Innovation policy

Agenda for the promotion of innovation and invention activities

Inventions must be given a particular interest by the state. Inventions are a necessary driver of all progress in society. They are a generator of welfare, employment, competetiveness and new export opportunities. State actions may cause both stimulus and obstacles to the development of inventions into commercially successful innovations. For the state to meaningfully promote inventive activity instead of
hindering it, funding, rating mechanisms and other actions should be as rational as possible.

Role of the state in a well-functioning innnovation policy

At present, the public innovation policy is not satisfactory. Developing an idea into a finalised product requires several intermediate steps which in Finland are not supported in any way. Thus, all aspects of the
innovation policy does not promote exports, though export is crucial for the Finnish economy.
International competition is ever fiercer. To prosper, we must have an innovation policy which opens new
views and presents new solutions.
Below, the Foundation for Finnish Inventions sets forth its views of the steps expected from Parliament
and the Government. The expertise of the Foundation and its interest groups is available.

A. Goals for the national budget
A1. The state must invest in the initial steps of inventions
The greater part (ca. 50 to 80 %) of salaries and subsidies domestically paid by the state will, after a
certain delay, return to the treasury in the form of taxes and employment. Innovation policy funding also
differs from other expenditures in that, in addition to the aforementioned feedback, part of the investment
leads to successful innovations. Thus, more than 100 % will finally be gained due to increased tax
revenues, employment and exports.
A2. In the distribution of public business subsidies, the focus should be on innovative pioneer
enterprises
Such investements have a greater impact on employment, welfare and exports than the supporting of
enterprises working with established technology. This shift of focus is also crucial for not having to rely
solely on foreign technology in resisting global warming.
A3. Earmarked public funds for prototype production should be available
In the commercialization of an invention from a raw idea to a marketable innovation, a step of particular
importance is the construction of a prototype. In this process, most of the know-how applying to the
product is generated. It is also typically, beside marketing, the most expensive phase of the project, often
leading to the project either stalling or moving abroad.
A4. An invention deduction should be applied in taxation
The economical position of the inventor should be improved in relation to patent agencies, lawyers and

investors. This could be implemented e.g. by making all expenses relating to the invention fully
deductible, or providing for treating those expenses in the manner of the present household deduction.
A5. The state should support local ”Product Channel” projects
Following evaluation, the newly re-developed local product development program of southeastern
Finland should be copied in other regions as appropriate.
A6. Public innovation funding should be directed to the development of novel ideas and inventions
in their early stages into products
Novel ideas and inventions should generate enterprises having a positive impact on employment and the
balance of trade. Proper focusing of support leads to new businesses and work opportunities.
A7. In the funding and activities within public innovation policy, use should be made of the ”third
sector”
In Finland, the role of the ”third sector” has traditionally been significant in several sectors of the civil
service. In the scope of innovation policy, the Foundation for Finnish Inventions, the Inventors Union, the
IPR University Center, the Society of Patent Agents, the Society of Finnish Businesses and similar parties
should be properly involved, making use of their competence. Implementing innovation policy cannot
rely on Business Finland alone. The discontinuation of state funding for the Foundation in 2014 was
particularly detrimental, as a number of nationwide operations collapsed abruptly: a) the so-called Product
Channel system, b) a unitary network of invention agents, c) a network of supporting business
professionals and d) a high-quality short education program in the IPR field.
A8. The setting up of inventor cooperatives shall be supported
Regionally established cooperatives have proved efficient as communities for assisting inventors and for
promoting invention development. Funding of these, also by public means, is productive.
A9. The state should support technology for evaluating the outlook of inventions by means of
artificial intelligence
The evaluation of the market potential of an invention requires researching extensive databases and chains
of reasoning. The use of traditional methods is more or less a lottery. Starting and developing innovative
enterprises should be supported by the creation of simulation, business game and database applications. In
the implementation of a novel innovation policy, novel innovation per se should be used, e.g. AI, AR, VR
and Big Data technologies.
A10. Pension fund resources should be directed to domestic inventions
This could be done by e.g. granting state guarantee for interest rates in novel innovation funds which
would thus fulfil the solidity requirements of the TyEL ( occupational pension) scheme.
A11. Private loans for inventions should be awarded state guarantees
A model for these soft loans may be found e.g. in the student loan system and the funding earlier granted
by the Foundation for Finnish inventions, both of which provide for remission in certain cases. This is far
more sensible than turning inventors into clients of quick-loan firms.
A12. Efforts must be made to increase the number of female inventors
The ratio of women as Finnish patent applicants has shown a significant increase. Nevertheless, the
number of female inventors is far from that expected from an egalitarian society and the level of
education among women. Women represent half of society but less than 10% of inventors. In view of this,
the present state of affairs implies a great deal of lost invention opportunities and productivity.

