In a vibrant city, companies have good opportunities to operate, grow and innovate. A well-functioning city is an important prerequisite for the success and competitiveness of companies. The city must be a high-quality and attractive living environment. A pleasant and safe city; well-functioning basic public services; art, cultural and recreational services; adequate housing, business premises and education; smooth transport and efficient administration form the basis for the success of companies and employees. Every division and individual employee of the City of Helsinki influences the city’s vitality with their daily work.
Helsinki is an important area of business activity on a national scale, offering opportunities to innovate, develop new things and do profitable and stable business. For example, Uusimaa accounted for nearly 50% of all research and development expenditure in Finland in 2022. Uusimaa’s research and development expenditure is strongly concentrated in the Helsinki Metropolitan Area. The potential for business renewal and growth in the Helsinki Metropolitan Area and Helsinki is also well illustrated by the capital investments received by startup and growth companies in the region. These investments are highly concentrated in the Helsinki Metropolitan Area in Finland.
The economic structure of Helsinki is very diverse. Compared to the rest of Finland, the industrial structure in Helsinki is service-intensive. Around 85% of employees in companies in Helsinki work in the service sector, whereas the figure for the whole country is around 64%. In recent years, the business environment in Helsinki has been subject to a number of external changes. The COVID-19 pandemic seems to have changed the way we work. Increased remote work is affecting the real estate market in Helsinki and has undermined the vitality of the city centre. Russia’s invasion of Ukraine, on the other hand, has affected Helsinki’s position as a tourist destination. For example, the restrictions on flying over Russian airspace are affecting Helsinki’s accessibility from Asia.
The City of Helsinki’s Economic Policy Priorities 2022−2025 structure the City’s economic policy priorities and activities. The City continues its long-term economic policy by investing in strengthening business and innovation environments that support the competitiveness of companies by means such as developing cooperation with higher education institutions in the region. The City invests in the growth and renewal of entrepreneurship and business in Helsinki by providing services for starting a business. Entrepreneurship opportunities are widely introduced to different population groups.
One of the City’s economic policy objectives is to develop Helsinki as a source of business that solves globally relevant problems. The City organisation responds to this objective by providing companies with opportunities to develop products and new solutions in an urban environment and with different City services.
Innovative piloting for a sustainable and smart city
The Testbed Helsinki activity of the City’s Economic Development Department has become established, and the procedure has been harmonised within the City organisation with other innovation service and funding providers that carry out innovation work, such as the City Executive Office’s Digitalisation Unit and Forum Virium Helsinki. An active discussion and exchange of information on the needs and supply of solutions to address specific issues between the divisions, Helsinki Group companies, other companies and representatives of the research, development and innovation sector is essential to ensure smooth implementation.
The Testbed Helsinki website provides a wide range of examples of the City’s innovation work and serves as a platform and communications channel to companies and for publishing innovation challenges. Companies can also use the form on the site to submit test proposals to help them take their business forward. Joint development is carried out in areas such as smart mobility, health and well-being and learning environments, and across the urban environment, for example to increase energy efficiency and urban greenery.
The City’s divisions employ so-called innovation agents, who are joint experts of the City Executive Office’s Economic Development Department and the divisions and whose task is to facilitate cooperation between companies and the City, identify development needs and find new, sustainable solutions to the city’s various challenges. This work is important to ensure high-quality and up-to-date work that contributes to the City’s shared sustainability goals. The pilots selected should continue to be financed with the Economic Development Department in cooperation with operators such as the divisions’ substance units or operators of the Helsinki Group. This approach provides flexibility and engages the different operators in a joint effort to design and implement the pilots in order to achieve the objectives. In some cases, companies also participate in co-financing the pilots themselves.
Joint implementation with the City’s innovation company Forum Virium Helsinki has also been further intensified, enabling a broader-based discussion and co-planning of pilot implementations. Projects in the common themes of university cooperation have also helped clarify common objectives and harmonise activities. This strong cooperation has also resulted in new pilot initiatives.
Sustainable innovation development in projects and business cooperation
Between 2023 and 2024, several new joint projects for sustainable urban development were launched in areas such as the circular economy in construction, energy efficiency and sustainable transport. In particular, work is also underway on new imaging and satellite technology solutions to support city planning and survey the state of urban nature. Forum Virium Helsinki is a key partner in these activities. Some of the solutions found support the development of solutions such as a 3D city information model for residents and solutions for planning activities within the City organisation. Urban greenery and biodiversity have become increasingly central themes. The City has been able to partner with a number of new companies that genuinely want to develop the city with sustainability as a priority, gaining access to the solutions they offer. Some of the projects have been initiated with the support of the Testbed Helsinki pilot implementations, or the support has reinforced the decision to undertake the projects. A trend that has also emerged is that in many pilots and larger projects, it has become more common to use various AI solutions to facilitate practical work.
