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I was walking home last night from the Startup Christmas party in downtown Helsinki, organised by GrowVC and Aalto Entrepreneurship Society, I came up with an interesting way of looking at our innovation system from the national perspective. Innovation, as we all know, is an extremely hot topic among politicians as they try to dig into the best future sources of government tax.

As many know, I’m a huge fan of growth businesses and try to promote them through ArcticStartup with our team. I’m such a big fan of the whole ecosystem that I believe that we’ve only began to touch on the possibilities it has for our economies and ultimately, our society. We talked a lot about the Finnish innovation system in the Christmas party and while there were some appraisals, it was mostly criticism of some sort on how to make the system better. Pretty much the usual stuff if you look at anything in our societies these days.

This got me thinking about the difference in supporting innovation in regular entrepreneurship and growth entrepreneurship. While it is very hard to define the points in which a company becomes a growth company – let’s for the sake of this blog post decide that first and foremost it is the passion of the entrepreneurs that counts and after that the results the company has achieved on an annual level. Say a 10-15% increase in revenues annually could be thought of being a very growth oriented company.

One of the problems we face is that not many people are able to distinguish between these two – growth entrepreneurship and regular entrepreneurship. The latter could be said to represent the majority of the companies in Finland and in some way the capitalist system itself. Growth entrepreneurs are those who take incredible risks and have incredible ideas on how to change the world and make it a better place. Almost all fail, but a few successful ones are able to take incredible leaps and do wonders to the way we live.

Now, not to wander about too much, I’d like to focus back on innovation and how it is supported in many economies. While there are a lot of incentives and tools available for businesses to leverage risk with the help of the governments – they are usually equally shared among the entrepreneurs in the society. Some of the help goes to growth entrepreneurs and some of the help goes to regular entrepreneurs.

What’s wrong with this equation then? Well, my argument is this: innovation in large companies is like inflation – it’s natural and it always happens. If it doesn’t, the companies don’t stay big very long. All the competition in the field is innovating as well, to keep ahead of their rivals. It’s natural and built into capitalism for survival. Where as in growth entrepreneurs they are usually in non-existent markets where consumers don’t realise the need for such a product or service and there are always extremely high risks and non-existent chances of pulling the concept through.

So how does supporting innovation fit into this framework then? Well, if you look at large companies – innovation in them is like inflation, it’s built into the system – they are bound to do it anyway. My point here is that large companies should not be supported by government money that much compared to more disruptive and higher risk ventures. These are the unnatural companies looking to do something new, and a lot of life support is usually needed to lift these companies off the ground – if the idea in the first place is any good that is.

So to finalise my random rambling here, I do think we (and perhaps other countries as well) should look into our innovation system and take a few steps back to think about the ways we are spending our tax payer money. While I do believe these organisations are of great value, their clients could be thought out more specifically on the potential of return-on-investment. If you look at it, the returns on innovation in large companies are not usually that great compared to growth companies who are able to create thousand-fold returns in new or near non-existent markets. While many of the growth companies fail, I’d still bet my tax payer money on them in the future for innovation.