Professionalization of Research and Development Activities in Finnish Companies before the 1970s

Abstract

From a European point of view, industrialization got off to a relatively late start in Finland. Industrial production began in the 1860s and continued to grow at a steady pace up to the 1950s (Hjerppe and Vartia, 1998). During the post-war depression, industry suffered from a constant lack of raw materials and trained workforce. Insufficient funds made it impossible to invest in machinery and equipment to the extent required — not to mention the strict customs regulations that may have thwarted such purchases from abroad in the first place. Shortage of funding also affected industrial R&D, which was decidedly meagre in Finland compared to that of other industrialized countries. In 1956 research appropriations accounted for 0.2 per cent of the Finnish GDP, while the corresponding figure in more advanced countries was well over 1 per cent and over 2 per cent in the USA and UK (Törnudd, 1958). By the mid-1960s, R&D expenses had doubled to 0.4 per cent but were still at a low level in international terms (Finnish Government, 1974).