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8. Public financial support a more general method of funding than debt and equity finance in innovation activity

Enterprises engaged in innovation activity applied for and obtained both equity and debt finance more commonly than non-innovating enterprises in 2016 to 2018. The majority of enterprises with innovation activity having applied for equity finance had used it for development activity. In contrast, only around one-half of those with innovation activity having acquired debt finance had used the financing obtained for research and development or other innovation activity.

Every fifth enterprise in the survey applied for and obtained equity or debt finance in 2016 to 2018. Funding was applied for and obtained by every fourth enterprise having reported innovation activity. The share of those having applied for and obtained funding was slightly over 10 per cent for enterprises that did not have innovation activity in the survey period.

On the general level, acquisition of financing was as general in various size categories, but manufacturing enterprises in the biggest size category applied for financing the least often, while in service industries the smallest share of finance applicants was among medium-size enterprises.

Equity finance was obtained by nine per cent of all enterprises in the survey – 12 per cent of those with innovation activity and three per cent of non-innovators. The share of those funding their activity with equity finance was the same in manufacturing and service industries.

Every tenth enterprise with innovation activity used equity finance for research and development or other innovation activity.

In 2016 to 2018, in all 16 per cent of all enterprises in the Innovation Survey received debt finance – 19 per cent of those with innovation activity and 11 per cent of non-innovating enterprises. Debt finance was used more generally in manufacturing than in service industries, the share of those having received debt finance was 21 per cent in manufacturing and 13 per cent in service industries.

As with equity finance, around every tenth enterprise with innovation activity used it for its development activity.

Figure 9. Enterprises having received equity or debt finance and use of funding on research and development or other innovation activity in 2016 to 2018

Public financial support was received by every fourth enterprise in the survey in 2016 to 2018, and 18 per cent used the received financial support – either fully or partly – on research and development or other innovation activity.

The share of enterprises with innovation activity having received public financial support was nearly one third, 37 per cent, and the share of those having used public financial support on innovation activity was 29 per cent. Five per cent of enterprises with no innovation activity received public financial support for their activity.

Clearly a bigger part of manufacturing enterprises than service enterprises received public financial support. In manufacturing, 34 per cent had received support and in service industries 17 per cent. Nearly one-quarter of manufacturing enterprises, 24 per cent, used public financial support for innovation activity, in service industries this share was ten percentage points lower, 14 per cent.

Examined by size category, public financial support became more widespread in 2016 to 2018 as in previous years as the enterprise’s size category grew. Support was received by 22 per cent of the smallest enterprises in the survey and by 44 per cent of the biggest ones. Financing was used on innovation by 27 per cent of the smallest size category enterprises with innovation activity. The corresponding share was 48 per cent in the biggest size category.

Public financial support was mostly channelled to enterprises through government financing, such as from Business Finland. Of all enterprises, the share of those having received government financing in 2016 to 2018 was 17 per cent, and around every fourth of those with innovation activity received government financing. The majority of those having received financing used it on innovation activity.

Six per cent of all enterprises in the survey and nine per cent of enterprises with innovation activity received financing from local and regional authorities in 2016 to 2018. Financing was received from the EU Horizon 2020 Programme for Research and Innovation by a few per cent of all enterprises and three per cent of enterprises with innovation activity, and most of them also used the financing for innovation activity. Other financing from the European Union was received by about five per cent of enterprises, which was six per cent of those with innovation activity. Some of that was also directed to financing innovation activity.

Figure 10. Enterprises having received public financial support and use of financing on research and development or other innovation activity in 2016 to 2018

Further information about financing and public support on innovation activity by industry and size category

Financing and public support and their use on innovation activity by industry group and enterprise size category
Financing and public support and their use on innovation activity by industry

Source: Innovation 2018, Statistics Finland

Inquiries: Mervi Niemi 029 551 3263, Heidi Pirkola 029 551 3246, tiede.teknologia@stat.fi

Director in charge: Mari Ylä-Jarkko

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Updated 23.4.2020