Many of the jobs that are being eliminated are ones that a young person would typically go on to after finishing their degree or even straight out of high school. This is problematic, not just for the individuals themselves, but for higher education institutions, and for society at large. A whole generation of young adults are entering the labour market with little to no work experience and little chance to gain any. This is a long-term resilience problem on a national scale.
Entrepreneurship as a national imperative
Research has long linked entrepreneurship to economic dynamism; from Schumpeter’s theory of creative destruction in the 1940s (Schumpeter 1976), Christensen’s notion of disruptive innovation (Christensen Institute n.d.) in the 1990s to numerous contemporary OECD analyses of small and medium-sized enterprises (OECD n.d.). As of 2021, Statistics Finland reports around 562,000 companies in Finland with almost 96% of companies being micro enterprises; having fewer than ten employees (Suomen Yrittäjät n.d.) and most are run by solo entrepreneurs (Suomen Yrittäjät 2025). These micro enterprises generate around 60 billion euros for the economy annually. Despite this reality, Finland still tends to think of employment primarily through traditional career paths.
Entrepreneurship is important to economic growth by acting as a catalyst for innovation and job creation. When more conservative companies are not hiring, entrepreneurship can be a bridge to foster innovation and economic stimulus. It also allows individuals and groups to demonstrate their abilities directly to customers and to enter jobs that will give them room to grow their expertise when entry-level jobs are not available.
For this reason, entrepreneurship in Finland is increasingly a part of people’s lives as the economy shifts and changes. For some this is an imperative, for others it is the engine that drives their passion. Either way, national economies such as Finland need more and better skilled entrepreneurs.
Structural barriers facing entrepreneurs in Finland
The most recent research by the Global Entrepreneurship Monitor (GEM) suggests that Finns are good at spotting entrepreneurial opportunities and have confidence in their abilities to start businesses but often hesitate to pursue them because of fear of failure (Suomalainen Stenholm, Kovalainen, Heinonen & Pukkinen 2016; Björk, Salmi, Akola & Haaja 2022). Instead of taking advantage of these identified opportunities, Finns are much more likely to see entrepreneurship as income insecurity than an opportunity for success. In other words, the challenge for Finns is not likely to be a lack of ideas or skills, but the conditions surrounding entrepreneurship. Part of this is due to Finland continuing to struggle with normalising risk-taking and the effects entrepreneurship has on one’s place in society (University of Oulu News 2023).
Through many government initiatives and speeches, support for innovation and entrepreneurship is promoted as a path for success in Finland. But the reality in support is something different. It is important that those who want to try entrepreneurship feel that they are supported, not just psychologically but in real financial and structural ways. In a world where 30% of businesses fail in the first two years, 50% do not survive past five years, and only 30% survive to ten years (Josty 2024), failure is a real possibility. And it is to be expected. Not every enterprise set up will be a success. Especially when many companies are started by people who have little to no formal training or support system.
The GEM mentioned above references the Finnish fear of failure as an inhibitor of taking the steps necessary once an opportunity has been spotted but this fear does not come from nowhere. In the 2021/2022 GEM report cultural and social norms in Finland are seen to discourage entrepreneurship at a higher level than the explored comparison countries Sweden, Norway, and The Netherlands. In the data collected for Finland in the GEM Finland report, every aspect tested in the section on cultural, social norms and society support, Finland scored less than a six on the ten-point Likert scale used to collect responses, the lowest being 4.95: “the national culture encourages entrepreneurial risk-taking.” (Björk et al 2022.)
Another barrier that is felt by almost every want-to-be-entrepreneur in Finland, was confirmed in the GEM Finland report is the burden that entrepreneurship puts on the individual by removing them from the social welfare system when they become an entrepreneur (Björk et al 2022). In a country known for its comprehensive welfare system, entrepreneurship effectively removes the safeguards of that welfare system if it does not work out. For those who try and fail, there is little recourse to public funds to help get them back on their feet such as being eligible for unemployment insurance, unemployment services or recourses to other public funds. The uncertainty in the economic situation only exacerbates these fears.
