II. El Desarrollo Actual de la Economía del Conocimiento · conocimiento del proceso de...

Universidad Nacional Autónoma de México

P R O G R A M A

Globalización, Conocimiento y Desarrollo

Desde la Perspectiva de México

D O S S I E R SOBRE FINLANDIA

II. El Desarrollo Actual de la Economía del Conocimiento

Preparado por

Silvia I. Almanza M. y Alejandro Dabat L. CCADET – UNAM IIEc - UNAM

Con la colaboración de: Beatriz Orquídea Melo M.

José Santos Escárcega C.

CONTACTOS

Silvia I. Almanza M.

[email protected] Centro de Ciencias Aplicadas y Desarrollo Tecnológico – UNAM Depto. de Tecnologías de la Información Grupo de Cibernética y Sistemas Complejos Circuito Exterior S/N, Ciudad Universitaria Tel. (5255) 56 22 86 02 Ext. 1141 Alejandro Dabat L. [email protected] Instituto de Investigaciones Económicas – UNAM Unidad de Economía del Conocimiento y Desarrollo Circuito Mario de la Cueva S/N, Ciudad Universitaria Tel. (4255) 56 23 01 00 Ext. 42438

Presentación El proceso de inserción de los países en la llamada Economía del Conocimiento, con distintos matices, es uno de los grandes retos del mundo actual: el progreso tecnológico está en el centro mismo del crecimiento económico y del desarrollo. Las nuevas tecnologías y el mejoramiento de las tradicionales, derivan en gran medida de la I+D y la innovación propias, o a través de la absorción y adaptación de las tecnologías extranjeras. Fomentar tal progreso técnico requiere de un complejo sistema de instituciones de apoyo y de políticas económicas y sociales adecuadas, dentro de una visión de largo plazo.

Finlandia es hoy referente mundial para enfrentar este reto, al haber pasado en poco tiempo de ser una economía periférica basada en sus recursos naturales, a una economía altamente competitiva, con un alto grado de conocimiento tecnológico. Dentro DE esta política, una de las características centrales del país fue el pleno aprovechamiento de sus recursos naturales y la industrialización de los mismos (madera-pulpa-papel-celulosa) –tal como aparece en el Volumen I del Dossier -, que posibilitó el pasaje a las industrias y servicios de alta tecnología.

En esta tarea, el papel del estado ha sido sin duda, crucial. Si bien el detonante fue un momento de crisis a principios de los 1990s, el éxito de su política se debe en gran medida a su visión de largo plazo, al impulsar dos procesos paralelos e interrelacionados, en donde la promoción de la I+D, la innovación y difusión del conocimiento a través de los diversos sectores económicos, han estado crecientemente en el centro. Por un lado, se ha enfocado en unas cuantas áreas estratégicas, concentrándose en unos cuantos clusters. Por otro, su política tecnológica y de innovación ha sido explícitamente basada en un enfoque sistémico, en donde la innovación y la competitividad se visualizan como resultado de diversos factores además de la intensidad en I+D, incluyendo la capacidad organizacional e institucional y el desarrollo social.

En esta Segunda Parte del Dossier sobre Finlandia hemos querido reunir diversos materiales de gran importancia, para ilustrar el diseño de una política exitosa de desarrollo, consistente con una visión de desarrollo basado en conocimiento. Como podrá verse en el material aquí seleccionado, de particular importancia es la gran inversión en capital humano y físico. Pero sobre todo, la gran lección para países como México, es la visión finlandesa de largo plazo y la flexibilidad de sus políticas de ciencia, tecnología e innovación para adaptarse a etapas particulares de desarrollo y manejar este proceso fundamental de transición hacia la Economía del Conocimiento. Silvia I. Almanza M. y Alejandro Dabat L., abril de 2008.

CONTENIDO

1. La Evolución y el Gran Salto hacia el Desarrollo Reciente

Entrevista de Noticias Cordis al Sr. Esko-Olavi Sëpäla, del Consejo de Ciencia y Tecnología de Finlandia, y al Dr. Erkki Ormala, Subpresidente de Política Tecnológica de Nokia

2. Finlandia como Economía del Conocimiento: Elementos de

Exito y Lecciones Aprendidas

Articulo de Carl J. Dahlman, Jorma Routti and Pekka Ylá-Anttila

3. Adaptándose a la Sociedad de la Información: Nokia y la

Revolución Tecnológica Finlandesa

Articulo de Oscar Álamo

4. Un Estado de Gran Bienestar y muy Competitivo

Artículo de El País, por Cristina Galindo

5. Educación y Ciencia en Finlandia

Reporte del Ministerio de Educación de Finlandia

6. Nuevo Conocimiento y Competencia para las Políticas de

Tecnología e Innovación.

Pasajes centrales del Reporte Final del Programa ProAct 2001 – 2005 de TEKES

7. La Visión Prospectiva Áreas de enfoque que delinean las futuras prioridades de I+D e Innovación en Finlandia del 2008 – 2015

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La Evolución y el Gran Salto hacia el Desarrollo Reciente

Entrevistas de Noticias Cordis

Referencia Reportaje a Esko-Olavi Seppälä y Erkki Ormala Basado en entrevistas de Noticias CORDIS con

Esko-Olavi Seppälä y Erkki Ormala Acrónimo del Programa: MS-FIN C

RCN: 25919

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EI camino de Finlandia hacia la prosperidad 4 de julio de 2006

EI milagro económico finlandés es un fenómeno estudiado con asombro en todo el mundo y fue acogido en Finlandia con notable orgullo. Cómo ha podido un pequeño país escandinavo pasar de una economía que carecía de capacidad tecnológica en los años 70 a la fuente inagotable de innovación que es hoy en día?

Finlandia continua siendo la economía más competitiva del mundo y ha alcanzado el primer puesto en la lista del Foro Económico Mundial cuatro veces en los últimos cinco años. Para responder a la pregunta "cómo? ", Noticias CORDIS hablo con el Sr. Esko‐Olavi Seppälä, del Consejo de Ciencia y Tecnología de Finlandia, que tiene un profundo conocimiento del proceso de innovación y desarrollo en Finlandia, y al Dr. Erkki Ormala, vicepresidente de Política Tecnológica en Nokia, Iíder tecnológico finlandés, quien ofrece una perspectiva más general de la industria.

Entre las joyas de la corona tecnológica de Finlandia están la empresa del Dr. Ormala, Nokia, Iíder mundial en tecnología de telefonía móvil y Linus Torvalds, inventor de Linux, el mayor proyecto colaborativo de tecnología de la información (TI) del mundo. Aunque el gran empuje hacia las áreas innovadoras comenzó a acelerarse en los años 90 las bases se remontan a los años 60. EI Sr. Seppala proporciono a Noticias CORDIS una breve introducción histórica:

"La industria de Finlandia empezó a invertir en desarrollo técnico a lo largo de los años 60 de modo que invirtió en sí misma en I+D (investigación y desarrollo) técnicos. A partir de mediados de los 60 se realizaron esfuerzos extraordinarios para ampliar la educación superior, con una ley sobre educación superior aprobada en 1966. Esta ley es valida todavía hoy en día y es responsable de generar un gran aumento del número de estudiantes y profesores. Esta ampliación se aplico de manera que se fundaron universidades nuevas en varias regiones, no ampliándose simplemente las antiguas", dijo.

La importancia de esta política no puede ser subestimada. Ha permitido a Finlandia disponer de una mane de obra altamente cualificada y con actitudes positivas para la investigación y el desarrollo, independientemente de su lugar de procedencia. Nada de lo que ocurrió posteriormente podría haber ocurrido sin este ingrediente fundamental. Hoy en día Finlandia se sitúa aun a la cabeza en las listas mundiales en materia de alfabetización, solución de problemas, matemáticas y otros indicadores de educación.

EI Dr. Ormala cree que las bases del cambio industrial se establecieron mediante el dialogo "público‐privado", perfilando una visión común. "Había dos tendencias. En primer lugar, concretamente a últimos de los 60 y primeros de los 80, se hizo evidente que la economía en aumento y el crecimiento industrial no podían estar basados en el comercio con Estados Unidos aunque este siguiera siendo importante. Para el crecimiento económico sostenible Finlandia necesitaba acceder a los mercados europeos. El requisito para ello era el valor añadido ya que la ventaja competitiva y los productos de calidad superior necesitaban aumentar su valor en el mercado.

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"En segundo lugar existía una joven generación de dirigentes visionarios que vieron una oportunidad en los mercados globales. Los 80 fue la década en la que Finlandia se abrió a las instituciones internacionales y a los mercados extranjeros", dijo el Dr. Ormala. De nuevo, la columna vertebral directiva se forma gracias a una solida base educacional. Pero respecto a la transferencia de tecnología se mostraron ciertas reservas.

De 1979 a 1980 la discusión sobre el acercamiento de la economía finlandesa a la tecnología y la microelectrónica causó algunas preocupaciones entre los sindicatos, que temían la pérdida de puestos de trabajo en varios sectores. No obstante, prevaleció una actitud pragmática y los sindicatos decidieron no descartar simplemente el asunto sino ver si realmente el cambio a una sociedad tecnológica costaría puestos de trabajo.

Denominado el "Gran Comité Tecnológico", los sindicatos consideraron que de hecho el efecto sobre el empleo fue nulo y si cabe positivo. Este sorprendente resultado "cambio la orientación porque los sindicatos y los obreros empezaron a tener actitudes positivas con respecto los procesos tecnológicos", explico el Sr. Seppala.

En 1982, a consecuencia de los descubrimientos del Gran Comité Tecnológico, el gobierno tomó la decisión de promover el principio de tecnología, tomando una amplia visión de la política tecnológica y técnica. "La tecnología adquirió la posición que se había mantenido en otros países después de la Segunda Guerra Mundial", señalo. "Considerando la tecnología no solo para ingenieros, sino como un fenómeno social en todos los sectores de la sociedad y la sociedad a todos los niveles".

