This publication presents a collection of papers from the OECD-Norway workshop on performance-based funding of public research in tertiary education institutions, held in Paris on 21 June 2010. The workshop was organised by the OECD Directorate for Science, Technology and Industry (DSTI) in conjunction with the Norwegian delegation to the OECD. It brought together delegates from the OECD Working Party on Research Institutions and Human Resources (RIHR) with experts and policy makers from OECD countries and non-member economies.

Tertiary education institutions (TEIs) are a key pillar of countries’ research and innovation systems. As part of the public research system, they play many roles: education, training, skills development, problem solving, creation and diffusion of knowledge, development of new instrumentation, and storage and transmission of knowledge. Expenditure on R&D performed by the higher education sector forms a relatively small component of total R&D spending in OECD countries: an average of 0.4% of gross domestic product (GDP) in 2008, equivalent to around 17% of total gross domestic expenditure on R&D. Nevertheless, because TEIs often undertake longer-term, higher-risk research activities at some distance from commercialisation, they make an essential contribution to the knowledge base and complement the research activities undertaken by the private sector.

This chapter provides an overview of models of performance-based research funding systems. It discusses the rationales for such systems from a number of perspectives, including innovation studies and the higher education literature. It explores the variation in their design, the funding implications and the long-term future of these systems.

This chapter focuses on the different types of indicators used in performance-based research funding systems. The indicators are classified into three groups: first-order indicators, related to inputs, processes, structures, outputs and effects; second-order indicators, which tend to be summary indexes; and third-order indicators, which involve peer review. It analyses their strengths and weaknesses and how they are used in national systems.

This chapter presents the results of a survey on funding models. It looks at rationales for the use of performance-based funding systems and outlines the key features of schemes and systems currently in use, including frequency of assessment and the allocation of funds. It discusses the effects of using performance-based funding as well as interactions with other funding mechanisms.

This chapter examines the impacts of performance-based research funding systems. It discusses the difficulties of measuring impacts, particularly in distinguishing between intended and unintended consequences and in establishing whether outcomes are desirable or not. It also explains why presenting an evidence-based assessment is a challenge.

The OECD together with the Norwegian government organised the workshop, Performance-Based Funding for Public Research in Tertiary Education Institutions: Country Experiences, to do a stocktaking of the performance-based research funding systems (PRFSs) now in place in a number of countries. This chapter outlines the main topics discussed at the workshop, emerging key policy issues and possible next steps for work on this subject.

The workshop on performance-based funding of public research in tertiary education institutions was opened by Mr. Andrew Wyckoff (Director, OECD Directorate for Science, Technology and Industry) and Ms. Toril Johansson (Director General, Norwegian Ministry of Education and Research). Mr. Wyckoff welcomed participants and highlighted the crucial contribution that the research of tertiary education institutions (TEIs) can make to solving some of society’s big challenges. Ms. Johansson noted that ongoing changes to countries’ funding schemes suggested that the ideal model had not yet been found, and expressed hope that the workshop would help in gaining more knowledge about systems and performance indicators as well as in identifying important issues for further exploration. The meeting was then handed over to the day’s chairwomen, Ms. Karen Haegemans (Flemish Authority, Department Economie, Wetenschap en Innovatie, Belgium) and Ms. Jana Weidemann (Ministry of Education and Research, Norway).