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In Finland, sustainable growth is created through RDI cooperation and RRF investments

14 Dec 2023

The objective of the EU Recovery and Resilience Facility (RRF) funding, granted through the Research Council of Finland and Business Finland, is to strengthen Finnish expertise and business clusters. Sustainable growth requires a long-term approach and courage to invest in fundamental research. The threat of the green and digital transitions is a shortage of experts, which was noted at the event A Greener, More Digital and Sustainable Finland, held on 17 October 2023.

The European Union Recovery and Resilience Facility (RRF) is part of the broader NextGenerationEU recovery plan, the largest recovery package in European history. RRF aims to both mitigate the financial and social impacts of the Covid-19 pandemic and make EU economies more sustainable, greener, more digital and more resilient. The Facility is also a key instrument for achieving the EU’s climate neutrality targets by 2050. In addition, RRF aims to guide Europe towards digital transformation, to create jobs and boost growth.

Finland’s Recovery and Resilience Plan is part of the Sustainable Growth Programme for Finland. Finland will receive up to 1.8 billion euros in grants from the EU Recovery and Resilience Facility for its recovery and resilience plan. In total, the grants received by Finland from NextGenerationEU will amount to a maximum of 2.6 billion euros. The first objectives of the plan have already been achieved.

In Finland, in line with the programme, sustainable growth requires long-term investments in fundamental research, companies and the creation of a favourable operating environment. Additional prerequisites include improving the attractiveness and retention of competence. The threat of skills shortage must also be combated, in order to implement the green and digital transitions. Research infrastructures and data sharing will play a key role in enhancing Finland's attractiveness.

Immediate and long-term impacts expected

Although RRF instruments have been considered relatively flexible, economic analyses suggest that, if national plans are successful, the instrument will have a significant and lasting positive impact on EU gross domestic product. The knock-on effects of RRF can support economic growth and reduce general government debt in the long term, as structural reforms enhance resource allocation, develop the business environment and increase the labour force participation rate. In the future, the instrument is estimated to create 1.5 million new jobs across the EU.

Marie Donnay, Director of the European Commission Recovery & Resilience Task Force, just visited Finland. In the opening speech on 17 October at the RRF stakeholder event held at Helsinki Music Centre, Donnay highlighted that the Recovery and Resilience Facility is expected to have a positive impact on all EU countries. According to Donnay, RRF’s direct and short-term effects are estimated to reach up to 1.5% of GDP. The effects vary from one member state to another, and RRF funding is also expected to have positive cross-border impacts.

According to a press release issued by the Ministry of Finance on 10 November 2023, Finland has already reached the first 20 milestones of its Recovery and Resilience Plan. The first payment request to the European Commission is on its way to be assessed and amounts to an impressive 273 million euros. The condition is that Finland meets the milestones approved by the Commission. Thus far, an advance payment of 271 million euros has already been received.

Several years of work underpinning the Recovery and Resilience Facility

The unique design of the RRF makes the instrument exceptional in relation to previous and other financial instruments. RRF combines reforms and investments utilising the synergies between them. The design of the instrument highlights the simultaneous nature of reforms and investments, which is key to maximising their potential impacts. National plans must be implemented in a tight schedule, as reforms and investments must be completed by August 2026.

Another significant and distinctive feature of the Recovery and Resilience Facility is its performance-based nature. In order to receive payment from the fund, the milestones and objectives set out in the national plans must be achieved. The performance-based approach serves as an incentive for large-scale economic, social and environmental reforms, and the Commission monitors the achievement of the objectives before disbursing the funding. This ensures the implementation of national plans.

A green and digital future is built through cooperation

The keys to sustainable growth in Finland are joint concrete measures, additional RDI funding and close cooperation between research and companies. Our strength is the low hierarchy of society, which favours the creation and spread of new ideas. A clear role division is crucial, and in the cooperation between universities, regional actors, organisations, companies and ministries, each actor has their own distinctive tasks.

At the same time, the challenge of accelerating is undeniable, and the role of public funding in this is to create a situational picture, promote and accelerate research and business cooperation, as well as speed up commercialisation. The objective of the RRF funding of Research Council of Finland and Business Finland, is to strengthen Finnish expertise and grow business clusters. Research and infrastructure projects enable new cross-disciplinary approaches and strengthen cooperation between different actors. Companies play a key role and often are the ones taking the first steps when identifying business potential.

However, in order to increase basic research and cooperation between universities, start-ups are not enough. Regional actors are of paramount importance as first contacts, and strengthening interfaces creates better opportunities for cooperation. A holistic approach involving all actors is key. Simultaneously, the aim must be to understand the nature and dynamics of new and existing research and innovation ecosystems.

For its part, Research Council of Finland is involved in the implementation of the Sustainable Growth Programme. The Research Council promotes the green and digital transitions by funding research, developing expertise and creating innovation and research infrastructures at local and national levels. The Research Council has achieved its 2023 targets, by opening four significant calls for applications for key sectors and research infrastructures in the green and digital transitions.

In total, 89 million euros has been invested in RRF research and research infrastructure projects through the Research Council of Finland. These projects will not only contribute to carbon neutrality and climate change adaptation but will also focus research on digital technologies.

Further information on the Research Council of Finland's RRF funding and its key figures:

A Greener, More Digital and Sustainable Finland

Approximately 200 invited guests attended the A Greener, More Digital and Sustainable Finland event, held at Helsinki Music Centre. Those present were representatives of research organisations and companies, political decision-makers, preparatory officials, as well as other RDI actors. The event was concluded with short presentations by seven companies and seven research organisations on how RRF funding has been used and what result expectations are seen.

RRF allocates a substantial amount of EU funding and also includes a strong solidarity factor. It is of utmost importance that information on the recipients of the funding is publicly available to everyone.

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