In addition to removing them from the social welfare system, being defined as an entrepreneur requires these people to make additional payments into a pension and social security system to support themselves should something happen. YEL, short for Yrittäjäeläkevakuutus, is the system of mandatory pension insurance for self-employed persons and entrepreneurs in Finland that secures old age pension payments as well as sickness, parental, and unemployment benefits (Finnish Centre for Pensions n.d.). Unfortunately, this system is out of date for modern entrepreneurship and is seen as more of a burden on entrepreneurs, and especially new entrepreneurs, as it sets its payment levels on “fictional” salaries that are for the most part unrealistic (Åberg 2025).
The 2021/2022 GEM report also talks about government actions, including the taxation burden and the support for new and growing businesses. These are both rated poorly by Finns for Finland and therefore constitute a lack of incentive for considering entrepreneurship. (Björk et al 2022.)
Barriers to student entrepreneurship
The pressures and the barriers mentioned above also affect students in Finland, but there are also additional barriers to entrepreneurship for them. These revolve around the student financial aid system and taxation. Earning money in a business, even if you do not necessarily benefit directly from it, can, in real terms, reduce the amount of financial aid you are eligible to receive or even remove your ability to receive any at all. This can leave students with a bill to repay at the end of the school year from money that was not really earned. This hardship can reduce their ability to pay their bills and diminish their enthusiasm for entrepreneurship more generally.
In the OECD’s 2019 and 2023 reports titled The Missing Entrepreneurs, one can see that Belgium is focused on getting more young entrepreneurs as they highlight them in both reports. The section about Finland does not mention student entrepreneurship but it does highlight the inequality in the social welfare system that exists for entrepreneurs and how this needs to be fixed to make entrepreneurship more viable.
Several European countries have experimented with alternative methods that aim to support student entrepreneurship. One great example is in our U!REKA alliance: through our Belgian partner HoGent University of Applied Sciences, we can see how their government has introduced a student-entrepreneur status that allows current students to access reduced or entirely waived social security contributions up to a certain amount of turnover. The special status of student-entrepreneur also allows the students to retain their student benefits (Flanders Agency for Innovation & Entrepreneurship n.d.) and requires continued studies and student status to be eligible which makes sure that the student still graduates. Additionally, the requirements state that students must be between 18-25 years old along with some minimum number of credits earned and a maximum of hours worked on their business. This academic and practical environment provides a supportive ecosystem and a financial cushion where coaching, education, and moral support is available.
This example demonstrates that institutional flexibility and creativity is possible. It also illustrates that student entrepreneurship can be supported without dismantling welfare structures. The issue is not whether students should contribute to public systems, but how risk and experimentation are treated during formative stages.
Proposals for promoting student entrepreneurs
Examples show it is possible to support higher education students to pursue entrepreneurship and think about their future in a different way than might be presented in other classes or areas of life.
There are at least two structural proposals, meaning government-required changes, that could begin to help current students to decide to try entrepreneurship in Finland before their studies are even done.
1. Removal or reduction in taxation for active students
Using the Belgian example, there is precedent within the EU for reducing income taxation for student entrepreneurs. This is a great way to test if this is a real barrier to entrepreneurship within this population. I have discovered in my Turbiini pre-incubator class that students usually have a plan to wait until they have graduated to start a business. This has come out in discussions with the class at the end of the course. After the final pitch that each student takes part in, they are asked when they imagine they will start their business. To note, it is also acceptable to say that they have used their current business idea just for the class and they will not be pursuing it. Since students can take this course at any point during their studies, there are students who are in their second year, right through to their last semester. So, what denotes “after I graduate” is different for each of them. Setting up their business is rarely something that they think to do while they study. It is unknown how many might be interested or convinced to begin their companies before they graduate if regulatory conditions were different, but this legislative change would be the beginning of interesting, and possibly encouraging, steps towards activating student entrepreneurs.
Interestingly, there are some students who start the course after having already started their businesses. As we also allow people to join our course through the open university studies, most of these cases are people who have noticed that they need more support after starting their business and are not actual students at any educational institution. This is not an ideal situation for starting a company. These students would not be impacted by the regulatory changes if implemented like the Belgian example as they are not students to begin with.
2. More flexible treatment of entrepreneurial income within student benefit calculations
Another important issue to note is the need for any benefits that come from establishing a business should be to guarantee a student’s basic funding through student benefits. This is on par with the removal of the welfare system discussed in the previous part about entrepreneurial activities in general.
