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 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.
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 and strengthening the capacity of startups to grow in selected industries. Entrepreneurship opportunities are widely introduced to different population groups. The City develops its employment services by utilising the resources of the entire City organisation with the aim of strengthening the likelihood of Helsinki residents to find employment. Helsinki’s attractiveness as a city of sustainable tourism, culture and events is also being developed.
During the current strategy period, particular attention is paid to the development of the vitality of the city centre and making Helsinki an increasingly attractive destination for international talent, business and investment. Helsinki has therefore prepared an action plan to strengthen immigration based on work, study and entrepreneurship. The City’s economic policy objective 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.
Helsinki plays an important role in the business activities of Finland as a whole. Helsinki is an important area of business activity that offers the opportunity to innovate, develop new things and make profitable and stable business. For example, Uusimaa accounted for nearly 50% of all research and development expenditure in Finland in 2021. Uusimaa’s research and development expenditure is strongly concentrated in the Helsinki Metropolitan Area. Uusimaa’s research and development expenditure has increased by around 29% between 2016 and 2021. This growth has been strongest in the business sector. 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.
Helsinki’s industrial structure is highly service-intensive. During the pandemic, this service-intensive nature was partly a weakness, as the various restrictions and the decrease in demand hit tourism and restaurant activities important to the city, as well as services such as culture and entertainment, causing a significant increase in unemployment. Meanwhile, other industries, such as information and communications, continued to grow strongly throughout the pandemic. The region’s business has recovered very well from the pandemic, but tourism to Helsinki, for example, has not yet recovered to pre-pandemic levels. This is also affected by Russia’s invasion of Ukraine, which may have an impact on the city’s position as a tourist destination in the longer term. It is still not possible to assess all the effects of the COVID-19 pandemic accurately. For example, how will the increasing remote work affect the development and role of the Helsinki city centre as one of the many urban centres in the Helsinki Metropolitan Area?
Innovative pilot activities for the development of a smart and sustainable city
The City’s Economic Development Department has established testbed activities. The Testbed Helsinki website brings together examples of the City’s innovation cooperation and serves as a platform and communications channel to companies and for publishing innovation challenges. Companies can use the form available on the website to submit pilot proposals for the development of their business in cooperation with the City and other possible stakeholders. The challenge and pilot competitions are used to find the best solutions, and innovation development is carried out in areas such as smart transport, health and welfare promotion, learning environments and a comprehensive range of topics related to the physical and digital urban environment, such as energy efficiency or the planning and implementation of the addition of 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. The pilots selected are financed from the budget of the Economic Development Department either fully or partly in cooperation with operators such as the divisions’ substance units or operators of the City Group, which provides flexibility in the planning and implementation of the pilots to achieve the objectives. In some cases, companies also participate in co-financing the pilots themselves.
Pilots and planning are also carried out in cooperation within the City and with Forum Virium Helsinki, an innovation company owned by the City. In research, development and innovation for sustainable urban development, stakeholder cooperation has also taken on a more prominent role in strategic university cooperation and business incubator activities, for example.
In Helsinki, the themes of innovative activities in the Kalasatama area, among other smart urban development testing environments, have become increasingly focused on sustainable development. This is also the case in the new testing environments in the suburban regeneration and urban development areas in Eastern, Central and Western Helsinki. Projects and national and EU-wide programmes are carried out with companies to develop participatory services that take into account local characteristics. Multidisciplinary activities strengthen cooperation across the City’s divisions, and the building and transformation of areas bring together the activities of the City organisation and partners, thereby strengthening the business base and, in particular, the substance expertise of the Urban Environment Division. This creates a sustainable and innovative Helsinki for its residents.
During 2022, the Urban Environment Division set up an Innovator Network, which was well received and has attracted a wide range of representatives from the different units of the division. The network also invited and engaged people working closely with the Urban Environment Division on innovation from the City Group’s subsidiaries, among others. The network draws on the division’s broad knowledge base to assess needs and make suggestions for pilots, which can be offered for innovation challenges for companies. In urban environments, particular interest, development needs and new business potential are currently focused, in particular, on the digitalisation of the environment, satellite and drone solutions, green infrastructure and climate change adaptation, property management, and improvement of environmental efficiency and the circular economy.
Since 2021, the circular economy cluster of urban construction has significantly promoted the theme’s cooperation and business development potential, especially in 2022. The cluster includes a wide range of companies whose core business concerns the property and construction sector. The City’s cluster work is also progressive on national and EU-level decision-making issues and is running a number of pilots to promote green growth and digitalisation. University cooperation and activities such as joint project planning and business incubator activities to improve sustainable urban environments offer an increasing number of new companies opportunities to bring their solutions to the fore in pilots and even on larger-scale projects. The activities generate more RDI (research, development and innovation) and student-driven entrepreneurship and jobs. Sustainability and positive social impact are growing phenomena and drivers in Helsinki’s growth company ecosystem.
The economic structure of Helsinki and Finland in 2021
- The strengthening of innovative and sustainable testing activities and the building of networks for the establishment of activities within the City organisation and with the City Group’s operators, as well as in cooperation with business incubators and universities. Examples include the establishment of the Urban Environment Division’s Innovator Network and the UrbanTech Helsinki cooperation.
- The expansion of Forum Virium and Kalasatama’s smart urban development themes and participation work in the suburban regeneration and urban development areas together with the divisions, and the expansion of cooperation with external stakeholders and EU-level project activities, such as the New European Bauhaus project.
- The implementation of the City of Helsinki’s cluster programme for circular economy in construction and the extensive extension of cooperation to the business sector (around 100 companies involved in related activities), RDI sector operators, and City Group operators and subsidiaries.
Areas for development:
- Efforts have been made to expand cooperation on innovative and sustainable procurement with the City Group’s operators and in international project cooperation, including through the ICLEI and Eurocities networks. So far, this has been carried out on a rather small scale, but it is important to extend the use of different procurement models to a larger scale.