Since 2021, the City of Helsinki’s Circular Economy Cluster Programme in construction has been a major project, channel and driving force for sustainable urban development that has resulted in scalable implementations from individual trials. It has attracted more than 150 companies and partners from the RDI sector. Many of them have been involved in concrete testing and pilot implementations, and have been able to present their activities to a wide network both in Finland and abroad, as well as spread the word about this activity that brings together cities and the construction sector and is highly significant in terms of its emission reduction and business potential. The cluster is also very active in the pioneering discourse on national and EU-level policy-making issues, developing practical work on green growth and digitalisation.
The City’s strategic cooperation with higher education institutions has facilitated the joint planning of sustainable development projects, and operational readiness has developed over the past few years. Network-based collaboration has also increased opportunities to bring in strong talent, and the needs-driven nature of project calls is on a solid footing. The activities increase RDI- and student-driven entrepreneurship and jobs. However, it is still important to develop all network-based development work through regular meetings and information exchange.
The City of Helsinki has long coordinated a local business network on environmental issues, particularly those that address climate challenges, with the aim of making the issue more visible and getting companies to work together with the City on climate and environmental goals. Climate action in the business world has come a long way in the last ten plus years, with many companies becoming highly responsible leaders in climate action. Environmental issues and sustainability have increasingly received the attention they deserve in recent years, and the Business Services Unit of the Economic Development Department is currently working to activate a broad-based sustainability network called Sustainability Partners. The main principle is to help local businesses improve their sustainability performance, facilitate cooperation between businesses and encourage joint development in line with the City’s sustainability goals. Another interesting, burgeoning area for sustainable business is the so-called blue economy, which refers broadly to coastal and marine environments and the sustainable use of resources and job development that preserve and enhance the well-being of their ecosystems. Similarly, the green economy is an emerging theme related to green solutions.
International cooperation and interest in Helsinki in terms of companies’ new, sustainable and innovative solutions and trial opportunities have developed positively. One positive channel has been the development of Nordic and wider European cooperation between cities, for example in the context of the annual Barcelona Smart City Expo. A joint visit to the event in 2023 proved to be a very positive experience to showcase local business solutions and establish important contacts. The event also brought concrete benefits to the City, and discussions at the event led to the launch of a joint project with the City of Stockholm to promote biodiversity. In addition to Europe, interest in joint business development and markets on climate and environmental issues has emerged with cities such as New York, Tokyo and Singapore. Experts from the Economic Development Department have also been involved in the City’s discussions on developing solutions for the reconstruction of Ukraine and have helped find the right business contacts to develop Ukraine’s energy infrastructure and energy self-sufficiency.
Successes:
- The common benefits of testing activities have been identified through cooperation between the City organisation and Group with several companies, examples of which include the green noise walls as part of a pleasant urban environment and the integration of the testing activities into different projects, such as the PilotGreen urban green pilots coordinated by Forum Virium. Collaborative trials on themes such as biodiversity have contributed to the implementation of wider measures on the theme.
- Innovative and sustainable testing activities have been strengthened and have helped establish networks within the City organisation and with the Helsinki Group’s operators, as well as in cooperation with business incubators and universities. An example is the Urban Tech Helsinki business incubator between the City of Helsinki, Aalto University and Metropolia University of Applied Sciences.
- The City of Helsinki’s Circular Economy Cluster Programme in construction has strongly developed cooperation in the industry, facilitated by the City. The three-year implementation has brought together business, RDI sector and city network operators and subsidiaries for concrete circular economy actions and actively promoted discussion on joint development and cooperation between operators. The cluster network includes more than 150 operators from the Helsinki Metropolitan Area and beyond.
Areas for development:
- The aim is to further expand cooperation on innovative and sustainable procurement with the operators of the Helsinki Group and, where possible, in international project cooperation. It is important to make use of different procurement models, and this requires training, courage and implementation examples.
- The activities of the Sustainability Partners network and innovation agents require permanent resourcing to integrate innovation and experimentation into the day-to-day work of the divisions.
Programmes and websites:
Testbed Helsinki
City of Helsinki Sustainability Partners
Forum Virium Helsinki
Urban Tech Helsinki