The Finnish National Fund for Research and Development (SITRA) is boosting the international growth and awareness of Finnish environmental expertise. Help is needed, even though Finland is ranked the best environmental country in the world.

World markets for environmental technology and equity investments in the environmental industry are increasing rapidly. Environmental technology is expected to become one growth factor of the century, with plenty of potential in Finland.

"A comparison by the World Economic Forum claims environmental matters in Finland are the best managed in the world. The private sector in this area and industry are also given top rating," stresses Jukka Noponen, director of Sitra's environmental programme.

"We have not, however, been able to take sufficient advantage of the opportunities created by the growth in world markets. Sitra is now aiming to promote the networking and international growth of environmental technology and expertise and also the more efficient exploitation of expertise concepts in the field on global markets."

Slow growth causes concern

There are thought to be some 1,300 environmental companies in Finland, fewer than 300 of which are environmental technology companies of some note. Their combined turnover is some 3.4 billion euros. The sector's world markets are worth about 550 billion euros, with Europe accounting for almost 200 billion euros of this figure.

Noponen says that investing in pure technology has been increasing at a significant rate annually in many European countries. The driving force behind the investment and markets is climate change and, consequently, the energy industry.

"In the Finnish development, cause for concern is being given by companies' slow growth and the paucity of new companies. In Finland the turnover is increasing by only three per cent, whereas world markets are growing by more than ten per cent a year. Employment in the sector did not go up at all between 1998 and 2003."

Finland's problems include a lack of unity among SMEs, the low level of networking, a lack of integrators, poor funding, and a shortage of productization, sales skills and international business experience.

Own brand for exports

"The need for network skills and networking will grow with the markets expecting integrated, life-cycle-based comprehensive solutions," Noponen emphasizes.

The main task in Sitra's environmental programme is to strengthen the international activities of SMEs operating in the environmental technology sector by activating equity investment and promoting integration. Sitra itself is an equity investor trying to create the preconditions for the growth of investment activity and equity capital for companies in the field.

"We will be endeavouring to eliminate the obstacles and bottlenecks in international networking and to create the preconditions for developing a good operating environment and for new financing and operating models, innovations and for faster growth in export turnover," Noponen says.

Sitra is also developing a common brand for the international operations of Finnish environmental companies. Attempts will be made to use Cleantech Finland as a name on a wide scale in order to help exports by Finnish environmental companies when the programme comes to an end.

"Our target is that in three years' time new equity investors will have entered the field and that investment in companies will have increased.

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Environmental technology is expected to be one growth sector of the future. (Photo: Sitra)