Nokia is Finland's biggest success story

A new study says Switzerland should offer young companies far more financial support if it wants to boost economic growth. The report by the Swiss Academy of Engineering Sciences examined Finland’s success in promoting innovation and asked what Switzerland could learn from the experience. “Finland has developed a high dynamic in innovation activities,” Beat Hotz-Hart, co-author of the study, told swissinfo. “Switzerland has an interest to understand how this dynamic is produced and what can be done through economic policy and innovation policy to accelerate innovation activities,” said Hotz-Hart, who is also deputy director of the federal office for professional education and technology. After a recession at the beginning of the 1990s, the Finnish economy grew by 4.3 per cent a year between 1995 and 2001. In the same period, Switzerland’s gross domestic product increased by only 1.7 per cent a year. According to the experts, European Union entry boosted Finland’s economy by 0.8 per cent. But a far more important factor is its strong political commitment to innovation. One of the study’s recommendations is to set up a new foundation to provide venture capital funding for start-up firms. Hotz-Hart said the foundation would need at least SFr300 million to be effective. He said that the equivalent Finnish fund had €650 million (SFr1 billion) at its disposal – money generated by the privatisation of the national electricity companies. Profits from investing the capital are used to promote start-ups. For new companies trying to turn a science project into a business, the research and development phase is a tricky time with private venture capitalists often reluctant to get involved.