EI Dr. Ormala cree que el cambio hacia la tecnología se produjo más desde la misma industria, unida a excelentes canales de comunicación entre la industria y el gobierno. En lugar de pedir apoyo la industria invirtió en sí misma y su financiación privada se ajusto entonces a los gastos del gobierno. "La piedra angular del desarrollo fue una discusión 0 consulta intensa entre el ámbito publico y el privado ‐ un mecanismo de consenso que permitía a ambos compartir una visión común. Esto fue muy importante y proporcionó previsibilidad, dando paso a que las industrias invirtieran en Finlandia ‐ dando confianza", dijo el Dr. Ormala.

En 1983 fue fundada Tekes, la agencia de financiación finesa para tecnología e innovación y después de 1983 la tecnología empezó a tener un papel mucho más visible. Curiosamente el verdadero catalizador del rápido cambio se produjo como una reacción a la inestabilidad económica una década después. “La participación pública estaba en buena forma a finales de 1980 pero entonces se produjo un serio deterioro a partid de 1990. 1993 fue el peor año durante la depresión, El PIB descendió más del 10 por ciento entre 1991 y 1993, se perdieron más de 400,000 puestos de trabajo, lo que significó una tasa de paro que aumento del 3.5 por ciento al 20 por ciento en ese corto período”. Irónicamente, en el fondo de la depresión, en julio de 1991, se fabrico el primer sistema global de comunicaciones móviles en Helsinki. "Un comienzo afortunado para la economía", comentó el Sr. Mr Seppälä. "Esto puede ser considerado en términos de inversión en I+D. Desde 1993 hasta el final, la I+D nacional creció aproximadamente el 10% cada año de 1993 en adelante. Esta fue la manifestación de las TIC, dirigida por Nokia. Esta

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innovación de alta tecnología orientada a la exportación se derivó de la depresión. EI desarrollo no se produjo sólo en la inversión privada sino también en la inversión del el sector publico".

A partir de 1995, el Partido Socialdemócrata de Paavo Lipponen fue más allá. En el primer gobierno de 1996, el gasto público se incremento el 25% entre 1996 y 1999.

EI gobierno invirtió grandes cantidades de dinero en investigación, innovación e iniciativa empresarial. ¿Pero cómo podía el gobierno finlandés permitirse esos grandes gastos? "Privatización. Después del periodo de recuperación, después de la depresión. La recuperación fue buena a partir de 1996. Fue posible recibir ingresos extra del gobierno y el sector publico dio claras señales para continuar la inversión en la base del conocimiento. Apoyado por asociaciones publico‐ privadas, en educación, TIC (tecnologías de la información y las comunicaciones) y áreas relacionadas", dijo el Sr. Seppala.

Quizás otra clave para el éxito de Finlandia sea la revaloración continua y reevaluación de sus sistemas de investigación y las respuestas rápidas a las demandas del mercado. Por ejemplo, la demanda de expertos en TIC era muy alta a finales de los 90. En respuesta a ello, el gobierno abrió plazas de estudio para desarrollar expertos en TIC en un programa conjunto entre gobierno, industria y municipios entre 1998 y 2002. EI programa fue un éxito.

Junto a las mejoras tecnológicas se realizaron paralelamente mejoras educativas. "Con el rápido aumento del volumen de I+D lIegó un rápido aumento de personal de I+D. EI nivel medio de educación mejoró junto con el crecimiento del volumen de modo que la media del nivel educativo era mucho más alta que a principios de los 80, incluso aunque haya tres veces más personal".

EI Sr. Seppälä explico esta doble mejora: "Hay dos razones para ello: En primer lugar, las mujeres entraron en el mundo profesional de I+D y desde 1990 el número de ellas ha crecido constantemente y aun sigue creciendo. EI 46 por ciento de nuevos doctorados y más de un tercio del personal de I+D son mujeres. En segundo lugar, el sistema de escuelas de posgrado para la formación de investigadores‐ de 1995 en adelante, las escuelas de posgrado con plazas de estudio a jornada completa para másters en ciencia y la preparación de doctorados aumentó. Ahora más de 100 escuelas de posgrado y universidades y 1500 plazas de estudio son pagadas por el gobierno”, dijo. Pero la educación en sí no es suficiente, aunque sea un ingrediente esencial. "Por supuesto el nivel de la educación general de toda la población debería ser lo más alto posible, ya que es la base de todo lo demás. Pero también es necesaria la competición de mercados globales, se necesitan conocimientos técnicos y un alto nivel de desarrollo de investigación, que proporcionen ventajas en la competición de mercados globales. Debes tener gente muy buena en las universidades, muy buenas empresas y ser competitiva en los mercados globales de ciencia y tecnología".

EI Sr. Seppäläes consciente de que un país del tamaño de Finlandia tiene Iimitaciones, de modo que el país ha concentrado sus esfuerzos en áreas específicas. "Finlandia es una pequeña nación en lo que se refiere a la población ‐ 5,3 millones, lo que restringe y Iimita la capacidad de tener empresas competitivas con una base amplia, pero esto es lo que queremos intentar alcanzar, tener éxito globalmente en ciencia, tecnología y

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comunicaciones". Afiadió el Dr. Ormala. "Para ser global necesitas especializarte porque no puedes ser bueno en todo. Las empresas globales son diferentes de aquellas que están en un mercado local".

Ahora, se prevé otra revolución. Aunque Finlandia se ve muy bien desde el exterior, se reclama el relanzamiento de estrategias de innovación debido a lo que se considera está declinando el rendimiento en el país.

"Podemos decir que los actores públicos mas importantes en ciencia y tecnología en los 90 son tres organizaciones expertas en financiación en el sector publico. La Academia de Finlandia, un sistema de consejos de investigación nacionales que financia la investigación básica en universidades. Tekes tiene un papel parecido ya que financia la investigación técnica aplicada en universidades y centros de investigación públicos y dirige la financiación tecnológica para compañías de negocios. SITRA, el Fondo Nacional Finlandés de Investigación y Desarrollo, que es el fondo más importante de capital de riesgo público".

"Estas tres organizaciones cubren todo el proceso de innovación. Es importante que pongan en funcionamiento programas nacionales en sus áreas y tengan una buena cooperación horizontal. Tanto por separado como en conjunto, constituyen el factor más importante del éxito alcanzado hasta ahora y serán la base del próximo. Ahora necesitamos ser más selectivos y estar más preparados que de costumbre para tomar grandes decisiones", dijo el Sr. Seppälä

EI Sr. Sepplälä cree que serán necesarias mayores decisiones en el futuro. "Normalmente una unidad de investigaci6n estándar es dirigida por un grupo, pero teniendo en mente proyectos a nivel de la EU y varias redes, deberíamos estar preparados para tomar mayores decisiones monetarias – esto cubre las mayores responsabilidades de las tres organizaciones, no sólo deberían tener sus propias actividades sino una visión más amplia del futuro desarrollo de ciencia, tecnología e innovación. Para cumplir eso, necesitan mejorar las actividades horizontales y la toma de decisiones políticas, para reforzar las actividades".

La innovación tiene efectos secundarios e inesperados. EI proceso de innovación que ha activado de este modo la economía finlandesa también tiene consecuencias. "Ciñéndome a la ciencia y la tecnología, puedo decir que Finlandia cayó en la depresión simultáneamente. Todo cayó al mismo tiempo. La operación tuvo lugar a distintos tiempos si se compara con diferentes regiones, en Helsinki mas rápidamente y después en las grandes ciudades universitarias de Finlandia, posteriormente en ciudades más pequeñas y más lentamente en zonas remotas".

"Hemos aprendido que la innovación técnica favorece la concentración de actividades ‐ las industrias de TIC se sitúan en los mayores centros, que tienen actividades de ocio, aeropuertos, etc. Este es un factor, la concentración provoca un desarrollo económico rápido y la emigración procedente del campo y áreas escasamente pobladas. En esta depresión de hace 15 años el sector publico se retiró de las regiones. Esto significa que hay diferencias a la hora de analizar los niveles y las tasas de desarrollo, la velocidad que las regiones desarrollan hoy en día. Necesitamos cuidar el desarrollo a largo plazo", dijo.

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La Presidencia Finlandesa de la UE Ilega justo a tiempo para muchos de los que en Europa se preocupan por la "brecha" tecnológica europea. EI ejemplo finlandés no debe limitarse a Finlandia y el mismo modele puede ser utilizado para seguir dirigiendo Europa. En consecuencia, la investigación e innovación estarán más a la orden del día en los próximos seis meses y para muchos esto no lIega demasiado pronto. Para más información sobre las actividades de investigación de la Presidencia Finesa, consultar la siguiente dirección web:

http://cordis, europa.eu/finland

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Finlandia como Economía del Conocimiento:

Elementos de Éxito y Lecciones

Carl J. Dahlman, Jorma Routti y

Pekka Ylá-Anttila

Referencia Dahlman, C.J, Routti, J. and Anttila, P.Y. 2005. Version de prepublicación del libro

Finland as a Knowledge Economy: Elements of Success and Lessons Learned, Finnish National Agency for Corporate Inernationalizacion, The Research Institute of the Finnish

Economy y el World Bank Institute.

Finland as a Knowledge Economy

Elements of Success and Lessons Learned

Overview

Edited byCarl J. Dahlman

Jorma RouttiPekka Ylä-Anttila

This is a prepublication version of the Overview of the book on Finland as aKnowledge Economy: Elements of Success and Lessons Learned, to be published inJanuary 2006. This study was developed in cooperation with Finland’s Ministry forForeign Affairs, Ministry of Trade and Industry, Finpro—Finnish National Agencyfor Corporate Internationalization, ETLA—The Research Institute of the FinnishEconomy and the World Bank Institute.

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© 2005 The International Bank for Reconstruction and Development / The World Bank1818 H Street, NWWashington, DC 20433

All rights reserved.

The findings, interpretations, and conclusions expressed here are those of the author(s)and do not necessarily reflect the views of the Board of Executive Directors of the WorldBank or the governments they represent.

The World Bank cannot guarantee the accuracy of the data included in this work. Theboundaries, colors, denominations, and other information shown on any map in this workdo not imply on the part of the World Bank any judgment of the legal status of any territoryor the endorsement or acceptance of such boundaries.

