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News 20.02.2019

Finland boasts significant increase in FDI

Business Finland published its first performance report on the 14th of February. Business Finland has played a key role in accelerating growth and attracting foreign investment. For Business Finland’s customers, the year 2018 was a year of growth, as their exports increased by 24%. Investments in Finland by foreign companies increased by 44%.

Business Finland continues the important work of its predecessors, Tekes and Finpro, for the good of the whole of Finland. It is an indisputable fact, that public innovation funding, when targeted right, plays an important part in the success of companies, and the society as a whole. 

- We work for the long-term welfare of the Finnish society. I am happy to say, that we were able to achieve good results even with limited resources. Each euro invested in innovations can trigger up to 20 or 30 times new growth and renewal. The 300 million euro addition to innovation funding, proposed by the Confederation of Finnish Industries, would result in 60 000 new jobs and 6 billion euros worth of new exports. All this can be done in just one parliamentary term, says Pekka Soini, Director General of Business Finland. 

Companies estimate funding from Business Finland as their most important source of funding for renewal. The impressive growth figures of Business Finland’s client companies prove the point.

- The turnover of Business Finland funded Finnish SMEs, increased by 20 % in 2014-2017, in comparison to non-Business Finland funded SMEs, who increased their turnover by 13 %. Similarly, our clients’ exports grew by 24%, and they were able to increase their value added by 22%. This is a good number for renewal, says Soini.   

Finland attracts investments from all over the world

Last year Invest in Finland’s 45 client companies invested over 475 million euros in Finland – a 44% increase from the previous year. Either as a direct or indirect result of these investments, 1180 jobs were created. Last year Invest in Finland had over 1000 new client contacts, and over 100 of those visited Finland. 

According to Ernst&Young, Finland was the most successful of the Nordic countries in attracting foreign direct greenfield investment in 2008-2015. Greenfield investments to Finland have increased substantically during that time period (630 investment projects in 2008-2015 compared to only 151 projects in 2003-2007). Greenfield investments are investments that increase production capacity in Finland, thus directly contributing to growth and jobs. 

- Companies that came to Finland with the help of Invest in Finland, paid 185 million euros to Finland just in corporate tax, and 463 million euros in income tax in 2012-2017, says Antti Aumo, Executive Director at Invest in Finland.

Last year approximate 270 new foreign businesses came to Finland, and around 200 of those already in Finland, made new investments. Most new companies came from Sweden (77), UK (69) and Norway (21). The biggest sectors were health and well-being and ICT. According to an estimate by Copenhagen Economics, the 1000 jobs created by foreign companies can leverage as many as 3500 jobs.

- Foreign direct investment benefits the economy in many ways. There are direct positive outcomes, such as increased tax revenue, as the companies pay tax from their profits as well as from salaries. Then there are indirect outcomes, such as when foreign companies make purchases from Finnish companies. Also, foreign companies bring new knowledge and know-how and new technologies, which in turn attract more investment, and other foreign companies, says Aumo.

The around 4300 foreign companies that currently operate in Finland, employ approximately 255 000 people – accounting for over 17% of all private sector workforce in Finland. According to Statistics Finland, foreign companies operating in Finland generated 92.2 billion euros in revenue in 2017 - a 9% increase to the previous year. The manufacturing sector is the biggest sector, both measured in revenue and in number of staff.

Finnish Startups catching the attention of foreign VCs

Business Finland has traditionally played a big funding role with companies receiving venture capital. Bigger funding rounds together with Business Finland funding, result in successful companies growing in international markets.

- Business Finland funding typically preceeds bigger venture capital investment. Our role in the early stages of funding is mainly to share the risk, and to trigger international growth. Since 2010, direct investment in Finnish statups has decupled, says Marjo Ilmari, Director of Startups.

A startup called ICEYE is a great example. The company develops radar satellites designed for imaging the globe. Business Finland granted ICEYE a 10 million euro loan to produce SAR satellites and to launch their Internet of Locations project. Since then, they have succeeded in attracting a lot of independent funding.

Visit Finland continues to attract more tourists to Finland

Tourism in Finland continued to grow from the previous years’ record numbers. The number of over-night stays by foreign nationals increased by 1.3% to 6.8 million. Europe is Finland’s core market: over half of the over-night stays come from the European Union member states, whereas the percentage of Asian travelers is 16%. During 2018, Visit Finland targeted marketing efforts especially to core markets such as Germany, the UK, China and Japan, but also to the steadily growing markets (The Netherlands, France and the USA). Visit Finland also directed some marketing efforts in India and the UAE, which are fast growing markets for Finland.  

The travel industry is booming, and Finland has a strong potential to become the most attractive travel destination in the Nordics. The key to success is national cooperation, says Visit Finland.

Business Finland 2018 funding figures

6060 funding applications, totaling 958 million euros

4440 positive funding decisions, totaling 565 million euros

    • companies 451 million
    • research 114 million

Of all funding to companies

  • grants 258 million
    • of which innovation funding 193 million
  • loans 193 million

Projects ending in 2018 resulted in

  • 2906 new or improved processes, services, products or applications
  • 816 academic thesis
  • 1303 patents or patent applications

Team Finland Market Opportunities

  • during 2018 over 2500 companies activated through the service
  • 590 new publications

 

Sources: Business Finland data,Business Finland commissioned study in ”World Class Ecosystems and a Competitive Business Environment” (forthcoming), FDI Attraction Scoreboard, Copenhagen Economics 2016. Statistics Finland. Ernst & Young.

More information

Contact:

Business Finland: Pekka Soini, Director General tel. 029 50 55700
Startups & funding: Marjo Ilmari tel. 050 5577 668
Invest in Finland: Antti Aumo tel. 040 5050 477
Visit Finland: Katarina Wakonen tel. 0400 723 088

E-mails firstname.lastname@businessfinland.fi