Destination Finland

On the basis of international comparisons completed in recent years, Finland has been consistently ranked as one of the best places to do business in the world. Here is a snapshot of the country, which is trying to attract Indian investment in the knowledge-driven sectors like pharmaceuticals and IT

Finland is ranked amongst the top ten countries worldwide for biomedical science and clinical medicine. Finland is also being spoken of as a global leader in the development of new niche applications based on biotech innovations, such as biomedicals, gene technology and molecular biology, human genetics, implants, biomaterials, drug discovery, diagnostics and drug delivery devices. Finland enjoys a long tradition of partnership between biomedical research and pharma industry, dating back to the early 1950s when Finnish biologists, biochemists and pharmacologists worked together to develop innovative methods for studying cellular communication. The industry-academia partnership has been nurtured through the years. This linkage between universities and research networks, national and private R&D funding organizations, and private companies, foreign and domestic, operating in the local market is one of the factors contributing to the leadership of the country in various segments within the lifesciences industry. Together they lay the foundation for building a profitable business or partnership in Northern Europe.

Robust bio-pharma industry

This R&D orientation has played a critical role in boosting the global competitiveness of the Finnish biotech sector. Today Finland's pharma market is worth EUR 1.6 billion and is closely integrated into the global industry through ownership arrangements. Around 164 Finnish bio-pharma companies got listed in November 2006. Most of these were small or medium-sized with a focus on healthcare applications. Today, Finnish biotech firms constitute almost 7 percent of all biotech companies in the EU, while Finland's total population is only 5 million (1.3 percent of the total EU population). Many Finnish bioproducts have been successful on the global marketplace. For instance, Precedex, a popluar pain-relieving tranquilliser used in intensive care, is an Orion Pharma product. Leiras (today owned by Schering) has also developed the polymer-based Delvivo drug delivery technology for the hormonal contraceptive Mirena. Simultaneously, new biopharma companies such as Biotie Therapies Corp, Hormos Medical Corp. and Juvantia Pharma Oy ltd are aiming to launch global products through partnerships with international pharma companies. Finnish companies and research networks are also actively engaged in bioinformatics especially the commercial development of biobanks for genetic analysis and disease identification and prevention.

Opportunities in the country

Today Finland is looking for an increased investment in its pharma and biotech sectors. The country has developed a slew of opportunities for Indian investors to consider. Some of them are as follows:

• Innovative start-ups with skilful, devoted employees and potential patents for further development.
• Established drug discovery companies and biotech companies interested in forming strategic partnerships to develop and launch new therapeutic methods and products
• M&A candidates specialized in relevant diagnostic/therapeutic field

Besides, foreign-owned companies in Finland are eligible for government incentives on an equal footing with Finnish-owned companies. Support is also given in the forms of cash grants, loans, tax benefits, equity participation, guarantees and employee training.

Also, in Finland, the government-administered aid to business is mainly aimed at improving the long term competitiveness of small and medium-sized enterprises (SMEs). Business aid to companies is coordinated by Employment and Economic Development Centres (T&E Centres), whose 15 regional offices provide consulting and training as well as financial aid. The centres are also a significant channel for EU finance. Public funding is allocated to projects expected to contribute considerably to project implementation, business success and employment. In cases where the investment costs of a project exceed EUR 1.7 million, the financing decision is made by the Ministry of Trade and Industry upon a proposal by the T&E Centre involved. Investment aid in different development areas expressed as maximum percentage of purchase costs. The minimum amount of non-public funding required is 25 percent of the total investment cost requires companies to present feasible project and financing plans. Investment aid can be granted to firms, especially SMEs, in the regional development areas.

For start-up companies, there are subsidies for establishing and expanding business operations. This aid helps cover salary costs of the new entrepreneur and the first employees, expenses for professional services needed by small innovative firms as well as rental costs for premises and equipment. It is available up to the first 24 months of operation with an aid ceiling of 50 percent of eligible costs. Transport aid and energy subsidies can be granted to companies for investments in energy efficiency and conservation. Loans and guarantees are given by by Finnvera, the state-owned financing company. Finnvera Plc improves and diversifies the financing possibilities of companies by granting loans and guarantees and by export financing services.

EU-funded support

The EU-funded programmes aim to diversify the economic and business structure and to improve employment. This is done by supporting the establishment and development of SMEs and the expansion of their activities. Financing is directed to projects developing the competitiveness, know-how and operating environment of the SME sector, with a special emphasis on start-up businesses and service sector companies. In the programming period 2007-2013, combined funding for EU programmes implemented in Finland amounts to EUR 6.1 billion (EUR 1.7 billion where of EU funding). While the Finnish State and the Finnish municipalities contribute a total of EUR 2 billion, it is worth keeping in mind that a certain amount of private funding is always required especially in projects carried out by individual companies. The Ministry of Trade and Industry coordinates the overall implementation of the EU funding, which is based on both European Social Fund (ESF) and European Regional Development Fund (ERDF) subsidies. The T&E Centres grant EU financing for the investment and development projects of SMEs, for improvement of the know-how of personnel, as well as for development of the services needed by these. Tekes finances the research and development projects of enterprises. Finnvera grants loan financing and guarantees for the various stages in the life cycle of enterprises. As these subsidies are not permitted to distort competition between enterprises, an upper limit has been set for them. Grants from the EU funds also require a national input; therefore a company must satisfy Finland's national regional aid terms to be eligible for them.

To invest in Finland is to gain proximity to the technologies and human resources that drive future innovation. Many smaller companies come to Finland to establish subcontracting agreements or partnerships with global leaders, while the bigger players come to recruit resources, test ideas and access new markets. Finland is open to innovators of all sizes.

Over the past 10 to 15 years, R&D investments in Finnish industries have grown more rapidly than other OECD countries, at an annual rate of about 10 per cent. With this pace of growth, Finland's R&D input in relation to its GDP is one of the highest in the world.

A market of 80 million consumers

Investments by foreign companies in Finland are usually market-driven or technology and skills-driven. Not only an ideal location for business in the BSR - markets in the Nordic and Baltic countries and north-western Russia represent a total of some 80 million consumers - Finland offers companies excellent infrastructure and a well-educated workforce. A base in the country is a very cost-effective way to access markets in the north of Europe.