The material in this work is copyrighted. No part of this work may be reproduced ortransmitted in any form or by any means, electronic or mechanical, including photocopying,recording, or inclusion in any information storage and retrieval system, without the priorwritten permission of the World Bank. The World Bank encourages dissemination of itswork and will normally grant permission promptly.

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Foreword

Knowledge is fueling economic growth and social development in every region of theworld. The forces of globalization such as migration, travel, trade, foreign investment,and communications are speeding the dissemination and use of information acrossboundaries. New ideas and innovation are spreading faster than ever. Knowledge-based growth and development offer opportunities for both developed and develop-ing economies. Advancement in information and communication technologies (ICTs)has been a necessary condition for these new developments in the global economy.

ICTs provide the means for developing countries to accelerate their progress oreven leapfrog into the current phase of development and to enable their integrationinto the global economy. For developed countries the knowledge-based economyallows further specialization, improvements in productivity, and the achievement ofsustainable growth: knowledge capital is the only asset that can grow without limits;and new knowledge increases the efficient use of resources that are in finite supply.

The Finnish experience in the 1990s is an example of how knowledge canbecome the driving force in economic transformation and growth. Although asrecently as the 1970s Finland was relying mainly on resource-intensive industries,it is now the most ICT specialized economy in the world. This achievement is all themore remarkable considering the deep recession it experienced in the early nineties,with a major banking crisis that led to rapid worsening of public finances, unem-ployment, and the external balance.

Rapid structural transformation beginning in the mid nineties coincided withequally rapid improvements in macro balances. By the end of the decade the country’smacroeconomic performance was one of the strongest in Europe. The Finnish experi-ence shows that it is possible to make significant structural changes in a relativelyshort time. It also shows that long-term decisions that shape research and educationare possible, and indeed necessary, during short term economic crisis, since they pro-vide guidelines for longer-run growth and help create a sustainable competitive edge.

The study has been a joint effort by the World Bank Institute, the Finnish Ministryof Trade and Industry and Ministry of Foreign Affairs, Finpro—Finnish NationalAgency for Corporate Internationalization, and ETLA—the Research Institute of theFinnish Economy.

Although Finland has many characteristics that cannot easily be replicated byother countries, much of its experience in designing knowledge-based economicand social strategies is highly relevant. A key lesson is the importance of flexibilityin responding to change, and the critical role of a responsive education system. Fin-land’s experience also highlights the importance of developing a vision and aprocess for consensus-building. We hope that Finland’s example of turning a crisisinto opportunity provides inspiration to other countries forging their own path intoday’s global knowledge economy.

Frannie A. LéautierVice PresidentWorld Bank Institute

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Acronyms and Abbreviations

EU European UnionGDP gross domestic productICT Information and Communication TechnologyIT information technologyOECD Organisation for Economic Co-operation and DevelopmentPISA Programme for International Student AssessmentPPP purchasing power parityR&D research and developmentS&T science and technologySITRA Finnish National Fund for Research and Development (Suomen

itsenäisyyden juhlarahasto)TEKES National Technology Agency (Teknologian kehittämiskeskus) of FinlandVTT Technical Research Center of Finland (Valtion teknillinen tutkimuskeskus)WEF World Economic Forum

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Overview

Finland: A knowledge economy driven byinformation and communication technologies

Finland is a country that has successfully transformed itselfinto a knowledge economy in a short time. The Finnish expe-rience of the 1990s represents one of the few examples of howknowledge can become the driving force of economic growthand transformation. During that decade, the country becamethe most ICT- (information and communication technology)specialized economy in the world and thus completed itsmove from the resource-driven to knowledge- and innovation-driven develop-ment. Four times to date at the beginning of the twenty-first century, the countryhas ranked as number one in the World Economic Forum’s(WEF) competitiveness index, and as one of the most devel-oped IT economies. It was ranked top in the OECD’s Programfor International Student Assessment (PISA) studies of learn-ing skills and educational attainment, and also achieved thehighest Knowledge Economy Index in the World Bank com-parisons (figure 1). The various elements pertinent to a

In the 1990sFinland becamethe most ICT-specializedcountry in theworld

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Figure 1. Global view: Knowledge Economy Index by countries and regions,1995 and the most recent year

Source: World Bank-Knowledge Assessment Methodology. www.worldbank.org/kam.Note: The Knowledge Economy Index (KEI) consists of 80 structural or qualitative variables

that benchmark performance of more than 128 countries. KEI is an aggregate of all variables thatare normalized from 0 (worst) to 10 (best).

Finland rankshighest in WEFcompetitivenessindex and PISAstudies

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knowledge economy—economic incentives, education, innovation, and IT infra-structure—also seem to be well balanced in Finland.

This achievement is quite remarkable especially when considering Finland’seconomic situation in the early 1990s. The country went through a severe economic

recession characterized by a major banking crisis, unemploy-ment rates rising from 2 percent–3 percent to over 15 percent,and the accumulation of government debt from modest levelsto over 60 percent of GDP and approaching internationallending limits. These difficulties were caused and exacer-bated by uncontrolled deregulation of financial markets anda rapid increase in foreign borrowing, which led to an over-heated domestic economy. High inflation pushed up interest

rates and overburdened the public sector due to smaller tax revenues and largerunemployment and welfare costs. Furthermore, the collapse of the Soviet Unionwiped out 15 percent of Finnish foreign trade with attractive barter arrangements.The collapse also left some traditional Finnish industries, including clothing andfootwear, with less competitive technologies and cost structures, and without mar-ket access. The resulting recession is clearly visible in a drop in Finland’s real GDPof more than 10 percent from 1991 to 1993 (figure 2).

Finland’s difficulties were amplified by its not being well prepared for economicintegration and globalization, its membership in the European Union (EU) andMonetary Union, and its lack of export diversity. Exports were dominated by the

2 Overview

In the 1990s, theeconomy stillwas goingthrough a deeprecession

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Figure 2. GDP per capita in Finland and OECD Europe, at 1995 prices andpurchasing power parity (PPP) exchange rates

Source: Rouvinen and Ylä-Anttila 2003; original sources: www.sourceOECD.org, Penn WorldTables.


forest-related industries, which still play an important role in the Finnish economy.Their position now is much stronger as a result of consolidation and the emergenceof a few multinational companies with advanced technolo-gies and market approaches. In earlier times, the competitive-ness of the forest-related industries was secured by frequentdevaluations of the currency in response to the cyclical natureof the international pulp and paper markets. In today’s Euroregime, this is neither possible nor desirable because of theensuing inflation and increase in foreign debt that Finlandwould experience.

Thus, the diversification of exports has been mandatoryto improve the performance of the Finnish economy. This diversification has beendue largely to the persistent emphasis given to higher education, linkages andspillovers among various industries, and the emergence ofnew knowledge-based industries. Since 1980, research anddevelopment (R&D) investments by the government—butprimarily the private sector—have more than doubled toreach levels equivalent to 3.5 percent of GDP in 2004, whichis above the EU average of less than 2 percent (figure 3).

The Finnish innovation system also has been successful inconverting its R&D investments and educational capacity intoindustrial and export strengths in the high-technology sectors.

Carl Dahlman, Jorma Routti, and Pekka Ylä-Anttila 3

Finland’s inno-vation systemsuccessfullyconverted R&Dand educationalcapacity intoindustrialstrengths

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Sweden Finland JapanUnited States Germany European Union

Figure 3. R&D expenditures as a share of GDP (%)

Source: OECD 2005.

Diversificationof both technol-ogy and exportswas a prerequi-site for improvedperformance


This conversion can be illustrated by patent statistics that put Finland among theworld’s top performers in technological innovation (figure 4).

High technology’s share of total exports also has grownfrom 5 percent in the late 1980s to approximately 20 percentin 2004, resulting in a significant trade surplus (figure 5).Today, Finland’s telecommunications exports are as high asthose of its forest-related industries, and the Finnish NokiaCorporation has grown into a world leader in mobile commu-nications. Hundreds of other smaller high technology compa-

nies also have been established, and many have become world leaders in theirniche markets.

Finland’s success is remarkable not only in light of its ear-lier economic difficulties. It also is interesting to see that aknowledge economy can be built successfully in a small andcomparatively peripheral country. Finland is a relatively largecountry covering an area equivalent to that of the Japan or theUnited Kingdom. Finland is located between latitudes 60 and70 North extending beyond the Arctic Circle. However,although more than half of the people in the world living thisfar north are Finnish, the total population of the country is only5.2 million. Furthermore, the Finnish language is spoken onlyby Finns. While this is an asset for a strong national culture, itmakes international communications difficult.

4 Overview

0

900

Japan

Swed

en

Finlan

d

Germ

any

United St

ates

Nether

lands

Denm

ark

France

OECD total

EU15

Austria

United K

ingdom

Canad

a

Australi

a

Irelan

dKore

aSp

ain

Czech

Rep

ublic

Hungary

800

700

600

500

400

300

200

100

Figure 4. Number of triadic patent families (per million habitants, for year 2000,patents from 1990–2000)

Source: OECD Factbook 2005.

Finland’ssuccess showsthat a strongknowledgeeconomy can bebuilt in a smalland compara-tively peripheralcountry

Finland isamong topperformers inpatenting


How did Finland become a knowledge economy?

As late as the late 1970s, Finland ranked at the lower end ofthe OECD countries in R&D intensity. Today, Finland’sinvestment in R&D accounts for approximately 3.5 percent ofGDP, which is the second highest in OECD and the thirdhighest in the world, just after Sweden and Israel.

Increasing investments in R&D during times of high unem-ployment required great political wisdom and courage, whenan easier path would have been to generate immediate employ-ment rather than build up longer-term strengths. IncreasingR&D was helped partially by national industrial and innovationstrategies communicated by the government. These nationalstrategies were important for consensus building, for example,by organizing economic policy programs attended by practi-cally all members of the Finnish Parliament and other decisionmakers from the public and private sectors, media, and labormarket organizations.

What we observe today are outcomes of longer-termtransformation processes. Specialization in high-tech and R&D-intensive production needs to be preceded by major structuralchange in economic and social structures. Recent research seems


0

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35

1990

1992

1994

1996

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2000

2002

2004

30

25

20

15

10

5

United States JapanFinland SwedenEuropean UnionDenmark Norway

Figure 5. Share of high technology exports of Finland’s total exports ofgoods (percent)

Source: Statistics Finland and OECD.

