Finnish startups are raising more of venture capital funding than their counterparts. Moreover, the share of foreign origin assets in Finnish R&D investments is largest across the benchmark countries, which indicates that Finnish innovations are globally competitive. However, Finland is lagging behind in some key indicators such as high-tech exports or material productivity.
These findings were highlighted as part of a benchmarking exercise regarding the research, development, and innovation (RDI) activities of Finland’s private sector. The benchmark study, commissioned by Business Finland, was published in December 2024. This was already the third release of the overview which was first published in 2022.
The recent study collected timeseries indicator data on Private Sector RDI in Finland and in other similar open economies: the Netherlands, Austria, Belgium, Denmark, and Sweden.
Based on the findings, Finland’s strengths relate to funding environment, number of startups and scaleups,digitalization expertise and product innovations, collaboration between companies and higher education as well as knowledge-intensive service exports.
Like other countries, Finland faces challenges in attracting skilled talent. The proportion of highly educated individuals in the total workforce (53 % in 2023) has decreased below the benchmark average in Finland during the 2020s, posing a potential long-term risk to innovation capacity. The number is, however, still significantly larger than EU average.
Moreover, Finnish product exports are still dominated by low technology products, and Finland has the fewest high-technology companies relative to the total number of enterprises among the benchmark countries. While RDI collaboration declined during the 2010s, Finnish companies continue to engage in extensive cooperation with other businesses and higher education institutions.
Overall, economic growth has become more ecologically sustainable in all benchmark countries. In Finland, the government is having a strong steering and incentivizing role in sustainable economic growth, which can be observed by above average and increasing sustainability related government R&D funding and policy stringency. On the other hand, when comparing performance indicators such as CO2 and material productivity as well as exports of environmental products, Finland is lagging the benchmark countries.
The study (in Finnish) is available here
