In 2022, the political commitment to higher level of R&D spending was sealed by legislation.
Finland aims to increase its research and development expenditure to four per cent of GDP by 2030. This will require increasing the public research and development expenditure to 1.33 per cent of GDP, assuming the public sector accounts for one third of R&D investments and the private sector for two thirds.
For context, in 2021 the overall GDP share of R&D expenditure in Finland was 3.0 per cent (7.5 billion euros). Out of this, the share of the public R&D expenditure (Government and Higher Education sectors) was roughly a third (31%) at 0.9 per cent of GDP / 2,338 billion euros. Total R&D expenditure increased by 8.1% from the previous year. The increase was based on enterprises, whose R&D expenditure went up by 11 per cent.
Finland’s R&D expenditure by sector and share of GDP 2021. Source: Statistics Finland
4% of GDP target enshrined in law
A new R&D funding law sets the annual level of central government R&D expenditure in a way that raises public sector R&D expenditure to 1.33 per cent of the GDP by 2030 under the projected economic development. The legislation came into into force in 2023.
The law includes an obligation for a statutory plan for research and development funding that extends beyond the spending limits period. The plan would specify the policy guidelines for and content of long-term research and development activities and establish basic principles for the allocation of R&D funding. The plan will be prepared in a parliamentary process, further strengthening the commitment to long-term research and development funding and policy.
Alongside R&D funding law, a law for a more extensive and permanent tax incentive for R&D activities was approved in 2022.
Further reading:
Parliamentary Working Group on Research, Development, and Innovation (Prime Minister’s Office)
Statistics: Research and Development (Statistics Finland)
Finland’s National Roadmap RDI (Ministry for Education and Culture)