On October 31, X-HUB Tokyo, which supports the overseas expansion of domestic startups, invited Mr. ATSUMI Eiji to give a lecture on the true image of Finland, innovation and startup environments, unique innovations, and the creation of a focused ecosystem. He also introduced the roles and activities of Business Finland, which is a public corporation under the Ministry of Economic Affairs and Employment in Finland, along with the roles and activities of related institutions.
Japan and Finland celebrate 100 years of diplomatic relations. Strengthening relationships through economic cooperation
〈speaker〉Mr. ATSUMI Eiji
The Embassy of Finland
（Business Finland）Investment department
I would imagine that when all of you think of Finland, you picture Moomin, the aurora, and saunas.
Finland has a population of 5.5 million, a very low corporate tax of 20%, and is a country in which you can have a lot of confidence and live worry-free.
Currently, there are more than 40 direct flights between Japan and Finland every week. With only a slight time difference of 6-7 hours, business can run smoothly as well. I think it is a very suitable environment.
Recently, various sources have started saying that Finland has a high level of innovation. There is a lot of R&D resources as well, so I think it has a lot of potential in this field. This year, Japan and Finland will celebrate their 100-year anniversary of diplomatic relations. When then-President Niinistö visited Japan in 2016, he and President Abe issued a joint statement on a strategic partnership, and both sides are excited about further strengthening economic cooperation.
Transforming into an entrepreneurial country through Nokia’s resources and a youth initiative
Whenever we talk about innovation and startups in Finland, Nokia is always brought up. As a business, Nokia has had its ups and downs, but this company has become one of the main driving forces that is supporting current startups in Finland.
Finland’s industrial structure is centered around steel and rare metals, as well as technology, including machinery, engineering and consulting. Companies with less than 249 employees account for 92% of total business, with major companies on top of startups and small business. This is their way of actively cooperating with other companies in various ways.
Big companies in Europe have a great deal of cash and a lot of leeway when restructuring. The reason they restructure is so that they are not abandoned by stockholders due to unreachable company goals. They have no alternatives. Nokia also had a lot of cash when it restructured, so they made business plans with startup support programs, prepared experts, and provided funding for startup support. Thanks to these efforts, approximately 800 companies have been established. In addition, many young people witnessed the laying off of their parents and relatives who worked for Nokia and they became aware of the crisis. Students of Aalto University, a university well-known for innovation, instilled the entrepreneurial spirit into Finish culture and started to cultivate entrepreneurs’ minds. Because of Nokia’s resources and the youth-led initiative, Finland has been transformed into an entrepreneurial nation.
Sharing the value of innovation in Finland
Business Finland is just like a combined organization of JETRO (Japan External Trade Organization) and NEDO (New Energy and Industrial Technology Development Organization). It supports innovations from applied research to commercializing in various ways. They also play a role in supporting smaller companies and the international expansion of startups in order to strengthen Finland’s innovation ecosystem.
In Northern Europe, since there is not a large amount of risk money in circulation, the public sector plays a considerable role as an investor, as opposed to the public sector in Silicon Valley and Israel which may not be looked upon with a favorable eye, but the European public sector, particularly that of Northern Europe, is quite active. The data also show that 60% of innovations that come from Finland were the result of money from the public sector. In that sense, in such a small country with a small population and limited amounts of money, I believe that the people all share a common sense of value: Let’s work together and invest our money and human resources into important matters.
About Finland’s innovation domain
The kinds of companies that want to enter Finland are in the areas of technology, such as digital, IC technology, and health & well-being. Another notable feature is that BioEconomy & Clean Tech have both been growing rapidly since last year. Perhaps because Finland declared that it would “become a leading country in a circular economy” and has worked actively, it has led to the current situation. I notice that investments into this circular economy from outside of Finland is increasing.
Regarding an area of innovation at which Finland is working hard, the first that comes to mind is the digital area. Helsinki’s public sector opened up big data that helps to create an environment that supports business. As an example, one achievement has been the great success of mobility services such as MaaS.
One of Finland’s interesting points is that the city will provide big data in a way that can be used for business in a positive way.
As for biotechnology and the circular economy, Finland is a “forest country”, so there are many trees. And in order to protect them, the forest needs to be thinned, but with the movement toward going paper less, fewer and fewer trees are being cut down. To solve this issue, the forest industry drives innovations actively. One such example is the success of bio-mass materials replacing plastics.
Regarding the field of health care, electronic health care records over the last three generations has been digitized for big data. It includes all information from birth. With the legal system in place to package such data and have it used in various research and development, companies that want to work on innovation creation have come to Finland.
Finland is also working hard to implement AI into various facets of society. Not everyone is familiar with AI technology, but in order to educate the public, online education programs have been created to help improve people’s understanding and to advance social implementation. The promulgation of AI technology is going smoothly.
Services for Japanese startups
If you want to start a new business or create a subsidiary in Finland that can be imported back to Japan, there is a soft landing service for this. Since there are Japanese people in Espoo, a city next to Helsinki, Japanese companies often visit there, but their businesses are never realized. So, for Japanese companies, we created the Espoo-Japan Innovation Hub concept, which is like a miniature Plug and Play in Silicon Valley.
Because this hub is like an industry support center at the city-level, it provides excellent service at a low cost. The period can be adjusted from several weeks to three months, depending on your needs. We are creating such a program with the hope that large Japanese companies and startups will see the Finnish ecosystem from the inside and start their businesses. Not only this, but Business Finland, Helsinki, Espoo, Tampere, and the industrial bureaus in various cities will be very eager to listen to your requests and provide support. If you are interested in learning more, please feel free to contact us. Thank you.