Mid-term evaluation of the leading company initiative (LCI) partnerships

Mid-term evaluation of LCI partnerships was undertaken in collaboration between VTT and MDI in the Autumn 2024.
The evaluation project focused on assessing the mid-term impacts of Business Finland's Leading Company Initiative (LCI) on the development and growth of business ecosystems, particularly through business-research cooperation. The evaluation proposal includes several steps: developing a customized impact model based on Business Finland's ecosystem impact framework, collecting and analysing data using advanced text analytics and large language models (LLMs), and measuring the most important forms of additionality (input, behavioural, and output). The analysis covered the effectiveness of business-research cooperation, the significance of common roadmaps, the emergence of societal impacts, and the growth of SMEs within LCI ecosystems. The goal of the mid-term evaluation was to provide insights into the success of the LCI and its broader impacts on the Finnish economy and society, for Business Finland to improve its operations and praogramme activities.

The evaluation of Business Finland's Leading Company Initiative (LCI) highlights significant advancements in fostering collaboration between businesses and research organizations. The initiative, launched in 2020, aims to tackle future challenges, boost R&D investments, create jobs, and positively impact Finnish society. By June 2024, 23 LCIs have been selected, each eligible for substantial funding. The ecosystems have succeeded in mobilising significant resources for research and innovation, and well under way in achieving their main targets, though the challenged in the operative environment have been significant and have in some cases slowed down the impact (e.g. in mobilising more SMEs).

The evaluation focused on the impact of cooperation within these ecosystems, developing new methodologies for analysing ecosystem impacts, particularly through NLP and advanced text analytics. The evaluation of the LCI partnerships demonstrates the initiative's success in fostering collaboration, generating knowledge spillovers, and contributing to Finland's strategic goals, and the findings provide insights for future development and utilisation of the LCI instrument to achieve national and international objectives. The findings indicate that the LCI has successfully generated knowledge spillovers and other externalities beyond the ecosystems, contributing to Finland's strategic goals. Main value added identified in the evaluation include:

Significance of Collaboration: The collaboration between companies and research organizations has been crucial in achieving the goals of the LCI. The partnerships have led to the development of new technologies, solutions, and business models, enhancing the global competitiveness of Finnish companies.

Knowledge Spillovers and Externalities: The LCI has generated significant knowledge spillovers and externalities, benefiting not only the participating organizations but also the broader Finnish economy and society. These include increased R&D investments, job creation, and advancements in sustainability.

Additionality of LCI Activities: The LCI activities have shown substantial additionality, particularly in terms of input additionality (increased investments and cooperation), behavioural additionality (changes in behaviour of firms and research organizations, e.g. more innovation-friendly and actively international SMEs with a stronger growth mind set), and output additionality (tangible results and synergies, e.g. business growth, patenting, exports).

Impacts on Finnish Economy and Society: The LCI has had a positive impact on the Finnish economy and society, contributing to sustainable development and addressing environmental themes. The initiative has significant potential for helping Finland achieve its 4% R&D targets, as well as employment targets in the participating companies. Significant differences exist between the various types of companies, and whilst both large and small companies benefit from knowledge spillovers and externalities generated through ecosystem cooperation, the impact may be more substantial for smaller companies, as they gain access to new knowledge, technologies, and best practices that can drive their growth and development. Smaller companies benefit from accessing larger research networks and partnering with more established firms and research institutions.

Future Directions: As Finland aims to increase R&D funding to 4% of GDP by 2030, the lessons learned from the LCI collaboration will be crucial in mobilizing resources and solidifying close collaboration between businesses and research organizations. A more mission-driven approach to LCI collaboration has been clearly visible and could be further fostered within the LCI ecosystems and between them.