Lassi Noponen has started as Director General of Business Finland

The new Director General of Business Finland, Lassi Noponen, appointed by the Finnish Government, began his tenure on September 1, 2024.

The newly appointed Director General, who has started a five-year term, greeted the stakeholders of Business Finland even before the beginning of his term. During the director general transition event held in August, preliminary guidelines for the future were heard as the now-incumbent Noponen shared his thoughts on the future Business Finland and how work on behalf of Finland's and Finns' success will be done in the future.

"I begin my role as Director General with enthusiasm but also with humility. We must work together to ensure that the major change process goes smoothly, and at the same time, I hope that we can further clarify the added value Business Finland brings to everyone."

"Thank you, Nina, and all BFers for your work so far. The work for the success of Finland continues, and we invite everyone to join us."

Noponen's speech held during the Business Finland Director General handover event is available in full below the picture.

Speech by Lassi Noponen in the stakeholder event organized at the TF House on August 22, 2024

Dear Director General Nina, distinguished guests.

Thank you, Nina, for your words.

This is a challenging situation in a couple of ways. The audience expects to hear guidelines for the future, yet not all questions have answers at this moment. On the other hand, I do not want my suggestions for reform to be interpreted as criticism of past actions, especially while standing next to the excellent outgoing Director General, whose work has been outstanding.

But this is an important moment, and I want to thank Nina once again for her work. Thank you.

In this address, I will cover

• A bit about my background and relationship with BF,

• How I view the current situation of BF,

• What is happening in the world and how it affects BF,

• Preliminary guidelines on themes I find particularly important for the next five years, and

• How we will work together for the success of Finland and the Finnish people – because ultimately, that is what everything boils down to.

I have a long history with this organization. Reflecting on the past – I have been involved with BF over four decades:

• As a customer in the 90s, when we developed a system with Tekes funding to audit the entire technology assets of the Neste corporation – a young chemist who worked there at the time is standing here beside me now.

• In the 2000s, I participated in export promotion trips as a corporate representative.

• In the 2010s, I acted as an external evaluator for Tekes' strategic R&D projects and led a business delegation for export promotion.

• In this decade, as you know, I have worked within BF's steering structure at the Ministry of Economic Affairs and Employment.

• Dozens of companies I have been involved with have received funding from BF and its predecessor.

Therefore, I have a pretty good feel for this organization.

Each leader of BF and its predecessors has left their mark on the organization. Nina has tuned the processes to be high-quality, as one would expect from a process engineering professional, and I can already say that many things will continue much as before.

I have a background in law and business economics and am now on my third career.

The first was at Neste, where I worked for nearly a decade in leadership roles in legal affairs, technology management, corporate restructuring, and financial administration.

The second, over 20 years, was spent as an investment banker and entrepreneur in private equity firms.

My third career in public administration began a year ago.

The common thread in my career has been technology, internationality, and entrepreneurship. For the last 20 years, I have worked in the field of clean technology, which I believe I know to some extent. I am an avid student of history and am impatient to achieve results.

I feel that BF is a very natural place to invest all the expertise I have accumulated throughout my career.

A few words about this organization. BF is an important part of Finland's economic engine but is quite poorly known to the average person.

We've seen public criticism for example when, in the corona crisis funding – which was set up astonishingly rapidly – there was a misfire, or when the risks of high-risk financing sometimes materialize.

It is good that the bar is set high, and that the use of common funds is closely monitored, but we would be doing something wrong if no risky investment ever failed.

Another unfortunate matter altogether is fraud and crimes. I want to further strengthen and develop BF's internal processes so that there is no room for such activities.

I want to state this clearly: In my opinion, BF is a much more important organization than its current public image suggests. BF is Finland's "secret sauce," a secret weapon called upon to handle important state projects because it has expertise in business and technology as well as the capacity to execute. This analysis is also supported by consistently good or excellent customer evaluations that BF has received.

It is an unfortunate truth that BF has not been given time to work in peace, and its structure is once again being significantly changed. A surprising decision, the international network is being transferred to the control of the Ministry for Foreign Affairs, and operational expenses are being significantly reduced.

Structural changes are painful, but regardless of our opinions on the decisions made, our task now is to ensure the best possible outcome.

But what is a good outcome – what is good?

The quality of the outcome is measured from the perspective of our customers, the Finnish companies. BF as an organization is not an end in itself, but our value is measured by Finland's success. In this regard, BF may have some room for improvement in its own operations.

