in content lists or on the content page.
Government financial support for research and development is the most significant incentive for companies to also increase their research and development efforts.
In a survey (link in Finnish) commissioned by Sitra, 60% of the business leaders interviewed said that the support already promised by the government encourages the company to increase its own research and development efforts either significantly or to some extent.
In addition, 80% believed that a significant and sustained increase in public R&D subsidies and tax incentives by 2030 would increase the company’s own R&D efforts.
In particular, small companies with fewer than ten employees and highly growth-oriented companies are ready to increase their own R&D investments, following the government’s lead. Highly growth-oriented companies include 22% of the companies participating in the survey. They come in all sizes.
Significant own investments are also considered by companies that already have research and development activities either in Finland or abroad.
“From the point of view of companies, additional government investments are really needed. Based on this survey, they should be targeted especially at small and highly growth-oriented companies,” says Petri Lehto, Senior lead at Sitra, who was in charge ofthe study.
The Finnish government is ready to invest more than a billion euros more in research and development in the next few years, provided that the private sector also participates in the investments. The goal is for R&D investment to reach 4% of GDP by 2030.
Companies’ interest in research and development is crucial for the entire economy. Finland cannot catch up on growth without innovative and internationally competitive products and services.
“While Finland is one of the most innovative countries in the world, for some reason, innovations are not reflected in economic growth, such as in Sweden. It is crucial to understand why the link between R&D activities and economic growth is weak in Finland, and how it can be strengthened,” says Atte Jääskeläinen, President of Sitra.
In April and June, Taloustutkimus interviewed 1,200 business decision-makers from different sectors and from different parts of the country, commissioned by Sitra. The survey focused on companies’ R&D intentions and growth targets, as well as incentives and barriers to renewal of companies’ businesses.
Skills shortage must be solved – companies desire more public-private research cooperation
In addition to funding, research and development requires skills and experts. One in three business managers reported that the company currently has too few research and development experts. More than 70% of the respondents identified the lack of skilled employees as a fairly or very significant bottleneck for their own R&D activities. Especially highly growth-oriented companies and manufacturing suffer from it.
Joint R&D projects between companies and universities would be one way to alleviate the skills shortage and combine forces and resources. According to the business decision-makers who responded to Sitra’s survey, research cooperation between companies and universities is the second most important development target immediately after the funding issue.
Around two in three respondents thought that facilitating research cooperation would make it easier for the company to increase its R&D activities in Finland. Among other things, companies would like better interaction between companies and researchers, clarity in funding and more information on the offerings of research organisations in general.
“Especially growth-oriented and industrial companies would benefit from closer cooperation with universities and research institutes. Facilitating such partnerships is of paramount importance and requires new means,” says Petri Lehto from Sitra.
Business decision-makers also considered it important to increase expertise in the commercialisation of R&D results, including through training and public funding to promote commercialisation. Indeed, 61% of those interviewed estimated that this would increase their company’s R&D activities in Finland.
In addition, 60% the interviewees considered that the development of market regulation to support the generation and uptake of innovations would encourage more R&D activities.
Sitra focuses on sustainable economic growth and innovation
This business survey is part of Sitra’s new direction. The new strategy, which will enter into force at the beginning of September, will bring three key changes to the work of the Finnish Innovation Fund. Sitra will strengthen the production of foresight data on Finland’s major future challenges, promote Finland’s reform through societal innovation and increase co-operation with other actors to solve these problems.
Sitra places sustainable economic growth and boosting well-being at the heart of its mission.
You might be interested in
“Our stakeholders have expressed a strong desire for Sitra to readopt its focus on innovation. In particular, we are investing in societal innovations that will reform Finland extensively. We need to be able to make significant reforms in Finland so that we can return to sustainable economic growth and increase people’s well-being. If Finland continues on the present course, it will wither away,” says Atte Jääskeläinen.
Work in the new direction began already in the spring, when Sitra facilitated a discussion on the development needs and strategic priorities of the research and innovation system with key players and companies in the sector. The work on RDI investments will continue in the autumn.
Established in 1967, Sitra has deep roots in R&D funding. Sitra has played a role in several Finnish success stories over the decades, from the development of xylitol to the internationalisation of the elevator company Kone and to the global promotion of the Finnish circular economy know-how.
Sitra does not use taxpayer money from the national budget. It raises the money for its operations almost entirely from the investment market.
