The CTO Survey was conducted by Spinverse Ltd. and covers Finnish CTOs’ views on the current innovation environment and its future outlook. The survey was supported by EK, Sitra and Technology Academy Finland.

1. CTO Survey 2013
23 Jan 2013
Terhi Marttila, Jussi Kajala,
Laura Kauhanen, Pekka Koponen

2. Contents
CTO Survey 2013 Introduction
CTO Outlook on 2013
CTO Views on Innovation across Value Chains

3. CTO Survey 2012
Introduction

4. CTO Survey covers Finnish CTOs’ views on the
current innovation environment and its future
outlook
Spinverse annually conducts the CTO Survey, targeted to Finnish Chief
Technology Officers (CTOs). The survey deals with themes that arise in the semi-
annual CTO Forum events.
The CTO Survey 2013 was done in partnership with Sitra, Confederation of
Finnish Industries (EK) and Technology Academy Finland (TAF)
The survey received 120 responses from various industries: online responses were
complemented by interviewing representatives from large companies.
Almost half (43 %) of the responses were from big corporations.
The results of the survey are compared to the previous years.

5. Nearly half of the TOP 100 R&D investors in
Finland answered the survey, added by other
significant Finnish companies
Examples
• Wärtsilä • Outokumpu
• Metso • Tikkurila
• Orion • Ahlstrom
• Kone • Sartorius Biohit Liquid Handling
• Bayer Schering Pharma • Logica
• UPM • Gasum
• Kemira • STX Finland
• Neste Oil • Beneq
• Tieto • Okmetic
• Fortum • NSN
• Konecranes • Ponsse
• EADS Secure Networks • Patria
• Vaisala • Santen
Over 95 % of Finnish R&D investments are done by the top 100 investors.
We cover this population well.

6. The main part of the respondents are
from technology-intensive industries
0 5 10 15 20 25 30 35
Electronics and ICT 33
Metal and Mechanical Engineering 22
Energy and Environment 15
Life Sciences and Healthcare 13
Chemical Industry 11
Forest, Pulp and Paper 7
Construction 6
Mining and Metallurgy 4
Food and Nutrition 4
Media and Marketing 1
The top three industries are similar to the surveys of 2012 and especially 2011.
The next two have bigger proportions now than in 2012, and there were no responses
from construction industry in 2012.

7. Nearly half of the respondents place their
companies to their value chain mainly as end
product manufacturers
0 10 20 30 40 50 60
Infrastructure 9
Back-office services 2
R&D services 14
Operational services 9
Sourcing and processing of raw materials 5
Intermediary products and composites 10
Assembly of sub-systems 6
Manufacturing of end products 50
Marketing, sales, distribution 11

8. The responses from the electronics and ICT industry cover
almost the whole value chain. On the other hand, metal and
mechanical engineering mainly belong to the group of end
product manufacturers.
0 5 10 15 20 25 30 35
Electronics and ICT 4 1 7 7 3 2 8 1
Metal and Mechanical Engineering 1 1 1 19
Energy and Environment 4 1 1 1 1 5 2
Life Sciences and Healthcare 1 1 1 5 5
Infrastructure
Chemical Industry Back-office services
2 1 4 3 1
R&D services
Forest, Pulp and Paper 1 1 1 4 Operational services
Sourcing and processing of raw materials
Construction 1 4 1 Intermediary products and composites
Assembly of sub-systems
Mining and Metallurgy 1 1 1 1 Manufacturing of end products
Marketing, sales, distribution
Food and Nutrition 1 1 1 1
Media and Marketing 1

9. R&D budgets vary between companies.
In general, SMEs use a bigger percentage of
their revenues to R&D
% of revenues used to R&D
> 15 % 21 5
SMEs
10-15 % 9 6
Big companies
6-9 % 6 5
2-5 % 17 14
<2% 9 20
N/A 1 3
0 5 10 15 20 25 30 35
Almost a half (48%) of SMEs but only 21 % of big companies use more than 10% of
their revenues to R&D.

10. CTO Outlook on 2013

11. Almost half of the CTOs plan increases to the
R&D budget for 2013 – however, the CTOs are
less optimistic than in the previous years
Diminishing resources have been a challenge
CTOs who increase R&D investments during the years past. The CTO becomes
responsible for leading operative R&D:
60% 56% methods and processes.
51%
50% 46%
39% 40%
40%
30%
20%
10%
0%
2011 prediction 2011 actual 2012 prediction 2012 actual 2013 prediction
Only about 13% had decreases in 2012 and 9% had them in sight for 2013.

