Title: Embassy of Finland
1Some Aspects of the success of Finnish Economy
- Presentation at the Launch of the Feel Finland in
Science 2006, Jan. 12, 2006 - Juha Niemi
- 1st Secretary
- Embassy of Finland, Tokyo
2FINLAND
- Location Northern Europe, between Sweden and
Russia - Independence 6.12.1917
- Capitol Helsinki
- Official languages Finnish and Swedish
- Population 5,2 million
- Area 338 000 km2
- Population density 17/km2
- appr. 180 000 lakes, 70 of area covered by
forests - GDP/capita 2003 28 700 US (ppp OECD)
- A typical Nordic Welfare State
3Good scores in recent international comparisons
- World Economic Forum Global Competitiveness
Report 2005 1st place - Institute for Management Development (IMD) World
Competitiveness Scoreboard 2005 6th place - Transparency International Corruption Perceptions
Index 2004 lowest level of corruption - OECD/Pisa on education 1st place
- UNDP Human Development index 2005 13th place
- WEF environment comparison 1st
4Finnish Economy and Society
- Finnish economy has been one of the best
performers among the OECD countries - brisk economic growth (04 3,6), low inflation
(less than 1) , high surplus in current account
(04 4,1) - government debt at 44 of GDP one of the lowest
among OECD countries - problem persistent unemployment (currently 7-8
) - one of the top countries in terms of equality in
incomes
5Finlands Real GDP Growth 1990-2004
6Drivers behind Finlands economic success
- 1. Quality education with equal opportunity
- 2. Investments in RD for technology development
- 3. Good regulatory framework and efficient public
service - 4. Open economy
- 5. Social model
71. Quality education with equal opportunity
- cultural undercurrent importance of education
stressed since independence - investment to the educational system currently
6 of GDP directed to public education - high-level, free and universal education from
comprehensive school to university - rationale small country with scarce natural
resources, important to mobilize all human and
intellectual resources - A corollary Finland one of the most advanced
countries in the world in gender equality - High participation of women in the work force
82. Heavy Investment in RD
Total 5.0 billion euros, 3.5 percent ofthe Gross
Domestic Product (GDP) in 2003.
9RD funding/GDP in 2003comparison of selected
countries
/ GDP
10Patents
High technology EPO patent applications
High tech. patents granted in the USA
- Applications per million inhabitants in 2002
- Patents granted per million inhabitants in 2002
Finland
Netherl.
Sweden
USA
Germany
Denmark
Japan
UK
France
EU
Ireland
Austria
11Other Tools...
- promoting co-operation particularly within our
main industry clusters - triangular co-operation universities/research
institutes, enterprises, central and local
government institutions - to lower barriers between public, private
academia, especially important when nurturing new
technologies - 22 science parks and technology centres
- 12 centres of excellence in universities
- incubators
- co-financing of research by public and private
actors
123. Sound regulatory framework and efficient
public service
- Premise Sound and predictable regulatory
framework important for business to thrive - Impartial, transparent and reliable public
service - Finland one of the least corrupt countries
- Efficiency aim at expanding room for private
sector to maneuver - less red tape
- public authorities more as regulators and less as
service providers -
- Consistent efforts at deregulation since 1980's
- liberalization of telcom markets in the early
1980's Nokia, ICT industry - privatization of postal services in the 1990's,
increased outsourcing of various public services,
private provision of day care for children,
public private partnerships etc.
134. Open economy
- Finnish mindset embrace globalization rather
than seek recourse to protectionism - Benefit allows access for wider markets and
foreign capital and forces to continuously
improve performance and stay competitive - Finland, a firm believer in international trade
liberalization - FTA with the EU in 1973, member of the European
Union 1995, member of the Euro-zone 2002, WTO - descriptive of Finland almost 40 of GDP derived
from exports
145. Social Model the Welfare State
- "double edged sword" in competitiveness rankings
high taxation - Finlands tax to GDP ratio 44.3 in 2004, 5th
highest in OECD (Japan 2003 25,3 ) - however, the system offers also benefits
- free health care, free tuition, safety net which
contributes to social cohesion and political
stability - welfare state enjoys wide support
15Challenges
- Fast-paced progress of globalization,
intensifying competition -
- To remain competitive
- build on strengths, invest in knowledge
intensive, make sure that the business
environment remains attractive - No room for complacency! Need to revisit all
aspects behind competitiveness continously! - streamlining welfare state, streamlining
bureaucracy etc. - Easier to get to the top than to stay there
16Doumo arigatou gozaimashita!