Finland Software Development Market - Forecast(2024 - 2030)

Report Code: ITR 0443 Report Format: PDF + Excel

Finland Software Development Market Overview

Finland Software Development Market size is valued at US $5.52 billion in 2023 and is expected to reach a value of US $7.51 billion by 2030 at a CAGR of 4.6% during the forecast period 2024-2030.  The process of creating computer programs is called software development. The procedure, commonly referred to as the Software Development Life Cycle (SDLC), consists of several stages that offer a way to create products that adhere to technical specifications and customer demands. According to a survey by Teknologiateollisuus, the operation of the technology businesses accounts for more than 50% of all Finnish exports, making the technology sector one of Finland's key export industries. The expansion of Finland's software development sector is predicted to be fueled by rising expenditure on research and development in this industry. The Finnish government has launched numerous measures in recent years to position the country as a pioneer in the data-driven economy. The Sustainable Growth Program for Finland, which aims to create a competitive operating environment for businesses and transform Finland into a world-class producer of data-driven services for digital societies, together with secure solutions for these services, published Finland's preliminary Recovery and Resilience Plan on March 15, 2021. The Ministry also established collaboration groups on operational architecture, information security and strategic goals for information management in the fall of 2020. The Finnish government reaffirmed its commitment to fostering digital transformation in December 2020 when it signed the Berlin Declaration on Digital Society and Value-Based Digital Government with the other EU Member States. This would enable citizens and businesses to take advantage of the benefits and opportunities provided by contemporary digital technologies. Factors like these are analyzed to propel the growth of the underlying segment.

Report Coverage

The report: “Finland Software Development Market – Forecast (2022-2027)” by IndustryARC, covers an in-depth analysis of the following segments of the Finland Software Development market. 
By Language: Java, Javascript, Python, C++, C#, Ruby, LISA, PHP, SQL, Android, IOS and others.
By Market Demand: In-house on Payroll, Hired from Secondment Providers, Hired Freelancers and Fully Outsourced.
By Deployment Type: On-Premise and Cloud.
By Business Size: Small and Medium Business, Enterprises and Government.
By End-use Industry: Banking and Financial Institution, Insurance Firms, Media and Entertainment, Government, Defense, Telecommunication, Automotive, Consumer Goods and Retail, Healthcare, Manufacturing, Gaming, Energy & Utilities, Travel & Logistics, Fintech, eCommerce and others.

Key Takeaways

Java held the highest share in 2021 due to the growing popularity of the language, as it provides a reliable platform for designing, building and prototyping services and applications.
The cloud segment accounts for the dominant market share during the forecast period owing to the onset of COVID-19 and the shift of consumers from on-premise to cloud.
Finland is one of the leading regions that have a strong base on Artificial Intelligence. The increasing adoption of AI in various sectors is set to propel the demand for software development in the region.

Finland Software Development Market Segmentation Analysis – by Language
Due to the language's rising recognition as a solid foundation for prototyping and constructing services and applications, Java had the largest market share in 2021. The region's expanding gaming development investments also play a major role in the market's expansion. Neogames reported that in 2019–2020, investments totaling more than €100 million were made in Finnish game development companies. The increase in pay that comes with earning degrees also helps the underlying market. According to the Salaryexplorer data, Java developers working freelance or for a company in the region, who have a Bachelor's degree, make 50% more money than those with a diploma or a certificate. However, the Python segment is analyzed to witness a steady growth rate due to the increasing government initiatives towards the adoption of AI and Data analytics. A report from IndiaAI claims that Finland launched the 1% AI Scheme in January 2019. Under this program, the government began by teaching 55,000 people or 1% of the population the fundamentals of AI. Over the following few years, the government would steadily increase the number of students. Numerous organizations in the area, such as the Python Finland Association, Knowledgehut and others, offer python certification in the area and support learning the language's principles and its libraries, such as SciPy and Matplotlib.

