The indicators in the table below present a synthesis of research, innovation and competitiveness in Finland. They relate knowledge investment and input to performance or economic output throughout the innovation cycle. They show thematic strengths in key technologies and also the high-tech and medium-tech contribution to the trade balance. The table includes a new index on excellence in science and technology which takes into consideration the quality of scientific production as well as technological development. The indicator on knowledge-intensity of the economy is an index on structural change that focuses on the sectoral composition and specialisation of the economy and shows the evolution of the weight of knowledge-intensive sectors and products and services.
Finland has one of the world’s highest R&D intensities. The country also performs very well in terms of scientific and technological excellence, with a strong positive evolution. The Finnish economy is knowledge-intensive, and has achieved an impressive and continuous change towards a stronger high and medium-high-tech specialisation. The country has several hot-spot clusters in key technologies at European and world scale, in particular in ICT, environment, materials, energy, security, and food and agriculture. However, Finland’s competitive position is facing challenges and its large export businesses have suffered. Considering its high level of R&D inputs, the country has a relatively low contribution of high-tech and medium-high-tech goods to the trade balance. Within the past few years, the decline of the important electronics (telecommunications) sector in particular, has created pressure for structural change in Finland.
The decline of this sector is expected to be reflected in a decrease in business R&D investments – previously dominated by Nokia. Consequently, as part of the Europe 2020 strategy, the Council recommended to Finland to continue efforts to diversify its business structure, in particular by hastening the introduction of planned R&I measures to broaden the innovation base in order to strengthen productivity growth and external competitiveness. The extent to which the business and public sectors will be capable of absorbing new innovations from the ICT sector – and more concretely the available highly-skilled human resources – is considered a determinant for new growth. To address these challenges, the Finnish government has intensified the reform of the national innovation system. In addition to general efforts in enhancing the efficiency and improving the internationalisation of its innovation system, current and planned policy reforms are targeted at increasing the number of high growth innovative firms as the major source of future employment growth.
The introduced temporary R&D tax incentive from 2013 to 2015 represents a novelty in Finland and targets SMEs and cooperatives. Furthermore, a new tax incentive for private investors into start-ups has been introduced to increase the volume of domestic venture capital market. These actions are expected to support especially knowledge- and innovation-based young growth enterprises. The Finnish Government has also recently fostered innovation and country’s transfer to a digital service economy by releasing non-sensitive public data.