Skip to main content Skip to search

Innovation and R&D Incentives in Finland

Finland stands as a beacon of innovation and research & development (R&D) in the global arena. Recognized for its advanced technological landscape, the country’s commitment to fostering innovation is deeply ingrained in its economic policies and national identity. R&D activities are pivotal to Finland’s strategy for economic growth, competitiveness, and social welfare, underscoring the nation’s dedication to remaining at the forefront of technological advancement.

The significance of R&D for the Finnish economy cannot be overstated. It is the backbone of the country’s ability to innovate, contributing to the development of cutting-edge technologies, sustainable solutions, and enhancing Finland’s position in international markets. R&D is instrumental in addressing complex challenges, from climate change to healthcare, and plays a crucial role in driving forward Finland’s technological prowess and industrial competitiveness.

Before we dive in, please read more about how to start a business in Finland here.

Governmental Support for R&D

Overview of Government Agencies and Their Roles in Supporting R&D

Finland’s government actively supports R&D through various agencies, with Business Finland and the Finnish Funding Agency for Technology and Innovation (Tekes) leading the charge. Business Finland, a result of the merger between Tekes and Finpro, provides a comprehensive suite of services aimed at fostering innovation, from funding to internationalization, and investment services. Tekes, prior to the merger, was renowned for its role in funding technological research and innovation projects, laying the groundwork for Business Finland’s current success in propelling Finnish R&D.


Description of Direct Funding Opportunities

Direct funding opportunities for R&D in Finland are robust and varied, designed to accommodate projects at different stages of development and across diverse sectors. Grants are available for exploratory and basic research, while loans and other financial instruments support more advanced development projects with commercial potential. These funding opportunities are structured to reduce the financial risk associated with R&D activities, thereby encouraging companies to invest in innovation.


Tax Incentives for Companies Engaged in R&D Activities

In addition to direct funding, Finland offers tax incentives to further encourage companies to engage in R&D. These incentives include deductions and allowances that can significantly reduce the tax burden on companies investing in research and development. The aim is to create a favorable tax environment that supports long-term investment in innovation, ensuring that Finland remains an attractive location for high-tech industries and cutting-edge research.

Through a combination of government agencies’ support, direct funding opportunities, and tax incentives, Finland has established a comprehensive ecosystem that nurtures innovation and R&D. This system not only bolsters the Finnish economy and technological advancement but also positions Finland as a global leader in innovation and research.


Collaborative Research Initiatives

Opportunities for Collaboration Between Businesses and Finnish Research Institutions

Finland offers fertile ground for collaboration between businesses and research institutions, fostering a synergistic environment that accelerates innovation. Finnish research institutions, renowned for their pioneering research, are keen collaborators with industry, working on projects that range from fundamental scientific discoveries to applied research aimed at solving real-world problems. These collaborations are facilitated by various platforms and programs designed to bridge the gap between academia and industry, ensuring a seamless flow of knowledge and technology transfer.


Public-Private Partnership Models and Their Benefits for R&D

Public-private partnerships (PPPs) in Finland have become a cornerstone model for R&D activities, leveraging the strengths of both sectors to achieve greater innovation outcomes. These models provide a structured framework for risk-sharing, capital investment, and resource pooling, making larger and more ambitious R&D projects feasible. The benefits of PPPs extend beyond financial aspects, including faster market entry for new technologies, enhanced research quality through shared expertise, and the development of a skilled workforce aligned with industry needs.


EU Funding and International Cooperation

Overview of EU Funding Programs Accessible to Finnish Companies

Finnish companies have access to a wide array of EU funding programs designed to support R&D activities, with Horizon Europe being one of the most prominent. This program is the EU’s flagship R&D funding mechanism, focusing on scientific excellence, societal challenges, and industrial competitiveness. It offers Finnish companies, from startups to large enterprises, opportunities to engage in groundbreaking research and innovation projects with financial support that mitigates the inherent risks of R&D activities.


Finland’s Role in International R&D Projects and Networks

Finland actively participates in international R&D projects and networks, leveraging its reputation for innovation and technological expertise. Finnish entities often lead or play key roles in consortia that tackle global challenges, ranging from climate change and sustainable development to health and digitalization. This international engagement not only amplifies the impact of Finnish R&D but also enhances the country’s influence in shaping global research agendas.


How Finnish Companies Can Leverage International Cooperation for R&D

Finnish companies can leverage international cooperation to access broader markets, diversify their research portfolios, and tap into a global pool of knowledge and resources. Engaging in international projects allows Finnish companies to establish valuable partnerships, gain insights into emerging technologies and market trends, and enhance their competitiveness on the global stage. Strategies for successful international cooperation include aligning with Finland’s strengths in technology and innovation, leveraging national support structures for international engagement, and actively participating in international R&D networks and forums.

Together, collaborative research initiatives and international cooperation form the pillars of Finland’s approach to R&D, driving not only national but also global progress in innovation.


Support for Startups and SMEs in R&D

Finland recognizes the critical role startups and SMEs play in driving innovation and economic growth. To support these entities in their R&D endeavors, a suite of programs and initiatives has been established, specifically targeting the unique needs and challenges faced by smaller enterprises.


