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Finnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes 02-2014 DM

Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

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Page 1: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Finnish innovation policy

and the role of Tekes -Some trends and challenges

Christopher Palmberg, Ph.D.

Programme Development Manager/Tekes

02-2014 DM

Page 2: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Structure

1. Recent developments in the Finnish economy

2. How is innovation policy adjusting?

3. The changing role of Tekes and some challenges

4. Towards innovation policy 2.0

02-2014 DM

Page 3: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

1. Recent developments in the

Finnish Economy

02-2014 DM

Page 4: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

02-2014 DM

• Industrial

restructuring in

Finland among

the most

dramatic in the

EU

• During 2000-

2012 GDP

declined by

10,3% points

Page 5: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

02-2014 DM

Page 6: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

02-2014 DM

• Finnish

public debt is

approaching

60% record

level

Page 7: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

R&D expenditures are declining especially in companies

3,35

3,55

3,75 3,73

3,64

3,43

3,32

3,13

2,8

2,9

3,0

3,1

3,2

3,3

3,4

3,5

3,6

3,7

3,8

2007 2008 2009 2010 2011 2012 2013 2014*

%

Finland is among the most R&D

intensive countries, but the R&D

share of GDP is declining

Lähde: Tilastokeskus, * ennakkotieto

4,5 5,1 4,8 4,9 5 4,7 4,6 4,3

0,6

0,6 0,7 0,7 0,7

0,7 0,6 0,6

1,2

1,2 1,3 1,4 1,4 1,5

1,4 1,4

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

2007 2008 2009 2010 2011 2012 2013 2014*

Billion €

Yritykset Julkinen sektori Korkeakoulusektori

R&D expenditures by sector 2007-2014* R&D expenditures as a share of GDP

Companies Public sector Universities

Page 8: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Finnish innovation performance has declined

compared with the leaders

Source: EC; Innovation Union Scoreboard 2015

Performance of innovation leader countries

Page 9: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Declining impact of Nokia but also new opportunities!

02-2014 DM

Page 10: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

2. How is innovation policy adjusting?

02-2014 DM

Page 11: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Public sector actors of R&D and

innovation in Finland

02-2015 DM 36100

PARLIAMENT

Academy of

Finland

Universities

Ministry of

Employment

and the Economy

VTT

Tekes

Other ministries

and their

institutes

Finnvera plc,

Finpro, Sitra,

Finnish Industry

Investment Ltd

Regional ELY Centres

GOVERNMENT Research

and Innovation

Council

Ministry of

Education and

Culture

Page 12: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Ministry of

Education and

Culture

Finnvera

Academy of Finland

Tekes

Finnish Industry Investment

Sitra

Public funding actors in the Finnish

innovation environment

02-2015 DM 36100

Basic research Applied research Business R&D Business development Marketing Internationalisation

Finpro

Regional ELY Centres

Page 13: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Radical

innovations

Incremental

innovations

Joint Programmes

Strategic

longterm

collaboration Basic research

Tekes

project

funding

Tax incentives,

ELY-center’s

development

subsidy

Sitra

Tekes

program

mes

SHOK

Strategic

research

openings

Academy

of Finland

Universities

and research

institutes

Main Finnish innovation policy instruments

INKA

Company-

and

research-

projects Demonstrations,

Piloting

Page 14: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Recent trends in Finnish innovation policy

• Towards broad-based policies

• User- and demand driven innovation

• Intangibility

• Towards system-level and ecosystem

promotion

• Bioeconomy, ICT, healthcare

• Cities as platforms

• From direct towards indirect RDI

support

• R&D tax incentive experiment

• Cutbacks in Tekes, increasing emphasis on

loans

• New funding instrument for strategic research

• Re-invention of industrial policy,

towards innovation policy2.0…

• Ecosystems, experimentation etc.

02-2014 DM

0

100

200

300

400

500

600

700

Public RDI by sectors, Million €

Yliopistot

YliopistollisetkeskussairaalatSuomenAkatemia

Tekes

ValtiontutkimuslaitoksetMuu rahoitus

Page 15: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

3. The changing role of Tekes and

some challenges

02-2014 DM

Page 16: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

We offer funding, expertise and networks

DM 1282874

Start-ups

Growth companies

Large companies

Universities

Research institutes

Providers of public services

Cities

Hospital districts

Page 17: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

The Tekes journey

DM 1180767

1983 2000 2015

Technology

Business

Services

Healthcare

social services

Working life

Feelings

Fast experiments Industries

EU

Page 18: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Tekes RDI funding in 2014*

01-

2014

DM 1231571

R&D Funding includes €2 million from the EU Structural Funds.

