Transcript Four (five) stages of competitiveness of a country

Supporting entrpreneurs and innovators in Finland
Timo Kekkonen
Director, Confederation of Finnish Industries, EK
Supporting entrepreneurs and innovators …
• Why support ?
• Who supports ?
• Some basic features in Finland
• Financing & venture capital in Finland
• Finnish funding agency for technology and innovation, Tekes
– an example
25.04.2007
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Timo Kekkonen
Innovation is a profitable investment
for the future
 R&D
investments
 Competence
 New knowledge
 New business
models
 Networking
 Innovations:
 Start-ups, new
business areas
and services
 Growth and
products and services, globalisation
of companies
methods and
processes,
 Productivity
organisational
innovations
Investments
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Results
Direct effects
 Renewing business
structures
 Affluence
 Regional vitality
 Employment
 Environment and
health
 Security and safety
 Social well-being
Impact on
national economy
and society
Timo Kekkonen
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DM 218475
09-2006 Copyright © Tekes
New economic growth model – sources of
economic growth
Labour
Education
Know-How
Research
Knowledge
Technology
Innovation
Productivity growth
Economic growth
Increase in
exports
Improvement
in employment
Regional
development
Growth in
well-being
Capital
According to the new growth model, economic growth
is rooted in education, research and technology.
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New technology companies
• New technology companies are important for the
national economy; they
– are quick in adapting new technologies
– grow and employ quickly
• Finlands’ strategic goal is to increase the number
of new technology companies and to speed up
their growth and internationalisation
– industry & service sector
• Early stage financing and business know-how is a
considerable problem when establishing new
technology companies
– new incentives, tax credits for private capital etc.
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DM 90614
04-2004 Copyright © Tekes
Key actors of the Finnish innovation environment
Invest in Finland
EU structural funds
for innovation
Finpro
Sitra
Finnish Industry
Investment Ltd Private investments
in innovation
Investors
Finnvera
Business Angels
Companies
Associations
Inventions
Regional Councils
Key actors
of the Finnish
innovation
environment
Regional TE-Centres
Polytechnics
Research institutes
National Board of Patents
and Registrations of Finland
Centres of Expertise
Technology Centres
Universities
Tekes
Academy of Finland
Ministry of Education
Other ministries
Ministry of Trade and Industry
Investments in different sectors
like environment, health and traffic
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Science and
Technology Policy
Council
National public investment in
innovation and know-how
Timo Kekkonen
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DM 36100
01-2006 Copyright © Tekes
Innovation environment in Finland
Resources and funding
Private
R&D
at companies
3,880
From abroad
169*
VTT
225 (78)
Business
Angels
approx. 380*
Venture capitalists:
Private 268**
Finnish Industry Investment:
direct 13, venture capital funds 42,
seed funding 11
Sitra 29
Public
Academy
of Finland
219 (219)
Universities
1,040 (454)*
Basic research
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Tekes
430 (430)
Innofin
Ministries,
6 (5)
TE-Centres,
sectorial research
312 (221)*
Applied research
Business R&D
Finpro
32 (20)
Finnvera
406 (40)
Business development
Marketing
Internationalisation
Timo Kekkonen
7
DM 36100
12-2006 Copyright © Tekes
Number of new companies and growth companies in
Finland
Companies
established
ca. 20,000
New active
companies
ca. 10,000
Companies
launching
new
business
ca. 6,500
1-5% of new companies are growth companies
Micro
companies
ca. 6,100
New growth companies
ca. 100-500
Time
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DM 90614 and 218475
09-2006 Copyright © Tekes
Innovating companies
2002-2004
Percent
100
90
80
70
60
50
40
30
20
10
0
1-49
50-99
100-249
250-499
500-
Companies
Total
Industry
Total
Services
Total
Number of employees
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Source: Statistics Finland
DM 36100
10-2006 Copyright © Tekes
SMEs participating in innovation cooperation
Finland
Denmark
Sweden
Norway
Iceland
Estonia
Belgium
Netherlands
France
Germany
Austria
Great Britain
EU
Portugal
Greece
Italy
Spain
0
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5
10
15
20
25
%
Timo Kekkonen
10
Source: European Innovation Scoreboard 2004
DM 58774, 36054, 36109 and 218475
09-2006 Copyright © Tekes
SMEs' share of corporate R&D
Estonia 1)
Italy 2)
Ireland 2)
Denmark 4)
Slovakia 1)
Spain 1)
Poland 2)
Portugal 2)
Netherlands 1)
Finland 1)
Hungary 1)
EU 25
Austria 5)
Great Britain 2)
Germany 1)
USA 3)
France 1)
1) 2002
2) 2001
3) 2000
4) 1999
5) 1998
Sweden 2)
Japan 2)
0
10
20
30
40
50
60
70
80
%
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Source: EU Key Figures 2005 on Science, Technology and Innovation
DM 36109 and 36054
08-2005 Copyright © Tekes
Services sector's share of corporate R&D
Slovakia 3)
Portugal 1)
Estonia 2)
Denmark 3)
USA 2)
Ireland 1)
Spain 2)
Italy 3)
Great Britain 2)
Hungary 3)
Netherlands 2)
Poland 3)
EU 25 2)
Finland 3)
France 2)
Sweden 3)
1) 2001
2) 2002
3) 2003
Germany 2)
Japan 2)
0
10
20
30
40
50
60
%
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Source: EU Key Figures 2005 on Science, Technology and Innovation
DM 36109 and 36054
03-2006 Copyright © Tekes
High-expectation entrepreneurship – there is a
Finnish interest to act!
