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10.5.2024 13:51

Number of business subsidy recipients halves

Statistics Finland says 18,889 companies got subsidies last year.

The number of recipients of business subsidies has halved compared to 2022. In monetary terms, the amount of direct business subsidies declined by over 40%.

“Subsidiary recipients are larger-than-average companies. Considering the challenges to public finances, we have too many companies enjoying large, ongoing business subsidies. “A critical review of business subsidies and a shift in focus to subsidies that more strongly support reinvention, growth and competitiveness would be justified,” Petri Malinen, an economist at Suomen Yrittäjät, the Finnish SME association, says.

Data from Statistics Finland show that €541m in direct business subsidies were paid and €1,184m awarded in 2023. Compared to 2022, the volume of direct business subsidies awarded dropped by 41%.

Of subsidies awarded, around a quarter goes to micro-enterprises, a quarter to SMEs, and half to large companies.

“When we know that in Finland micro-companies make up 96.5%, SMEs 3.4% and large companies 0.2%, we can see that business subsidies are focused very heavily on large companies,” Malinen says.

“Last year, 18,889 companies received subsidies. The number halved since 2022 and when compared to the entire field of businesses, which consists of 571,742 businesses, we see that just over 3% of companies got subsidies,” Malinen says.

Subsidies favour the few in monetary terms

“Business subsidies are paid to many companies, but in monetary terms, they favour small numbers of people,” Malinen says.

Half of direct subsidies are awarded to just 3.6% of recipients. In 2023, the average amount of paid subsidies was around €100,000.

Most subsidies were awarded for research, development and innovation (RDI), international expansion and company operations, for which €574m was awarded.

RDI, international expansion and company operations are the most subsidized target class of business subsidies in monetary terms. Subsidies for these operations were awarded to 12,300 businesses. The number is around two thirds of all subsidized businesses.

“Supporting these operations is important and justified to support Finland’s competitiveness and growth over the longer term. Growth and competitiveness decide the kind of welfare state we have in the future,” Malinen says.

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