Finland Software Development Market Segmentation Analysis - by Deployment Type
By deployment type, the cloud segment accounts for the dominant market share during the forecast period owing to the onset of COVID-19 and the shift of consumers from on-premise to cloud. Finland is one of the main centers for cloud computing. The recent COVID-19 pandemic is further accelerating the growth of the underlying market segment, as is the rising penetration of cloud services across numerous industry verticals. Finland uses cloud services the most in Europe, according to the PrivacyShield Framework, followed by other Nordic nations. According to the survey, Finnish businesses are accustomed to purchasing services from third parties and there aren't many substantial hurdles to using third-party services. This is why development in cloud services has been particularly high in the previous five years. Furthermore, the PrivacyShield Framework claims that the market segment is expanding due to the rapid development of private infrastructure as a service (IaaS) and awareness of platform as a service (PaaS), both of which are integrated with cloud development. However, it is also predicted that the on-premise category would expand at a faster rate due to the increasing automation and adoption of AI across a range of end-user industries. Some of the most important on-premise software, created for varied corporate needs, include the Microsoft Office package, Adobe Creative Suite and SAP. These are also fantastic substitutes for contemporary SaaS for businesses.

Finland Software Development Market – Deployment Type (%) for 2021



Finland Software Development Market Drivers

The growing number of deals and acquisitions in the region:
Finland is one of the main centers for software and information technology development in the world. Nevertheless, there has been a decline in deal activity in Finland as a result of the COVID-19 pandemic's devastating effects across numerous industry verticals. However, the volume of deals increased dramatically over a year and outpaced the same period of the previous year. For instance, 66 deal activity and acquisitions were reported in the first quarter of 2021, according to an M&A report by KPMG. This number was higher than the volumes reported for similar periods in 2017, 2019 and 2020. Among them, some of the key contributors were the creation of video games and software, as well as the infrastructure of transportation. The M&A research by KPMG also indicates that the technology sector in particular has been less affected by COVID and has even expanded its share of deal volumes from around 20% in 2017-2019 to roughly 30% in 2020-2021. The research also claims that the increase in transactions and acquisitions in the area demonstrates the active interest of international purchasers in the Finnish market. Total Specific Solutions in the Netherlands purchased the Innofactor Prime business from Innofactor in March 2021. Additionally, Netflix disclosed in March 2022 that it has agreed to buy Finland's Next Games. These developments are expected to be among the key elements propelling the expansion of the Finland Software Development Market.

Increasing adoption and promotion of AI by the Government of Finland:
Finland is one of the top locations with a solid foundation in artificial intelligence. The region's demand for software development is expected to increase as AI is increasingly used in a variety of industries. For instance, Helsinki, the capital city of Finland, is home to one of the largest concentrations of artificial intelligence. The Finnish public sector actively uses AI applications, according to the 2020 Global Startup Ecosystem study. Furthermore, Finland is ranked in the world's top quartile for AI readiness, according to a McKinsey report. These and other elements make Finland a desirable location for software development businesses. In Finland, more than 1,240 enterprises were using artificial intelligence in August 2020, of which, roughly 750 had created their own AI software, according to the State of AI survey. According to the report, Finland currently has over 400 artificial intelligence start-ups and an additional 50 are founded annually. Additionally, according to the 2020 Global Startup Ecosystem study, 3.15% of Finnish businesses with more than five employees have incorporated artificial intelligence. From 2017 levels of 0.9%, this figure has tripled. During the forecast period of 2022–2027, developments like these are anticipated to be some of the key drivers of the growth of the Finland Software Development Market.