Specialization inhigh-tech andR&D-intensiveproductionneeds to bepreceded bymajor structuralchange ineconomic andsocial structures

Increasing R&Dintensity wasfacilitatedthrough nationalconsensusbuilding


to indicate consistently that while poor countries get richer with this specialization,their sectoral production and employment become more diversified or less concen-trated. On the contrary, countries with high levels of income that specialize in hightech and R&D intensive production are characterized by concentrated sectoral spe-cialization. These conclusions are supported by cross-sectional analysis of countries

and apply well to the development of Finland over the pastfew decades.

It is important to note that a knowledge economy is an ensembleof elements that must be in balance. It is not necessarily the lack oftechnological infrastructure or skilled engineers that restrainseconomic growth. It might equally well be the lack of entrepre-neurs or proper economic incentives and opportunities.

In Finland, the specialization of production, trade, andR&D in more knowledge-intensive goods and services coin-cided with the gradual opening of the economy and deregu-lation of capital flows. A peculiarity of the Finnish case is theatypical pattern of industrial renewal from essentially natural-resource-based industries toward machinery, engineering, electron-ics, and ICT. There are few, if any, other examples of natural-resource-abundant countries that have managed to transformtheir industrial structures toward higher knowledge intensityand value added so rapidly and successfully as Finland. Theorigins of the Finnish knowledge economy can be traced back touser-producer linkages between the forest-based industries as earlyusers of high technology, and the emerging engineering, electronicsand ICT industries in the 1960s and 1970s (figure 6).

6 Overview

Finland hasevolved quicklyfrom a resourcedriven economyto a knowledgedriven economy

Figure 6. Finland’s stages of industrial and economic development

Sources: Adapted from Porter 1990 and Hernesniemi and others 1996.

Finland’s indus-trial renewalbenefited fromliberalizingtrade and liftingthe remainingrestrictions oncapital flows inthe 1990s

Kno

wle

dge

Finland from mid 1800sto early 1900s

Abundant and cheapwood raw material

Resource-driveneconomy

Imported technology

Standard products

FOREST-BASEDINDUSTRIES

MACHINERY,ENGINEERING INDUSTRIES

& FOREST-BASEDINDUSTRIES

ICT, ELECTRONICS, MACHINERY, ENGINEERING,

FOREST-BASEDINDUSTRY, CHEMICALS

Finland from the endof WWII to 1980s

Ability and willingnessto invest

Investment-driveneconomy

Imported but upgradedtechnologies

Differentiated products

Finland since late 1980s

Domestic knowledgegeneration

Knowledge-driveneconomy

Ingenious innovations,own R&D andtechnologies

Products spanningcompletely new

markets


Finland’s industrial renewal has benefited from the government’s liberalizingtrade and lifting the remaining restrictions on capital flows in the 1990s, which pro-moted investment in general and the inflow of foreign capital in particular. It is impor-tant to note that the developments in industry were pivotal to the Finnish ICT-drivenpath toward the knowledge economy. These developments resulted from theincreased investments in R&D. However, even though public funding of R&D hasincreased substantially during the past decades, its relative share of total R&D expen-ditures has decreased. Increasingly, investments in R&D have been privately funded.Presently, private funds account for some 70 percent of the total.

The increase in private R&D is attributable, above all, to Nokia. Although thereare also other firms, Nokia was the industrial engine for developments in the ICTindustries in Finland. Nokia thereby to a significant extent influenced the rapidindustrial restructuring in the 1990s toward electronics and electrical engineering(figure 7). By 2003 Nokia accounted for 25 percent of Finland’s total R&D expendi-tures, 3.7 percent of GDP, and 20 percent of total exports.

In addition to Nokia, industrial and innovation policiescontributed to the development of the Finnish knowledge-based economy, both indirectly and directly. Especially notewor-thy is the shift in the focus and content of industrial policies in the1990s away from macroeconomic policies and industrial subsidiestoward microeconomic “conditions-providing” policies. The latter


0

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Man

fact

urin

g pr

oduc

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)

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8,000

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Textiles & apparelChemicalsPulp & paperElectronics & electrical equipmentMetal & engineering

Figure 7. Finnish manufacturing production volume by industry (millions of €in 2000 prices)

Source: Statistics Finland and ETLA.

Policy emphasishas shifted frommacroeconomictoward microeco-nomic policies


put R&D and innovation center stage. Public subsidies are now increasingly R&D-based, and market failure remains the main justification stated for these policies.Furthermore, science and technology (S&T) policies have been integrated under thecommon umbrella of innovation-oriented industrial policies. In addition, most pub-lic research funding is competitive—that is, not only companies but also researchinstitutes and universities are put in competition for the project financing providedby various government agencies.

On a sectoral level, Finland had a long tradition of a competitive market struc-ture in telecommunications operation, in which the state monopoly covered onlythe trunk networks. This tradition combined with further liberalization of thetelecommunications market early on are the main explanations for the rapid diffu-sion of mobile telephony in Finland. At present, despite almost full trade liberaliza-tion, Finland still has some regulations and trade restrictions in the service sector aspart of common European Union policies.

Specificities of Finnish industrial and innovation policies

A specificity of the Finnish “model” has been the early applicationof a systems view of industrial policy. This systems view could bedescribed as an acknowledgement of the importance of interdepen-dencies among research organizations, universities, firms, andindustries due to the increasing importance of knowledge as a com-petitive asset, especially in the case of small open economieswith a well-developed welfare system. Furthermore, the sys-temic approach to policymaking is based on the notion that the vari-

ous stages of innovation process—from basic research to commercialization—often aresimultaneous rather than sequential, and funding and services are demanded accordingly.

However, it is important to stress that a systems view of industrial policy doesnot imply that Finland has followed a “master plan” in which the governmentplayed a strong leading role. Rather, the systems view was concretized through anemphasis on responsive longer-term policies to improve the general framework conditionsfor firms and industries, especially in knowledge development and diffusion, innovation,and clustering of industrial activities. The systems view was formulated through vari-ous public-private partnerships involving economic research organizations, indus-try federations, and firms; and was anchored in broader economic policy circles.

The first definition of the systems view of industrial policy is found in the 1990Review of the Science and Technology Policy Council. The council made the concept ofa national innovation system an important cornerstone for science and technology pol-

icy. However, the more significant and concrete consequence of thisnew systems view was the high priority that the government gave toinvestments in R&D. In hindsight, given the severe economicrecession that Finland was enduring at the time, this prioritiza-tion appears a bold one. However, it again exemplifies the strongintegration between technology and industrial policy in Finland.

As just mentioned, institutions and policy organizations alsohave played important roles in Finnish knowledge economydevelopment. A systemic view of policies is reflected in how dif-ferent organizations in the national innovation system see theirroles in promoting science and technology. Each organization

8 Overview

A systems viewwas adoptedearly in indus-trial and tech-nology policies

Institutions andpolicy organiza-tions have alsoplayed an impor-tant role inFinnish knowl-edge economydevelopment


has its relatively well-defined function in the national innovation system, but at thesame time there are public initiatives and efforts to increase collaboration among vari-ous innovation agencies. Such collaboration extends from basic research and R&D tobusiness development and the commercialization of innovations.

The collaboration between funding and innovation-promoting agencies is basedon the systemic model of innovation defined above, asopposed to the old linear model. The various stages of the innova-tion process—from basic research to commercialization—are fundedsimultaneously to a greater extent than before (figure 8). Thisnew funding logic demands closer collaboration and coordina-tion among the various public and private sector fundingorganizations. The collaboration intensified in the 1990s duringthe ICT boom and has proved to be important in many otherfields of science and technology as well.

The most important public players in the national innova-tion system and their positions and roles in the Finnish sys-tem of innovation are illustrated and described below (figure 9). The Science andTechnology Policy Council is a relatively independent player and the most impor-tant coordinator of science and technology policies. The otherpublic players are subordinated to either the Ministry of Edu-cation or the Ministry of Trade and Industry. Sitra is a publicfoundation operating under the Parliament.

The Science and Technology Policy Council is chaired by thePrime Minister and is responsible for the strategic developmentand coordination of Finnish science and technology policy aswell as of the national innovation system as a whole. The high


R&D at companies3,528

Business angels387

Business developmentMarketingInternationalisationBusiness R&DApplied researchBasic research

Publ

icPr

ivat

e

Universities976 (443)

Academyof Finland

185

VTT213 (63)

Tekes395

Finnvera364 (41)

MinistriesTE-Centres,

sectorial research302 (229)

From abroad158

Venture capitalists:Private 294

Industry Investment Ltd 40(additional government investment 42)

Sitra 32

Finpro31 (19)

Figure 8. Science and technology system in Finland: Resources and funding

Source: Tekes 2005.

The science andtechnology sys-tem in Finlandhas many publicand privateinstitutions withspecializedfunctions

There is closecoordinationbetween thepublic andprivate sectors


level of the Council is also clear from the fact that it consists of the other most impor-tant Ministers, and other major stakeholders in science and technology.

The Academy of Finland focuses on financing basic research. The Academy’s objec-tive is to promote high-level scientific research through long-term quality-basedresearch funding, science and science policy expertise, and efforts to strengthen theposition of science and scientific research. The Academy’s operations cover all scien-tific disciplines. It operates within the administrative sector of the Ministry of Edu-cation and is funded through the state budget. Approximately 15 percent of all gov-ernment research funding is channeled through the Academy.

The National Technology Agency, or Tekes, has a major role in formulating Finnishinnovation and technology policy by allocating funds forresearch and development in private firms and researchorganizations as well as in universities. Approximately 30percent of the government’s total R&D budget is channelledthrough Tekes. The agency was established in 1983 and func-tions under the Ministry of Trade and Industry.

