institutions at all
four levels. The importance, though of different actors and institutions may
change over time and vary between regions.
The new production of knowledge
The systems of innovation approach was developed by economist as a re-
sponse to a new economic situation, in which slow economic growth in-
creased the attention paid to innovation. Learning is one of the key concepts

sonnel for industry, raising the general level of familiarity with science and
technology throughout society. The numbers of sites, including research as
professional activity, are increasing.
Gibbons et. Al. (1994) assert that science has transformed from Mode-1 to
Mode-2 science, from an academic mode to a mode, where knowledge is gen-
erated in the context of application. Mode-2 science is characterized by trans-
disciplinarity and wide social distribution. The latter refers to the diffusion
over a wide range of potential sites of knowledge production and different
contexts of application or use. Knowledge production becomes part of a larger
process in which discover, application and use are closely integrated.
Traditionally science has always spoken to society in the sense that it has pro-
vided a continuous flow of new ways of conceptualising the physical and so-
cial world. But now society speaks back to science. New knowledge is pro-
duced in more complex contexts of contemporary society. This contextualiza-
tion of science is reflected in shifts in the research agendas and how research
priorities are set.
One manifestation of this transformation of the industrial society to a knowl-
edge society is the new demands put on universities. Universities are now
expexted to contribute to the international competitiveness of nations, stimu-
late wealth creation and support the growth of sustainable development. In-
novation is seen as the key factor to achieve all this. An unrestrained belief in
innovation has grown up and successful innovation is currently assumed to
require knowledge and skills not only of the natural science but also the social
16
sciences and the humanities (Nowotny et al. 2001). In this way knowledge
production transcends disciplinary boundaries. Scientific fields are fused and
the traditional university structure of faculties and departments that has cre-
ated and sustained these divisions become less relevant. The changing land-
scape is manifested in the making of economic development a core functio of
the university in addition to teaching and research.

are founded on new principles and new conceptions, which in turn are devel-
oped in basic science. From the point of view of this perspective technology
was applied science.
From this point of view technology is applied sciece. However, when the lin-
ear model of science-technology relations has been applied to historic cases
studies it has often failed. The invention of the transistor is a famous example.
Unquestionable, the invention involved science in rather fundamental ways,
but it cannot simply be explained as an application of proceeding advances in
science (Gibbons & Johnson 1970). The invention of the transistor was
fpremised on basic research but also gave rise to a number of new scientific
questions. The invention of the transistor indicated a spiral model of interac-
17
tion in both directions, with cooperative arrangements between university
and industry at various stages of research, development and innovation.
A combination of Mode-2 perspective, where knowledge production tran-
scends organisational boundaries, and the spiral model of interaction can be
seen as the foundation for the Triple Helix model (Leydesdorff & Etzkowitz
1998). As university becomes more dependent upon industry and govern-
ment, so have the latter become more dependent upon university. The Triple
Helix model implies that the paradigm of research in innovation studies has
incorporated a network mode. Innovation is seen as the result of a local inter-
action between university, industry and government. Triple Helix refers to
the movement toward a new global model for the management of knowledge
and technology. Henry Etzkowitz identifies four stages in the rise of triple
helix dynamics (Etzkowitz 2002).
1. Internal transformation in each of the helices. Universities play a new
role in society. They are not only training students and conducting re-
search, but are also making efforts to put knowledge to use. The new
university elides the traditional boundaries between academia and in-
dustry. Strategic R&D alliances among companies and governments

18
The models raises the question of how general solutions may be in practice.
Probably, there are several types of links between the three spheres, which
may constitute a successful interaction. The interaction may be determined by
the context. The characteristics of a successful Triple Helix in one region will
be of little relevance in another region. The Triple Helix-models are primarily
a heuristic approach to be used in the study of historical cases.
The regional impact of universities
Triple Helix addresses the question of which factors determine the regional
impact of a university. Different researchers focus on different factors when
the try to answer this question.
Some researchers focus attention to the regional context and refer to the size
of the region or the regional economic structure. The hypothesis is, that large
regions with existing high-tech industries offer better conditions for substan-
tial regional impact. An American statistical study show a positive correlation
between change in the resource flow to a university and the size of the high-
tech sector in regions with more than one million inhabitants (Varga 1988).
One possible conclusion from this analysis is that public investment in uni-
versities in metropolitan regions with more than one million inhabitants and
with a large high-tech sector will have a larger regional payoff than invest-
ments in universities in other regions. However, it is an open question if the
identified correlation also reflects a causal relation. If the relation is a causal
one a second question deserves attention.
Are the results from a statistical analysis of US regions relevant also relevant
for other countries? If that is the case there are only three regions in the Nor-
dic countries – the Stockholm region, the Copenhagen/Malmö region and the
Helsingfors region, which fulfil the conditions i. e. having a population larger
than one million people and a large high-tech sector. The conclusion based on
the U.S study would be that the governments in Denmark, Finland and Swe-
den concentrate public resources to university to these three regions. For

