The Nordic EdTech Scene: Part 3 — The Finnish EdTech story
I recently had the privilege to chat with Niko Lindholm and to learn more about the Finnish EdTech ecosystem. He shared his thoughts on how Finland is championing the public-private partnership in education as well as other interesting facts.
For those unfamiliar with Niko here are a few words about him.
Niko has been working to build the Finnish EdTech (export) ecosystem since 2010. First at Business Finland, where he was responsible for education exports. After that he worked for Claned (a Finnish EdTech startup), before taking up the role of Program Director at xEdu. He’s currently working at the Innovation/ Smart City Unit at City of Helsinki with the goal of building schools into Innovation Platforms.
Looking at the Finnish EdTech Scene
The EdTech scene in Finland is a blend of traditional and modern pedagogical initiatives. Major publishers, such as Sanoma and Otava have been creating digital content for a long time. But when looking at the EdTech startup scene, it has only started to bloom quite recently.
However, there have been a few drivers pushing this forward. One of them being the government’s willingness to develop the education system on the digital front. The main cities are also taking their own initiatives by implementing new digitalization programmes, in order to further develop their education services.
xEdu — an EdTech accelerator is also playing a pivotal role in Finnish EdTech ecosystem growth and development.
Before xEdu, there was no real anchor in the ecosystem in place for new startups. The accelerator has been crucial in building a community for EdTech companies and in raising the profile of the Finnish and Nordic EdTech scene.
— > xEdu has opened the application for its 6th acceleration program that will start this Fall.
Investments in EdTech are soaring
There are over 80 Edtech startups (more popping up every year) and around 150 established EdTech related companies in Finland (2018). Niko estimates that between 10–12 million Euros of VC money has been invested in these companies in the last three years.
This figure is probably higher, as not all companies make their investments public. What’s interesting is that these investors have come from all over the globe; from the US, the Nordics, and Asia. It seems as if Finnish EdTech companies are catering to everyone’s taste.
The role of Public-Private Partnership in EdTech Innovation
The key to the Finnish success story is the importance of Public-Private Partnership in EdTech Innovation. The Finnish EdTech ecosystem is quite vocal on how governments, educators, and innovators can build meaningful products together.
There’s an issue where the majority of the global EdTech mostly focuses on the ‘Tech’ part and little on the ‘Ed’ part. This is a real problem, as a lot of times, EdTech products do not answer the needs of schools, teachers, and learners. A tight-knit ecosystem is one way we can tackle this issue — Niko Lindholm
The 5 biggest cities in Finland are currently setting up a structure where cities and schools become Innovation platforms for new EdTech development. They’re currently designing models where they are:
- asking teachers about their needs.
- transforming those needs into challenges for the existing EdTech companies or new entrepreneurs on the scene.
- procuring the best solutions that match with the challenges and use a method called Rapid Experimentation (4 months / twice per year) to give schools and EdTech companies the possibility to co-create products in the schools.
Niko highlights that there’s a strong emphasis on the importance of user-centered solutions. Products are initially evaluated by experts before and after the Rapid experimentation, then a tray of solutions that has been co-created by the schools and companies is given to each city ’s department of education.
The EdTech companies go through the process of co-creating new solutions with the schools who benefit greatly. As they are able to verify whether their solution is impactful or not.
Visualizing the Finnish EdTech ecosystem
Below you can find a graphical representation of the Finnish EdTech Ecosystem.
- Innovation Platform: The base is the most critical. This is where new solutions are built and co-creation activities are initiated.
- Acceleration: The second layer shows that Finland already has accelerators in place, such as xEdu. They offer early-stage startups, a 4-month intensive program twice a year.
- Export: There’s an Official Government-Driven Program called Education Finland.
The base of the pyramid is in its development phase, but when that is ready the innovation platform will be able to push more high caliber companies up to the acceleration and export layers and then onto the international markets.
By creating this kind of PPP-model Finland is able to grow the ecosystem in Finland.
Challenges faced by Finnish EdTech companies
Finnish companies face two big challenges on the domestic market.
- Small in size and long public procurement cycles.
EdTech companies need to sell, in order to stay alive. The public procurement process in big cities can sometimes take up to 6 months.
2. Lack of domestic VC money that really understands the business domain.
Education has always been a public service in Finland and therefore VC´s don’t see its true business potential.
But neither do they understand that Finnish Edtech products co-created in the best education system in the world as being “hot property” outside of Finland.
Advice for international EdTech companies?
Finland is a country that is lacking behind others in the use of EdTech. This is due to Finland’s highly educated teachers resenting “EdTech” that brings no added value to their work.
If you create products that teachers want to use then you are doing a great job. Just do not try to sell anything irrelevant. They will laugh at you and show you the door.
Finland is trying to go beyond the “Buzz of EdTech” towards structures that will potentially create meaningful solutions for the education market. However, this may only be possible when schools and companies start co-creating new solutions.
When this is achieved we’ll have an ecosystem that will benefit everyone. And this is why Finland want the schools to be the base for new EdTech development.