Finland’s Cleantech Delegation Advocates Partnership with Los Angeles

Carlos Valderrama: Thank you very much for coming to the Chamber. We’re very proud that you’re here with us. The Chamber is one of the oldest institutions in the city—we’ve been around for about 126 years. 

The region of Southern California handles $400 billion of trade every year—exports and imports coming to the Port of Los Angeles, the Port of Long Beach, and the Los Angeles World Airports. About 40 percent of all imports into the United States come in through our ports, making our logistics—moving cargo from the ports all the way to New York—very important. We are pleased that you’re going to help us begin to develop more initiatives internationally. 

The Chamber is honored to participate in this forum. We want to develop more initiatives between your country, Finland, and our great region. 

We welcome the honorable Ms. Lenita Toivakka to Los Angeles—Minister of European and Foreign Affairs of Finland. Also, a special welcome to Mr. Lassi Noponen, leader of the Business Delegation. I know he is interested in doing business in Los Angeles. 

Let’s begin today to restore this relationship. It is today, as always, a pleasure to welcome the Consul General, Juha Markkanen, from Finland. He’s doing a great job representing your country. Certainly we believe he’s a great player here in the community. 

He knows quite well that in Los Angeles, we have the third-largest concentration of diplomats in the country, with 103 countries represented here. That is the reason why you are in the right place to do business. 

Lenita Toivakka: Thank you and greetings from Finland. I’m very happy to be here. 

Finland is a country that, time and again, has been said to have the best education system in the world. I think that’s relevant because the top of the world education system provides very high-quality experts. Finland has just been ranked number one in the world for Quality Research Personnel by Bloomberg 2014. 

Combine this educational backbone with Finland’s ranking as the third most competitive country in the world by the World Economic Forum in 2013, and as number two in cleantech innovation by the Global Cleantech Innovation Index 2014. We have managed in Finland to create a blend that is very good for future cleantech business-making. 

Finland is quite well known for being an early adopter of new technologies—a result of a long tradition in developing and applying new solutions. The quite longstanding national investments in innovation and forward-looking technology have produced world-class expertise in many sectors of the Finnish economy. There are, at present, over 2,000 enterprises active in various cleantech sectors in Finland. That’s quite a lot when you think about the size of the country. We are only 5 million people.

The combined turnover for the Finnish cleantech sector was €25.8 billion last year, with an annual growth rate of 15 percent. This includes cutting-edge cleantech companies, research and development, clean solutions, cleaner products and services. 

Today, Finland is the global leader of energy efficiency, clean industrial processes, and also bioenergy. Other key cleantech sectors include analysis and automation, renewable energy, water and wastewater treatment, waste management, and emission reduction. 

Finland has become a hotbed for environmental technology. This partly is because of our harsh climate, long distances, and lack of fossil-fuel resources. It has simply made sense for both industry and society to minimize energy consumption. 

Let me give you an example. The benefit relationship in the energy production in the capital city of Helsinki is 90 percent, while it’s about 40 percent in most other European cities. 

As a result of this approach, today Finland is the world’s leading researcher in the energy and environment field. More than 40 percent of the Finnish public research and development funding goes to the energy and environment sector, and more than a third of public R&D funding is made in cleantech. Our long history in forestry and ICT provide a wealth of opportunities when we combine this with our new innovations. 

That’s why Finnish cleantech companies do not stay in Finland. They come here to California. California—particularly Los Angeles—is the obvious choice for partners, collaboration, cooperation, and innovation in cleantech. California has been described as the epicenter of the US cleantech market. It’s number one in cleantech technology deployment in the United States. 

Here it’s important to note that cleantech deployment is being driven by state- and metro-level activity working together with entrepreneurs and venture capitalists. The Global Cleantech Innovation Index 2014 reports that both Finland and the United States are among the top three countries that provide the best political, social, and financial conditions to cultivate cleantech innovation, and also commercialization over the next 10 years. 

It’s great that we are here together. We have a clear vision in common. By developing a better, more efficient, and cleaner way of living, we are building a stronger economy; creating new jobs; and preparing for the next generation to succeed in an increasingly global economy. Indeed, creativity and advances in scientific knowledge are slowly bridging the gap between the world we have and the one we want to have. Progress comes only when we dare to innovate and seek new solutions, and when we acknowledge that what we think is impossible today might actually be possible tomorrow. 

Finland and California are rather unique in their approach, bringing to use new forward-looking innovations. This room is full of bright minds, eminent thinkers, and good ideas that all strive for the same thing. No matter where you come from, your unique perspective on the many challenges of clean technology will translate this potential into meaningful change. 

I would encourage you to be bold and to think very big. Please use your creativity to disrupt the systems that allow dirty technologies to persist. Let’s hold very fruitful discussions.

Lassi Noponen: We know from history that times before paradigm changes are oftentimes characterized by desperate attempts to maintain the prevailing paradigms. We also know that when the paradigm then changes, it always happens quicker than anybody had expected. There are a lot of examples of this in the history of technology. 

I mention this because, when historians look back in hundreds of years, they will see our time as characterized by desperate attempts to maintain the paradigms we have for energy and other resources. 

In California, we have a chance to look into the future. Many of the new paradigms are more advanced here than in other parts of the world. 

In Finland, we have really high hopes for cleantech. Not only hopes—we have our distinct strongholds in clean technologies.

This business delegation here today is a representative group of companies from the various sectors of cleantech in Finland. 

My company is an accelerator that invests in clean technologies and services. Our mission is to be the leading accelerator in the Nordic countries, redefine cleantech, and grow into Europe’s leading cleantech accelerator in three years. One of the goals of this trip is to find partners to establish ourselves here in California. 

I see three major trends affecting the cleantech market. Most of the companies represented in our delegation are tied to these mega-trends. 

The biggest one is the decentralization of energy production. Consumers have become producers. That turns the whole thing upside down. At the center of all this is renewables.

The second big trend is the Internet of Things merging with cleantech—web solutions that, for example, optimize industrial processes to be significantly more efficient. The cost of processing power, bandwidth, and sensors is decreasing dramatically. This makes energy optimization easier, when everything can be done remotely. 

My company has been very active in this. I’ll give you an example from the world of compressed air. We are main owners in a company called Enersize that reduces industrial customers’ cost for compressed air by 30 percent. By the way, compressed air is 15-20 percent of all industrial energy consumption in the world. This reduction we are talking about can be as much as 2 percent of all electricity consumed in the world. This is done with software to optimize the compressed air systems in industrial plants.

 The fact is that energy has been a really badly managed resource compared to many other resources—for example, cash. Imagine if 30 percent of the balance of your bank account could somehow vanish during the night due to inefficient management. This is exactly what happens with compressed air in industry, even in very sophisticated Western industrial companies and plants. 

The third revolutionizing thing we see is the rise of the sharing economy, where Uber and AirBnb have made breakthroughs and have also become very valuable companies. 

One of the firms in our portfolio is called Swap.com, which at the moment is the fastest-growing online consignment business in the United States. It’s based in Chicago and it’s a consumer Internet company that is growing exponentially. We believe that Swap’s trading of pre-owned items could be game-changing.

Many of the companies represented in this delegation are closely linked to these three trends. In addition, we have companies representing major cleantech sectors such as biofuels, electrification of transportation, as well as smart cities, and consulting and education related to these things. 

I’ve been in the cleantech business for 15 years. There have been tough times, but now it looks like the stars are aligning. We are really excited to be here in California.