The Structure and Renewal of Corporate R&D Activities: Signs of Rising Productivity?

Analysis 2 Paolo Fornaro, Mika Maliranta


Statistics on Finnish companies’ investments in research and development (R&D) mask significant structural changes in this millennium. The R&D investments of large and old companies began to decline sharply at the beginning of the 2010s. Just before this, the R&D investments of small and new companies started to grow. During the 2010s, the R&D investments of medium-sized and slightly older companies began to increase. At the turn of the 2020s, there are finally signs of growth in the R&D investments of large companies as well. Currently, the largest companies, employing at least 500 people, are the only business size group in which Finland is behind Sweden and Denmark in real R&D investments. In 2021, nearly half of the R&D personnel worked in companies that did not exist before 2007. In the structural transformation of corporate R&D activities, there has been growth in the amount of R&D investments in the private services sectors and among R&D staff with doctoral degrees. In private services, investment has grown especially in applied research and basic research. On the other hand, the growth in development work has been relatively modest. Taking into account the delays in the effects of R&D investments, recent developments promise a strengthening of productivity growth in Finland’s business sector in the coming years.