1. Some Facts and Figures... and Thoughts on the Finnish Innovation Environment Timo Kekkonen, Confederation of Finnish Industries EK

2. Innovation drives growth Intangible investments have a growing importance in productivity growth and in the creation of wealth Investments in intangible assets accounted for ⅔ – ¾ of labour productivity growth in many OECD countries Firms invest as much in intangible assets related to innovation (R&D, software, skills, organisational know-how, branding,…) as in traditional capital (machinery, equipment, buildings,…) 2

3. Some strengths of the Finnish Innovation System Openness of the economy Favourable framework conditions, e.g. macroeconomic stability High level of education Sizeable R&D expenditure Strong ICT sector Long-term commitment to education and research Close co-operation within the system Radically optimistic entrepreneurial culture gaining ground Start-up of several reforms …

4. Copyright © Tekes Finland in international comparisons 1/3 Finland ranks highly in competitiveness and innovation.  According to Innovation Union Scoreboard 2010, Sweden, Denmark, Finland and Germany are the Innovation leaders and all show a performance well above that of the EU27.  ITIF ranked Finland second with R&D input and personnel, venture capital, productivity and trade indicators.  A survey measuring the achievement of the EU’s Lisbon goals published in 2008 indicated that Finland was the most competitive economy in the Union. Finland came top in productivity development and human capital.  Based on the Lisbon Review, Finland was third in competitiveness comparison in the EU in 2008. Finland was on top in innovation and R&D and in enterprise environment, as well as in sustainable development.  According to WEF, Finland was the fourth most competitive country in the world in 2011. The top three countries were Switzerland, Singapore and Sweden. Finland rates also as one of the innovation powerhouses. Sources: EU, The Innovation Union Scoreboard 2010; The Information Technology and Innovation Foundation ITIF; The Atlantic Century II European Growth and Jobs Monitor 2008; The Lisbon Council & Allianz Dresdner Economic Research: The Lisbon Review 2008; WEF: The Global Competitiveness Report 2011-2012 09-2011DM 36054

5. Copyright © Tekes Finland in international comparisons 2/3  IMD ranked Finland 15th in overall competitiveness in 2011. The three most competitive countries were Singapore, USA and Hong Kong.  Based on the comparison of the European Commission in 2005, Finland was among the leading countries in investing into knowledge-based economy and performance of the economy.  In the Canadian Performance and Potential 2005-2006 comparison, Finland was among the four gold medallist when OECD countries were compared by economic, societal and environmental indicators.  In a comparison made by the University of United Nations, Finland was ranked second in overall ranking. Finland was also ranked second in education, technology and information indices.  According to the OECD PISA 2006 study, young Finns were first in the OECD in sciences, second in mathematics and reading. Sources: IMD: World Competitiveness Yearbook 2011; Key Figures 2005 on Science, Technology and Innovation; Performance and Potential 2005-06, The World of Canada, Trends Reshaping Our Future, 2005; United Nations University, The Millennium Project 2001; PISA 2006 Science Competencies for Tomorrow's World. OECD 2007. 05-2011DM 36054

6. Copyright © Tekes Finland in international comparisons 3/3 Wellbeing and sustainable development  Wellbeing Assessment is a method of assessing sustainability that gives people and the ecosystem equal weight. The Wellbeing Index (WI) is the combination of indicators related to human wellbeing (HWI, Human Wellbeing Index) and ecosystem Wellbeing (EWI, Ecosystem Wellbeing Index). Published in 2001, The Wellbeing of Nations surveys 180 countries. In this comparison Sweden ranks 1st and Finland 2nd.  The 2008 Environmental Performance Index (EPI) ranks 149 countries on 25 indicators tracked across six established policy categories: Environmental Health, Air Pollution, Water Resources, Biodiversity and Habitat, Productive Natural Resources, and Climate Change. Finland is ranked 4th.  The Human Development Index (HDI) ranks 179 countries by a composite measure of life expectancy, education and income level. Iceland is at the top of HDI 2008, followed by Norway, Canada, Australia and Ireland. Finland is ranked 12th. Sources: Robert Prescott-Allen (2001), The Wellbeing of Nations. A Country-by-Country Index of Quality of Life and the Environment; WEF: Yale and Columbia Universities; UNDP, Human Development Report 2008; The Environmental Performance Index 2008 03-2010DM 36054

7. Copyright © Tekes EU member states’ innovation performance Source: Innovation Union Scoreboard (IUS) 2010 03-2011DM 36054 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Sweden, Denmark, Finland and Germany are innovation leaders in the EU. SII points 2010 (Summary Innovation Index)

8. Copyright © Tekes Innovation and competitiveness Source: The Information Technology and Innovation Foundation ITIF; The Atlantic Century II, Benchmarking EU & US, Innovation and competitiveness 07-2011DM 36054 Finland was ranked second with R&D input and personnel, venture capital, productivity and trade indicators.