12. Especially metal, life sciences and food sectors
increased their R&D investments for 2012,
whereas the forest industry decreased those.
R&D Budget in 2012
70% 62%
60% 55%
47% 50%
50%
40% 36%
30% 29%
30% 24% 25%25%
17%
20% Increase
9% 8% 9%
10% 0% 0% 0% 0% 0% 0% Decrease
0%
Electronics Metal and Energy and Life Chemical Forest, Pulp Construction Mining and Food and Media and
and ICT (n = Mechanical Environment Sciences Industry (n and Paper (n = 6) Metallurgy Nutrition (n Marketing (n
33) Engineering (n = 15) and = 11) (n = 7) (n = 4) = 4) = 1)
(n = 22) Healthcare
(n = 13)
R&D Budget in 2013
80% 75%
70%
60% 50%
47%
50% 40% 42%
38%
40% 29%
30% 25%
14% 17% 14% 17% Increase
20% 13%
10% Decrease
0% 0% 0% 0% 0% 0% 0%
0%
Electronics Metal and Energy and Life Chemical Forest, Pulp Construction Mining and Food and Media and
and ICT (n = Mechanical Environment Sciences Industry (n and Paper (n = 6) Metallurgy Nutrition (n Marketing (n
33) Engineering (n = 15) and = 11) (n = 7) (n = 4) = 4) = 1)
(n = 22) Healthcare
(n = 13)

13. Even though a third of the companies increases
recruiting in 2013, this number has clearly
declined from the previous years
CTOs who increase R&D recruiting
80% 73% Many big corporations have decreased the
70% number of R&D employees. The business
65%
units are tied up with day-to-day work;
60% a balance should be retained, it is difficult
54% at the moment.
50%
40%
29% 28%
30%
20%
10%
0%
2011 prediction 2011 actual 2012 prediction 2012 actual 2013 prediction
However, only about 10 % foresee decreases for both 2012 and 2013.

14. The biggest drops in recruiting from 2012 to 2013 happen
within the Metal and Mechanical engineering, as well as
Chemical industries.
R&D Employees in 2012
50% 44%
45% 40%
40% 35%
35% 30% 31%
30% 25%25% 25%
25% 21%
20% 14%14%
15% 10% 11% Increase
8%
10%
Decrease
5% 0% 0% 0% 0% 0% 0%
0%
Electronics Metal and Energy and Life Chemical Forest, Pulp Construction Mining and Food and Media and
and ICT (n = Mechanical Environment Sciences Industry (n and Paper (n = 6) Metallurgy Nutrition (n Marketing (n
33) Engineering (n = 15) and = 11) (n = 7) (n = 4) = 4) = 1)
(n = 22) Healthcare
(n = 13)
R&D Employees in 2013
60%
50%
50% 44% 42%
40%
40%
30% 25%
20%
20% 17%
13% 13%13% 14%14% Increase
10%10%
10% Decrease
0% 0% 0% 0% 0% 0%
0%
Electronics Metal and Energy and Life Chemical Forest, Pulp Construction Mining and Food and Media and
and ICT (n = Mechanical Environment Sciences Industry (n and Paper (n = 6) Metallurgy Nutrition (n Marketing (n
33) Engineering (n = 15) and = 11) (n = 7) (n = 4) = 4) = 1)
(n = 22) Healthcare
(n = 13)
In 2013, recruiting clearly increases in the Electronics and ICT, Construction, and
Mining and Metallurgy industries.

15. Over a half of the companies introduce an
increasing number of products or services to the
markets each year
60% 54% 53%
50%
40%
33%
30% 28%
20%
10%
0%
New products - New products - Filed patents - Filed patents -
2012 2013 2012 2013
Only 2% decreased the numbers of new products and patents in 2012.
For the year 2013, 2% see decreases in the number of new products and no
one in the number of patents.

16. An increasing number of companies is planning
to benefit from external technology sources
0% 5% 10% 15% 20% 25% 30% 35%
Licensing technologies from an external 28%
party 32%
Licensing technologies to an external 21%
party 28%
Buying IP/patents from an external party 9%
14% 2012
2013
Selling IP/patents to an external party 5%
11%
Acquiring a company because of its 11%
technology portfolio 16%
Creating spin-offs 9%
16%
In 2011 and 2012, 23 % of CTOs planned to license out a technology.
Moreover, only 7 % actually did that in 2011, compared to 21 % in 2012.

17. R&D budgets vary between companies.
In general, SMEs use a bigger percentage of
their revenues to R&D
% of revenues used to R&D
> 15 % 21 5
SMEs
10-15 % 9 6
Big companies
6-9 % 6 5
2-5 % 17 14
<2% 9 20
N/A 1 3
0 5 10 15 20 25 30 35
Almost a half (48%) of SMEs but only 21 % of big companies use more than
10% of their revenues to R&D.