the profile of the university and the industrial structure of the region become
important. The knowledge profile of the university should be directed to-
wards knowledge areas where knowledge advancements can lay the founda-
tion for new production and future growth.
The role of universities in regional innovation systems
I this book we will analyse the role of universities in regional innovation sys-
tems. We do so by studying nine Nordic regions with a university. We have
chosen regions outside the largest metropolitan areas in each of the five Nor-
dic countries. By that choice we announce that we do not focus on the impor-
tance of the region’s size as an aspect of the regional impact of universities.
Our focus is on the role played by the universities in different regional inno-
vation systems and the impact of the universities on regional development.
The seletion of regions has been guided by the ambition of studying regions
with universities of different age and structure. In the sample there is one
university founden in the 1920s, one in he 1950s, one in the 1960s, three in the
1970s, two in the 1980s and one in the 1990s. The age of a university may be
relevant for three reasons. Firstly, the circumstances under which the univer-
sity was founded and the role it was extpected to play in the region may dif-
fer. In many years a univesity was primarily considered to be an educational
institution producering qualified labour to the public sector. The view that the
university may represent a potential engine of regional growth was not actu-
alized until the end of the 1960s. Secondly, the time when a university is
founded may also exert influence of its structure and specialization. Thirdly,
you may assume that the age of a university has an influence on the regional
impact. Older universities tend be larger and large and old universities can be
expected to show greater regional impact than young and small universities.
We do not define the system of innovation a priori. Our point of departure is
the universities in the selected regions. The issue is to explore the role of the
universities in the economic transformation of the regions and in their re-
gional systems of innovation. By taking the universities as our point of de-

evolved to be different in their profile.
Karlskrona/Ronneby in Sweden and Vestfold in Norway got their university
colleges in the late 1980s and the early 1990s (chapter 6). While the university
college in Karlskrona/Ronneby was completely new the one in Vestfold was
an amalgamation and upgrading of two training colleges with their root in the
19
th
century. In both cases technical education represents a significant part of
the two university colleges.
In one way the Akureyri case has similarities to the Aarhus case. Akureyri is
the second largest region in Iceland, which got the third university in the
country in 1988 (chapter 5). From another point of view the differences are
dramatic. Population in Iceland is somewhat smaller than the population in
the city of AArhus. And the population in the Akureyri region is just one
tenth of the population in AArhus city. Obviously there is a significant differ-
ence in scale between Akureyri and Iceland and the other cases. The univer-
sity of Akureyri is a small-scale university, which, with six faculties, has the
same breath as a traditional comprehensive university in spite of the fact that
the number of students is small.
The case-chapters are followed by a comparative analysis of the regions end-
ing up in policy implications (chapter 8). Two general conclusions are drawn
from the cases. First, established universities always oppose each plan to
found new universities. Their standard argument is that the lack of experi-
enced academic staff will make it difficult to fill the academic positions in the
new university with qualified teachers and researcher. Secondly, new univer-
21
sities have a strong tendency to develop into a traditional multi-faculty re-
search based university. A university that initially was organised in a new
way normally ends up as traditional university. There is a strong thrift to-
wards the classical university model.