Specific Programs and Initiatives Aimed at Startups and SMEs

Business Finland is pivotal in offering tailored support to startups and SMEs. This includes innovation vouchers, which startups can use to purchase expert services for developing innovative products or services, and research and development grants designed to reduce the financial risk associated with R&D activities. These initiatives provide vital resources for startups and SMEs to engage in innovative projects, enabling them to compete on a global scale.


Incubators, Accelerators, and Innovation Hubs Supporting R&D in Tech Startups

Finland is home to a vibrant ecosystem of incubators, accelerators, and innovation hubs that specialize in nurturing tech startups. These platforms offer more than just funding; they provide mentorship, networking opportunities, and access to expertise in technology development and commercialization. Notable examples include Maria 01, a leading startup campus in Helsinki, and Aalto University’s Startup Center, which bridges academia and industry to foster innovation.

R&D in Key Sectors

Finland’s strategic approach to R&D focuses on sectors where the country has established strengths or sees significant growth potential. These sectors not only receive considerable financial incentives but also benefit from a collaborative research environment and governmental support.


Focus on Sectors Where R&D is Particularly Incentivized

  • ICT: Finland’s strong ICT sector, rooted in the country’s legacy as a leader in mobile technology, continues to be a focal point for R&D investments. The sector is expanding into software development, cybersecurity, and IoT.
  • Cleantech: Recognizing the importance of sustainable development, Finland incentivizes R&D in cleantech, including renewable energy, waste management, and water technology.
  • Biotech and Healthcare: The biotech and healthcare sectors are at the forefront of R&D, driven by Finland’s excellent healthcare system and research institutions. Innovations in digital health, personalized medicine, and biopharmaceuticals are particularly encouraged.
  • Emerging Technologies and Areas of Research Receiving Significant Support


Emerging technologies such as artificial intelligence, quantum computing, and 5G are receiving significant support, reflecting Finland’s ambition to lead in these cutting-edge areas. The focus on these technologies aligns with global trends and Finland’s strategic priorities, ensuring the country remains at the innovation frontier.


Future Trends in R&D Within Finland’s Priority Sectors

The future of R&D in Finland is marked by a continued emphasis on digitalization, sustainability, and health technologies. With the government and private sector investing heavily in these areas, Finland is poised to make substantial contributions to global challenges, leveraging its strong innovation ecosystem and collaborative approach to R&D.


Navigating the R&D Support System

Navigating the Research and Development (R&D) support system in Finland requires understanding the available incentives and how to effectively access them. The Finnish government and various agencies offer a structured pathway for businesses to engage in innovative projects and benefit from the support system designed to foster technological advancement.

Steps for Businesses to Access R&D Incentives and Support

  • Identify Relevant Programs: Start by identifying R&D programs and incentives that align with your project’s goals, whether offered by Business Finland, EU funding mechanisms, or sector-specific initiatives.


  • Eligibility Check: Ensure your business and project meet the eligibility criteria for the identified programs. Criteria may include company size, sector, and the nature of the R&D activity.

  • Application Preparation: Prepare a comprehensive application detailing your R&D project, its innovation potential, and expected outcomes. Expert advice from consultants can be invaluable in this stage.

  • Submission and Follow-up: Submit your application within the stipulated deadlines and be proactive in following up. Be prepared for additional queries from the funding agency.

Challenges in Obtaining Support and How to Overcome Them

Businesses often face challenges such as navigating complex application processes, meeting stringent eligibility criteria, and competing for limited funds. To overcome these challenges, it’s crucial to:

  • Start planning early, allowing ample time for application preparation and submission.
  • Seek guidance from agencies like Business Finland, which offers workshops and consulting services for potential applicants.
  • Collaborate with partners, including research institutions and other companies, to strengthen your application.


Resources and Consulting Services Available to Assist with Applications and Project Planning

Various resources and consulting services are available to assist businesses in accessing R&D support:

  • Business Finland provides advisory services, tools, and templates for applicants.
  • Specialized consulting firms offer expertise in drafting applications, project management, and compliance with funding requirements.
  • Networking events and seminars provide platforms for sharing experiences and advice on navigating the R&D support system.


The significance of R&D incentives in fostering innovation within Finland cannot be understated. These incentives not only underscore the Finnish government’s commitment to technological advancement but also provide a vital lifeline for businesses striving to push the boundaries of innovation. By engaging in R&D activities and leveraging available incentives, businesses can contribute to Finland’s status as a global leader in technology and innovation.

Businesses are encouraged to explore and utilize the R&D support available, recognizing that these efforts are not just investments in their future but also contributions to Finland’s economic vitality and global technological leadership. The process may be complex, but the potential rewards—both financial and intellectual—are substantial.

Looking ahead, the future of R&D support and innovation growth in Finland appears bright. With continued governmental backing, a strong culture of collaboration between academia and industry, and a robust support system for R&D, Finland is well-positioned to remain at the forefront of global innovation trends. As new technologies emerge and the global landscape evolves, Finland’s commitment to R&D is expected to drive further growth, creating opportunities for businesses and strengthening the nation’s economy.