9. Copyright © Tekes Competitiveness Sources: WEF, The Global Competitiveness Report 2011-2012 and IMD World Competitiveness Yearbook 2011 09-2011DM 36054 Total ranking 2011-2012 IMD Total competitiveness 2010 WEF Global competitiveness 2011 5 3 4 1 10 14 12 26 20 1 7 6 8 23 13 4 1 3 2 4 5 8 9 6 12 11 10 13 17 19 14 1 2 3 5 6 7 8 9 10 11 12 13 14 15 16 157 2011 Switzerland Singapore Sweden USA Germany Netherlands Denmark Japan Great Britain Hong Kong Canada Taiwan Qatar Belgium Norway Finland

10. Copyright © Tekes Innovation index The Innovation index covers quality of research institutions, company spending on R&D, university and industry research collaboration, availability of scientists and engineers, utility patents and intellectual property protection. Source: WEF, The Global Competitiveness Report 2010-2011 09-2010DM 36054 and 789348 Points according to WEF

11. Copyright © Tekes Science and innovation profile of Finland Source: OECD Science, Technology and Industry Outlook 2010. 01-2011DM 36054 Finland is a pioneer in many aspects of innovation activities.

12. Copyright © Tekes Finland leads in technology and innovation Measurements of the comparison are R&D investments as percentage of GDP, scientific and engineering researchers per capita and patents per capita. Source: Martin Prosperity Institute: Global technology rankings. 10-2010DM 36054 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Ranking

13. Copyright © Tekes Ranking of EU countries Source: WEF, The Lisbon Review 2010 11-2010DM 36054 The Lisbon Review Information society Innovation and R&D Liberalisation Total rank Network industries Financial services Enterprise environment Social inclusion Sweden Denmark Netherlands Luxembourg Germany Austria France Great Britain Belgium Ireland Estonia Cyprus Slovenia Czechia Finland 2 8 4 7 5 1 6 3 9 11 18 13 10 15 20 1 3 6 7 2 9 4 5 14 11 17 10 12 19 15 4 2 7 6 1 17 10 12 11 8 5 3 13 15 19 3 2 1 4 5 9 8 13 14 6 11 16 7 15 10 1 3 5 6 7 2 4 9 10 11 8 14 18 12 16 1 5 3 2 7 9 6 10 4 14 13 8 16 12 17 2 1 3 5 12 4 8 9 7 6 10 14 21 11 13 1 7 5 2 6 4 3 11 10 8 9 14 13 18 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Sustainable development

14. Copyright © Tekes R&D investments in some countries Source: OECD, Main Science and Technology Indicators 03-2012DM 36109 and 36054 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Percentage of GDP

15. Copyright © Tekes Public sector’s share of total R&D funding in 2009 Source: Eurostat 11-2011DM 36109 and 36054 %

16. Copyright © Tekes Companies’ share of total R&D funding in 2009 Source: Eurostat 11-2011DM 36109 and 36054 %

17. Copyright © Tekes Exports of Finnish goods have decreased significantly with slow recovery as a result of the global crisis 03-2012DM 36054 and 928485 1995 = 100 Exports of goods by country Value index, national currencies, seasonal adjusted 3 month moving average. Source: OECD Main Economic Indicators 2012

18. Copyright © Tekes Exports´ share of GDP in 2009 Source: Statistics Finland 11-2011DM 36054 %

19. Copyright © Tekes High tech exports in some countries Exports of Finnish high tech products totalled 4.6 billion euros in 2011, i.e. 8 % of total exports of goods. Sources: Eurostat and Finnish Customs 03-2012DM 32186 and 36054 % of total exports

20. Copyright © Tekes Industrial production has grown rapidly in Finland, but the global crisis has reduced production more than in other developed countries 03-2012DM 36054 and 928485 Source: Eurostat, METI, OECD Volume index of industrial production 1995 = 100

21. Copyright © Tekes Labour productivity growth in the total economy in 2001-2010 Source: OECD 12-2011DM 36054 Average annual growth %

22. Copyright © Tekes Reserve of foreign direct investments Source: UNCTAD, World Investment Report 2011. 11-2011DM 36054 % of GDP

23. Copyright © Tekes Business R&D input in Finland by sectors *) estimate based on queries and other calculations Source: Statistics Finland 10-2011DM 36100 Billion euros Total 4.9 billion euros in 2010 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

24. Copyright © Tekes Key actors of the Finnish innovation environment 10-2010DM 36100 Key actors of the Finnish innovation environment Finnish Industry Investment Ltd Business Angels Investors Companies Research institutes Universities Academy of Finland Research and Innovation Council Ministry of Employment and the Economy Other ministries Ministry of Education and Culture Tekes Technology Centres Centres of Expertise Polytechnics Regional ELY Centres Regional Councils Finnvera Finpro Sitra Association s Inventions EU structural funds for innovation Private investments in innovation Invest in Finland National Board of Patents and Registrations of Finland Investments in different sectors like environment, health and traffic National public investment in innovation and know-how Strategic Centres for Science, Technology and innovation

25. Something has to change. We need... new measures to promote entrepreneurship – growth companies more non-technological innovations a more efficient and focused public innovation system more international mobility to increase productivity with new working models 25