18. CTO Views on Innovation
across Value Chains

19. Finnish CTOs understand the importance
of customers and suppliers in R&D
The occurrence of R&D collaboration of the CTOs’ companies with...
100 % 4 5 5
2
90 % 7 9
11 22 22
8 36
80 % 9 No opinion
70 % Never
32 30
60 % 38
45 Have tried, once or
22 50
50 % twice
Occasionally
40 % 6
30 % 8 Continuously
51 50 24
20 % 40 14
22
10 %
13 14
0% 4 0
Collaborative Collaborative Collaborative Collaborative Crowdsourcing: Open innovation
R&D with R&D with R&D with R&D with other Utilizing e.g. platforms: e.g.
universities or customers suppliers external end-users in co- Demola, Design
research partners than creation Factory,
institutes within the ones listed Innovation Mill
our main above
industry

20. The main benefit of R&D collaboration are product or service
ideas for electronics and energy, flexible knowledge for metal
and life sciences
Electronics and ICT Metal and Mechanical Engineering
90% 100%
80% 90% 10%
70% 19% 80%
16% 38% 34% 16% 70% 15% 15% Not important
60% 60% 10% 15%
50% 41% 45% 10% 25%
19% 50% 20% Important
40% 40% 80%
30% 59% 56% 56% 30% 60% 55% 60% 55% 65%
20% 44% 47% 20% 45% 40%
31% 29% 34%
10% 10%
0% 0%
Energy and Environment Life Sciences and Healthcare
120% 100%
90% 8% Not important
100% 80%
20% 38% 0% Important
80% 20% 70% 31% 23%
0% 10% 10% 60% 31%
60% 50% 31% 15%
40% 85% 77%
40% 80% 10% 70% 70% 20% 70% 20% 70% 30%
46% 54% 54% 54% 46%
20% 20% 38%
30% 30% 30% 10%
0% 0%

21. Networks are important as a main benefit of R&D
collaboration for chemical, construction and mining
sectors. Forest values customer satisfaction and new
markets.
Chemical Industry Forest, Pulp and Paper
120% 120%
100% Not important
100% 14%
29% 25% 80% 0% Important
80% 13%
38% 63% 25% 60% 14%
60%
14% 14% 14%
40% 40% 86% 86%
75% 25% 71% 25% 75% 14% 43%
50% 50% 57%
20% 38% 20% 43% 43% 43%
25% 25% 29%
0% 14%
0%
Construction Mining and Metallurgy
120% 120%
Not important
100% 0% 0% 100% 0%
80% 25% 80% 33% 33% Important
50% 0%
25% 60% 67% 67% 0% 0%
60%
50% 0% 100% 100% 33% 100%
40% 75% 75% 40%
67% 67% 67% 67%
20% 50% 50% 50% 20%
25% 33% 33% 33%
0% 0%

22. Collaborative R&D across value chains is
considered to be easy – is it really?
60%
Would like to do more SMEs
50%
50% Big
42%
40% 38%
34%
29%
30% 26% 27%
23%
21%
19%
20%
13% 13%
10%
0%
Collaborative R&D with Collaborative R&D with Collaborative R&D with Open innovation Crowdsourcing: Utilizing Collaborative R&D with
suppliers customers universities or research platforms: e.g. Demola, e.g. end-users in co- other external partners
institutes within our main Design Factory, creation than the ones listed
industry Innovation Mill above
16% 15%
Find it difficult SMEs
14% Big
12% 11%
10%
10%
8%
8%
6% 6%
6%
4%
4%
2% 2% 2% 2%
2%
0%
0%

23. The CTOs would like to increase their R&D
collaboration especially with Finnish SMEs
Ardent, innovative entrepreneurs have
a lot stronger drive than the ones working 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
in big corporations.
32% SMEs
Finnish SMEs
44%
Big
23%
SMEs abroad
23%
21%
Large Finnish corporations
25%
30%
Large corporations abroad
27%
26%
Universities and Research Institutes in Finland
27%
17%
Universities and Research Institutes abroad
27%

24. Foreign SMEs and large companies are seen as
interesting, but how to find good R&D partners
among them?
The amount of CTOs who think that it is easy to find good R&D partners among...
80% 75%75%
70%
60%
60%
54%
52%
50% 48%
42%
40%
40%
32%31% 32% SMEs
30% 25% Big
21%
19%
20%
10%
0%
Start-ups Finnish SMEs SMEs abroad Large Finnish Large Universities Universities
corporations corporations and Research and Research
abroad Institutes in Institutes
Finland abroad

25. CTOs’ views on networking and
collaborative R&D
Networking is important for the When developing your product portfolio
development work; however, it needs upstream in the value chain, you need to
to be remembered that own skills remember not to go to your customer’s
are needed in order to absorb new area of business.
knowledge.
By developing service business,
a technology supplier can
participate in process and
technology optimisation.
R&D could be developed by improved
networking. CTOs have a central role
in this. In order to ensure expertise and an
availability of knowledgeable employees,
It is important to support the research
done at universities. That can often also
be utilised in processes and product
development.