The major financial instruments of Tekes are (1) industrialR&D grants and loans to firms and (2) grants for applied(technical or technology-related) research in public organiza-tions. Typically, research grants are allocated via technologyprograms planned in collaboration with firms and research

10 Overview

Public sector Parliament

Government Science and TechnologyPolicy Council

Ministry ofEducation

Other ministriesMinistry ofTrade and Industry

Academy ofFinland

SitraTekes

Policymakers

Universities Researchinstitutes

Polytechnics

Businessenterprises

Industryand

academicsocieties

FoundationsFundsResearchinstitutes

Financing

Operators

Private sector

Figure 9. Finnish innovation system: Organizations and coordination

Source: Adapted from www.research.fi.

Tekes—theNationalTechnologyAgency—has amajor role inbuildinguniversity-industrycollaboration


institutes. The technology programs launched by Tekes set priorities for specificsectors of technology or industry and define the allocation of money for R&D indifferent fields.

The Technical Research Centre of Finland, or VTT, was established in 1942. It hasbecome the biggest polytechnic applied research organization in Northern Europeand is integral to Finland’s innovation system. By developing new technologicalsolutions and applied technologies, VTT helps its clients to improve their compet-itiveness. VTT also promotes technology transfer by participating in national andinternational research programs and collaborative networks.

The Finnish National Fund for Research and Development, orSitra, to fill the need on the public side to have an instrumentby which to experiment and start new activities without thebudgetary delays and political commitments of governmentto carry them out immediately on a broad front. To do thisrequires sufficient economic means preferably as an endow-ment and flexibility in decision making. Sitra was establishedin 1967. Initially, it was subordinated under the Central Bankof Finland, but since 1991, it has operated as a public founda-tion under the Parliament.

For economic success, certain social and institutional innovations are as important astechnological ones. For almost two decades, good governance and a low level of cor-ruption have been strongly connected to the notion of theknowledge economy. Good governance and political trans-parency play an invaluable role in the Finnish society, partic-ularly in its knowledge economy. Institutions, both adminis-trative and political, also do matter. One example ofinstitutional innovation is the Committee for the Future, astanding committee of the Parliament of Finland, which hassignified the need for longer-term orientation and consensusbuilding in politics and the development of a sustainableknowledge-based economy (box 1).

Education: quest for equity and high quality

Education is the key element of a knowledge-based, innovation-driven economy. It affectsboth the supply of and demand for innovation. Human capital and skilled labor com-plement technological advances. New technologies cannotbe adopted in production without a sufficiently educatedand trained workforce. The demand side is also importantsince innovations may not take place in the absence of edu-cated and therefore demanding customers and consumers.

In OECD’s recent Program for International StudentAssessment studies (PISA 2000 and 2003), Finland emergedat the top in terms of learning skills among 15-year-olds inmathematics, science, and reading literacy. Other high performers includedAsian countries: Hong-Kong China, Japan, and Korea. What is unique in theFinnish case is the low variation among schools and across students. Signifi-cantly, the low performing group did better than the average of the some 40countries surveyed.


Good publicgovernance anda low level ofcorruption areessential to theknowledgeeconomy

The Committeefor the Future isan example ofan institutionalinnovation forcreatingconsensus

Education is thekey to both thesupply of anddemand forinnovation


In the Finnish education system, the local authorities are largely responsible fororganizing basic education and schooling. Equality by gender, region, and socioeco-

nomic background are fundamental principles of the Finnisheducation policy. Everyone receives the same basic education,and, furthermore, it is the goal of the educational system thatno one relies on basic education alone. Previously, equality wasconsidered quantitatively, and the distribution of schools andaccess to them were measures of equality. Nowadays, equalquality of education for everyone is the goal, and individuallearning results are the measure of success. The social securitysystem in Finland also exerts a strong incentive for young peo-ple to continue educating themselves after the lower secondaryschool, which is normally completed in the age of 15–16 (figure

10). One example of this is the requirement that a person must be 18 or over to qual-ify for unemployment benefits. Hence, there is an incentive to continue to go toschool (free for everyone) after completing the lower secondary education.

Initially, starting in the twelfth century, all education in Finland was in the handsof the Church, and classes were taught only in Latin. However, since the early nine-teenth century, education policy and the development of the education system inFinland have exhibited the above-mentioned principle of equality. The country alsorecognized the connection between educating the populace and economic growth

12 Overview

Box 1. Committee for the Future

The Committee for the Future is one of the Parliament of Finland’s 15 standing commit-tees. The committee has 17 members who all are Members of Parliament and representdifferent political parties. The committee is the only of its kind in the world. Its task isto conduct active and initiative-generating dialogue with the government on majorfuture problems, including knowledge economy developments. The committee hasbeen given the special task of following and using the results of research on futuretrends.

The idea of conducting policy work on the future in Parliament came from the floor.In 1992 a large majority of Parliament Members accepted an initiative that called for thegovernment to submit a report to Parliament on Finland’s long-term prospects andoptions. In 1993 Parliament established a temporary Committee for the Future to pre-pare responses to the policies outlined in the government’s report. In 2000, in connec-tion with Finland’s constitutional reform, Parliament decided to make the Committeefor the Future a permanent committee.

The tasks of the committee include1:

• Assessing the social impact of technological development and serving as the Par-liamentary body responsible for assessing technological development and its con-sequences for society

• Issuing statements to other committees on matters related to the future whenasked

• Initiating public discussions of issues pertaining to future development factorsand development models

• Analyzing research regarding the future.

1 See www.parliament.fi/FutureCommittee.

Equality by gen-der, region, andsocio-economicbackground arefundamentalprinciples ofFinland’s educa-tion policy


early on. Finally, educating the common people served as toolin nation-building prior to Finnish independence in 1917.

In contrast, in higher education, economic trends and thedemand for certain skills have played significant roles in educationpolicy. The expansion of the Finnish higher education system hasfollowed and supported the course of economic development. Sincethe mid-1990s, the number of researchers in both the privateand public sectors has risen faster than ever before in thecountry’s history and ranks first in the world when comparedto total employment (figure 11).

Challenges ahead

Clearly, the knowledge- and R&D-oriented, “high-road”strategy that Finland has pursued since the early 1990s hasbeen one of the European and the world’s success stories. Giv-ing high priority to sound macroeconomic policies but graduallyshifting the policy emphasis to microeconomic policies have provedwise choices. After all, the competitive edge of an economy iscreated at the micro level: in firms, innovation and policyorganizations, and educational institutions.

The country’s stellar economic performance during thepast 10 to 15 years is attributable in considerable part todevelopments in the ICT sector. Being one of the leading pro-


Doctoral degreeLicentiate degree

Master’s degree

Bachelor’s degree

UNIVERSITIES

(Postgraduatepolytechnic degree)

Polytechnic degree

POLYTECHNICS

MatriculationExamination

UPPER SECONDARYSCHOOL (3 years)

Professionalqualification

LOWER SECONDARY SCHOOL (3 years)

PRIMARY SCHOOL (6 years)

VOCATIONALSCHOOL (3 years)

Compulsoryeducation

85% of each agegroup reachesthis level

40% of each agegroup reachesthis level

Figure 10. Finland’s education system

Source: Ministry of Education 2003 and Leijola 2004.

The expansion ofthe Finnishhigher educationsystem has fol-lowed and sup-ported the courseof economicdevelopment

Giving high pri-ority to soundmacroeconomicpolicies butgradually shift-ing the empha-sis to microeco-nomic policieshave provedwise choices


ducers of a new generic technology certainly has created a strong competitive edgefor the country. Consequently, many of the future challenges relate to ICT and thesustainability of competitiveness. Can the position gained be maintained?

The current competitiveness is not necessarily a guarantee offuture growth. Across the world, competitiveness rankingsseem to predict future growth relatively poorly. Many of theAsian countries that were ranked high in the early 1990s serveas examples. Continued success must be built on constant upgrad-ing and renewal.

It is the use of ICT—not necessarily its production—that isdecisive for long-term economic growth. As the technology matures, the productiongradually will spread to new locations. The ICT revolution is by no means over yet,

but parts of both technology and service production havestarted to relocate. The geography of the ICT industry isreconfiguring in a similar way as previous breakthrough tech-nologies (figure 12).

The big policy issue today is whether the country can keepits Nordic welfare model and still compete successfully in theglobalized world economy. In Finland, productivity is the key tomeet the increasing financing requirements of the welfare society.Due to Finland’s relatively larger baby boom generationsafter the war, the aging of its population is proceeding some-what faster than that of other European countries. The work-ing age population (15–64) will start to decline before 2010.

14 Overview

0

16

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d

Swed

enJap

an

United St

ates

Norway

Australi

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Korea

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aEU15

United K

ingdom

Nether

lands

Spain

Slovak

Rep

ublic

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Poland

Italy

14

12

10

8

6

4

2

Figure 11. Number of researchers (per thousand employed)

Source: OECD Factbook 2005.Note: Refers to 2001 or the latest available year. See the source for additional notes.

Current compet-itiveness is not aguarantee offuture growth

The big policyissue today iswhether Finlandcan keep itsNordic welfaremodel and stillcompetesuccessfully inthe globalizedworld economy


This decline will have several consequences for knowledge economy developmentsas well as for the whole society. On the one hand, the decline will provide opportu-nities to develop ICT-based welfare services in the public sector. On the other hand,it implies a tough challenge to keep the productivity growth fast enough. However,as the labor input of the aging population declines, keeping up this growthbecomes increasingly difficult.


Percent151050− 5− 10− 15

KoreaChina

United KingdomHungary

MexicoTaiwan

DenmarkLuxembourg

AustriaCzech Republic

SpainHong Kong

GreecePoland

PortugalSlovak Republic

IcelandTurkey

SwitzerlandItaly

IrelandNew Zeland

BelgiumNetherlands

NorwayFrance

GermanyJapan

FinlandSweden

United States

Figure 12. Changes in the countries’ global mobile phone market sharesbetween 1996 and 2002

Source: Rouvinen and Ylä-Anttila 2005. Calculations are based on OECD International Tradeby Commodities Statistics.

Notes: Percentage points. Here “mobile phones” refers to the International Trade by Commod-ity Statistics (HS96) code 852520 (Transmission apparatus, for radiotelephony incorporating recep-tion apparatus). The total global export market is defined as the sum of the above 31 countries.The difference of the shares are calculated from the nominal US$ values in 1996 and 2002. Exportstatistics unavoidably include some through-traffic, so they must be interpreted with caution.