Starting a business is a risky endeavour. With unpredictable income and ongoing outputs of capital for different expenses. It is well documented that it can take a business upwards of two to three years to become profitable. Allowing students to keep their student benefits, irrespective of how their entrepreneurial activities go, can help them to predict their basic income and give them the security they need to take the risks that entrepreneurship requires.
From individual courage to institutional sandbox
As it stands, in the Finnish system, becoming an entrepreneur takes great courage. Yet society needs more people to become entrepreneurs. We have seen that there is a problem in Finland with fear of failure, not with skills or spotting opportunities. With the above proposals we would begin to address the fear issue by removing pressures to free up younger people to take the inspired chances that become more difficult as they get older and have more responsibilities.
Developing incentives that have clear benefits while being a student will encourage more students to try entrepreneurship, giving campuses more people to support and encourage. When you have increased numbers of individuals leaving campus life with real-life entrepreneurial experiences, they will not be starting from zero when entrepreneurial opportunities present themselves.
Fully utilising the services that campuses across Finland are developing will thus produce more citizens and residents who have experience in taking the risk and have had the opportunity to fail in a safe environment that will not threaten to bankrupt them or their family. This is the kind of support needed to help Finnish youngsters to get over the fear of failure that previous generations have. Institutional sandboxes would provide opportunities during their studies to explore ideas that they normally would not dare.
We need to shift the conversation from how entrepreneurs must be brave and risk everything—including their access to the social welfare system—to attempt entrepreneurship to how we might design institutions and safety nets that make entrepreneurship viable and less personally devastating. Having the support of an educational environment alongside entrepreneurship is important as there are many transferable skills that are acquired in learning environments that are vital for acting on opportunities when they are seen.
References
Björk, P., Salmi, A., Akola, E., & Haaja, E. 2022. Global Entrepreneurship Monitor 2021–2022 Finnish report. Published 30 November 2026. Oulu: University of Oulu.
Christensen Institute n.d. Disruptive Innovation Theory. Accessed 25 March 2026.
Finnish Centre for Pensions n.d. Self Employed. Accessed 9 April 2026.
Flanders Agency for Innovation & Entrepreneurship (VLAIO) n.d. Entrepreneurship as a student-self-employed person. Accessed 15 February 2026.
Josty, P. 2024. Rethinking Fear of Failure. Published 22 January 2024. Accessed 26 February 2026.
OECD n.d. SMEs and entrepreneurship. Accessed 25 March 2026.
OECD/European Commission 2023. The Missing Entrepreneurs 2023: Policies for Inclusive Entrepreneurship and Self-Employment. Published 30 November 2023. Paris: OECD Publishing.
OECD/European Union 2019. The Missing Entrepreneurs 2019: Policies for Inclusive Entrepreneurship. Published 10 December 2019. Paris: OECD Publishing.
Schumpeter, J.A. 1976. Capitalism. Socialism and democracy (5th ed.). London: Routledge.
Statistics Finland 2023. Number of enterprises 562,000 in 2021. Published 3 March 2023. Accessed 26 March 2026.
Suomalainen, S., Stenholm, P., Kovalainen, A., Heinonen, J.& Pukkinen, T. 2016. Global Entrepreneurship Monitor Finnish 2015 Report. Published 20 September 2016. Turku: University of Turku.
Suomen Yrittäjät website 2024. Entrepreneurship in Finland. Published 11 June 2024. Accessed 16 February 2026.
Suomen Yrittäjät website 2025. SY and Fennia campaign puts solo entrepreneurs in spotlight. Published 13 June 2026. Accessed 16 February 2026.
University of Oulu News 2023. Still untapped entrepreneurial potential in Finland, the report shows – the fear of failure prevents starting a company. Published 3 January 2023. Accessed on 3 March 2026.
Yle News 2014. Study: Fear of failure keeps Finns from entrepreneurship. Published 22 January 2014. Accessed 20 February 2026.
Åberg, S. 2025. High expectations for the YEL survey work – the system needs reform. Veritas Blog. Published 24 June 2025. Accessed 5 March 2026.
Author
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Pamela Spokes
Specialist, Metropolia UASPamela Spokes BA, MA, MBA, AmO. Educator in Service Design and Entrepreneurship with the Turbiini Pre-Incubator Programme in English.
About the author
