Concepts and definitions

R&D; appropriation

Government budget appropriations or outlays for research and development activity.

R&D; in full-time equivalents (FTE)

R&D in full-time equivalents refers to the amount of time spent on R&D work during one year of full-time work (approx. 35 hours per week), allowing for 4-6 weeks of holidays.

R&D work done outside normal working hours is taken into account in calculating R&D in full-time equivalents, provided it is remunerated.

Research and development activity

Research and development activity (R&D) is understood as systematic work undertaken to increase the stock of knowledge and use it to devise new applications. The defining criterion is that the purpose of the activity should be the presence of an appreciable element of novelty. Research and development activity includes basic research, applied research and experimental development.

Basic research is defined as work undertaken to acquire new knowledge, without any particular application in view. Basic research includes analyses of properties, structures and relationships with a view to formulating and testing hypotheses, theories or regularities.

Applied research is work undertaken to acquire new knowledge directed primarily towards a specific practical application. Applied research includes seeding applications for the findings of basic research or determining new methods or ways of solving a particular problem.

Product and process development (experimental development) is systematic work that draws on existing knowledge gained from research and/or practical experience with the aim of producing new materials, products, processes, methods and systems or of substantially improving existing ones.

Socio-economic objective

Government budget appropriations or outlays for R&D are considered in the statistics according to the social policy (socio-economic) objective. The division of government R&D funding into different objectives depends on the viewpoint of the classifier, in this case the provider of funding. The definitions used in Finland are based on the NABS classification (Nomenclature for the Analysis and Comparison of Scientific Programmes and Budgets, rev. 2007):


Industrial production and technology


Transport, telecommunication and other infrastructures


Exploration and exploitation of the earth




Culture, recreation, religion and mass media

Political and social systems, structures and processes

General advancement of knowledge: R&D financed from other sources than GUF

General advancement of knowledge: R&D financed from general university funds (GUF)

Exploration and exploitation of space

State research institute

Research institutes attached to ministries are one of the main sources of information needed in social decision-making. There are currently 12 publicly financed research institutes in seven administrative sectors.

State research institutes, with abbreviations (administrative sector):

Finnish Institute of International Affairs, UPI (Parliament of Finland)

VATT Institute for Economic Research (Ministry of Finance)

Natural Resources Institute Finland LUKE (Ministry of Agriculture and Forestry)

Finnish Food Authority (Ministry of Agriculture and Forestry)

National Land Survey of Finland NLS (Ministry of Agriculture and Forestry)

Finnish Meteorological Institute (Ministry of Transport and Communications)

Geological Survey of Finland, GTK (Ministry of Employment and the Economy)

VTT Technical Research Centre of Finland Ltd * (Ministry of Employment and the Economy)

Radiation and Nuclear Safety Authority, STUK (Ministry of Social Affairs and Health)

National Institute for Health and Welfare, THL (Ministry of Social Affairs and Health)

Finnish Institute of Occupational Health, TTL (Ministry of Social Affairs and Health)

Finnish Environment Institute, SYKE (Ministry of the Environment)

* non-profit state enterprise with special tasks

The primary task of state research institutes, which are the main actors in sector research, is to acquire, produce and provide information as the basis for political decision-making and development of society. In addition to research duties the institutes have a varying number of different specialist, monitoring, training, guidance and other official functions, charged and other service activities and so on. Research institutes produce services horizontally to many different administrative sectors and to the rest of the public sector. They also provide services to businesses and to third sector operators.

The majority of research and development activities carried out in research institutes are financed with appropriations allocated in the state budget. In addition to budget funding R&D activities are increasingly financed by external funding consisting of income from charged services and funding from elsewhere than the institute's own budget classes. External funding mainly comes on a competitive basis from several sources and from both domestic public and private sectors and international sources. The share of external funding is based on the performance targets of the institutes and is thus estimated.

Referencing instructions:

Official Statistics of Finland (OSF): Government R&D funding in the state budget [e-publication].
ISSN=2489-3250. Helsinki: Statistics Finland [referred: 1.4.2020].
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