Just 1 in 8 business owners thinks Finland offers enough incentives to grow business

Just 13% of all companies and just over one in five strongly growing companies (22%) think that business owners in Finland have enough incentives to grow their companies. Sixty-eight per cent say that there are not enough incentives, the growth company survey from Epicenter and Suomen Yrittäjät shows.

Growth companies say that the most important changes that would encourage businesses to grow are legislation to ease hiring, the appreciation of enterprise, increased local bargaining, dividend and corporate taxation, and the appreciation of wealth gain.

“You don’t have to look far to answer the question of why we have no growth. There’s a clear reason: entrepreneurs and owners in Finland don’t have enough incentives to grow. We have big problems in regulation, taxation, funding and the appreciation of enterprise,” says Mikael Pentikäinen, the CEO of Suomen Yrittäjät, the Finnish SME association.

“We’ve placed a totally unreasonable burden on employers’ shoulders over the years. That has to change. Hiring should be made easier and the administrative burden borne by business owners should be systematically lightened,” Pentikäinen says.

Suomen Yrittäjät and Epicenter commissioned a growth company survey from Verian, which attracted responses from 1,549 SME representatives in June–September 2024. The confidence interval for the overall results is +/- 2.5 percentage points.

Few see extremely good conditions for growth

Just 6% of companies consider the conditions for growth extremely good over the next three years, with 31% considering conditions quite good. One company in five (19%) considers the conditions for growth quite bad or extremely bad.

Satisfied customers, employees’ skills and stable company finances are the most important factors which facilitate growth. That is according to the companies which see the conditions for growth as extremely good or quite good in the next three years.

“Strongly growth-oriented companies consider their conditions for growth good, dare to take risks, and are willing to hire skilled employees. However, there are too few of these companies. Worryingly, these companies see no particular reason to stay in Finland if they succeed,” says Kristian Nieminen, Country Manager at Epicenter.

R&D bring growth

Over half of strongly growth-oriented companies and companies which have grown by more than 30% in recent years have research and development (R&D) operations. The same figure for all companies is 18%.

“Investments in R&D create the conditions for growth. That’s why it’s essential that companies have the resources for R&D. That requires good cooperation with universities,” Pentikäinen says.

The most important R&D investments are launching new products or services (58%), staff training (42%) and deploying new technology (42%).

Trust in companies’ own skills

Business owners broadly believe that Finnish companies ought to strive to expand internationally and that companies have sufficient skills for growth and international expansion. In particular, strongly growth-oriented companies believe that they dare to invest in growth.

By contrast, they consider Finland’s regulatory environment, the targeting of national and EU funding programmes and the level of tax incentives problematic. Another widely held belief is that it is not easy for companies to access finance to fund growth.

“It’s easy to hide behind the explanation that Finland can’t afford to support strongly growth-oriented companies. However, I don’t think it’s just a question of money. Rather, we have to recognize these companies’ special needs and focus our actions more strongly on supporting them. It’s time we understood that the source of genuine growth is new business – not just supporting existing export companies,” says Nieminen of Epicenter.

You can read the results of the study in more detail here.