Learning from the Land of a Thousand Lakes: Finland, Innovation Policy, and Indonesia’s Long Road Ahead

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Introduction: Why Finland?

Discussing innovation policy is always fascinating, especially when exploring advanced cases like Finland and their relevance to Indonesia. For this semester’s final assignment, together with Abdul Faqih Hanan and Marla Ruby Quintine, we examined "A Comparative Review of Innovation Policy: Theoretical Framework, Finland Case Study, and Its Relevance for Indonesia." This analysis provided new insights into building a resilient and adaptive innovation ecosystem.

Innovation policy frameworks have evolved significantly over time—from linear models focusing solely on basic research, to interactive models emphasizing market feedback, and now more systemic approaches such as the Triple Helix (government-industry-university) and Quadruple Helix (including society). Finland successfully employs these systemic models through initiatives like the INKA urban innovation program and the Sitra Fund, supporting community-driven innovations and circular economy projects.

Finland’s Innovation Journey and Its Challenges

Innovation has become Finland’s primary economic and social transformation pillar. Since the 1970s, Finland has consistently prioritized innovation, aiming to invest 4% of GDP in R&D by 2030—a stark contrast to Indonesia's investment below 1% of GDP. Finland’s transformation involved sustained investments in education, research, innovation, and collaborative governance among government, industry, and academia.

Yet, Finland’s innovation journey wasn’t without challenges. The 2009 global economic crisis and Nokia’s fall shook the national innovation ecosystem, highlighting vulnerabilities such as policy fragmentation and declining business R&D. Finland responded by enhancing national coordination, promoting industry-academic collaboration, and diversifying into sectors like clean technology, bioeconomy, and artificial intelligence.

Key Lessons and Recommendations for Indonesia

Indonesia faces significant obstacles in building an effective innovation ecosystem. These include low R&D investment, fragmented policies, weak collaboration among academia, industry, and research institutions, and inadequate Intellectual Property Rights (IPR) protections. The complicated process of IPR registration and minimal commercialization incentives prevent many innovations from reaching the market. Moreover, corporate social responsibility (CSR) remains perceived more as an administrative burden than as a catalyst for innovation.

Indonesia should adopt Finland’s approach to integrating cross-sectoral innovation policies through a mission-oriented strategy. Clearly defined national innovation missions would unify efforts across ministries, agencies, academia, and industries, creating impactful and cohesive outcomes. Additionally, improving Indonesia’s IPR infrastructure through simplified processes and financial incentives for commercialization is vital. Finland’s extensive use of Technology Transfer Offices (TTOs) at universities can serve as an excellent model for accelerating innovation commercialization in Indonesia.

Leveraging digital and technological infrastructure is another key area. Finland demonstrates significant success by prioritizing digital infrastructure and leveraging technologies such as artificial intelligence and big data. Indonesia needs to bridge the digital divide through substantial investment in infrastructure, alongside fostering regional digital innovation clusters to enhance inclusive growth.

The rise and fall of Nokia illustrate that innovation is a continuous process requiring humility, openness to change, and ongoing learning. For Indonesia, institutional reform, mission-oriented policy integration, enhanced collaborative governance, improved IPR protection, and leveraging CSR strategically are essential. By learning from Finland, Indonesia can build an innovation ecosystem that is inclusive, adaptive, competitive, and prepared to face future challenges effectively. This exploration aims to inspire stakeholders to drive meaningful innovation forward across Indonesia.