Economic Impact of Innovation

The index below is a summary index of the economic impact of innovation composed of five of the Innovation Union Scoreboard's indicators

table25

Finland performs well above the EU average but slightly below the reference group in terms of the economic impact of innovation. Finland's relative weakness lays in a less knowledge-intensive export, in particular a lower knowledge-intensive service exports as share of total exports. The stimulation of high-growth innovative companies in Finland remains a key policy priority in the new Government Programme. Despite Finland’s technological sophistication, its current performance in nurturing high-growth companies could be improved and in fact Finland is lagging behind its own objectives in this regard. This challenge is recognised by the Finnish authorities and new policies are expected in 2013. The government’s decision to introduce R&D tax incentives from 2013 is a new initiative in Finnish R&D policy.

This is in line with the new strategy of Tekes (Finnish Funding Agency for Technology and Innovation) to focus more on high risk innovative high-growth companies. Tax incentives will help start-ups and companies seeking primarily private financing and advice (a tax incentive for private investors). The government is also considering a separate tax incentive for companies making better use of their intellectual property rights (patent pool). The focus of public R&D&I funding is being shifted to SMEs which are growth-oriented, job creating and are successfully establishing international connections.

Several specific policy measures have been taken recently, such as: (1) A new joint service “Growth Track” provided by business development organisations, which is intended for enterprises aiming at rapid growth and internationalization; (2) the introduction by Tekes of a programme for funding young, innovative companies; (3) the renewal of Finnvera’s (Export Credit Agency of Finland) export guarantees schemes; (4) the expansion of the Vigo Accelerator Programme to six areas. (5) the focusing by Tekes of one third of company funding on young innovative enterprises (6) the wider use of financial engineering instruments to maximise the benefits of the EU Structural Funds.