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72 Pekka Himanen and Manuel Castellsyears to finish his masters thesis but, using this freedom, he created the Linuxoperating system.Financing the process of innovationThe second key factor in the process of innovation is finance. The state hasalso invested in the financing of innovation, as reflected in the high level ofnational R&D investment. Two public agencies have been formed to takeresponsibility for finance: Tekes (the National Technology Agency) financesrisky new R&D projects, and Sitra has proactively developed the Finnishventure capital market by setting an example as a “public capitalist.” Theyhave both been given an autonomous status so that, although they report to theMinistry of Trade and Industry and to Parliament, they are not directly part ofthe governmental bureaucracy and can thus make independent decisions toreact more dynamically to changing needs. Internally, they are also more likenetwork organizations: in all, they have only 260 employees and they networkwith other partners based on the needs of each project.Nokia is a good example of how the state has helped Finnish companiesto invest in longer-term innovation. At the beginning of the 1980s, the developmentof the GSM standard was started, and, as has been noted, the developmentof an open mobile phone standard was considered very critical bythe Finnish state, which therefore invested heavily in its development. Ascan be seen in figure 2.11, the public Tekes support helped Nokia to take a3025201510501970197219741976197819801982198419861988199019921994199619982000Source: Ali-Yrkkö and Hermans (2002)Figure 2.11 Share of Tekes funding in Nokia’s R&D (%)