The recent budget cuts for research and innovation have an impact on innovation activity and w ithout corrective action will be felt for years to come in the form of dampened innovation activity and productivity growth. Finland needs a new approach for innovation and renewed governance for science, technology and innovation (STI), lifting itself out of the period of uncertainty and lack of confidence that followed the 2009 recession to establish a new' national vision for sustainable recovery. This recovery needs to be based on research, innovation, education and training in the framew'ork of the strong international engagement w'hich Finland needs in order to overcome disadvantages due to its small size and geographic location.