The Finnish Innovation System and Comparisons with Scotland May 2007

Finnish Innovation System Finland tops Global Innovation Scoreboard and near the top of a number of other indices, such as WEF, IMD and the EU Innovation Scoreboard High business enterprise R&D figures and innovation scores (Community Innovation Survey) Above average growth since mid 1990’s Broadly similar size, GDP and population to Scotland What are the differences/similarities?

Public Sector Policy Makers Scottish Parliament Scottish Executive Enterprise Transport & Life Long Learning Education Other Chief Scientific Advisor Environment & Rural affairs Financing Scottish Enterprise Highlands & Islands Enterprise SFC Scottish Executive Operators Private Sector Higher Education Institutes ITIs Other Public R&D NHS Research Institutes SMEs Low R&D intensity SMEs Low R&D intensity SMEs High R&D intensity SMEs High R&D intensity Service sector Foreign Branch plants Foreign R&D firms Scottish innovation system

Science, Technology and innovation policy in Finland Science and Technology Policy Council  Coordinates S&T policy and national innovation system  Chaired by PM with multi-ministerial representatives Academy of Finland  Funds basic research  4 Research councils Finnish Innovation Fund (SITRA)  Direct to parliament endowment fund  Pilot new activities  E.g. VC investment, tech transfer support

Science, Technology and innovation policy in Finland National Technology and Innovation Agency (TEKES)  Funding for research and development in firms, research orgs and universities  50% technology programmes – specific industry or technology – m euros, 3-5 years  22 programmes in operation, 50% funding, e.g. Distributed energy systems Future healthcare Innovative Services  Also other R&D grants and loans  50% targeted to SME’s  Collaboration usually a criteria

Science, Technology and innovation policy in Finland Employment and Economic Development Centres  15 regional centres to coordinate local delivery  Business support, advice, funding Finvera  Support Internationalisation and exports  Loans, grants, export credit  Also channel for EU funds for Finnish SME’s

(Euros million) Finland: Source: TEKES Notes: 1. The numbers represent the total R&D of each organization in million euros in Funded from state budget appear in parentheses. 3. TEKES’ and the Academy of Finland’s R&D are funded entirely by the state budget. Academy of Finland – basic research via 4 research councils (Culture & Society, Natural Sciences & Engineering, Health, Biosciences & Environment. VTT - Technical Research Centre of Finland (applied polytechnic research institution) TEKES - National Technology and Innovation Agency (R&D funding to businesses, research centres & unis – 50% to SMEs) T&E Centres - Employment and Economic Development Centre (business support, advice, funding) Innofin – supports entre-preneurs to exploit innovations SITRA - Finnish Innovation Fund funds pilot innovation activities Finpro – provides business internationalisation advice Finnvera – supports SME internationalisation and exports through loans, grants, export credit

Business R&D 726 Universities (890) Basic Research Applied Research Business R&D Business Development Internationlisation Public Private VC Investment 176 (19) SDI (25) SE Innov support (115) Bus Ang 52 SE Bus Dev (55) S Exec Innov Support (105) Research Inst (111) Research Councils (390) Resources and players in the Scottish Innovation System (Euros million) Notes: 1. The numbers represent the total R&D of each organization in million euros in Funded from state budget appear in parentheses

ScotlandFinland Population (2005)5,094,8005,246,000 GDP ($, millions, 2005)157, GDP per head ($, 2005)31,54530,916 Employment (2005)2,415,4002,404,000 GERD % of GDP HERD % of GDP BERD % of GDP % SME’s participating in R&D cooperation1420 % Firms collaborating with firms or universities during innovation5070 Finland compared to Scotland

Overall level of funding higher Level of BERD – nearly 5 times Scotland % GDP  Partly but not entirely Nokia High level commitment to Innovation policy Long term and strong consensus Focus on Business research and the need to collaborate Strong technology/sector calls

Finnish Specialities Nokia Effect  50% of R&D Long Term policy making  Strategic foresight and follow through into collective action Cultural norms and characteristics  High trust in government High Degree of co-ordination  Across ministries and business orgs - spread innovation message Culturally strong but open to ideas

Discussion Points Some similarities but some differences Needs drive public policy What can we learn from Finland?  Small, open economy  Continual renewal  Long term strategy  Collaborative behaviours