A13. Finnish inventions and inventors should keep a high profile at exhibitions abroad
At most foreign exhibitions, a state-funded party should arrange stands of a sufficient size in order to
allow Finnish inventors and innovative small enterprises to exhibit their products for free. For example,
Business Finland, Sitra, Team Finland and the relevant embassies could act as responsible parties.

B. Legislative goals
B1. It should be easier to use a patent or other IP right as a pledge or asset in balance sheets
B2. In trials regarding basic income and unemployment management, the inventive activity of
citizens should be encouraged
B3. In the purging of red tape, innovation should be prioritized.

C. Further objectives

C1. The state should have an office or a subcontractor for receiving citizen’s ideas and advising on
how to proceed
It is widely known that a significant amount of product ideas are left unevaluated and unused. The
expense of opportunities lost in this way may even represent a macroeconomical problem. If need be, the
state could be a partner in enterprises set up around an invention, if sufficient funding from the private
sector is not available. The priority in time granted to private sector funding secures the neutrality of
public competition.
C2. For corrective maneuvers within innovation policy, the policies of Germany, Sweden and Israel
should serve as models.
Inventions made by private inventors and in academia have been particularly neglected in Finnish
innovation policies. They typically remain completely unexplored, or move abroad.
C3. In public acquisitions, new innovations should be promoted by means of scoring and
requirements.
C4. State companies should be required to arrange annual idea competitions
The state profits from promoting inventive activities among citizens, but its authority is relevant only in
companies where it has at least partial ownership. The inventor’s IP rights must be secured in the course
of the competitions.
C5. A common innovation body for state instituions and universities should be created
The task of this organisation is to support and guide universities and inventors employed by them. Such a
body may be set up without any legislative action, e.g. on an iniative from members of Parliament. The
R&D activity in universities should be developed through state action so as to improve the position of
academic inventors and the utilisation of inventions made within the scope of academic research. Finnish
universities lag behind in the utilisation of inventions. Using their inventions, universities can improve
their funding, connections to the business sector, international cooperation, motivation of students and
researchers, resisting the climate crisis, and so forth. The quality of this function within the various
universities is very diverse.
C6. The knowledge of immaterial property rights, i.e. copyright and industrial property among
university students should be guaranteed
Knowledge of the basics of IPR is important in every field, and at least the basics of IPR practice in one’s
own field of education is part of basic professional skills. At least five points worth of IPR should be
included in the compulsory curriculum of university students.

C7. A working group consisting of experienced innovators should be established to guide the
proliferation of business ideas which promote Finnish exports.
Ideas do not grow into products without appropriate models or prototypes. Thus, they must be given
support in order to develop into a presentable state. Presentability is a requirement for receiving private or
public funding.
C8. Innovation support must extend to innovative enterprises yet to be established and lacking
previous financial statements.
A great deal of ideas having great potential for development are created by individuals still having no
registered company to rely on.
C9. Finland should set as its goal to be a leading country in the field of combining responsible
development and novel technology.
As the basic atmosphere within society is harmonic, there is hope for the improvement of the invention
environment and the strengthening of the innovation ecosystem.

Kirjoittanut Keksintösäätiö

28.12.2021

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