National innovation systems and policies are confronted by many interrelated factors, including large socio-economic structural problems, globalisation, pressure to provide public research funding and changes in research communities driven by the Mode 2 paradigm. These changes challenge sectoral public research organisations (PROs). The role of universities and other policy organisations in innovation policy has been studied at length but there has been little investigation of PROs, despite their significance in developed and developing economies. This article fills this gap by exploring PROs in Finland, an open, industrialised and export-dependent economy. It draws several conclusions about the current state and future prospects of PROs in Finland. PROs are in transition in terms of their organisational, managerial and funding structures and their role in the internationalising national innovation system. Their rationale, legitimacy and strategies are also changing due to national innovation driven missions and internationalisation strategies. All PROs in Finland now engage in international cooperation. However, despite increasing funding from international sources and the globalisation of many aspects, PROs are still national organisations subject to national policies and governed by national bodies. Finnish PROs need to redefine their strategies at the international and European levels without forgetting their national role.
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