GEM 20+ activity by region
Amount of activity targeting to over 20 jobs
Percentage of adult-age population participating
in high-expectation entrepreneurial activity
1,8
1,6
1,4
1,2
1
0,8
0,6
0,4
0,2
0
USA
Iceland
World
Denmark
UK
Source: Erkko Autio, GEM Finland 2005; Artturi Tarjanne
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Germany
Norw ay
EU
Sw eden
Finland
Some conclusions based on the national ”scene” …
• There is significant innovation potential in SME’s
• SME’s in Finland are active in innovative networks
• The Finnish corporate R&D scene is still dominated by large
companies
• The service sector is an excellent growth area for entrpreneurship
and innovations
• Finland lacks ”entrpreneurial spirit” – could this be changed by
edu
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Venture capital investments in Finland
Million euros
Number
450
450
400
400
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
0
95
96
97
98
99
00
01
02
03
04
05*
* Prel
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Source: Finnish Venture Capital Association.
Covers investments made by members of the association.
DM 36104 and 38065
03-2006 Copyright © Tekes
Venture capital investments in seed and start-up
phases
Average 2002-2003
Sweden
USA
Finland
Denmark
Iceland
Switzerland
Great Britain
Norway
France
Belgium
Netherlands
Portugal
EU 15
EU 25
Ireland
Germany
Austria
Spain
Greece
Poland
Italy
0.0
0,0
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0.1
0,1
0.2
0,2
0.3
0.4
0.5
0.6
0,3Per thousand
0,4
0,5of GDP
0,6
0.7
0,7
0.8
0,8
0.9
0,9
1.0
1,0
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Source: European Innovation Scoreboard 2004
DM 36104 and 36054
03-2005 Copyright © Tekes
Venture capital investments
Average 2000-2003
Iceland
USA
Canada
Korea
OECD
Sweden
Great Britain
Netherlands
Finland
EU 15
Spain
Denmark
Norway
France
Belgium
Ireland
Germany
Portugal
Switzerland
Austria
Japan
0,0
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Early phase
0.0 0,1
0.1 0,2
Expansion phase
0.2 0,3
0.3 0,4
0.4 0,5
0.5
Percent of GDP
Source: OECD, Science, Technology and Industry Scoreboard 2005
DM 36104 and 36054
03-2006 Copyright © Tekes
Some conclusions based on the national ”scene” …
• The Venture Capital Market is small and national – the number of
companies and the total investments are declining
• Start-up and seed phases are well represented in VC investments
• Early-phase and growth pahese well balanced – but not
sufficiently resourced
• Increase required both in early phase and growth phase
investments into knowledge-based companies
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Finnish funding agency for technology and innovation,
Tekes – an example
PARLIAMENT
Science and
Technology
Policy
Council
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GOVERNMENT
Ministry
of
Education
Ministry of
Trade and
Industry
Academy
of
Finland
Tekes
Universities
VTT
Other
ministries
and their
institutes
Sitra
Finnvera plc
Finpro
Finnish
Industry
Investment Ltd
Regional
TE-Centres
DM 36100
01-2006 Copyright © Tekes
Impact of Tekes activities
Renewal of trade and industry, economic growth,
good employment and societal well-being.
Competitiveness,
profitability and
growth
New businesses,
start-ups
Societal and
environmental
impacts
Projects and programmes
International cooperation
Research institutes
and universities
Enterprises
Tekes
 provides expert services
and R&D funding
 coordinates programmes
25.04.2007
Timo Kekkonen
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DM 35890
11-2006 Copyright © Tekes
Risk funding for R&D encourages companies
Tekes’ R&D funding contributes to
–
–
–
–
starting new R&D projects
speed up the utilisation of project results in business
enhancing and widening cooperation and networking
utilising international cooperation
The risk funding is aimed at
– R&D activities in various phases of innovation process
– promoting the birth of new companies and
strengthening the growth of starting companies
– companies and corporations operating in Finland,
foreign ownership of a company does not prevent funding
Tekes’ R&D funding also contributes to the development
and well-being of society and to the growth of the
national economy
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04-2004 Copyright © Tekes
Funding criteria for company R&D projects
Tekes’ experts evaluate the project, the business,
resources and the company from a holistic viewpoint
The key issues of the evaluation are
– Business activity to be pursued
– Technology, innovation, competence
and know-how to be developed
– Resources available for the project
– Cooperation to be developed and
utilised
– Direct affect on social, environmental
and welfare aspects
– Impact of Tekes’ funding and expert work
on project implementation
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DM 42097
04-2003 Copyright © Tekes
Funding depends on the project’s degree
of challenge, novelty and time to market
Degree of challenge
and novelty increases
International
top level
R&D grant
Demanding
international
level
National
top level
R&D grant or
combined funding
Loan-weighted
combined funding
Demanding
national
level
R&D loan or
capital loan for R&D
Product development
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Timo Kekkonen
Research
Time to market
increases
23
DM 42097 and 218475
09-2006 Copyright © Tekes