Finland has a history of getting behind megatrends before they become mega. Finnish companies have been drivers behind everything from urbanisation to mobile communications. Now Finland is getting in front of the next great megatrend: the circular economy.
The old model of economic growth based on the overconsumption of natural resources is coming to an end. The new circular economy is founded on services: sharing, renting and recycling. Those companies who can keep resources in circulation will be those who profit in the future. Finland has such companies in abundance, and many are looking for international partners and capital to accelerate their success.
Strong government support
These companies already have domestic support from the Finnish government and public organisations. At Sitra we have created the World Circular Economy Forum 2017, the first of its kind.
Regulations have also been changed to encourage innovation. Finland has a great pool of talent and consistently ranks near the top in global education rankings. Finland’s R&D investments as a percentage of GDP are the highest in Europe and fourth highest in the world.
Tekes, the Finnish Funding Agency for Innovation has developed programmes aimed at encouraging companies to innovate in the circular economy, especially in the fields of cleantech and bioeconomy. Tekes also helps to provide funding and are eager to invest in promising companies with private investors.
Rethinking products and business models
A number of Finnish companies are reinventing how we think of consumption. 3 Step IT manages the entire lifecycle of IT equipment for their customers. Instead of scrapping or recycling old computers, they refurbish the equipment and sell it to new owners. Within five years sales have jumped 46 per cent to €465 million while profit has doubled to €19.5 million.
A ubiquitous part of shopping is the packaging. RePack has created reusable packaging for web stores which has won international design prizes and caught the attention of media throughout Europe. RePack’s innovative solution enables reverse logistics and better customer relationships. Major brands have signed up and 79 per cent of customers would recommend it to others.
Valtavalo is even rethinking the idea of lights. Valtavalo has developed LED tubes to replace fluorescent lighting tubes in commercial and industrial settings, and customers can buy lighting as a service. Sales are growing at almost 30 per cent annually and the young company has already had a string of profitable years.
The overuse and misuse of fossil fuels has long been recognised as a problem of the linear economy. Electric cars can be part of the solution but they have to be charged somehow. Virta has developed an electric vehicle charging platform which connects all key players across the ecosystem. They cater to individual owners, professional charging networks and organisations with fleets of electric vehicles.
Electric vehicles for consumers are popular, but there are major profits to be made in industrial applications. Visedo creates electric and hybrid engines for heavy machinery like ships and construction machinery. There is huge demand for such solutions and sales are approximately doubling each year.
Norsepower uses an ancient power source in the maritime industry: the wind. Their novel solution is a spinning cylinder which harnesses wind power as an auxiliary power source for ships. Independent tests show their solution has the potential for up to 20 per cent fuel saving.
This is just a hint of the innovative Finnish companies in the circular economy sector. If you want to learn more about investing in Finnish firms, see business opportunities from Invest in Finland, Tekes’ Smart & Green programme or our list of interesting companies.