The Finnish initiative on AI startups
When discussing ways of ensuring European competitiveness in the age of artificial intelligence, we often talk about encouraging and incentivizing existing European companies to start utilizing artificial intelligence.
This is very important challenge to tackle for Europe to remain competitive and an issue that has spurred a variety of activities in Finland as well. AI can be a significant competitive advantage for companies that adopt it early, take AI to the core of their business and commit to it.
While AI can deliver great results in terms of e.g. increasing effectiveness and optimizing existing processes, we need to go beyond these types of applying AI and keep in mind the possibilities that lie in AI-powered new business models that might disrupt whole industries.
In many sectors, small businesses can challenge large traditional companies using new types of artificial intelligence solutions.
These solutions not only improve the quality of services and reduce costs but also create completely new industries and services. We often talk about born digitals when referring to companies that have been digital in nature right from the beginning and thus have no need for a separate digitalization strategy.
How about companies that are born in the AI era? While ensuring adoption of AI in existing European companies across sectors, we need to make sure that native AI companies have the best possible environment to grow.
Functioning AI ecosystem is fertile ground for such AI success stories to get started.
Finland has been home to groundbreaking artificial intelligence research for decades, Academician of Science Teuvo Kohonen’s pioneering work in neural networks is well known around the world.
Currently, world-class research is carried out in numerous fields, for example teaching algorithms with small data sets, such as patient data of only one patient.
Finnish Center for Artificial Intelligence was established to bring together the leading research and make it available to companies, and the public sector.
Besides research, Finland has good founding in terms of high level of digitalization, considerable data resources of the public sector and quality educational system.
Perhaps better known to the wider audiences than pioneering AI research are the technical product innovations that Finland has brought to the world, such as Angry Birds, and the companies behind them.
We are proud of the startup scene in Finland. With over 500 startups in Helsinki alone, Finland’s capital region is home to Slush, one of the largest tech festivals globally that gathers some 2,600 startups and 2,000 investors every fall to Helsinki from all over the world.
A few years ago, an old hospital complex in Helsinki was transformed into the biggest startup hub in Nordics, named Maria 01. Some 500 kilometers north, Oulu-based Polar Bear Pitching competition allows founders to pitch investors for unlimited time as long as they do it standing in freezing water in a hole cut to a frozen lake.
In addition to innovative activities that boost the ecosystem, Finland’s startup game is strong also on the numbers side.
When looking at venture capital investments in startups and early stage growth companies as percentage of GDP between the years 2013 and 2017, Finland takes first place in Europe.
Venture capital financing received by Finnish companies is twice the European average. In 2017 Finnish startups and early stage growth companies attracted EUR 208 million in foreign financing, a number that has increased tenfold since 2010.
New competitive innovations from AI and platform economy are vital for the Finnish national economy.
Business Finland’s AI Business Program offers funding, networking and export services for research, development and utilizing artificial intelligence in business for either a companies’s own development projects, or joint ecosystem projects with other companies.
A recent tool of speeding up investment is creation of State Business Development Company VAKE that has been geared up to invest with focus on artificial intelligence and platform economy. Its funds come from transfer of state owned shares.
How can government help startup ecosystem to flourish? Besides funding, governments need to ensure that startups have the expertise and skills needed available to them.
Government can invest in education and training.
For the long-term strategy and early stages of learning path one example is addition of algorithmic thinking into the national core curriculum for all primary schools in Finland, starting at age six.
New, modular ways of gaining new skills are needed for keeping those who are already in working world up to date with digital advances.
University of Helsinki opened first year computer science studies recently to all those interested without application process or fees.
This was possible through a government-funded pilot of flexible shorter trainings especially targeted to boost technical skills.
In addition to growing and training skilled workforce for startups, recently introduced Startup Permit allows for international entrepreneurs to build startups in Finland and join the startup ecosystem.
This recidence permit is targeted towards innovative and growth minded founders whose business idea shows potential for rapid international growth and who come from outside European Union.
It is naturally not the residence permit that attracts founders but business opportunities. It is still a good way of signaling the strong support for startup community.
Government’s only role is not to support startups and invest in them.
To remain agile and relevant in the age of artificial intelligence, there is a lot we can learn from startups.
Creating a culture of experimentation is one of the key projects of Finland’s current government and it has been greatly inspired by startups.
