What's Next for Finland?
One of the major supporters of DEMO Africa and LIONS@frica with me in Nairobi last week was Nokia. As I took a look at just how much innovation Nokia has created, I was curious to look further into the current startup culture in its home country of Finland and see just how important high-growth entrepreneurship is to its economy.
It turns out very important. Long gone are the days where the country´s giant forest and metal companies determined the collective fate of the economy. Not only was Nokia the flagship for Finland’s IT startup boom of the late nineties but by 2000 it produced 21 percent of Finnish exports, and today serves as the core of a renewed momentum for startups in Finland.
While Finland remains one of the only major economies not actively participating in Global Entrepreneurship Week, there is an emerging grassroots movement for entrepreneurship in Finland. For example, AaltoES, or Aalto Entrepreneurship Society, a student-run organization established in 2009 by an inter-disciplinary group of students from Aalto University, is building a startup community for the wider Northern Europe region. The proven strength of this grassroots movement has attracted support from the Technology Industries of Finland Centennial Foundation, KAUTE foundation, Wihuri Foundation, TEKES, Aalto Center for Entrepreneurship, and Aalto University, as well as from project-specific sponsors.
This drive for entrepreneurial passion from the ground up soon met with real support from the top. Aalto University’s Aalto Center for Entrepreneurship (ACE), established in 2010, aims at creating business success stories from within the Aalto community, and thereby act as a catalyst for “elevating high ambition entrepreneurship from Finland and through the Baltic region.” ACE has translated this commitment into a structure that handles activities related to technology transfer, intellectual property management, commercialization and the teaching and research of growth entrepreneurship. The impact is already being felt, with startup entrepreneurs emerging from initiatives like the Aalto Venture Garage (AVG) located just outside of Helsinki on Aalto’s School of Technology campus. The AVG offers seed funding and access to space where at least 15 startup teams work side-by-side each year. Some projects are identified for “fast track” development and are connected with corporate partners. Then there is Aalto’s Startup Sauna, an accelerator program that offers an intense six-week entrepreneurship boot camp for selected startups from throughout the Baltic and Nordic regions. The university has also sought connections to other startup ecosystems, for example, by establishing a partnership with the Stanford Technology Ventures Program (STVP), the entrepreneurship center at Stanford’s School of Engineering. Through this partnership, Finnish students can gain access to coaching from entrepreneurs and educators. In September, the Roundtable on Entrepreneurship Education (REE) Europe 2012 conference will take place at this university following interest abroad in learning about its unique initiatives.
With so much going on to build the Finnish entrepreneurship ecosystem, around Aalto and beyond, ArcticStartup, a media outlet that is 100% dedicated to covering the startup scene in the Nordic and Baltic region, has had plenty of material. It has spread the news of recent rockstar startups, such as worldwide gaming sensation Rovio Mobile, fire alarms producer Jalo Helsinki and loudspeaker designer Uploud Audio. Rovio’s founders were graduates of the Helsinki School of Technology, one of three schools that make up Aalto University.
The overall hope is to turn around what Prof. Erkko Autio, chair in technology transfer and entrepreneurship at London’s Imperial College Business School, called “the Finnish paradox.” The paradox refers to the observation that Finland is punching below its weight when it comes to high-growth ventures, at least as measured by the Global Entrepreneurship Monitor.
That “weight” is the fact that Finland is considered among Europe´s largest investors in early stage startups, its investments in R&D (consistently above 3% of GDP) are among the highest in the world, and the country has long been a leader in innovation policy and outcomes, as reflected in its position among the top in the ranks offered by various studies, such as the World Economic Forum’s Global Competitiveness Report, INSEAD´s Global Innovation Index, the Martin Prosperity Institute´s Global Creativity Index, the European Commission´s Innovation Union Scoreboard, the Cleantech Group´s Green Tech Clusters ranking, and others. Besides the mindset, Finland also has great innovation talent. According to the Innovation Union Competitiveness 2011 report, Finland has maintained strong growth in the number of its science and engineering graduates. In 2008, the country topped all other EU members in the penetration of researchers in the workforce. Moreover, the European Commission recently recognized Finland as one of the members who include entrepreneurship as part of its national lifelong learning, youth or growth strategies.
Perhaps instead of doing more, entrepreneurship champions in Finland can pause for a moment to see if there are any gaps or obstacles blocking entrepreneurship in the current ecosystem. For example, entrepreneurship guru Steve Blank, who explored Finland´s entrepreneurship scene last September, observed that allocating financing for R&D and innovation through the governmental TEKES might be an inadequate mechanism. Every year, Tekes finances some 1,500 business R&D projects, and almost 600 public research projects at universities, research institutes and polytechnics. Some question whether TEKES´ staff has the experience to choose from applicants and whether its funding activity is blocking the emergence of private sector funding mechanisms.
Despite the challenge of turning a world of resources into strong entrepreneurship outcomes, my bet is we will see this entrepreneurship hub finally bloom. Finland has come long way already. It did not surprise me to see Nokia at the heart of developer talent in Africa last week and I see no reason why Finland cannot be ranked as one of the top ten startup ecosystems in the world.