Four (five) stages of competitiveness of a country

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

2 Timo Kekkonen

Innovation is a profitable investment for the future

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R&D investments Investments

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Competence New knowledge

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New business models Networking Innovations: products and services, methods and processes, organisational innovations

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Start-ups, new business areas and services Growth and globalisation of companies Productivity Results Direct effects

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Renewing business structures Affluence Regional vitality Employment Environment and health Security and safety Social well-being Impact on national economy and society

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New economic growth model – sources of economic growth Labour Economic growth Education Research Technology Know-How Knowledge Innovation 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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Key actors of the Finnish innovation environment

EU structural funds for innovation

Finnvera Regional Councils Regional TE-Centres Polytechnics Centres of Expertise Invest in Finland Finpro Sitra Finnish Industry Investment Ltd

Private investments in innovation

Investors Business Angels Companies Associations Inventions Key actors of the Finnish innovation environment Research institutes National Board of Patents and Registrations of Finland Technology Centres Tekes Universities Academy of Finland Ministry of Education Other ministries Ministry of Trade and Industry

Investments in different sectors like environment, health and traffic National public investment in innovation and know-how

Science and Technology Policy Council

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Innovation environment in Finland Resources and funding R&D at companies 3,880 Academy of Finland 219 (219) From abroad 169* Universities 1,040 (454)* 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 Tekes 430 (430) Finpro 32 (20) Finnvera 406 (40) Ministries, TE-Centres, sectorial research 312 (221)* Innofin 6 (5) Basic research Applied research Business R&D Business development Marketing Internationalisation

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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 Time Micro companies ca. 6,100 New growth companies ca. 100-500

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Innovating companies Percent 100 90 80 30 20 10 0 70 60 50 40 2 002-2004 1-49

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50-99 100-249 250-499 Number of employees 500 Companies Total Industry Total Services Total

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 %

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) Sweden 2) Japan 2) 0

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1) 2002 2) 2001 3) 2000 4) 1999 5) 1998 10 20 30 40 50 60 70 80 %

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) Germany 2) Japan 2) 0

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1) 2001 2) 2002 3) 2003 10 20 30 40 50 60 %

High-expectation entrepreneurship – there is a Finnish interest to act!

GEM 20+ activity by region Amount of activity targeting to over 20 jobs 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

Germany Norw ay EU Sw eden Finland 25.04.2007

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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 25.04.2007

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Venture capital investments in Finland Million euros 450 400 350 300 250 200 150 100 50 0 95 96 97 98 99 00 01 02 03 04 05*

* Prel

Number

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15 Timo Kekkonen Source: Finnish Venture Capital Association.

Covers investments made by members of the association.

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

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0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1,0 Per thousand of GDP

Iceland USA Canada Korea OECD Sweden Great Britain Netherlands Finland EU 15 Spain Denmark Norway France Belgium Ireland Germany Portugal Switzerland Austria Japan

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0,0

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Venture capital investments

Average 2000-2003 Early phase Expansion phase 0,2 Percent of GDP 0,3 0,4 0,5

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 25.04.2007

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Finnish funding agency for technology and innovation, Tekes – an example Science and Technology Policy Council

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Ministry of Education Academy of Finland Universities PARLIAMENT GOVERNMENT Ministry of Trade and Industry Other ministries and their institutes Tekes VTT Sitra Finnvera plc Finpro Finnish Industry Investment Ltd Regional TE-Centres

Impact of Tekes activities

Renewal of trade and industry, economic growth, good employment and societal well-being.

Competitiveness, profitability and growth Enterprises New businesses, start-ups Societal and environmental impacts Projects and programmes International cooperation Research institutes and universities Tekes

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provides expert services and R&D funding

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coordinates programmes

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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 25.04.2007

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 25.04.2007

Funding depends on the project’s degree of challenge, novelty and time to market Degree of challenge and novelty increases International top level Demanding international level National top level Demanding national level Loan-weighted combined funding R&D loan or capital loan for R&D R&D grant or R&D grant combined funding Product development Research Time to market increases

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Four (five) stages of competitiveness of a country

Transcript Four (five) stages of competitiveness of a country

Supporting entrpreneurs and innovators in Finland

High-expectation entrepreneurship – there is a Finnish interest to act!

Venture capital investments

Impact of Tekes activities

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