60%

*Further cutbacks up to 138 Meuro have been announced by the new gvmt. from 2016

Page 19: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Natural resources and

sustainable economy

Arctic Seas

2013–2017

BEAM – Business with Impact

2015– 2019

Green Growth –

Towards a Sustainable Future

2011–2015

Green Mining

2011–2016

Groove – Growth from

Fenewables 2010–2014

Tekes programmes

Vitality of People

BioIT – 2012–2014

Bits of Health 2014–2018

Innovations in Social

and Healthcare services

2008–2015

Learning Solutions

2011–2015

Skene – Games Refueled

2012–2015

Intelligent environments

5thGear 2014–2019

EVE – Electric Vehicle

Systems 2011–2015

Feelings – Intangible Value

Creation and Experienced

Value 2012–2018

Innovative Cities

2014– 2020

Industrial Internet –

Business Revolution

2014–2019

Witty City 2013–2017

Smart Procurement

2013–2016

Built Environment

2009–2014

Trial – Environment for

Cognitive Radio and Systems

2011–2014

Working life

Liideri – Business,

Productivity and Joy at Work

2012–2018

DM 1242635

Page 20: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

BEAM is a joint innovation programme between

Tekes and Ministry of Foreign Affairs (MFA)

Vision: Finnish companies and other actors are part of global

ecosystems that create economic, environmental and

societal impacts both in Finland and developing countries

Mission: BEAM helps Finnish companies build succesful and

sustainable businesses in Finland and developing countries

through inclusive frugal nnovations for societal

challenges

Targets: SMEs and their Finnish and global partners (including NGOs) which aim to develop inclusive frugal innovations in

various sectors for Sub-Saharan Africa, Latin American, South

and Central Asian markets

Duration and funding: for 2015-19 with total funding of 50 Meuro

(50% public, 50% private sources), funding will cover grants and loans, challenge

competitions and an impact fund as possible program services

Page 21: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

United States Washington, D.C.

Palo Alto

India China Beijing

Shanghai

Hong Kong

EU Brussels

Tekes as a part of Team Finland network

2015–2017

Japan

Tokyo

Taiwan

Taipei

12-2014 DM 1338694

Germany

Russia Moscow

Page 22: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

There are also opportunities…

• Start-up boom and SLUSH

• Demise of Nokia – rise of new ICT entrepreneurship

• Intangible value creation

• Cleantech-Bioeconomy-circular economy

• Digitalisation for new services and efficiency - 5G, IoT, biodigi etc.

- ’NMT2.0’ a possibility e.g. in smart city, healthacare, education?

• Global challenges – global opportunities

• …

03-2013 DM

Page 23: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

4. Towards innovation policy 2.0

03-2013 DM

Page 24: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Academy

of Finland VTT

Finnvera Tekes

Sitra

Strengthen the

renewal of

Finland’s

industry and

economy

Joint direction – Joint goal: Renewal of Finland’s industry and economy

Finpro

Page 25: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Focus areas of joint strategy

Market access

New business

ecosystems

Wellbeing and health

Digitalisation

Natural resources and resource efficiency

Intangibility and

value creation

Tekes as an active and visible playmaker in selected fields

Bioeconomy

Digitalisation renewing business and industry

Cleantech

Page 26: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Changing nature of competition

• Industries (1980s) • Comparative advantage and specialization

• Clusters (1990s) • ’The Porterian diamond’

• Value chains and networks (2000s) • Vertical integration – outsourcing, strategic alliances

• Ecosystems (2010s…) • Joint value creation, platforms, orchestration, PPPs

Page 27: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Role of the state – towards an entrepreneurial state…

Please check TED talk for a quick glance: http://www.ted.com/talks/mariana_mazzucato_government_investor_risk_taker_innovator

Page 28: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Towards ecosystem policy – old wine in new bottles or something different?

’Traditional’ sectoral – cluster

policy

’New’ business (eco)system based

policy

Rationale Economies of scale, market failures Spillovers, coordination-challenges,

system-level and transition failures

Ideation Reactivness, identification of growth

industries, independant visions and

strategies

Proactiveness, identification of new

operation modes, joint visions and

strategies

Instruments Funding, sectoral approaches, general

development of overall innovation

environment

Facilitation, PPPs, cross-sectoral,

context specific and tailored approaches

Implementation Steering, siloed, narrower policy mix,

company specific, national

Orchestration, experimentation, broad-

based, network-ecosystem specific,

international

Impact

monitoring

Success of companies and sectors,

ex-post evaluations

Success of companies and ecosystems,

ex-ante + ex-post evaluation

Risks Compromises with all stakeholders,

lack of dynamism, path-dependency,

avoidance of experimentation

Clashes with some stakehodlers, chaos,

public sector domination, discontinuing

good projects

Page 29: Finnish innovation policy and the role of TekesFinnish innovation policy and the role of Tekes -Some trends and challenges Christopher Palmberg, Ph.D. Programme Development Manager/Tekes

Summing-up

1. The Finnish economy is in dire straits, geopolitical

situation is also challenging

2. Finnish innovation policy is adjusting through cut-

backs but also new innovative openings (’innovation

policy 2.0’)

3. Tekes is undergoing large changes: focus on SMEs,

intangible value creation and (eco)systematic

innovations

4. A new strategy is being developed that hopefully will

lead to system-smarter policies

03-2013 DM