5.1 Finland in a changing world economy
5.2 What is the National Economy invested in?
5.3 R&D and internationalization
5.4 ICT Finland
5.5 Nokia - a big company in a small country
5.6 ICT cluster in Finland - A historical perspective
5.7 The World's most competitive nation?

5.3 R&D and internationalization

The funnelling of capital into intangible investments, as well as brick-and-mortar investments, have been at least as important as changes in investment among sectors. New research on economic growth focuses on the significance of non-material factors, that is, know-how and knowledge, as keys to economic growth.

International comparisons reveal another familiar trait in terms of so-called soft investments. In the 1980s these were scarce in Finland, but in the '90s they grew faster than in industrial countries on average.

Compared with other industrialized countries, the internationalization of Finnish companies began relatively late, in the late 1970s. In the decade that followed, growth in foreign investment was quicker than elsewhere. In the '90s, foreign companies increased investments in Finland following deregulation of foreign ownership in 1993 and EU membership in 1995. The stock of Finnish companies' investments abroad is still double that of the foreign investment stock in Finland, though.

While in the early 1980s, the volume of industrial investments abroad was less one tenth of the size of domestic investments, it had risen to one third by the turn of the millennium. Still, Finnish companies' investment stock is somewhat smaller in relation to GNP than that of Swedish, Dutch or Swiss companies, for instance. The rapid internationalization of Finnish business looks likely to continue.