Finland's innovation system has been the focus of international interest in recent years. As a model to the rest of the world in terms of its innovation policy, Finland has been successful in international reports on competitiveness and in surveys that measure innovativeness. The clear theme of Finland's Presidency of the EU, which begins in July, will be, naturally, "An Innovative Europe".

The basis for Finland's innovation system in its present form was created some 20 years ago. The system consists of education, research, product development, funding and corporate activity. The producers of the new knowledge are universities, research institutes and companies, and its main users are companies and society.

The objective of the system is to contribute to research and development work and to the development and utilization of new technologies, products, services, procedures and operating methods. The aim is to generate new expertise and business operations and, consequently, prosperity for society. Wide-ranging international cooperation is an essential part of the innovation system.

"The world has changed in twenty years, globalization has increased in pace and competition become harder," points out Hannele Pohjola, a leading adviser at the Confederation of Finnish Industries (EK).

"We've been good, but that's not enough. We have to be good tomorrow and the day after as well. We need concentrations of top skills, areas of expertise that are at the forefront internationally, and superiority factors."

Ideas develop into fully-fledged products

"Investments in research and development are our success factors. Contributions to the success have come from the Finnish Funding Agency for Technology and Innovation (TEKES), with its operations, technology programmes and cooperation with universities, research institutes and companies. The funding of basic research by the Academy of Finland and an improvement in the availability of venture capital have also contributed to the success. Nor should we forget the liberalization of the markets," Pohjola adds.
Finland is especially well known throughout the world for its innovative approach to telecommunications. Great expectations have also been placed on the bio sector in recent years.

The generation of new services and service innovations is now more important than ever. Competitiveness and success are created as a combination of high-level industrial products and services.

"The big challenge for the future is to expand research and development activities from technologies to different business processes. The innovation system must support the creation, growth and internationalization of top skills and business operations that will succeed on the market. It must attract companies and the best practitioners in their skills to come and work in Finland," Pohjola says.

For the whole of Europe

During the Presidency of the EU Finland wants to emphasize the significance of innovations for the future and success of the whole of Europe. The principle is that "Europe needs big global companies, but the companies do not need Europe".

"Legislation still has to ensure the development of the single market. Innovative development must be encouraged and the availability of international funding must be protected. There must also be increasing input into research and development," Pohjola explains.

The EU's target is to raise the amount of investment in research and development to three per cent of the gross domestic product by 2010. At this moment the average figure is 1.93 per cent, which is well below the figures in the USA (2.6%) and Japan (3.5%).

"The three per cent target is not the final objective, more of an indicator. Finland is out in the front: our own target is four per cent," Pohjola says.

>> Finland at the top in innovative thinking (28.3.2006)

Finland will lay stress on the construction of an innovative Europe during its Presidency of the EU. Photo: Juventia Pharma