Innovation thrives in Finland’s tight-knit ecosystems

Innovation rarely happens in isolation. It takes a network of people, organizations and ideas to bring about meaningful change.

In Finland, collective innovation is deeply rooted in the country’s history and culture. As a relatively small and cohesive population, Finns have a long tradition of working together towards shared goals.

“People in Finland cherish new ideas and are curious about how to make them work. We have a strong engineering culture here,” says Janne Kari, Head of Industry, ICT & Digitalization at Invest in Finland. “In the 1940s, a Finn built the first functioning black-box flight recorder. In the 70s, we invented the heart rate monitor and in the 90s we made the world’s first GSM call.”

"There’s a strong sense of ‘being in it together' that fuels collective innovation. Ideas flow and partnerships form here very easily."

Today, this spirit of innovation and collaboration is visible across Finland’s network of universities, research institutes, startups and larger companies. The ease with which people connect and work together has created one of the world’s most dynamic innovation ecosystems.

"In Finland, there’s a strong sense of ‘being in it together' that fuels collective innovation. Ideas flow and partnerships form here very easily. A lot of this work is driven by national strategies to develop Finland for a carbon-free, digitized and resilient future,” says Kari. 

Finland offers attractive tax incentives to support innovation and business growth. These include enhanced deductions for R&D costs, accelerated depreciation on new machinery, and tax-free employee share schemes for non-listed companies.

Innovation and collaboration across all sectors

The public and private sectors often work together in Finland, guided by policy frameworks and significant government investment in R&D. The Innovation and Skills in Finland 2021–2027 programme is investing more than EUR 3.1 billion in seven priority areas to drive sustainable growth, regional development and societal well-being.

Other public organizations also provide support for innovation. Business Finland arranges funding and helps international companies to establish in the country. The Research Council of Finland funds scientific research with the potential for strong societal impact. 

VTT Technical Research Centre of Finland – Finland’s largest public R&D organization – is a cornerstone of the country’s innovation ecosystem. VTT often helps to bridge the gap between research and commercial applications. Collaboration with companies, universities and other organizations fosters innovation in cybersecurity, energy, health, materials science and more. 

Many Finnish startups are nurtured by VTT, including those emerging from Aalto University and the University of Helsinki. Startups are also nurtured through the Finnish Startup Community, which has members at different growth stages. Some of Finland’s most successful new companies are members, including Aiven, Supercell, Supermetrics and Wolt. 

Established Finnish companies also support the country's edge in innovation. Nokia remains a leader in telecommunications, while Neste and Fortum are pioneers in renewable energy. The Finnish subsidiaries of international companies like ABB and Sandvik lead local innovation ecosystems in their respective industries.

Global recognition for Finnish strengths

Finland’s propensity for innovation is widely acknowledged on the international stage.

The Global Innovation Index (GII) is an annual ranking that evaluates countries based on their innovation capabilities and outcomes. For 2024, the GII ranks Finland 7th out of 133 economies. Over the past decade, Finland has consistently placed in the top 10.

The country also performs exceptionally well in the European Environment Agency’s Eco-innovation index, which measures progress towards a sustainable economy. In the latest results, Finland ranks 2nd in the EU.

"Minimal bureaucracy and low hierarchies in Finnish workplaces mean good ideas can quickly gain recognition and move to implementation."

Happiness is another national characteristic that underpins the country’s success in innovation. Finland has consistently ranked as the happiest country in the world in the UN World Happiness Report.

“Work-life balance is highly valued in Finland. People often manage their own hours and are encouraged to take time off to recharge in our beautiful nature. Minimal bureaucracy and low hierarchies in Finnish workplaces mean good ideas can quickly gain recognition and move to implementation,” says Kari.

Finland’s well-structured society – where stability is valued – also supports a culture of innovation. A strong social foundation means people can focus on the entrepreneurial and creative pursuits driving the country’s next wave of technological advancement.