Denmark’s first university was founded in Copenhagen in 1479, while the two
most recent additions were founded in 2001 and 2003. The universities of Co-
penhagen and Aarhus are the oldest and largest, and in 2001 had a combined
total of over 44,000 students and 4300 teaching and research staff, comprising
40% of all students and researchers. This marked concentration of university
places within Denmark is reinforced by the fact that Copenhagen and Aarhus
are simultaneously home to the two largest business schools, so that these
four institutions alone account for more than 60% of the country’s students
and research and teaching staff.
The University of Copenhagen remained alone until the 19th century, when
three specialist universities were founded, also in the Danish capital, namely
the Technical University of Denmark (1829), the Royal Veterinary and Agri-
cultural University (1856) and the Danish University of Pharmaceutical Sci-
ences (1892). These were in the early 20th century followed by the Copenha-
gen Business School (1917).
Nor until 1928 was Copenhagen’s total dominance of university education
broken, when the Danish provinces welcomed their first university in Den-
mark’s second city of Aarhus. For many years Aarhus University was the only
university outside the metropolitan area. It was conceived as a multi-faculty
university, with the individual faculties being gradually built up over the pe-
riod 1928-1954. And just as Copenhagen had its own Business School, so Aar-
hus also acquired a local Business School in 1939. Another 26 years elapsed
23
before Denmark’s third city of Odense was endowed with a university in
1965. This expansion relates to a rapid rise in the number of students, as from
the late 50’s to the late 60’s annual university intakes almost quadrupled, from
1443 students in 1956/7 to 5348 in 1966/67.
The swelling ranks of students can be seen as a result of the large cohorts of
young people born in the post-war years gradually reaching university age
and of the extension of the Danish welfare model, creating a stronger demand

tribution to bring to regional economic development. In other words, the aim
was to ensure the development of the regions outside Copenhagen and Aar-
hus. Expansion of the university sector in terms of new universities and de-
partments has since the 70’s mainly taken place outside the two major cities.
However, the expansion of the university institutions in the late 60’s and early
70’s was far from able to cope with the high demand for university places. In
1960, 4% of each yearly cohort went to university while in 1970 the figure was
10%. This significant rise in student intakes led to total numbers of students
reaching the maximum of existing capacity. The lack of both universities and
24
of academic staff hence led to a flattening of the growth rate in the period
1970-80, and in 1977 a quota system for applications was introduced. These
quotas meant that, by the end of the 80’s, only 8% of each annual cohort was
being accepted at one or other of the universities. In the first years the quotas
applied only to the most popular subjects, but due to capacity problems and a
feared lack of employment opportunities for the many new graduates, during
the 80’s the entrance quotas were extended to practically all university
courses.
The quota systems, overwhelmingly dependent on grade averages achieved
in the upper secondary matriculation examination, meant that for the most
popular courses, such as medicine, psychology, political science and law, the
majority of those who had passed the matriculation examination were in real-
ity prevented from reading their preferred subject. University courses were
typically set at five years for a straightforward “Kandidat” (Masters level)
degree, but this guideline was regularly exceeded and the “eternal student”
was not an unknown phenomenon or problem.
During this period the democratic governance system remained largely unal-
tered until the coming into force of the new Universities Act of 1992, and in-
deed in part until the passing of the Universities Act of 2003. However, it
came to be recognised that the often slow and decentralised (democratic) de-

single ministerial purview.
Meanwhile on the teaching side the university reforms involved an adapta-
tion to the British-American system, with the introduction of a new Bachelor-
Master-PhD graduation route (3 + 2 + 3). The overriding motive for the
teaching reform was the creation of a more flexible teaching system with op-
tions both for withdrawal after completion of the Bachelor degree and for a
possible subsequent change of direction. An additional benefit was the option
to include the growing international student exchange activity, hitherto im-
peded by incompatibility of education systems, in the system. Despite these
obvious advantages the change met with fierce opposition at most universi-
ties, and in 2003 it is still doubtful whether the withdrawal option and change
of direction is a real possibility in most university courses. At the same time,
the reforms dictated the introduction of a so-called “taximeter” system,
whereby the financing of individual universities and faculties was made de-
pendent on how many students were fed through the system. Funds follow
the student and universities’ finances have thus become dependent on how
many Bachelors, Masters and PhD’s are produced.
This change, combined with the higher subsidies in 1994-98 and the general
economic upturn, with good job opportunities for graduates in the burgeon-
ing knowledge services sector, led to a marked rise in student intakes and a
continuous growth in numbers of students and thus the production of Mas-
ters graduates throughout the 90’s. Hence the number of university students
rose by 20% from 1991 to 2001. This also means that around 17% of each an-
nual cohort of young people currently goes to university – a significant in-
crease over the 8% who did so in the late 80’s, see above.
In 2003 Denmark passed a new Universities Act. This legislation is a con-
tinuation of the basic principles of 1992, and can be interpreted as the final
reaction to the democratic decision-making processes of the 1970 Universities
Governance Act. The main aim of the new Universities Act is to preserve the
universities’ central place in the global knowledge society. The measures em-