Ambitious and reforming industrial policy

Technology is our most important tool for adapting the future of Finland, Europe and the world toward a sustainable one. In climate crisis solutions, digitalisation and data economy are key.

Finnish companies should be encouraged to reform and grow to international scale. Finland has a diverse, healthy and brave business network that makes investments. Successful businesses also take responsibility for employment and, for their part, the financing of the welfare state.

Under Marin’s Government, Finland has, once again, risen to be among the most competitive countries in the world: in international comparison we rank higher than ever since 2005.

During the next parliamentary term, we must lay the foundation for industrial policy of the future. Finnish industry must lean on a high degree of processing, higher productivity, increasing utilisation of robotics, skills, zero emissions, and a greater number of winners. The role of central government in the success of the industrial sector is, primarily, in providing a stable and predictable environment, a sufficient level of investments, enough skilled employees, and good operating conditions.

We want to be the most competitive environment in the world in climate industry and pioneers in data economy – in business that makes the world a better place. The rapidly changing digital world economy calls for bold, strategic industrial policy.

Mission-oriented industrial policy

Industrial policy must be mission-oriented. Mission-oriented policy means that the government, together with researchers and key stakeholders, sets the long-term social goals that steer decision-making. The missions require stable and strategic steering. The basis of industrial policy must be sector and technology neutral, but a small country must also know how to target its limited assets to its strengths.

Above all, companies wish for predictability in their investment decisions. Particularly in the current times of crises, the future may seem uncertain and, at worst, this may slow down investments or even postpone them to the future. It is a matter of honour to a government led by Social democrats that we bring certainty to uncertain times – especially when innovation cycles are often longer than government terms.

Effective competition benefits consumers and supports productivity growth. SDP supports ambitious competition policy. The powers and resources of the competition authorities must be on a level that enables genuine interventions in a concentrated market and, if necessary, even splitting up companies that have grown too dominant.

We will invest in export and international growth

Finland and our international network must be present in places where we can generate sustainable growth. This calls for changes in the work of organisations under the Ministry for Foreign affairs and the Ministry of Economic Affairs and Employment. Specifying common objectives is most important.

The results of the internationalisation of Finnish companies reveal that the diversity of our economic structure has not increased as expected, which is a big problem for Finland’s sustainable growth. The support for the internationalisation of companies must be stronger and more strategic.

Export promotion must be carried out as cross-sector cooperation, in which higher education institutions and research institutes have their strong role alongside companies and public organisations. It is important that RDI activities and export promotion can, in the future, also be in separate organisations. The collective capability of export promotion to plan and react as economic structures and industries change must be improved. Company and business offerings are developed proactively in cooperation between key Team Finland organisations. The operations are managed together, tailored and targeted in cooperation also to new sectors, or such offerings are developed that pass traditional sectors altogether. Export complexes that will emerge based on the EnergySampo and Nokia 5G solutions that are now in preparation are good examples of this.

SDP’s objective is that Finland’s sustainable export grows at least at the same rate as in the reference countries, the target being two percent/year. Finland’s stronger growth and productivity largely come through the growth and investments of companies.

Companies should be provided with a clear pathway for growth. The services and support system offered to companies must be business-oriented and create a pathway from solo entrepreneurship to international growth – not so that the entrepreneur must see every authority in turn and seek information about the possibilities of the support systems.

Companies must have one Team Finland contact person to ensure smooth and productive interaction with both domestic and international authorities. Also private operators will be assembled along the growth pathway to support companies, for example, with financing the internationalisation, recruitments and strengthening know-how. Finland’s export promotion networks should reach regions and towns, too. Activities promoting export and internationalisation must be simplified, international activities must be compiled as one system, and strategic steering of Team Finland organisations must be strengthened by defining a common strategy and goals for them.

Productivity, growth and wellbeing from blue skies research

The widely accepted concept of R&D funding reaching 4% of GDP in 2030 is the major goal in research, product development and innovation policy. Strong basic research and education, consistent and increasing funding of which must be guaranteed, is the basis for the whole RDI system and adopting new information. The biggest investments in reaching this goal come from the private sector, and thus the business-oriented innovation policy must systematically consider the generation of a leverage effect. Also the approach to various innovation funding instruments must be flexible, which means that direct subsidies, loans, guarantees, capital investments and carefully planned tax deductions, too, must be included in the system.

The RDI system must be developed as a whole. As public RDI funding increases, the funding must, in principle, be targeted evenly at all different parts of the innovation system. It must be possible to raise the funding levels of current players consistently and in a balanced way. In the early stages of increasing the funding, particular attention must be paid in supporting business-oriented applied research together with universities, research institutes and companies.

Finland needs more of both business-driven applied research and basic research in, for example, institutions of higher education. The 4% of GDP target is so ambitious that a zero sum game with the funding of different institutions will not help: the levels must be raised overall. The supported RDI entities must be large enough to ensure effectiveness of the funding.

Also, the importance of predictability cannot be stressed enough in innovation policy. The system must be agile, but those doing innovation efforts must be allowed to concentrate on their work in the long term. To improve predictability, parliamentary work extending across parliamentary terms should be continued by updating the plan regarding the structures and distribution of R&D funding every term.

Innovation policy both nationally and at the EU level should support innovations that are radical and reform entire sectors or business models. This means, in practice, that a larger number of even publicly supported innovation experiments will fail, but this should also be possible in a strong system.

The annual 35 billion euro state and municipal procurements have a significant effect on the development of economic activity. Procurements must be planned so that they support the development of economic activity in Finland and the demand for new innovations. It is key that ecological and social responsibility and wide-spread effectiveness steer the procurements. A dialogue between companies and the public administration is central. Municipalities must be given broader industrial and employment policy tools by offering them, for example, some of the current tools of the Centres for Economic Development, Transport and the Environment (ELY Centres).