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Published: 23 April 2020

Innovation expenditure grew in 2018 from two years ago

Over 60 per cent of enterprises employing at least 10 persons were involved in innovation activity in 2016 to 2018. Good one-third of enterprises introduced new or improved products to the market and nearly one half renewed their business processes. Compared with the previous survey of two years ago, EUR 760 million more innovation expenditure was now reported. The data appear from the statistics on enterprises’ innovation published by Statistics Finland.

Enterprises’ innovation activity is still, particularly as concerns product development, more common in manufacturing enterprises than in service industries. Forty per cent of manufacturing enterprises made product innovations in 2016 to 2018 and 34 per cent of enterprises in service industries introduced new or improved products to the market.

Processes related to business activities were renewed by nearly an equal share of manufacturing and service enterprises. Renewal of production processes is more common in manufacturing than in service industries. For other business functions, activity was renewed almost as generally – with regard to information technology and administration systems and business practices and external relations slightly more often in service industries than in manufacturing.

Prevalence of innovation activity in manufacturing (B-C-D-E) and services (G46-H-J-K-M71-M72-M73) in 2016 to 2018, share of enterprises

Prevalence of innovation activity in manufacturing (B-C-D-E) and services (G46-H-J-K-M71-M72-M73) in 2016 to 2018, share of enterprises

Around two-thirds of the combined turnover of the surveyed enterprises were generated in 2018 in enterprises that had had product innovations in 2016 to 2018. In 2018, the turnover derived from product innovations represented altogether 22 per cent of the turnover of those having reported product innovations. This is 14 per cent of the combined turnover of all enterprises in the survey.

A total of EUR 760 million more innovation expenditure was recorded in 2018 than in the previous survey in 2016. Expenditure amounted to nearly EUR 6.8 billion. Growth was mostly recorded in enterprises located in service industries. The majority, 66 per cent, of innovation expenditure reported in Finland was generated from research and development. In Finland enterprises reported fairly little expenditure on other innovation activity. Although innovation expenditure grew mainly in service industries, over one-half, 58 per cent of expenditure in 2018 was generated in manufacturing, where innovation expenditure totalled EUR 3.9 billion. Thus, the share of service industries was 42 per cent and EUR 2.9 billion.

Twenty-nine per cent of those with innovation activity used public financial support for financing innovation activity. The most common form of support was government financial support. Financing obtained through equity finance was used for research and development or other innovation activity by one-tenth of those with innovation activity and debt finance was also directed to innovation activity by around 10 per cent of those with innovation activity.

Data protection legislation is challenging from the viewpoint of innovation activity. Of the sub-areas of legislation presented in the inquiry it was assessed clearly most often as having an effect on innovation activity, above all as a factor hampering innovation activity.

Lack of skilled employees in the enterprise and different priorities within the enterprise as well as too high costs were found to be the most essential of the factors hampering actual innovation activity. Over 40 per cent of those with innovation activity assessed lack of skilled employees at least a medium high factor hampering innovation activity.

The inquiry examining innovation activity inquired about enterprises’ development potentials more widely from enterprises that did not have innovation activity in the reference period of the survey. There were features promoting renewal in enterprises even if the activity was not realised in the reference period into work aiming at innovations. For example, nearly 30 per cent of enterprises that did not report innovation activity in 2016 to 2018 acquired technical services and over one third renewed their stock of machinery, equipment and software.

Source: Innovation 2018, Statistics Finland

Inquiries: Mervi Niemi 029 551 3263, Heidi Pirkola 029 551 3246,

Director in charge: Mari Ylä-Jarkko

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Updated 23.4.2020

Referencing instructions:

Official Statistics of Finland (OSF): Innovation [e-publication].
ISSN=1797-4399. 2018. Helsinki: Statistics Finland [referred: 22.9.2023].
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