Finland has set an ambitious target to raise research and development (R&D) expenditure to 4% of GDP by 2030. Achieving this goal requires not only increased investment, but also a clearer understanding of what counts as R&D in a rapidly changing economy.
While industrial sectors have traditionally dominated R&D expenditure in Finland, significant innovation activities are increasingly taking place in also services, software development, creative industries and data-driven environments. However, in these industries, development work is often iterative, closely linked to implementation, and difficult to distinguish as R&D or innovation activities. This makes it challenging to identify and report R&D and innovation in a comprehensive way. Similarly, emerging areas such as artificial intelligence are reshaping how R&D is conducted, but much of this work may remain invisible in existing statistics.
R&D definitions are not merely technical classifications for statistics. They also directly influence how funding is allocated, how policy instruments are designed, and which types of activities are recognised as R&D. Therefore, it is essential to ensure that definitions and their practical implementation are reflecting and recognising both current and emerging forms of innovation.
Although R&D statistics across EU and OECD countries are based on shared frameworks, their interpretation and implementation vary in practice. Differences in guidance, reporting practices, and administrative processes can lead to inconsistencies in how R&D is measured and compared across countries. Moreover, the interpretation may have implications on what kind of R&D and Innovation activities get public funding and which not.
A new research project led by 4FRONT, in collaboration with VTT Technical Research Centre of Finland and Maastricht University is aiming to shead light on this topic. The project explores how R&D activities are evolving across sectors, how the boundary between R&D and broader innovation is shifting, and what this means for measurement, reporting, and policy.
The project combines statistical analysis with qualitative sector-specific studies and international benchmarking. It also introduces novel approaches, such as using large language models to analyse company-level innovation activities and identify areas that fall outside traditional R&D classifications. As a result, the project will provide a comprehensive analysis of R&D trends as well as concrete sectoral examples, and practical recommendations for policymakers, funding bodies, and organisations. These recommendations aim to improve how R&D is identified, measured, and supported across different industries and across EU Member States.
Further information:
Vesa Salminen
vesa.salminen@4front.fi
+358 40 1252 370
More about the project in Finnish: https://tietokayttoon.fi/-/t-k-toiminnan-muutos-nakymat-ja-mahdollisuudet-eri-toimialoilla-tk-muutos-
