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International spearhead research commercialised in Finland through local effort

Research-based companies are established in numbers but success stories have still to emerge.

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Research-based companies are established in numbers but success stories have still to emerge

Universities carry a great deal of responsibility for developing Finland’s knowledge-based economy. They have succeeded in this task remarkably well, but the expectations for commercialising the research results remain unfulfilled in terms of quantitative results. The rate of setting up new research-based companies is approximately the same in Finland as elsewhere in the world, but their financial successes have remained modest and are lagging behind those of others.

These findings have been revealed in the recently published Sitra Report Tutkimustulosten kaupallinen hyödyntäminen (The commercial exploitation of research results). For the first time in Finland the report compiles university-specific commercialisation figures and compares them with corresponding data from the US and the UK.

“Looking at the figures, the consulting activities related to the commercialisation of research results in Finnish universities are of good international standard. It does not mean, however, that we should settle for what we now have, particularly as the financial figures – licensing income, net sales of established companies and the development of results – are modest,” says Kari Kankaala, one of the authors of the report.

On average, the Finnish universities included in the report produced 40 invention disclosures per €100 million spent on research, whereas the corresponding figures in the UK and the US are 28 and 87, respectively. Accordingly, the Finnish universities were awarded seven patents per €100 million spent on research, whereas the corresponding figures in the UK and the US are 15 and 11, respectively.

The licensing income of universities per € 100 million spent on research was approximately €250,000 in Finland in 2005, the corresponding figures being € 1.6 million (2004) in the UK and € 7 million in the US (2004). Finnish universities produced five spin-out companies per €100 million spent on research, when the corresponding figures in the UK and the US are six and one, respectively.

The most notable observation was that of all the Finnish research-based companies included in the report established in 2000–2005 (171 in total), only one has exceeded net sales of € 2 million in 2005, and only 15 companies have exceeded €400,000. Seven of these technology companies are based in the city of Tampere, two in Oulu, two in Espoo, two in Helsinki, one in Kuopio and one in Jyväskylä.

Goals and strategies lacking

Finland still lacks a clear policy on the role of universities in the commercialisation of research results. The resources and know-how in research service units have improved, but the challenges of further clarifying their role in the commercialisation process and the development of their leadership practices remain.

“More explicit policies are needed, because it is difficult to run activities that have no explicitly formulated goals. Furthermore, evaluating such activities is equally difficult. Is a €300,000 research contract more desirable than a licensing agreement worth the same amount?” says Kankaala.

Monitoring the utilisation of research input is currently relatively poor and inconsistent, particularly with regard to the substantial research and development investments made in Finland. This situations could, however, be remedied fairly easily.

“Closer integration of research result commercialisation into university administration and their everyday activities would decrease the additional workload and give added impetus to the efforts. The Ministry of Education should also provide guidelines as to what it sees as being the purpose of the commercialisation of research results and what the aims of such activities are,” says Kankaala.

Internationalisation and commercialisation as challenges

According to the report, technology incubators supporting research-based enterprises have generally succeeded well in creating new competence-based enterprises in their region. Identifying growth-seeking companies, their evaluation and development through the pre-incubator services and coaching provided by technology incubators has proved a functioning concept. The share of new growth companies prepared to enter international markets has increased from 13 to 25 per cent in the period 2005–2006. The increase in the number of incubator companies is also expected to continue, provided the funding of incubators is also secured after the current year. In 2003, the number of incubator businesses was 98, while in 2006 it was 161 and the target for 2007 is 200.

“In order for us to rapidly provide the necessary assistance for growth companies aiming at international markets, we will, however, need more Finnish and international consultants and mentors who know international markets and have a solid background in funding and business. Universities and technology incubators should look for strategic partners among such experts,” says Kankaala.

According to Kankaala, Kutinlahti and Törmälä, choosing the correct route for commercialisation is one of the biggest challenges. Currently, the decision on which route to choose for the commercialisation of an idea rests mainly with the researcher.

“The key driver of the Finnish economy is its strong competence base. It would thus make sense to invest as much into the commercial utilisation of this competence as was spent on building it in the first place. There is the risk that we will truly start lagging behind other countries unless the public sector for its part is able to promote, through its own actions, the creation of effective, inspiring, goal-oriented and productive operative models for the exploitation of R&D investments,” Kankaala concludes.

Further information

Kari Kankaala, tel. 050 351 3020
Anu Nokso-Koivisto, tel. 050 563 6997, anu.nokso-koivisto@sitra.fi

The University of Helsinki, the University of Jyväskylä, the University of Kuopio, the University of Oulu, the Tampere University of Technology, the University of Tampere, Helsinki University of Technology, VTT Technical Research Centre of Finland and the National Public Health Institute all participated in the research published by Kari Kankaala, Pirjo Kuntinlahti and Timo Törmälä, Tutkimustulosten kaupallinen hyödyntäminen (The commercial exploitation of research results).

Publication details

Tutkimustulosten kaupallinen hyödyntäminen – Kvantitatiivisia tuloksia (The commercial exploitation of research results – a quantitative overview)
Kari Kankaala, Pirjo Kutinlahti and Timo Törmälä.
Sitra Reports 72, ISBN 978-951-563-590-7 (paperback), ISSN 1457-571X (paperback), ISBN 978-951-563-591-4 (URL:http://www.sitra.fi), ISSN 1457-5728 (URL:http://www.sitra.fi).

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You can also order the report from Sitra, phone + 358 9 618 991, e-mail publications@sitra.fi

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