The LTP objective ‘Enhancing competitiveness and innovation capacity’ first and foremost entails efforts towards achieving a knowledge-intensive business sector across the country, including regional competence-building. It also comprises clear efforts in the area of innovation through centre initiatives, either across the scope of innovation or in selected areas. Greater research expertise in individual businesses through the funding of research fellows is crucial to innovation capacity and forms part of these efforts. The objective also encompasses the target area ‘Testing and commercialisation of public R&D’ to contribute to new business activities. The target area ‘Innovation in the state and municipalities’ is under-dimensioned but important to innovation capacity in a sector that represents half of Norwegian value creation. Basic allocations and institutional investments are to underscore the institute sector’s crucial need for long-term competence development and participation in the market for research, both nationally and internationally.