Can both the dynamism of the economy and social cohesion and welfare bemaintained in the future? To address these issues, a high-level expert group with

representatives from various expert organizations and min-istries was initiated by the Prime Minister. Its report recom-mended, among other things, focusing on a few world-classcenters of excellence in science and technology. The reportalso recommended further increasing public R&D fundingbut, basically, only for competitive research. The main idea ofall of the group’s recommendations was to pursue maintain-ing the competence base across the board, but increase it inselected focus areas by concentrating public efforts. Therationale of the policy shift would be that a small country

simply cannot be competitive except on a very few sectors or industrial clusters inthe global economy.

Lessons to be learned

Finland has many specific characteristics that cannot be replicated easily by manyother countries. One of these characteristics encompasses two attitudes: an inde-

pendent spirit of self-reliance and a “can-do” mindset thathave been tempered by weather, geography, and occupations.Before national independence in 1917, long periods under therule first of Sweden and then of Russia also contributed to theindependent spirit and strong national spirit of self-reliancewith the will to overcome difficult odds.

Another tempering factor is that since Finland has 60 per-cent of the world’s population who live as far north as theFinns do, partly above the Artic Circle, over time, the verycold climate has created a very hardy population who must

plan ahead to survive. For example, in the in the 1860s, when two summers weretoo short for a growing season, 5 percent of the population starved to death.

A second specific characteristic—shared with other Nordic countries—comprisesa strong spirit of cohesiveness, high moral values, an emphasis on equality, and rel-atively equal income distribution. These traits probably result partially from Fin-land’s historical geographic isolation and quite homogeneous gene pool. The traitsalso may have been strengthened by its unique language, which is distinct from theother Nordic languages and which forms an exclusive bond among the Finns anddifferentiates them from others.

A third characteristic is a willingness to interact with the outside world in anopen but strongly nationalistic way. Perhaps because of the country’s geographic

isolation, Finns have a natural curiosity about the outsideworld that has made them very open to outside ideas andtechnology. In the 1800s, Finns relied heavily on timber andsawmill technologies from their Nordic neighbors and theGermans. Finns also were among the first to introduce elec-tricity and to use the telephone. Similarly, they were veryopen to experimenting with different telephone technologiesalmost as soon as they were invented and to develop theirown versions.

16 Overview

Can both thedynamism ofthe economyand social cohe-sion and welfarebe maintainedin the future?

Finland hasmany specificcharacteristicsthat cannot bereplicated easilyby many othercountries.

One characteris-tic encompassesa strong spirit ofcohesiveness,high morals, andemphasis onequality


While several other characteristics may be somewhat unique to Finns, thesethree have been highlighted because they appear to be part of what has enabledFinland to build a successful nation state and, more recently, turn a major economiccrisis into an opportunity and to transform itself from a somewhat marginal economy inEurope to the most competitive and knowledge intensive country in the world in less than adecade.

On another front, key policies that are partially responsible for Finland’s successare quite typical of the Washington consensus. These include:

• Strong rule of law• Strong governance and accountability• Stable macroeconomic policy• Strong financial sector (after the 1990s crisis)• Openness to outside ideas and a free trade regime• Strong focus on encouraging domestic competition.

Some of these—strong rule of law, strong governance andaccountability, and strong tradition of encouraging domesticcompetition—are among Finland’s strong cultural and historical characteristics andtraditions. The strong openness to outside ideas and technology dates back to theearly development of the forestry industry in the nineteenth century and has beena marked feature of the development of the ICT industry. It should be noted that,even before joining the EU, Finland undertook significant trade reform to fosterstronger competitive pressure that would improve performance across many sec-tors of its economy.

Other policies, however, such as strong macroeconomic policy and financial sec-tor and the free trade regime, are relatively more recent and were strengthened aspart of the commitments that Finland made when it joined the European Union.Before it joined the EU and the European monetary union, Finland suffered fromsignificant macroeconomic and exchange rate instability. In fact, its financial crisisof the early 1990s was not too dissimilar from those common in many developingcountries.

After the 1990s crisis, reforming the banking system andstrengthening the capital markets, including venture capital,were important to make financing available for the growth ofthe new knowledge-intensive sectors of the economy, partic-ularly the ICT cluster. Moreover, the financial and economicrestructuring that took place after the crisis broke the tradi-tional banking-led relationships including with Germany andJapan and led to a more dynamic and open financial systemled more by stock market capitalization. The financial restruc-turing also included the liberalization of capital accounts andthe removal of restrictions on foreign investment. These twoactions did not occur until 1993, when Finland joined theEuropean Economic Area, and they were fundamental intransforming the economy. By 2000, 67 percent of the shares of the Helsinki stockexchange were foreign owned as were more than 90 percent of Nokia’s shares.

Clearly, all of these policies have been very important for Finland’s success andmay be considered necessary conditions, even if not sufficient, to explain its success-ful transformation into a knowledge economy. However, it should be re-emphasized


Liberalization offinancial mar-kets in the 1990swas instrumentalto developingthe knowledgeeconomy

Many of theWashington con-sensus policiesmay be consid-ered necessarybut not suffi-cient to explainFinland’s trans-formation to aknowledgeeconomy


that Finland’s very strong early focus on competition in thetelecommunications sector in particular was critical in layingthe basis for a very dynamic sector and strong domestic capa-bility. These then were critical for the development of Fin-land’s very strong ICT sector.

Other policies are less typical of the Washington consen-sus. These include:

• Strong welfare state, particularly the very strong focus on education• Strong focus on coordination of policies among key government agencies

and between them and the productive sector• Strong focus on R&D and innovation• New type of industrial policy• Strong focus on the future.

The Nordic welfare state with its strong social safety net and strong focus on freepublic education was an important element of Finland’s transformation. The socialsafety net was particularly important in addressing the jump in unemployment dur-ing the early 1990s crisis. The focus on retraining people and linking unemploymentbenefits to getting additional education also were very important in restructuringthe economy toward high-technology industries. A special characteristic of Finland’seducational system, which differentiates it from the Anglo-Saxon Washington Con-sensus, is that education is free all the way up to the university level. Other notablecharacteristics of Finland’s education system are its strong focus on equality meas-ured by outcomes, tying welfare payments to training for young persons, tremen-dous openness; and focusing higher education on the needs of productive sector.

On a broader level, it is appropriate to reflect on what can be learned from theFinnish experience and what this implies for developing countries.

The first lesson is that it is possible for a country to make adramatic recovery in GDP and undertake a major restructur-ing, as Finland did. An important corollary is that a crisis canbe turned into an opportunity. However, for this to happen,there may need to be certain preconditions as well as greatflexibility in the economy.

Finland is not unique in turning a crisis into an opportu-nity. Korea turned its major 1997 financial crisis into anopportunity to undertake a major reform of its economicincentive and institutional regimes. On the other hand, Japandid not turn its early 1990s crisis into an opportunity formajor reform. This difference requires reflection.

In the case of Finland, what made this restructuring possi-ble included the special characteristics already noted of a strong “can-do” attitudeand strong social cohesiveness. These were complemented by the strong safety netof the welfare state. Without these three, it is not clear that it would have been pos-sible for Finland to cope with unemployment that grew close to 20 percent and awrenching restructuring process in which people were redeployed from decliningsectors in the old economy to the new ICT sectors. The already high education levelof the population and the very robust response of the tertiary education sector toexpand and produce workers with the new ICT skills were additional facilitatingelements.

18 Overview

Other policiesare less typical ofthe Washingtonconsensus

One key lessonis that it ispossible tomake a dramaticrecovery inGDP, undertakea major restruc-turing, and turna crisis into anopportunity


Another special element was that there was a large conglomerate, Nokia, whichwas able to rise to the challenge. It is particularly noteworthy that, at the time of thecrisis, Nokia was a large diversified conglomerate that had been growing throughmergers and acquisitions. Besides feeling the effects of the general economic crisis,it was going through its own internal identity and management crisis. However, itdecided to divest most of the traditional business and focus on the ICT sector, andmobile telephones in particular. Its success in making this transformation is leg-endary and hard to explain and ultimately probably has to be attributed to its newmanagement.

Nokia’s success was facilitated not only by its long history of developing capa-bilities in the ICT sector and its acquisition of some companies in the sector but alsoby the government’s strong vision of the potential of the sector and by the flexibil-ity of the economy in responding to the opportunity. The opportunity included the:

• Availability of high-level manpower who had been idled by the collapse ofother businesses

• Strength of the university and research infrastructure• Quick response from the educational system in producing the needed new

engineers, managers, and skilled workers• Availability of foreign capital to fund the growth of the ICT sector• Availability of venture capital and government seed funding to start up new

high-tech enterprises that became part of the ICT cluster that grew uparound Nokia.

A second lesson is that globalization is a double-edged swordand a demanding task-master. Finland’s crisis in the early 1990s,in part, resulted from the global downturn of the forest-related industry as well as the collapse of its trade with theformer Soviet Union. Part of the solution to the crisis alsoresulted from globalization. The dramatic development of theICT industry is part of globalization. Finland’s rapid growthin the ICT area was possible because of globalization both interms of (a) producing for a world market and (b) its ability to access the foreigncapital and knowledge that it required to develop the industry.

On the other hand, Finland is also struggling with the impact of globalization,which is putting pressure on it to improve its technology and education system tostay competitive in a very demanding global environment. Finland still has anunemployment rate of nearly 10 percent. As noted in the Prime Ministers report onFinland’s Competence, to face the challenge of globalization “requires an economyand society that are capable of change and can make best use of their strengths.” To thisend, the report proposes that “a competence-based strategy requires continuous renewalfrom the economy. Reforms must apply not only to the weak points of the crucially impor-tant education and innovation systems, but also to the functioning of the markets for labor,goods, and services, and the public sector.”2 It then sets out a series of reforms tostrengthen all these areas, even though, by most international comparisons, Finlandis already doing better than most countries. All of Finland’s concerns above empha-size just how much pressure globalization is putting on even the most competitiveplayer.


