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Finland is a country of small companies with 443 731 companies. At the same time our entrepreneurship is in transition and the business field is renewing. Single-person businesses with business networks are becoming more common and entrepreneurs are aging. The number of employer entrepreneurs has collapsed.

“Entrepreneurship interest young people and the number of immigrant entrepreneurs is growing”, says Sanna-Mari Jyräkoski, CEO of the Federation of Finnish Enterprises Central Finland.

The low number of female entrepreneurs (33 % of all entrepreneurs) is one of the structural flaws in the Finnish economy. There are many reasons for this.

“The skills are underestimated, many fear failure, lack of business networks and funding. There are not enough incentives to grow businesses as well. Many also find it difficult to combine entrepreneurship and family life”, says Jyräkoski.

“We need more female entrepreneurs. Finland would have 50 000 more female entrepreneurs if the proportion were the same as for men”, she highlights.

The growth orientation does not seem to be increasing, 27 % of entrepreneurs are not seeking growth. The most significant enablers of growth are obvious.

“The most important thing is customers satisfied with company’s products and services, skilled personnel and good financial position of the company.”

Growth Prospects for Finnish SMEs

Kasvu Open has produced open and free sparring programmes for SMEs since 2011. Together with its partners, Kasvu Open implements up to 20 sparring programmes annually.

"So far, we have sparred 3 450 companies, and we have the network of over 1 669 experts", says Inka Hyvönen, Account Manager at Kasvu Open.

So, what actions growth requires?

"At all stages of the business it requires focusing on marketing and sales and getting new customers. Also, searching for new partners is crucial", she says.

Panel discussion: What does the research reveal us?

Finnish SMEs facing many kinds of challenges today. What are they and what could be right solutions for these?

“The main bottleneck in our export is in the microenterprise size category. According to Eurostat, In Finland the micro-enterprises’ export of goods is among the lowest in European small, developed economies both relative to the population and to the country's total export of goods. This bottleneck could be opened by promoting Lean Export among the micros. By Lean Export, I mean international sales experiments with paying customers, as early as possible, and with affordable loss”, says Matti Muhos, Professor of Growth Management at University of Oulu Kerttu Saalasti Institute.

“There is too little support and tools for SMEs in Finland. There should be more training and coaching, networking skills, and marketing and communication skills. When you start do too big things in SME alone, you might get burn out”, lists Tanja Leppäaho, Professor at LUT University.

"Many SMEs have too little knowledge of the market”, says Arto Ojala, Professor at University of Vaasa.

“There should be more international skills and experts. International students should also be supported to find jobs in Finland after graduation. Then everybody wins”, says Ulla Hytti, Professor at Turku School of Economics.

“Networks are important. The easiest way for an SME to grow is to have wide networks and social relationships”, says Leppäaho.

"Networks also support the well-being of individual entrepreneurs", adds Hytti.

More research findings: Business incubation and bold experimentation

The annual number of new SMEs in Finland is one third lower than in the other Nordic countries and Estonia. Estonia is number one in Europe.

“It would be important to invest in business incubation activities in Finland. There should be more systematic incubation activities for university graduates, where the incubation service and funding funnel is built from the perspective of the potential student entrepreneur”, says Muhos and continues: “Our ongoing research on Generation Z entrepreneurs growth priorities reveals that student entrepreneurship can be boosted a lot with sustaining and systematic business incubator activities. The examples from our peer Nordic countries set the bar quite high.”

“To be productive in a long run, university incubator should be built to sustain as a long-term process. Short-term “silver-bullet” projects are good for ramping up incubators, but the sustaining impact is generated through a sustaining process. It is important that every new student generation have equal opportunity to learns about the entrepreneurial opportunities in addition to employment as an employee.”

The latest Finnish report in Global Entrepreneurship Monitor provided by Muhos and his colleagues (Björk et al. 2023), revealed that of failure is a deterrent to starting a business in Finland (40% of men and 60% of women). In a recently published article (Saarela et. al 2024, 1983 respondents) Muhos and his colleagues further analyzed gender gap in entrepreneurial potential in Finland and reflected its underlying causes.

“In Iceland, for example, the perception of risk is different, and people are willing to try regardless of success or failure. In Finland, we should put more effort to bold experimentation and seize new opportunities.”

“In addition to traditional employment, we should also describe for students the way to entrepreneurship. It is funny that a business student must justify why to become an entrepreneur. This requires a cultural change.”

“In Finland, our strengths already include strong digital skills and artificial intelligence, a good mentality for planning and the ability to scale up. We also need to learn how to utilize networks and commercialization. We just need more courage to become entrepreneurs.”

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The BOOST workshop was organised by Dr Daria Hakola and Dr Mari Suoranta, Jyväskylä University School of Business and Economics, Strategy and Entrepreneurship research group. The workshop was funded by the Foundation for Economic Education (Liikesivistysrahasto, LSR).

Read more about the workshop.