>>Finnish innovation system

The national innovation system is an extensive entity comprising the producers and users of new information and knowledge and know-how and the various ways in which they interact. At the core of the innovation system are education, research and product development, and knowledge-intensive business and industry. Varied international cooperation is a feature running through the system.

The producers of new knowledge include universities and polytechnics, research institutes and business enterprises. The users are mostly enterprises, private citizens, and decision-makers and authorities responsible for societal and economic development. The role of scientific information in societal and economic development has been constantly growing, which increases the significance of cooperation and networking both between the public and private sectors and within the sectors.

A key task for science, technology and innovation policies is to ensure a balanced development of the innovation system and strengthening cooperation within it. Alongside this, increasingly important are also cooperation relationships with other sectors, such as economic, industrial, labour, environmental and regional policies or social welfare and health care services. The prerequisites for knowledge-based development are created within different policy sectors.

In Finland the formulation of national science, technology and innovation policies has been assigned to an expert body, the Science and Technology Council, which is chaired by the Prime Minister. The foremost organisations responsible for science and technology policies are the Ministry of Education and the Ministry of Trade and Industry. The Ministry of Education handles matters relating to education and training, science policy, universities and polytechnics, and the Academy of Finland. The Ministry of Trade and Industry is in charge of matters pertaining to industrial and technology policies, the Finnish Funding Agency for Technology and Innovation (Tekes), and the VTT Technical Research Centre of Finland. Nearly 80 per cent of the government R&D funding is channelled through these two ministries.

The strategic aim for Finland is to secure sustainable and balanced social and economic development. Achieving this aim entails a high employment rate, high productivity and good international competitiveness. The role of the Science and Technology Policy Council is to contribute to the realisation of the strategy by means of science, technology and innovation polices and partly through education policy.

The innovation system approach has also been gaining importance within regional development. The network of Finnish universities and polytechnics, technology centres, the Centre of Expertise Programme, and other operations has developed innovation prerequisites in the regions to the extent that it is now possible to speak of the innovation systems of the regions and their development.

The globalisation of the economy and technology and the rapid international change arising from it currently exert strong influence on industrial structures, business models, and competence  demands on the work force and society as a whole. Knowledge in its various forms has become a competed key factor for the development of societies. An efficient and efficacious national innovation system and regional systems are emerging as ever more crucial factors for economic growth and for social welfare.

To date, Finland has ridden the change well, having been able to exploit the opportunities opening through knowledge-intensive growth to an exceptional degree in international terms. Finland has moved over from an economy based on natural resources towards a knowledge-based economy. The rapid change in the industrial structure has also benefited the primary sector of industry: products and production methods have become more knowledge-intensive in the economy overall. This means that the country is better equipped to face future challenges.

The challenges in developing the Finnish innovation system relate to the prioritisation of activities, international and national profilisation of research organisations, and the development of selective, foresight-based decision-making. Finland has set an aim to raise the GDP share of R&D to four per cent by 2010. The justification for the increase in funding is that funds are focused to targets of primary relevance to the economy, other societal development and citizens' welfare. It is for the same purpose that the existing resources are pooled into entities exceeding critical mass, as exemplified by the strategic centres of excellence in science, technology and innovation to be soon launched. These represent a new kind of organised cooperation between businesses, universities, research institutes and financing organisations, in which the parties commit themselves to anticipating the needs of society and business in time spans of five to ten years.

In its policy report 'Science, Technology, Innovation', published in summer 2006, the Science and Technology Policy Council put forward a programme which combines the contentual, financing and structural development objectives of research and innovation. Apart from those mentioned above, the development challenges are seen to include the quality of research; scientific and practical relevance; alleviation of fragmentation in research; internationalisation of science, technology and innovation; and obstacles to and incentive for entrepreneurship.

The development of action models and procedures highlights the importance of horizontal cooperation at all levels of the innovation system. In Finland, the foremost trends are integration of technological and social innovation; increase in interdisciplinary and cross-technological activities; and the emergence of the services sector, notably knowledge-intensive services, alongside manufacturing industry as a key factor for the welfare of society, the economy and citizens.

Esko-Olavi Seppälä

13.9.2006