Startups in Finland aim to triple domestic R&D investments to over €900 million by 2028, but are increasingly concerned about the broader economic outlook.

The Finnish Startup Community (FSC) released its latest Startup Barometer for Q1/2025, revealing strong optimism around R&D growth, even as expectations for the broader economic outlook have become more cautious.

According to the survey, FSC member companies invested an estimated €360 million in R&D in 2024, with projections showing a sharp rise to approximately €1.14 billion by 2028. When focusing on their domestic R&D investments, the increase is just as striking: from €301 million in 2024 to an estimated €925 million in 2028.

“Startups often operate at the frontier of new technologies. As a result, the R&D phase comes early and at scale, long before product–market fit. The survey results highlight the ambitious growth targets startups have set for their R&D investments, provided the operating environment allows it,” said Youssef Zad, Chief Economist at the Finnish Startup Community.

Finland aims to increase R&D spending to 4 percent of GDP by 2030. Public R&D funding will account for one-third of the total, with private investments making up the remaining two-thirds. According to Statistics Finland, total R&D expenditure in 2023 was €8.4 billion (3.1% of GDP), of which companies contributed €5.703 billion. Increasing and sustained public support for R&D strengthens startups’ incentives to invest in growth and innovation in Finland and internationally.

Transforming cutting-edge research into successful commercial technologies offers Finland and Europe a powerful opportunity to lead global innovation and drive sustainable growth. Start-ups and growth companies, powered by exceptional talent, are already generating bold new ideas—but that alone is not enough. Established industries must also play their part to ensure these innovations are broadly adopted and effectively scaled.

“Achieving this requires a greater appetite for risk, increased capital—through stronger public and private investment—and a focused effort to remove friction across the entire innovation ecosystem. Finland must commit to renewal and embrace growth. Only then can we strengthen the knowledge base of our society and build a solid foundation for long-term success,” comments Juha Vartiainen, the Global Affairs officer and Co-founder of IQM Quantum Computers.

Sentiment toward the surrounding economic environment is declining

At the same time, the Barometer shows that expectations regarding the broader economic environment have unfortunately weakened for the third consecutive quarter. While the companies that responded to the Barometer remain relatively confident about their own financial situation, the outlook on the surrounding economic environment has become increasingly pessimistic.

“This caution is likely linked to geopolitical uncertainty, such as the rising tensions between the United States and the EU, which are increasing uncertainty in global markets and investment timeframes. Despite this, most indicators show that confidence in the startup sector has improved compared to 2023, which was a challenging year for startups globally. The Finnish startup sector is preparing for significant innovation-driven growth, but realizing this potential requires a globally stable environment that encourages risk-taking and technological development,” summarizes Riikka Pakarinen, CEO of the Finnish Startup Community.

Link to the Barometer Survey

About the Startup Barometer
The Startup Barometer is a quarterly survey conducted by the Finnish Startup Community. It tracks sentiment across member companies on topics including financial outlook, hiring expectations, and thematic issues, such as R&D investment. The Q1/2025 survey included responses from a wide range of member startups, covering over 70% of the community’s total revenue base.