Physical AI opens new opportunities for Finnish industries – national partners join forces

Physical AI has the potential to become one of Finland’s next growth sectors. Sitra, the cities of Espoo, Oulu, Tampere and Turku, together with a range of key national organisations, are launching a joint initiative to identify Finland’s strongest competitive advantages, attract investment and accelerate the creation of new business opportunities.

Physical AI refers to the use of artificial intelligence in robots, machines and other physical systems. It is expected to transform industries, for instance manufacturing, logistics and production as much as software-based AI has already transformed knowledge work.

In many areas of physical AI, markets and value chains are still taking shape, meaning competitive positions have yet to be firmly established. According to experts, Finland has a strong starting position, but that alone will not be enough.

“Finland’s strength lies not in any single technology, but in our ability to combine industrial expertise, software and artificial intelligence. We are now identifying the areas where this combination can generate new business opportunities and sustainable growth”, says Laura Halenius, senior lead at Sitra.

Participants in the Physical AI Growth Accelerator include the regional business development organisations of Espoo, Oulu, Tampere and Turku, as well as leading national organisations in the field; University of Oulu, VTT Technical Research Centre of Finland and AI Finland to mention a few. Through its funding, Sitra supports joint efforts by the cities to strengthen Finland’s physical AI ecosystem and create the right conditions for future growth.

Focusing on areas where Finland can succeed

Finland’s expertise in industry, automation and technology provides a strong foundation for developing and commercialising new solutions.

The initiative will create a shared understanding of Finland’s opportunities in physical AI, identify the most promising application areas and prepare joint actions involving businesses, research organisations, investors and public-sector actors.

The project brings together centres of expertise from across Finland, each with their strengths in key technologies and application domains.

“In the next phase of growth in physical AI, artificial intelligence, wireless connectivity and edge computing will be integrated with physical devices and autonomous systems. The Oulu region has strong expertise in these areas and excellent potential to turn that expertise into new international business”, says Jussi Leponiemi, key account director in defence and ICT at BusinessOulu.

In the Tampere region, physical AI is closely linked to a strong tradition of engineering and manufacturing, spanning the entire value chain from chips and sensors to industrial machinery.

“As AI moves from computer screens into factories and worksites, it creates opportunities for significant productivity gains and export growth”, says Pertti Aimonen, chief operating officer at Business Tampere.

Turku contributes its maritime expertise together with a robust industrial and technology ecosystem, providing a platform for developing both new solutions and new growth opportunities.

“The Archipelago Sea offers an internationally unique environment for testing and developing physical AI technologies in demanding northern conditions”, says Reetta Vuorinen, senior specialist in frontier technologies and HRD at Business Turku.

The Espoo region, home to more than 1,500 high-tech companies, provides excellent conditions for accelerating the adoption of physical AI across industrial value chains.

“The Otaniemi innovation hub hosts world-class expertise in quantum technologies, semiconductors and microelectronics. By combining this expertise with strong development and deployment environments in defence and dual-use technologies; smart city solutions and health technologies, as well as expertise emerging across Finland, we can create significant new growth stories”, says Teemu Haapalehto, acting director of economic development at the City of Espoo.

The initiative is part of Sitra’s Growth from Critical Technologies project that aims to strengthen Finland’s foresight and innovation capabilities in technology and create the conditions for economic growth. Sitra’s role is to improve understanding of the drivers of growth and identify sustainable growth opportunities for Finland.