A second lessonis that globaliza-tion is a double-edged sword anda demandingtask-master

2 Prime Minister’s Office, 2004.


The third, and perhaps the most critical, lesson is the importance of flexibility orelasticity of the economy to react of changing opportunities. Finland’s case aptly demon-strates the importance of this flexibility in the way that it was able to significantlyrestructure its economic structure as a result of the crisis of the early 1990s. Two crit-

ical aspects of that process of creative destruction were thevery strong social cohesion and strong safety nets. However,it is perhaps the educational system that has played the most criticalrole. Finland already had a high level of educational attain-ment, which facilitated the necessary restructuring of theeconomy. In addition, the educational system was able torespond very quickly and flexibly to the new opportunities.Furthermore, increasing this flexibility is seen as a key priority torespond to the continuing challenge of the constant restructuringthat results from globalization

The Finnish experience also has several implications for devel-oping countries.

The first implication is the continued importance of the basic elements of the WashingtonConsensus. These elements are essential to give the economies the flexibility they need

to constantly redeploy assets to their most productive uses.The second implication is the imperative to develop vision and

consensus-making mechanisms. Reforms involve changing thestatus quo, and doing so usually does not happen unlessthere are major external or domestic forces pushing ordemanding such changes.

The third implication is the importance of developing appro-priate knowledge strategies, Finland had to increase higher edu-cational attainment in general, and scientific and technicalskills in particular. These challenges involved not onlyincreasing R&D expenditure but also focusing on getting the

fruits of R&D into the market. Finland’s strong emphasis on the systemic approachto innovation evolved, including bridging the entrepreneurship and financing gapsto turn invention into commercial application.

These strategies have to be adjusted to the specifics of each country. For the majority ofdeveloping countries the focus needs to be somewhat differ-ent than Finland’s. Because, in virtually all sectors, develop-ing countries are still very far from the technological frontier,they still need to put priority on developing effective meansof tapping the pre-existing and rapidly growing stock ofglobal knowledge.

Developing countries need to put more weight than theydo now on understanding, acquiring, adapting, diffusing,and using existing knowledge, including indigenous knowl-edge. This includes putting in place basic technological infra-structure such as norms and standards, metrology, testing,and quality control, as well as strong dissemination mecha-nisms and institutions such as technical information centers,productivity organizations, and agricultural and industrialextension agencies. In addition, developing countries need to

20 Overview

A third lesson isthe importanceof flexibility foran economy toreact to changingconditions, andthe critical roleof a responsiveeducation system

Finland’s experi-ence drives homethe importanceof developingvision andconsensusmakingmechanisms

Finland’sexperiencedemonstratesthe importanceof developingappropriateknowledgestrategies which,however, have tobe adjusted tothe developingcountries’conditions


set up public research institutes that can help them access what global technologiesmay be relevant and help them adapt these technologies to their circumstances.

More importantly, utilizing their existing knowledge also involves creating tech-nological capability in their productive firms and in getting them to invest inimproving and eventually creating their own technologies in their most advancedsectors.

Developing nations also will have to pay more attention to all levels of educa-tion. To the extent that many still have very low educational attainment, they willhave pay more attention to strengthening universal basic and secondary educationfor their citizens to become effective users of technology. They also will need toimprove higher level secondary education and even higher education to keep upwith and make effective use of the rapidly expanding technological frontier.

Developing an effective innovation system also involves attracting FDI that canbring in relevant new technology to advance local economies. Attracting FDI alsoincludes getting into global value chains controlled by multinational companiesand trying to move up those value chains. It also includes developing linkages andnetworks between domestic public and private researchinstitutes and universities and foreign ones, as well as amongall of these domestic institutions.

A final implication for all countries is the importance of focus-ing not only on what can be learned from the past (their own andother countries’ experience) but on anticipating and preparing for thefuture. This is one of the key lessons of the Finnish example andexplains to some extent why Finland not only was able to makesuch a dramatic transformation to a knowledge-based econ-omy but also why it has been able to remain so competitive.

Moreover, as can be inferred from the challenges that Fin-land is facing as a result of the rapid advances in knowledge and the continuouschallenge of globalization, the world is not standing still. What worked in the pastmay not work in the future, and the prerequisites for beingsuccessful seem to be rising ever higher and becoming evermore demanding. Thus derives the importance of looking for-ward to see to what extent it is possible be better prepared forfuture challenges and opportunities. Developing countries inparticular need to monitor this aspect closely because theremay be important new areas that can be exploited, and it willbe necessary for them to be ready to move to take advantageof them.


It is important tofocus not onlyon what can belearned from thepast, but also toanticipate andprepare for thefuture

What worked inthe past may notwork in thefuture, and theprerequisites forbeing successfulare becomingever moredemanding


Overview Sources

(For complete references see full report.)

Hernesniemi, H., M. Lammi, and P. Ylä-Anttila. 1996. “Advantage Finland: TheFuture of Finnish Industries.” ETLA Series B 113 and SITRA 149. Helsinki:Taloustieto Oy.

Leijola, L. 2004. “The Education System in Finland: Development and Equality.”ETLA Discussion Paper 909. Helsinki.

Ministry of Education, 2003. “The Finnish education system”http://www.minedu.fi/minedu/education/education_system.html.

OECD (Organization for Economic Co-operation and Development). 2005. OECDFactbook 2005: Economic, Environmental and Social Statistics. Paris.

Porter, M. 1990. “The Competitive Advantage of Nations.” London: Macmillan.

Prime Minister’s Office. 2004. “Finland’s Competence, Openness and Renewability.The Final Report of the Finland in the Global Economy Project.” Prime Minister’sOffice Publications 26/2004. http://www.vnk.fi/tiedostot/pdf/en/91776.pdf.

Rouvinen, P., and P. Ylä-Anttila. Forthcoming 2005. “Finland : A Prototypical Knowl-edge Economy?” In eEurope 2005, ed. S. Dutta. Heidelberg: Springer Verlag.

Rouvinen, P., and P. Ylä-Anttila. 2003. “Little Finland’s Transformation to a Wire-less Giant.” In The Global Information Technology Report: Toward an Equitable Infor-mation Society, ed. S. Dutta, B. Lanvin, and F. Paua. New York and Oxford:Oxford University Press with World Economic Forum.

Useful Websites

Academy of Finlandhttp://www.aka.fi

http://www.research.fi

http://www.virtual.finland.fi/

CIM Creative Industries Managementhttp://www.cimfunds.com

ETLA, Research Institute of the Finnish Economyhttp://www.etla.fi

European Union Research Programmeshttp://www.cordis.lu/en/home.htmlhttp://europa.eu.int/comm/research/

European Venture Capital Associationhttp://www.evca.com

Finnish Venture Capital Associationhttp://www.fvca.fi

22 Overview


Finpro—National Agency for Corporate Internationalizationhttp://www.finpro.fi

Institute for Strategy and Competitiveness, Harvard Business Schoolhttp://www.isc.hsb.edu

Merit, Maastricht Economic Research Institute on Innovation and Technologyhttp://www.merit.unimaas.nl

Sitra, Finnish National Fund for Research and Developmenthttp://www.sitra.fi

Tekes, National Technology Agency of Finlandhttp://www.tekes.fi

World Bank and World Bank Institutehttp://www.worldbank.org

World Economic Forumhttp://www.weforum.org

Authors’ Contact Information

Carl J. DahlmanLuce Professor of International Affairs and Information TechnologyEdmund A. Walsh School of Foreign ServiceGeorgetown University305M Intercultural CenterWashington, DC 20057USATel 202-687-8045Fax 202-687-5528Email: [email protected]

Jorma Routti ProfessorCIM Creative Industries Management Lutherinkatu 2 BFIN-00100HelsinkiEmail: [email protected], [email protected]: +358-400-464575

Pekka Ylä-Anttila Research Director, ETLA—Research Institute of the Finnish EconomyManaging Director, Etlatieto OyETLALönnrotinkatu 4 BFIN-00120 HelsinkiTel. +358-9-609900Email: [email protected]



3

Adaptándose a la Sociedad de la Información: Nokia y la Revolución Tecnológica Finlandesa

Oscar del Álamo

Referencia Álamo, Oscar del. 2001.

Magazine Nº 25 18 de diciembre. ISNN: 1577-5232

Magazine Nº25

18 de diciembre, 2001 ISSN: 1577‐5232

Adaptándose a la sociedad de la información: Nokia y la revolución tecnológica finlandesa

Óscar del Álamo Analista IIG

La llegada de la globalización y el predominio de las nuevas tecnologías de la información en todas y cada una de las esferas de nuestra vida cotidiana ha provocado cambio sustanciales respecto a lo que habían sido los parámetros habituales del mundo hasta hace escasamente unos años. Hoy día, para los diversos agentes empresariales (no sólo para ellos sino para el resto de agentes de las diversas vertientes de nuestra sociedad), el reto ya no consiste en cómo afrontar la globalización de los mercados sino en cómo se compite en el mundo para sobrevivir; un mundo que sufre alteraciones y cambios a velocidades de vértigo y en el que la capacidad de adaptación a estas alteraciones constituye la clave para la supervivencia y el éxito futuro.

No obstante, esto no es fácil. Al contrario, es extremadamente difícil. Prueba de ello la tenemos en el hecho de que diversas empresas han sufrido graves daños e, incluso, han acabado sucumbiendo al ritmo de los cambios acontecidos con la llegada de la sociedad de la información por no disponer una estrategia de adecuación así como, también, por carecer de una voluntad que la hiciera posible. Las directrices que dirigen el rumbo de nuestra era se asientan sobre el riesgo que supone el cambio constante. Si bien la actual sociedad de la información promueve grandes niveles de incertidumbre hacia un futuro que cada vez parece más inmediato, de algo podemos estar plenamente seguros: la sociedad y los mercados económicos que forman parte de ella nunca permanecen inmutables y hoy más que nunca podemos ser plenamente conscientes de que pocas cosas se mantienen igual.

A pesar de la dificultad que hoy puede suponer adaptarse a unos parámetros de cambio constante, podemos disponer de algunos ejemplos que demuestran que la supervivencia en la sociedad de la información no constituye un mero ideal sino una realidad al alcance.

