How does your country’s entrepreneurial ecosystem compare to others?
Many countries join GEM to explore this question. Finland is the latest example. The Nordic country officially rejoined GEM in April of this year. The lead institution is the Federation of Finnish Enterprises (FFE), the largest business federation in Finland, and the GEM Finland team is funded by both the Alhopuro and the Yksitysiyrittäjäin Foundations.
“Our motivation is clear: we want more reliable information on entrepreneurship and how Finland is doing compared to other countries,” said Dr. Mika Kuismanen, Director and Chief Economist of the FFE and the team leader of GEM Finland. “As a business federation, we need this information as our goal is to make Finland one of the best places to do business.”
FFE’s membership structure reflects Finnish business life as a whole. The organization plays an active role in ensuring political decision-makers act to improve SMEs’ operating environment. It also provides information to the public to help influence opinions and raise awareness of entrepreneurship in Finland.
FFE influences Finnish decision-makers at all levels: locally, nationally and in the European Union. Moving forward, the organization will be able leverage GEM in its interactions with stakeholders.
“GEM’s questionnaires are unique,” said Kuismanen. “We do not have this kind of information available, so we expect GEM to increase the level of discussion around entrepreneurship. We also expect that GEM will raise new angles and topics to explore, while learning from other countries.”
FFE’s organization operates at three different levels. Some 60 employees work from the organization’s headquarters in Helsinki, while 20 regional organizations, generally consisting of 2-4 employees, represent FFE’s different geographical locations. Local municipal organizations are made up of volunteer entrepreneurs. Their work focuses on municipal-level decision-making and lobbying, which is extremely important, especially for smaller firms, according to Kuismanen.
Not only does Finland benefit from the collaboration; so too does GEM. Finland had been part of GEM from 2011-2016. The initial GEM Global Study in 1999 comprised researchers from all the G7 nations — Canada, France, Germany, Italy, Japan, UK and USA — together with Denmark, Finland and Israel.
“Increasing the number of GEM teams throughout Europe has been a priority in recent years,” said Dr. Aileen Ionescu-Somers, GEM Executive Director. “GEM Finland joins several new European teams in 2021: Romania, Hungary, Lithuania and France. We are thrilled to have Finland back as part of GEM and are excited to further grow the number of teams in Europe.”
“GEM will benefit from Finnish membership by increasing the consortium’s representation among the Nordic countries,” said Kuismanen.
In addition to Kuismanen, the GEM Finland team includes Mr. Petri Malinen, Head of Economic Policy and Sustainable Growth at the FFE, and Mr. Sampo Seppänen, an economist at the FFE who specializes in energy, climate, transport and circular economy issues. In the future, GEM Finland will look to cooperate with research institutions and universities.
Entrepreneurship in Finland
Finland is known for its strong social system. According to the Kuismanen, this has different pros and cons.
“Our absolute strengths are the social stability and well-functioning administration as well as the insurance schemes in place for entrepreneurs,” Kuismanen said. “The downside is the relatively high tax burden which has created some incentive problems. Non-functional labour laws and the corporative system doesn’t give equal rights for all firms.”
Finland is a small open economy, heavily dependent on international value chains. Many small Finnish firms operate internationally. This creates growth possibilities and it also acts for a buffer to negative national shocks.
“We have a lively start-up scene but the financial environment is not optimal,” said Kuismanen. “We have too few private investors and firms are overly dependent on banks. Due to the increased banking regulations, many firms face unnecessary growth obstacles.”
Now the country can address such weaknesses using the richest source of reliable information on the state of entrepreneurship and entrepreneurial ecosystems across the globe.
Kuismanen concluded: “We are very pleased to be part of GEM and we will carry out our work as well as possible!”
Access previous GEM research from Finland at the following link.