Air Supremacy

By Sami J. Anteroinen
Editor-in-Chief

This article was published on NORDICUM 3/2009

Business angels are often in a key role as start-up companies struggle to get off the ground. Our cover story offers some perspectives into the issue (see pages 8–10). In the interview, business angel Risto Siilasmaa credits the Ministry of Employment and the Economy for fresh thinking in this regard. The Ministry is working on a system which would give tax incentives to business angels and encourage “serial entrepreneurship” – which has, in the past, been lacking in Finland.

In addition to recognising the value of business angels, the Ministry is also targeting R&D expenses as an area for future tax breaks. R&D related tax incentives are already in use in over half of the EU Member States and in the majority of OECD countries. So why has Finland shunned away from their use?

The answer can be found in the structure of the innovation system. Finland has embraced a policy where public innovation investments have been made as direct support to the companies. TEKES, the Finnish Funding Agency for Technology and Innovation, has 3,000 corporate clients on an annual level – a mere drop in the bucket if one considers the entire business ecosystem.

As a response, the Ministry aims to eliminate the middleman and help out especially SMEs to take their research and development into another level. In addition, Minister of Economic Affairs Mauri Pekkarinen believes that the tax breaks could also attract international companies to root their R&D operations in Finnish soil.

Indeed, the appeal of Finland seems to have increased in the eyes of the world of late, if one is to believe the ECER-Banque Populaire Ranking 2009. The French study assessed entrepreneurs’ general satisfaction in 37 major European cities – with Helsinki coming out on top. Even the researchers themselves were surprised by this outcome, noting that Finland is generally ranked by the Global Entrepreneurship Monitor survey in the middle band of European countries. Yet over the past few years, it has consistently amazed entrepreneurship academics.

And why exactly is Helsinki the new Mecca for European entrepreneurs? Well, the study points out such reasons as the existence of several institutions dedicated to entrepreneurship as well as having able City officials ready to go to battle for local businesses. The recently launched Helsinki Metropolitan Entrepreneurship Academy (HMEA) programme is listed as one example of this proactive mindset. The study also acknowledges that Finland has for several years been developing numerous research programmes to foster entrepreneurship.

Is the reality truly as rosy as this? Read the Siilasmaa interview before you make up your mind.