This week I returned to Finland and the city of Turku where I am a visiting professor at the university.
The occasion is the 35th European Entrepreneurship Research Conference which, as I was at the fourth event in Durham in 1990, makes me feel extremely old.
Of course, having had to avoid such gatherings for so long, it has been wonderful to finally be able to reunite with colleagues and friends to discuss, face to face, some of the latest studies in my chosen field.
It is also an opportunity for me to discover what happened to the Finnish economy – one of the most competitive in the world – after the Covid-19 pandemic and especially the future prospects of entrepreneurship. in this fantastic country.
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The good news for Finland is that, according to its latest SME Barometer (which provides a full picture of Finnish small and medium-sized businesses’ perceptions of the economy – forecasts are optimistic after last year’s slowdown. is not surprising given that Finland’s overall economic decline was only half that of the rest of the European Union in 2020.
As a result, expectations of SMEs have risen sharply and there are strong indications that the economy will experience substantial growth over the next two years, with companies predicting profitability to return to pre-pandemic levels.
More importantly, many companies believe they can continue to adapt to changes in the business environment as the economy reopens, albeit in a different way than it was before March. 2020 as they seek to rebuild better.
As with small businesses here in the UK, concerns remain about staff retention and rapidly rising costs, especially with the rise in the price of raw materials, which could lead to higher prices for commodities. products and services.
And although the pandemic has not dampened the enthusiasm of entrepreneurs to expand their businesses, there may be fewer high-growth companies that thrive in the long term, although Finnish companies continue to grow. adopt new technologies, invest in training their staff and look to international trade to expand their operations.
Despite the desire for growth, it should be noted that less than half of Finnish SMEs have a loan from a bank or other financial institution, with the use of external financing dropping considerably in 2020, with one in ten companies having decided not to apply for funding despite having urgent financial needs.
Another positive indicator for the future of the Finnish economy is the growth in the number of new businesses over the past year. The latest data from Statistics Finland showed that more than 10,000 businesses were opened between April and June 2021, an increase of 23% compared to the corresponding period in 2020.
What is interesting is that the industry with the highest number of new companies was the sector of high-value professional, scientific and technical activities, demonstrating, once again, the innovation potential of the economy. Finnish.
Indeed, Finland’s reputation as a global hotspot for high growth companies is also reflected in the record amount of venture capital investments generated in the first half of 2021.
According to the latest data, while venture capital firms have invested £ 424million in the full year of 2020, more than £ 470million of investments have been made in Finnish firms over the course of the year. first half of this year, three quarters of which came from foreign investors.
This means that Finnish start-ups have received the most venture capital funding in Europe when the amount invested is looked at against economic performance, this figure being even higher than the UK where London is now considered global venture capital.
This ranking was largely motivated by subsequent major rounds of investment in successful businesses such as Wolt, a food delivery company that operates in more than 120 cities across 23 countries and has raised £ 370million this year. year.
However, there has also been a massive increase in support for new high-potential companies with 16 new venture capital funds created over the past five years, many of them focusing on start-ups.
This is not surprising considering that at the beginning of December, the biggest start-up event in the world will take place not in Silicon Valley but in Helsinki. Slush – which was originally created as a student-led nonprofit movement to change attitudes towards entrepreneurship – will bring together 1,500 investors with some of the world’s most exciting new companies and confirm the place of the Finland as a place where innovation and business thrive.
As the old Finnish saying goes, “he who is afraid will not play” although it seems clear to me that there are more and more entrepreneurs in this small country who play and are not afraid to take risks in starting a new business.
And when I return next summer to attend my doctoral thesis defense, I can’t wait to see how this entrepreneurial trend continued in 2022.