The software industry is one of Finland’s most prominent industry sectors. The industry -- along with software entrepreneurship -- has grown rapidly since the early 1990s. In 2004, there were about 3,000 software companies in Finland, the majority of which were start-ups or in early growth stages. Their business ranges from infrastructure software and data security solutions to various Internet and wireless applications, with strong technology forming the basis for innovative products. An increasing number of Finnish software companies seek to expand their operations to global markets and welcome contacts from U.S. companies.
The United States is the number one supplier of standard, non-customized application software. Competition for new-to-market computer software companies is strong and comes from previously established U.S. companies, such as Microsoft, Novell etc.
The Finnish software industry is characterized by the following trends:
- Expanding focus and application areas beyond traditional information and communications technology (ICT) software market (convergence)
- Fast-growing number of new start-up software companies
- Increasing role of Web-related software
- Fast-growing role of embedded software
- Increase in software exports
- Consolidation of software industry (mergers and acquisitions)
- Increase in mobile software
More than two out of three Finnish software companies develop and produce traditional ICT software. International software vendors have, however, rapidly increased their shares in the Finnish market. This trend is expected to continue in the next five years.
In addition, Finnish companies have increased their activities in system and tools software segments. Examples of these kinds of products are Web-related infrastructure software packages and security software. Growth in these sectors is fueled by exports. It is estimated that there are about 1,100 companies providing their own software products in Finland and another 100 with products in the development or pilot phase. The most common exporting countries are Sweden, the United States, and Germany.