26. SHOKs are clearly more important for big
companies than for SMEs. EU funding is
only important for a third of the CTOs.
100 %
10%
90 % 19% 20% 24% 21%
25%
14%
80 % 4% 39%
4%
1%
55% 48%
70 % 60%
60 % 40% 37%
42% Not important
50 % Not utilized
30%
5% 9% No opinion
40 % 77% 77% 75% 4% 9%
24% Important
30 % 8%
20 % 40% 33% 36% 34%
31%
26% 28%
10 %
0%
Tekes Tekes Tekes SHOKs SHOKs SHOKs ELY EU EU EU
2010 2011 2012 2010 2011 2012 2012 2010 2011 2012
• In 2010 and 2011 figures, the “not utilized” opinion was not used
• 65% of the CTOs who stated SHOKs to be important were from big corporations

27. In 2012, SHOK funding was found the most
important by companies within the Forest, pulp
and paper industry, as well as Metal and
mechanical engineering
100 % 0%
90 % 18% 17%
21% 23%
27%
32%
80 % 43%
70 %
33%
20% 36%
60 %
42% 0%
27%
50 % 54% Not important
Not utilized
40 %
9% 33% No opinion
33%
30 % 12% Important
57%
45%
20 %
32% 15%
10 % 24%
20% 17%
8%
0% 0%
Electronics Metal and Energy and Life Sciences, Chemical Forest, pulp Construction
and ICT (33) mechanical environment Healthcare, Industry (11) and paper (7) (6)
engineering (15) Pharma (13)
(22)

28. The importance of SHOK funding remains the
same in 2013
100 % 0% 0% 0% 0% 0%
9%
14%
90 %
33%
80 %
27% 47%
54% 50%
70 % 29%
64%
60 %
50 % Decrease
No opinion
40 % 52%
50% Stay similar
33%
30 % 47% Increase
38% 57%
27%
20 %
10 % 17%
15% 14%
7% 8% 9%
0% 0%
Electronics Metal and Energy and Life Sciences, Chemical Forest, pulp Construction
and ICT (33) mechanical environment Healthcare, Industry (11) and paper (7) (6)
engineering (15) Pharma (13)
(22)

29. A quarter of the respondents were not familiar
with the most common EU funding opportunities
CTOs who find these EU funding opportunities familiar
0% 10% 20% 30% 40% 50% 60% 70%
Framework Programme 7 (FP7) 58%
65%
EUREKA, Eurostars 25%
23%
Horizon 2020 8%
35%
SMEs
Structural Funds (EAKR, ESR) 23% Big
13%
Joint Undertakings (e.g. ENIAC, ARTEMIS, 8%
Clean Sky) 21%
Competitiveness and Innovation Framework 2%
Programme (CIP) 6%
None of the ones mentioned 21%
27%

30. Mining and metal industries need more piloting
opportunities, SMEs and more value added
processing to be done in Finland
Good technology companies in the metal industry A problem of small entrepreneurs is credibility.
value chains are quickly acquired by someone. However, giving opportunities for piloting has been
our policy. [The company] sees new SMEs
beneficial and needed within the industry.
• The mines that have been active in Finland for a long time have
active collaboration in technology piloting with their technology
suppliers.
• Technology companies within the mining industry would like to
collaborate more with Finnish SMEs and wish to have new
entrepreneurs within the industry
• The mines that have opened in Finland lately bring new opportunities
for enlarging the collaboration to new metals and production
processes
• Domestic value-added to Finnish ore should be increased
Where will Finnish mining technology be developed
in the future? [...] Core competences should be retained
in Finland.

31. Conclusions
Even though Finnish CTOs see their R&D investments and
recruiting to increase, they are less optimistic than in the previous
years: less CTOs see increases coming up.
Most CTOs have R&D collaboration with their customers, suppliers
and universities. Big corporations would like to increase R&D
collaboration especially with Finnish SMEs. However, only a third
of the SME CTOs think that it is easy to find good R&D partners
among big corporations.
Building international networks would need additional emphasis to
also enable a better gain from international funding opportunities:
25% of Finnish CTOs are not familiar with the most common EU
funding opportunities and only a third of them thinks that EU is an
important source of public funding.
The interviews revealed that Finnish mining and metal industries
need more piloting opportunities, SMEs and more value added
processing to be done in Finland.