A keynote speech at the award ceremony of the annual Icelandic Innovation Award, 10 April 2014, Grand Hotel Reykjavik

1. Growth-seeking entrepreneurship:
The role of the support system
Petri Rouvinen
ETLA, The Research Institute of
the Finnish Economy
Nýsköpunarverðlaun Íslands
Grand hótel Reykjavík
April 10th, 2014

2. What I mean by…

3. Invention Innovation≠
$+

4. Innovation ≈ Seeking opportunities
1% spark – 99% sweat
Needs (some) money
Mostly not technical
Mostly incremental
Increasingly digital

5. Innovation Entrepreneurship≈
$+
$+ +

6. Entrepreneurship Self-employment
Perceives economic
opportunities and
introduces them
in the market
Works but is not
employed by others;
may employ others
but typically not
Overlap under 10%

8. EU Innovation Scoreboard:
Finland among leaders &
Iceland among followers
(above the EU average)
Source: European Union, Innovation Union Scoreboard, 2014
0.684
0.593
Finland Iceland

9. 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
Economic effects
Innovators
Intellectual assets
Links, entrepren.
Firm investments
Finance, support
Research systems
Human resources
Economic effects: Finland
Innovators: Iceland
Intellectual assets: Finland
Links, entrepreneurs: Iceland
Firm investments: Finland
Finance, support: Iceland
Research systems: Iceland
Human resources: Finland
New PhDs,
upper sec. ed.
Int. co-publicat.,
non-EU grad stu.
Pub-priv
co-publ.
Patents, trademarks
protected designs
Share of
Innovative sales
Dimensions of Innovation Union Scoreboard
Source: European Union, Innovation Union Scoreboard, 2014
VC
n/a

10. “Iceland is the only country
for which innovation has
not improved over the
2006–2013 period.”
Innovation Union Scoreboard 2014, p. 71

11. Early-Stage Entrepreneurs:
Iceland leads
the advanced countries
Source: Global Entrepreneurship Monitor, 2010 Global Report.
Measure: Early-Stage Entrepreneurial Activity / Adult pop.
5.7
10.6
Finland Iceland

12. • History: Attitudes & culture hostile to growth companies
… but since the crisis Finland to a global startup hotbed!
• Why?
– Aalto university
– Encouraging examples
– Challenges of incumbents
– Digitalization & globalization
– Several good policy measures
Startup in Finland!?

13. A new Act in 2009 “privatized” universities
and reformed management & decision-making
3 former university merged to form Aalto Univ. in 2010
Aalto’s faculty & students became cheerleaders for startups:
Aalto Entrepreneurial Society, Aalto Centre for Entrepreneurship…

14. A brochure of Tekes and NeoGames by the same name.
After 50 failures, Rovio
hits the jackpot with
Angry Birds
Over 800 employees
After just three years of
operation, Supercell
sold a 51% stake
for €1.5bn
150 employees
250
900
2012 2013
Turnover
Million €
1,800 pers. 2,200 pers.

15. 0.5 0.3 0.5 0.7 0.8 1.1 1.2 1.8 2.5 3.1 4.0 3.3 3.6 3.8 3.0 2.9 3.1 3.2 2.6 1.2 1.2 0.5
-0.1
0.5
1990 1994 1998 2002 2006 2010
Nokia’s Share of Finnish GDP, %
Source: Ali-Yrkkö, ETLA
est.
Beyond corporate & public employment…

16. 1011
0101
1100
0010
3D
IoT
Cost of entry ↓ Market reach ↑

17. With outsourcing &offshoring: size & location matters less
Ability to position oneself in global value chains

18. Vigo Accelerators Tekes: Shift in Emphasis
10 Vigos, public–private Tekes startup funding, m€
partnership business
accelerators: €220mn
private & €70mn public
investment to 90 target
firms in 2009–2013.
Some public measures
45
40 42
61 58
74
88
102
127
134
2003 2006 2009 2012

19. Conclusions

20. Some observations regarding Finland
• Seeking a list of (broad) growth industries
inconsistent with global realities (cf. megatrends)
– Businesses do grow, but across a range of
industries & often in small increments
• Too focused on “big hits” & the VC market?
– A number of “nice growth” companies
may jointly matter more for society

21. Humble questions regarding Iceland
• Good scientific base... Applications???
• Icelanders with sufficient tools for thought?
• Banks & family/friends finance 90% of new firms
– But does not fulfill needs of growth-seeking startups
– 5–10 rounds of startup finance before maturity: path?
• Manifold innovation support in Finland...
Iceland at its optimal level of public support?

22. Growth-seeking entrepreneurs
(and similarly-minded corporate intrapreneurs)
are a necessary link between
ideas & their societal impacts…
Is this link sufficient in Iceland?

23. For Iceland to do?
• Lessons from Finland?
– Vigo Accelerators?
• A Norwegian-style tax incentive (≈Tekes)?
• But: No silver bullets – this domain is systemic
– A broad set of framework conditions needed
for innovation & entrepreneurship
(cf. Nordic Innovation: 20 categories)

24. Try a lot,
fail fast and often,
scale up or try again.

25. Thank
You!
fi.linkedin.com/in/petrirouvinen/
Petri.Rouvinen@ETLA.fi
 +358–50–3673474