Hi, I think not wanting to grow is not an issue of modesty but an issue of business and instutional cultures and attitude towards entrepreneurship. We have an old saying that tells it all "I possess the narrow but long bread working in a institution". This is what people want - security instead risktaking and we are taught to focus that way. I could say it is already in our genes

Unfortunately institutions and corporations are not going to be the nr 1 employers anymore in the near future. We need to create a new business climate, we need to rethink innovation (BTW Schumpeter died 70 years ago!), Innovation as it is now is nothing more than a relic from the production era! We need co-creation and ubi-effects. The change is happening while we Finns desperately hold on to our rotten moorings without seeing that in the other end there is no ship.

Aiming (not) for growth is a cultural trait; it's pure Finnish modesty. I think it's got the good and bad side. Basically the modesty appeals to many of us, and some other cultures as well. Then again, too much modesty makes a project look uninteresting and the people unenthusiastic. I believe in visionary leaders who can energize other people. Virgin's Branson and many others show the way by sizzling behaviour, and vigour, and belief in what they're building, even in their weakest moments. Kind of whacko attitude but with solid business sense in the background.

One note on international fundraising. Its great when it works, but as far as I know there are 7 Finnish firms who have gotten funded by international investors in 2009 so far (out of about 50 or so growth VC investments total) - Heptagon, Imbera, EvoStem, Nexstim, Eniram, Silecs, and My Sites - happy if anyone can correct me by the way) - as far as I know only 2 had no Finnish investors already.

I will fully agree that there are very significant missed opportunities in general on the internet and social media side in Finland. There is no private VC culture at all in these fields, only a few angels kicking around, plus VeraVentures which is doing an admiral job holding up the market in that space... Would warrant some more investors IMHO.

At the time Nokia accounted for something in the region of 25% of Finnish exports so perhaps their interpretation of Nokia as an international customer might have been understandable. However it seemed to have the effect of reducing the need to export directly. For these companies, having a giant in their midst created a dependency on Nokia leading to complacency and a distortion in exports. Perhaps a legacy of that situations still exists today.

In Ireland, we have similar concerns. The location here of giants like Google, Ebay and Facebook was initially welcomed but is now seen in some quarters as a drain on young digital media talent which may restrict the growth of the indigenous sector here. Finland is seen here as a role model for innovation, whereas we are seen as great at exporting ourselves if not our innovations. I still have a great affection for Finland (hello to any of my friends there who read this) and I still believe there could be a valuable exchange of experience in this area between Ireland and Finland, possibly even leading to some productive partnerships.

My conclusion is that A) Finnish companies are more focusing on securing funding than the actual strategy of internationalization B) Finnish companies have absurdly outsourced their internationalization decision to public funding authorities ie. if Tekes or TE-Keskus will turn down application, then companies usually abandon internationalization.

What worries me most is that this is rule rather than exception. Only very few companies make a strategic decision to expand, apply for funding and even if it is not approved they will still carry out the expansion strategy. The rest are just testing if they got luckly in the funding lottery. Sad but so true.

Timo

Finnish innovation system needs, in my opinion and experience, a massive reshake and reorganisation. My motto: "You cannot learn how to play Championships League matches, by just watching the games and visiting the stadions. Learn to play and then play!" I wish our support system would encourage our companies to get themselves better involved in "playing the league", not only to play at best "arranged friendly-matches"...

We do not need to improve the current system, we need a totally new system. Also the biggest problem is not that the companies do not want to grow - the most serious problem is that many of them don't want to be entrepreneurs at all and they think about how to end the company.

One problem is that we measure effectivity by input/output (money) only even though there are many other points of efficiency that are needed in order to get innovation to the market, such as production, innovation, access and resource effieciences (dÁveni).

Also the understanding of the use and social benefits of technology is bad, very bad. Finland has lost 10 years in that competitive advantage, falsely believing being nr. 1. The innovation systems are to blame about this misery,

I truly hope that people like you keep on writing about this. Sooner or later the change must come!

So, I found TEKES money to be totally different thing than private investor money. Comparing these is difficult. TEKES does not push companies to do great business. That is just not the way how public money works. They make sure that company follows the rules they give with the money, that is what they can do.

I found this issue quite annoying: in order to lower your taxation you have to get government funding to every bigger project you do. So, first you do business, then pay taxes, then go to TEKES and ask for some of your money back. Order of these steps might vary. Bigger companies hire people to do that, small time players do by themselves. For us all it is overhead.

I know there are great people working at TEKES and I'm in great debt for your efforts, thank you! I'm not saying that people there are not capable of doing good judgement. In their position I would do the same thing, follow the rules. However, I would never invest my own money to capitalize companies to get consultants (usually without any glue in that specific business) to figure out what might be the right market or so on. How many of TEKES employees would invest their own money to those companies/activities? Would you give someone without a working product €100K for networking, BizDev or market research? I know I wouldn't;)

It is also a bad sign that nowadays there are organizations only to coordinate TEKES projects, some formed as privately held corporations(what? entrepreneurship?). Why do we have so many people coordinating Finnish HighTech startups in their journey to the global market and so few people running those companies?

Staying in the Valley currently, I must agree with you, Finland is not good for testing a product for global market. User base is too small. You get the wrong idea about the market. Our best selling product has less than 1% of its market in Finland and yes we have done marketing in Finland. Starting in Finland, then expanding to global is the most expensive way to do it.

That all being said from my perspective as an entrepreneur, I still found TEKES to be good (maybe not optimal) for Finnish economy and this is why:
Ok, lets face it, they fund projects that no private investor would ever fund. Projects with no business capabilities at all. But every time they fund something it goes >1 times to GDP of Finland. Just the way going to Iraq boosted to US economy. If you would load the same money to airplane and drop it to Helsinki it would have less positive effect to the GDP.

Obviously that is not a ultimate good thing for the economy in the long term, but it offers great possibilities to adjust economy in shot term and therefore adds stability to it. So one thing TEKES has to be capable of, is to be capable to use lot of money. If you have to spend €560M, you will run out of great startups (guess less than 500 in Finland). Therefore you need rules that make it possible to fund something else. E.g. http://www.supermatrix.fi. But would you invest your own money to Supermatrix Do you really think we will all start to use thin clients and Finnet will drive Google and Apple out of business in Finland? I know, that was provocative, the good thing is that they are building faster networks...

Generally it has never been a great idea to put politicians to tell which industry will make the new Nokia. They don't know, we don't know, but the market will tell us eventually. Why is it always so in Finland, that we end up having something like Sitra to put our taxpayers money to something, a new bio-tech-Nokia perhaps? Are our politicians so much smarter than their colleagues in other countries;) What I would like to see in the near future would be that TEKES would have smaller and less specific projects. To just fund everything with the least overhead possible for the both parties. Currently TEKES uses about €0.7M in operational costs for every €10M they fund. Please correct me if I'm reading it wrong.