There is also a positive change on the horizon. BF's R&D funding authority will significantly increase in the coming years. This, combined with shrinking operational expenses, is certainly a challenging equation, but one of BF's strengths is its good spirit of working for Finland, and even in this situation, it provides a solid foundation to build upon.

BF's latest major change process does not occur in a vacuum. In my previous role, I had a front-row seat to observe how rapidly the operating environment is changing.

Geopolitics has astonishingly quickly become a dominant factor in commercial relations between states, rather than open market economies – this is perhaps seen more quickly and clearly in the Ministry of Trade than in the markets, unlike many other things.

Large state subsidies are being used by nations everywhere to "pick winners," and we in Finland cannot dictate the rules by which the global economy operates – we must adapt.

There is an old saying that the state should not pick winners, but in Finland, the state has historically been heavily involved in building industries, so we might have some ingrained expertise in this activity.

I suspect that we will live in a geopolitically dominated environment for a long time. This will also affect BF as new funding products emerge, as well as opportunities for cooperation, for example through NATO and among allies.

In public discussion, there has already been mentions of potential collaborations in areas such as quantum technology and icebreakers. More is sure to follow.

Finland's problem is well known to all of us: no growth for 16 years, no improvement in productivity. The deterioration of the economy is a vexing phenomenon because it creates a negative spiral for every sector of society, which we can also see happening here.

What can we do here at BF to help turn Finland back onto a path of growth?

To put it fashionably, three points:

1. We need to keep the customer at the center and perhaps simplify BF's operations somewhat – by this, I mean that customers should not develop products to BF's funding requirements but to market demands. We must trust in companies that must know their own markets, but BF must have the ability to recognize sustainable competitive advantages.

2. On the other hand, we must also demand more from companies. Taxpayer-funded grants to companies are not automatic; they are a privilege that can be granted in Finland if it is seen to benefit the country.

3. However, we must also remember that when funding companies, BF must take great risks, and we need courage because we know there will inevitably be misses, but that is part of building something new. And let's remember to celebrate the winners, not just look for problems.

In addition to financial expertise, I feel that one of my main tasks is to ensure that BF's benefits are understood throughout society – that it receives the recognition it deserves. Recognition is not an end in itself, but if the changes we achieve together are not well understood, there is a risk that the existence of the entire operation, as beneficial as it is, will be questioned.

BF can take on a larger role in public discussion than before.

The Finnish economy is on the brink of collapse, but the government has addressed the issue, and necessary reforms have been made. BF has a significant role to play in the pursuit of growth.

One reform is to significantly increase investments in R&D activities. It is not self-evident that taxpayers should participate in companies' product development and export promotion, but there is a lot of research evidence that state contributions to early-stage R&D activities are economically justified.

However, we cannot invest in everything, and choices must be made. We have areas of strength in high technology where Finland can and has already built competitive advantages (quantum computing, space technology, shipbuilding, AI applications to improve industrial processes).

The government program also aims to increase the number of medium-sized Mittelstand companies. From BF's perspective, it would be excellent if we could support the emergence of category leaders in Finland. These companies, leaders in their own, even narrow, fields, have large positive spillover effects on society (e.g., immigration).

Prioritization is needed, but another problem in Finland is that everyone often chases after the same fashionable idea or concept. In addition to focusing on priorities, I want BF to also enable the development of unfashionable ideas.

For me, it is now important to spend the first few months in the role getting to know the organization and listening to perspectives.

Finland is a small country, and we have good cooperation between different actors, many of whom are represented here today. This, together with the good spirit of BF, is a key to success, and I want to continue to develop it.

Please bear with me for a moment longer.

Amidst all the noise, I feel the greatest responsibility for ensuring that we use significant taxpayer funds carefully and that they generate growth in well-being for Finns. One of my beacons is to look at the world through an "economist's lens."

Interest groups pursue their own benefits in the economy, as they should, but when BF distributes taxpayer money, it must keep the overall good of society clearly in mind.

I grew up during the decades when Finland rose to the top of the world in practically every measurable way. Although those decades had their challenges, the quality of life for Finns visibly improved continuously. This is no longer a given. BF has an important role to play in ensuring that Finland's success story continues and does not turn into a tragedy.

I begin my role as Director General with enthusiasm but also with humility. We must work together to ensure that the major change process goes smoothly, and at the same time, I hope that we can further clarify the added value BF brings to everyone.

Thank you, Nina, and all BFers for your work so far. The work for the success of Finland continues, and we invite everyone to join us.

(translated with the help of AI)