The Finnish Startup Community is disappointed by the government’s decision to cut Business Finland’s innovation funding. The decision comes at a time when investments in research and development (R&D) are clearly on the rise. According to the community, now it is crucial to ensure sufficient support for innovation activities, namely the phase that advances from research to commercialisation.
“Business Finland’s Tempo and Young Innovative Companies (YIC) funding are among the most impactful instruments in Finland’s innovation and growth policy. They are designed for early-stage companies whose product, service, or business model has high potential but still carries a high level of risk. At exactly this stage, the role of public funding is irreplaceable. Preserving these funding instruments is essential”, demands Riikka Pakarinen, CEO of the Finnish Startup Community.
For example, Tempo projects are typically relatively small, but their impact is significant. With modest public support, it is possible to enable substantial additional private investment, accelerate product development, and strengthen companies’ readiness to later seek larger funding rounds, such as venture capital investments or broader Business Finland instruments.
“Early-stage companies need funding to validate markets, test different solutions, and build their first customer relationships. Without Tempo funding, many promising innovations would never make it to market. Finland has no comparable funding instrument that covers the same stage as quickly and agilely. Companies supported by Tempo funding often target international markets from the outset. Every successful project increases Finland’s export potential and competitiveness. Tempo is therefore not an expense—it is a strategic investment in the future growth of Finland’s economy”, Pakarinen explains.
Cuts to Business Finland’s funding authorisations have led, among other things, to the suspension of the Young Innovative Companies (YIC) funding programme for the current year. This is a serious blow to many growth-oriented startups that rely on early-stage funding to commercialise ideas and technologies.
R&D investments have continued to grow in Finland for eight consecutive years. In new companies, the commercialisation of this research is crucial, as only after the commercialisation phase do new innovations begin to generate results and the much-needed economic growth.
“Domestic startups invested a total of approximately €800 million in R&D activities in 2023. Of this, around €260 million was directed at so-called deeptech startups, whose innovations are based on long-term research and technological development”, Pakarinen concludes.
The community reminds that innovation funding is an investment in Finland’s future growth and competitiveness. Without sufficient support during the commercialisation phase, many promising Finnish innovations may go unused or move abroad.