The Finnish Innovation Strategy

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1 The Finnish Innovation Strategy Antti Eskola Commercial Counsellor Ministry of Employment and the Economy Innovation Department TEM / INNO

2 Ministry of Employment and the Economy Strategy and foresight Corporate strategy group Strategic projects group EMPLOYMENT AND ENTRE - PRENEURSHIP DEPARTMENT WORKING LIFE AND MARKETS DEPARTMENT INNOVATION DEPARTMENT ENERGY DEPARTMENT Research and foresight group Entrepreneurship and enterprise support Regulation of working environment Knowledge -based innovations Energy markets Corporate steering Administrative sector steering and structures group Functioning of labour market and skills Quality of working life Demand-based innovations Renewable energy sources and sustainable T&E Centre steering group Industrial policy co-ordination group Regional Employment and enterprise services Intermediate labour market and employability support Competition policy Internal market and consumer policy Innovation environments Growth ventures Basic energy production Regional strategy group Programme group Business law group Internationalisation and exports Structural fund policy group Mineral policy Structural fund administration group TEM / INNO

3 Finnish innovation environment = public-private partnership Parliament of Finland Council of State Research and Innovation Council Ministry of Education Ministry of Employment and the Economy Other ministries The Finnish Funding Agency for Technology and Innovation The Finnish Innovation Fund Universities and other research centers Finpro Finnvera Industry Investment Industries & Enterprises TE-Centers 3

4 R&D investments in Finland Total 5.9 billion euros, 3.4 percent of the Gross Domestic Product (GDP) in 2007 Nokia approx. 45% of all industrial R&D >80% of telecom R&D Public sector 1.7 billion (28%) Enterprises 4.2 billion (72%) Source: Statistics Finland Competitive public funding 42% of total public R&D funding: Tekes 500 M Academy of Finland 250 M 4

5 Finnish innovation system/policy SWOT STRENGTHS Education Commitment & continuity Co-operation & competition Industry share of R&D investments Proactive and client -oriented public innovation services (funding, expert) Public R&D funding with strong incentives for co-operation and risktaking WEAKNESSES Small absolute volumes in R&D (3,5% GDP = 5,5 bn, < 1% global R&D) Dependence on global s Low foreign direct investments Low international researcher mobility Small number of growth-oriented enterprises Small venture capital volumes for start-up and early growth-phases OPPORTUNITIES More coherent and strategic national policies (foresight insight policy) Stronger focusing of public R&D resources Going beyond industrial innovation : Promotion of innovation in private and public services Market-pulled innovation stimulation Active participation in major EU R&D programmes and platforms Going beyond EU: Active linkage with global innovation hotspots THREATS Dominance of one sector (ICT) and one company in business R&D Risk of declining business R&D expenditure Businesses increasingly move their operations abroad, including R&D Losing focus: Participation in too many projects with scarce resources TEM / INNO

6 Classical innovation environment Economic growth Business/industrial competitiveness Well-being University reserarch Research institutions Intermediaries (SPs, TLOs) Public R&D financiers and programmes Young Innovative firms Large corporations Higher education Private investors, financial markets Competition policy, regulatory environment SMEs MTI/PPe 2007 Open culture of co -operation Innovation = new product, technical solution new production process new (industrial) service 6

7 Extended innovation environment Economic growth Business competitiveness Public sector productivity Work-life quality Well-being University research Research institutions (VTT) Sectoral research Education Learning Intermediaries (SPs, TLOs) Public R&D financiers and programmes Private investors, financial markets Competition policy, regulatory environment Regional Innovation = new product, technical solution new production process MTI/PPe new 2007 (industrial) service Public procurement, tax incentives User-driven innovation Public services Innovation = new expert-service new business model new design or brand Work-life Young Innovative firms Large corporations SMEs Open culture of co -operation Innovation = improved public service organisational or..structural improvement 7

8 Innovation policy entering into new territory from Competence-based policy more towards Demand-based policy Knowledge push traditional (scientific) research (done in public R&D orgs), and promotion of R&D and technology programmes Demand pull * public procurements * working life s * user communities * innovative public services * regulatory framework MTI/PPe

9 Innovation strategy - Focal points Hubs and communities Mobility and attractiveness INNOVATIVE INDIVIDUALS AND COMMUNITIES Individuals and entrepreneurship Broad-based approach WORLD WITHOUT BORDERS COMPETENCE BASE SYSTEMIC APPROACH Participation and influence Management of change Market driven incentives DEMAND AND USER ORIENTATION Engaging innovation activity

10 Finland s Innovation Strategy 2008 Key Directions 1) The central government s rules of procedure and steering mechanisms will be renewed with a special view to strengthen the link between political decision -making, policy advice and implementation. 2) Emergence of user- and demand-driven innovation policy equipped with new policy thinking and tools. 3) Regional centres of RDI will be enhanced. 4) The public innovation support system will be rationalised (in order to activate enterprises in RDI and to respond to the needs of user-oriented innovation activity). 5) New incentives for risk-taking and venture capital organisations and individuals (e.g. taxation issues) 6) Education and management training will be fortified 7) The and better use of opportunities offered by th e regulatory framework will be realised.

11 Thank you! Antti Eskola Commercial Counsellor Ministry of Employment and the Economy Innovation Department TEM / INNO

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