Finland aims to increase its research and development expenditure to four per cent of GDP by 2030 to accelerate sustainable growth, strengthen competitiveness and boost productivity.
In line with this target, the Finnish government will raise the central government funding for R&D activities to 1.2 per cent of GDP by the end of the decade, assuming the public sector roughly accounts for one third of R&D investments and the private sector for two thirds. In 2025, central government funding will increase by EUR 280 million relative to overall R&D funding in 2024.
For context, in 2022 the overall GDP share of R&D expenditure was 3.0 per cent (EUR 7.9 billion). Out of this, the share of the public R&D expenditure (Government and Higher Education sectors) was roughly a third (32%) at 0.95 per cent of GDP / EUR 2,539 billion.
4% of GDP target enshrined in law
An R&D funding law, that came into force in 2023, sets the annual level of central government R&D expenditure in a way that raises public sector R&D expenditure to 1.33 per cent of the GDP by 2030 under the projected economic development. Alongside R&D funding law, a law for a more extensive and permanent tax incentive for R&D activities was approved in 2022.
Parallel to legislation, the Finnish government adopted a multiannual plan for R&D funding in 2024. The plan highlights the importance of developing the R&D system in a comprehensive manner. Investing in cooperation between higher education institutions, public research organisations and businesses also plays an important role. The plan will guide the use of R&D funding in the coming years.