Writing this directly from back seats of the Kasvufoorumi event organised by the Finnish Software Entrepreneurs Association while it’s still going. While there are a lot of traditional presentations from companies and organisations involved in this ecosystem, there was also a presentation by Pasi Sorvisto, Juha Ruohonen and Pekka Roine that really caught my eye.
The study titled The Value Creation For The Research-Based Ideas revealed very interesting numbers and the honest true state of the Finnish so called “innovation system”. Based on the executive summary of the presentation it has managed to coin the state of our innovation ecosystem the best I’ve seen so far.
The study was ordered by Aalto University to analyse and learn the real status of different instruments and their effects. Mind you, the study has not been released yet, so I cannot double check the facts and statements I will make here. But I count on my ability to write down what I hear.
The key takeaway for me was that there is an enormous amount of waste being created in terms of the financing the ecosystem receives from the government. The Finnish government issues about 2 000M euros of financing annually for different R&D projects. This investment creates less than 3M euros in licensing fees.
Another point to make is that while 2 billion euros is investment into the sytem, there are other sources of income naturally. The 2 billion includes about 600 million that goes to Tekes. These naturally create other sources of income.
Another figure that puts into perspective how much money is just put into the system in the form of R&D tax payer money is that about 83M euros of of venture capital money is annually put into early stage seed investments. You don’t need a doctorate degree to understand that there is a lot of waste here.
The three gents behind this research also travelled to other parts of the world to analyse how the situation is globally. Luckily, licensing was a minimal source of revenue in other parts of the world as well. Most (over 80%) of the global universities’ value creation to the startup ecosystem is through the transition of these people to work in startups and not in licensing the innovation.
Pasi Sorvisto stated that we need to keep innovating, but realise the fact that we do not possess all of the knowledge in the country. To make use of the innovation, we need to acquire talent from overseas to commercialise them.
Editorial note: These facts are based on my personal notes from the event. The research will be available at a later date and we might look into it to see if we need to clarify any of the above statements.