Finland Software Development Market Challenge

Lack of Proper Work Culture:
Finland is one of the major centers for the development of software and video games, but several workplace-related problems are causing a decline in the number of competent workers in the area, which is inhibiting the market growth. The Finnish Ministry of Employment and the Economy's Working Life 2020 research project indicated that higher management staff in the region exhibit poor leadership skills. It further revealed that the weakness of the Finnish leader is viewed as his/her poor ability to inspire people and give his/her subordinates a sense of the importance of the work. These kinds of elements make it less advantageous for software developers, which hinders the expansion of the Finland Software Development Market. 
 Finland Software Development Market Competitive Landscape
Product launches, acquisitions, market penetration and R&D activities are key strategies adopted by players in the Finland Software Development market. The top companies in the 10 Finland Software Development market are:
Vincit
Sangre
FA Solutions
Softros Systems Inc.OY
Oivan
Unelma Platforms
Altoros
Espeo Software
Softability
Qt Company

Recent Developments
In February 2022, Elisa, a Finnish supplier of digital and telecommunications services and Google Cloud entered into a partnership to accelerate Elisa's cloud transformation journey and develop joint breakthroughs in several areas.
In October 2021, Together, AVSystem and Daimler Finland formed a collaboration to resell Cloud ACS, giving Finnish consumers a complete Wi-Fi mesh package as well as other device management services.
In February 2020, following the completion of a $40 million round of fundraising, Aiven, a Finnish provider of managed cloud service hosting for software infrastructure services, planned to increase its Boston presence.

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 1.Finland Software Development Market Overview
    1.1. Definitions and Scope
 2.Finland Software Development Market - Executive Summary
    2.1.Market Revenue and Key Trends by Company
    2.2.Key trends by Language
    2.3.Key trends by Market Demand
    2.4.Key trends by Deployment Type
    2.5.Key trends by Business Size
    2.6.Key trends by End-use Industry
 3.Finland Software Development Market Forces
   3.1.Market Drivers
        3.1.1.Growing number of deals and acquisitions in the region
        3.1.2.Increasing adoption and promotion of AI by the government of Finland
    3.2.Market Constraints
        3.2.1.Lack of Proper Work Culture
 4.Finland Software Development Market -Strategic analysis
    4.1.Value chain analysis 
    4.2.Opportunities analysis
        4.2.1.The growth of the gaming industry, metaverse and extended reality
        4.2.2.Presence of key players and the Russia-Ukraine conflict is set to provide the market with high-growth opportunities
    4.3.Freelance and Secondment Impact Analysis
        4.3.1.Labor Legislation
        4.3.2. Economic Developments
        4.3.3. Schooling/Education
        4.3.4. Corporate Recruitment Plans
 5. Finland Software Development Market – by Language (Market Size – €Million/€Billion)
    5.1. Java
    5.2. Javascript
    5.3. Python
    5.4. C++
    5.5. C#
    5.6. Ruby
    5.7. LISA
    5.8. PHP
    5.9. SQL
    5.10. Android
    5.11. iOS
    5.12. Others
 6. Finland Software Development Market – by Market Demand (Market Size – €Million/€Billion)
    6.1. In-House on Payroll
    6.2. Hired from Secondment Providers
    6.3. Hired Freelancers
    6.4. Fully Outsourced
 7. Finland Software Development Market – by Deployment Type (Market Size – €Million/€Billion)
    7.1. On-premise
    7.2. Cloud
 8. Finland Software Development Market – by Business Size (Market Size – €Million/€Billion)
    8.1. Small and Medium Business
    8.2. Enterprise
    8.3. Government
 9. Finland Software Development Market - by End-use Industry (Market Size - €Million/€Billion)
    9.1. Banking and Financial Institution
    9.2. Insurance Firms
    9.3. Media and Entertainment
    9.4. Government
    9.5. Defense
    9.6. Telecommunication
    9.7. Automotive
    9.8. Consumer Goods and retail
    9.9. Healthcare
    9.10. Manufacturing
    9.11. Gaming
    9.12. Energy & Utilities
    9.13. Travel & Logistics
    9.14. Fintech
    9.15. eCommerce
    9.16. Others
 10. Finland Software Development Market Company Analysis
    10.1. Company Revenue, Products, M&A and Developments
    10.2. Vincit
    10.3. Sangre
    10.4. FA Solutions
    10.5. Softros System Inc.OY
    10.6. Oivan
    10.7. Unelma Platforms
    10.8. Altoros
    10.9. Espeo Software
    10.10. Softability
    10.11. Qt Company

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