As our partnership with Nexit Ventures is coming to an end, so are the items we’ll be covering. In the second last item we’re covering – we’ll focus on the importance of startups in an ecosystem, such as Finland in this case with recently published data. The importance of growth companies to an ecosystem is mostly known by the entrepreneurs running these companies. They see the potential that so many others fail to see. The data in this post should strike as interesting to many, to say the least.
First of all, if we look at the growth company ecosystem in Finland – we can see that there are 6 attributes that define them best:
- Younger – over half of the companies are less than 10 years old and less than one tenth is over 25 years old.
- Smaller – close to 60% of growth companies are usually less than 20 employees strong.
- ICT intensive – the concentration of growth companies is the highest in the ICT sector.
- Knowledge intensive – employees usually are very highly educated educated.
- Targets of venture capital – growth companies have received venture capital financing more often than their colleagues.
On the downside, there are very few growth companies in Finland. Between 2006 and 2009 of all the companies, only 5% were growth companies. However, despite their few numbers – they are extremely important to an economy.
On average, each of the 691 growth companies in Finland grew by 74 people on average during the three years. Together, these 691 companies generated over 51 000 new jobs. This is almost half of the new jobs created in Finland during this time period.
Stop to think for a moment. A mere 691 companies, that aren’t really enjoying the spotlight of the national politics generated nearly half of the new jobs in the country.
In 2009 Finland’s “technology and innovation politics” division received some 643 million euros in financing from the government. In the same year 671 million euros was invested into other forms of “labour politics” by the government. I’d be almost certain that the 671 million euros were unable to create one fifth of the real, market oriented jobs, the 643 million euros was able to create through technology and innovation politics.
So how does Finland compare to other countries, for example Norway and Israel in terms of growth ambitions? There are double in Norway and triple in Israel, the amount of companies that intend to employ at least 20 people in 5 years time in comparison to Finland. Therefore, the level of ambition among companies is dramatically lower in Finland compared to Norway and Israel.
Statistics like these should cast the message we, the supporters of growth companies have been shouting for years – they’re an extremely important part of the economy and through that, the source of welfare in many ways.
Nexit Ventures is a mobile venture capital firm focused on wireless technologies and services. Leveraging its extensive network in the global mobile marketplace, Nexit invests primarily in Nordic and US-based earlystage companies with products and services for a global market. For Nordic mobile companies, Nexit provides a bridge to Silicon Valley markets and exit opportunities.