Recent report: Accelerating investments in Finland requires more effective co-operation between companies, research, and the public sector

News, Press release

13.06.2022 09:24 EEST

The ecosystems of companies, research organisations and the public sector, and extensive co-operation in innovation activities are the only way to implement major changes related to systemic challenges. Through international comparisons, VTT Technical Research Centre of Finland and Gaia Consulting examined practices used by the ecosystems to boost sustainable growth and renewal in five countries. According to the report, in order to make focus choices and ensure the effectiveness of funding, Finland needs both a better overall picture of the funding instruments boosting growth and closer collaboration between actors.

The report funded by the export industry was published on 7 June 2022. It compares the models and practices of Austria, the Netherlands, Sweden, and Denmark that could also promote long-term innovation policy in Finland.

’There are two key weaknesses in Finland's innovation system. Firstly, state funding is needed to leverage RDI investments by companies and leveraging is needed to boost RDI investments in companies. In other words, the national target of 4 per cent of the investments in relation to GDP is not met. Secondly, the commercialisation pipeline does not work: Research is being carried out, but innovations are not turning into business,’ says Solveig Roschier from Gaia Consulting, who led the project.

The study did not identify one superior partnership model for the ecosystems, but it found measures and practices that can take Finland in the right direction.

Reform needed in four areas

There is a need for measures that support the ecosystems, especially in connection with funding, a shared vision, coordination of co-operation, and impact.

Funding must be long-term and targeted at the different stages of the innovation development cycle. The transition from one instrument to another must be smoother so that a uniform whole can be created.
A shared vision that bridges the needs of industry, a sufficiently ambitious research agenda, and societal impacts in a balanced manner is needed. In addition, one needs to determine how to implement and change the vision if the operating environment changes.
Co-operation should be coordinated. The larger or more complex the ecosystem or cluster, the more it needs coordination.
The value generated by the ecosystem must be extensive and diverse. The benefits gained by universities, research institutes, companies and society must be made visible transparently. Information about the benefits and value must be integrated to support the management and funding of ecosystems.

‘Ecosystems, in which different parties act in a coordinated manner in close co-operation benefiting all partners, effectively generate innovations that accelerate renewal. They are the driving force of sustainable growth and continuous development, and central to ensuring Finland's competitiveness in the future. We should urgently achieve the national target of increasing RDI funding to 4 per cent of GDP. The ecosystems, then, create a functional platform for efficient utilisation of funding,’ says Sampo Ahonen from Helmet Capital.

Funding instruments must work together

The Finnish innovation system has many public funding instruments that support the development and renewal of innovations. These include Business Finland's leading companies (in Finnish Veturi) and the Academy of Finland's Flagship Programme. The overall picture is currently fragmented. The utilisation of different funding instruments requires extensive familiarisation with their conditions and restrictions.

The utilisation of the funding of ecosystems should be streamlined and understanding of different instruments should be improved.

‘We should also take advantage of the opportunities in private funding more extensively, especially in the financing of commercialisation. Instead of reforming structures and creating new instruments, we need to look at the whole and get the different instruments and parties involved to work together,’ says Research Manager Katri Valkokari from VTT.