La multinacional finlandesa del sector de las telecomunicaciones Nokia es un claro ejemplo de ello. Durante su historia se ha caracterizado por una capacidad innovadora para lograr adaptarse a los cambios y circunstancias de la economía finlandesa y, por extensión, a la internacional. Ello, lejos de ser un simple mecanismo de adaptación, ha formado parte de una estrategia empresarial que se ha convertido en símbolo de admiración no sólo para los propios finlandeses sino para el resto de ciudadanos y naciones del mundo. Para llegar a interiorizar esta estrategia ha sido necesario sentar las bases de una cultura flexible, construida sobre la diversidad, el compromiso y el aprendizaje continuo.

Lo que podría parecer un simple ideal o pauta lógica de comportamiento en un mundo caracterizado por unas condiciones como las que nos rodean se materializa si tenemos en cuenta que Nokia, hace un siglo, era una fábrica de papel mientras que hoy es la empresa pionera en el panorama internacional de la telefonía móvil.

papel mientras que hoy es la empresa pionera en el panorama internacional de la telefonía móvil.

Casos como el de Nokia demuestran la importancia de la esfera económica y de las empresas que interactúan en su interior como motores básicos para el desarrollo de las sociedades en el marco de la era de la información. Estas empresas se han convertido en uno de los pilares o actores estratégicos básicos de cara a mantener el desarrollo de los países e impulsar el proceso en aquellos que aún no gozan de este privilegio. En este sentido, observar la reciente historia de Finlandia[i] a través de Nokia puede constituir una guía privilegiada para muchos de los países que buscan las fórmulas adecuadas de cara a fortalecer su sector empresarial como eje básico para el fomento del tan ansiado desarrollo.

1. El progreso de un país humilde

Finlandia es un pequeño país, atravesado por el Círculo Polar Ártico, ubicado entre Noruega y Rusia, con una población de 5,16 millones de habitantes (lo que equivaldría, por ejemplo, a la mitad de la ciudad de Sao Paolo –Silva, 2001). El país tiene una superficie de 338.145 kilómetros cuadrados (ligeramente más grande que la provincia de Buenos Aires que tiene 307.571 –Embajada de Finlandia en Buenos Aires, 1999). Finlandia es un país de bosques y lagos; los bosques cubren el 69% de la tierra y existen 188.000 lagos.

Bajo estas condiciones, la realidad del país hasta hace poco tiempo estaba marcada por la simple existencia de fábricas de madera y de papel, una vida dedicada a la pesca e industrias agroforestales y una vida "dura" debido a las gélidas condiciones climáticas[ii]. Todo eso fue verdad hasta 1990, fecha en que el país empezó a convertirse en un núcleo de modernidad y fascinación dando lugar a un nuevo Silicon Valley gracias al impulso emprendedor de Nokia, la empresa líder en fabricación y venta de teléfonos móviles a nivel mundial (Lapouge, 2000)[iii].

Al llegar a 1990 la recesión económica finlandesa, en tan sólo dos años, contraía el PIB en un 13%. El desempleo ascendió de un 3 a un 17% y la inflación aumentó violentamente. Sin renegar a su "genio" rural, los finlandeses, con el impulso fundamental de Nokia y viendo las posibilidades de la nueva sociedad de la información, se lanzaron al campo de la tecnología punta. El tema de la sociedad de la información en Finlandia fue recibido como un aspecto clave en la reforma de la economía y la gestión pública. El fruto de esta visión fue el diseño de una estrategia nacional para afrontar el reto de la sociedad de la información llamado "Finland´s way to the Information Society". La estrategia nacional y su implementación fueron publicadas en diciembre de 1994 como resultado del proyecto.

Con esta filosofía Finlandia se lanzaba al campo de la tecnología como medio de consolidación de la sociedad de la información y tras cuatro años de dura recesión, a partir de 1993, el desempleo empezó a bajar (hacia unos niveles ubicados, en primer término, hacia un 10% para ir descendiendo, después, hasta cotas inferiores al 8,4%)[iv]. Así, las altas tecnologías pasaron a dominar las exportaciones y la influencia de los sectores tradicionales fue reduciéndose pasando de un 63 a un 50%. La inflación desaparecía y los niveles de crecimiento ascendían a un 4% por año.

Nokia se ha convertido en el símbolo de esta evolución y el progreso de la empresa ha agitado al país. Al norte del mismo, cerca de la localidad de Oulu, próxima al Círculo Polar, ha sido construida una auténtica Tecnópolis en la que se concentran diez mil intelectuales, básicamente ingenieros y técnicos, formando el "Valle del Silicio sobre hielo"[v].

El país, que se sentía en la periferia del mundo, cambió de lugar gracias a la intervención de la telefonía celular, la aparición de Internet y el conjunto de posibilidades que acompañaban a esta nueva tecnología. De repente, a través de la innovación tecnológica impulsada por Nokia, el país ha pasado a situarse en el centro del mundo. En buena parte gracias a la intervención de la compañía, el país ha sabido combinar sus antiguas costumbres y ha pasado a copar los

gracias a la intervención de la compañía, el país ha sabido combinar sus antiguas costumbres y ha pasado a copar los primeros puestos en el panorama tecnológico mundial a partir de la década de los 90, constituyendo un liderazgo digno de análisis que lejos de mantenerse inestable parece consolidarse con el avance de los años y la progresiva mejora y expansión de las tecnologías.

Así, es muy significativo anunciar que el 70% de los habitantes del país poseen telefonía celular y sólo un 13,5% de la población está conectada a Internet a través de computadores; los ciudadanos emplean la telefonía móvil para hacerlo (Silva, 2001). Finlandia es considerada, pues, como la "tierra prometida" para la telefonía móvil y el acceso a Internet a través de ella. Ya en 1999, obtuvo la licencia para operar con la tercera generación de telefonía móvil que entrará en vigor el próximo año y que permitirá acceder a las ventajas del computador y de Internet a través de los propios teléfonos celulares (Silva, 2001).

La clave de todo el proceso de crecimiento económico en el país se encuentra en Nokia que, en el inicio de la década de los 90, centralizó sus actividades en el área de la telefonía móvil. Por medio de su cuartel general instalado en la capital, Helsinki, empezó la difusión de celulares por todo el mundo.

2. La adaptación como estrategia

La historia de Nokia es la historia de un continuo proceso de adaptación a las condiciones y circunstancias históricas que han dominado a Finlandia durante su existencia. La mejor manera de comprobar esta evolución es analizar, rápidamente, la exitosa historia de la compañía hasta la actualidad.

Oficialmente, la historia de Nokia empieza en 1865, cuando el ingeniero de minas finlandés Fredik Idestam creó una fábrica papelera en el sur de Finlandia y empezó a fabricar papel que en seguida tuvo éxito al ir realizándose la industrialización en Europa y aumentar rápidamente el consumo de papel y carbón. En 1912, la compañía había logrado diversificar sus actividades hacia los cables y la industria de la goma gracias a la colaboración con las industrias finlandesas del caucho y del cable, que habían adquirido protagonismo ante la demanda creciente del momento de transmisión de energía, así como para las redes de teléfono y telégrafo. No obstante, al hablar de la compañía, también puede considerarse 1967 como una fecha clave para la reorientación del negocio, instante en que a esta empresa papelera se une la Compañía de Caucho de Finlandia y la Compañía de Cables de Finlandia para formar el Grupo Nokia, momento en el que las bases para las telecomunicaciones ya estaban echadas.

En estas circunstancias y previendo el potencial de la inminente sociedad de la información, ya en 1969, Nokia presentaba los primeros equipos de transmisión que cumplían con las normas del Comité Consultivo para la Telegrafía y Telefonía Internacional. Esta pronta introducción en la era digital constituyó una de las decisiones estratégicas más importantes adoptadas por el grupo a lo largo de su historia y que respondía a la consolidación de los sistemas de modulación por impulso y codificación que, en 1968, constituían la última novedad en materia de telecomunicaciones y que suponían la transformación de las señales analógicas en señales numéricas pudiendo reducir así el tamaño y aumentar la capacidad de los cables empleados hasta el momento. Esta gran apuesta supondría para la empresa el primer eslabón de entrada a la futura era digital.

Con esta base, y junto a una fuerte convicción en la mejora y reducción de las infraestructuras fijas, Nokia empezó a levantar el imperio de las telecomunicaciones móviles en Finlandia comprando fabricantes de equipos electrónicos al gobierno. En 1978, el grupo nórdico iniciaba la compra de Televa, la división electrónica militar del gobierno que trajo consigo un incremento en el conocimiento en materia de redes de telefonía. Un año después, Nokia iniciaba el cortejo de la compañía estatal Salora y comenzaba a vender teléfonos móviles bajo la marca Salora. Finlandia fue la pionera

de la compañía estatal Salora y comenzaba a vender teléfonos móviles bajo la marca Salora. Finlandia fue la pionera en 1981 de la instalación de un sistema regional de telefonía y Nokia supo aprovechar la coyuntura.

Durante la década de los ochenta, el desarrollo de la fiebre consumista provocó que las operaciones de Nokia se extendieran rápidamente a aún más sectores, países y productos. La estrategia consistía en expandirse rápidamente en todos los frentes. Así, a pesar del progreso tecnológico de la empresa[vi], Nokia era más conocida como una empresa dedicada a la manufactura de botas de goma y componentes mecánicos y electrónicos al margen de la producción de telefonía que había emprendido. No obstante, al final de la década Nokia volvía a dar un nuevo paso de cara a forjar la leyenda que la caracteriza en la actualidad. Así, la Conferencia Europea de Administraciones de Correos y Telecomunicaciones decidía desarrollar un estándar común para la telefonía móvil digital. Este sistema era el Sistema Global para las Comunicaciones Móviles (GSM). Nokia se convertía en uno de los principales desarrolladores de esta tecnología (un claro ejemplo de esta situación lo encontramos en el hecho de que la primera llamada GSM se realizó en Finlandia, con un teléfono Nokia sobre una red equipada por Nokia). La apuesta de la empresa respondía a las posibilidades y versatilidad del sistema GSM para el desarrollo de nuevos servicios entre los que se incluían la transmisión de datos de alta velocidad a través de redes de telecomunicaciones sin cable.

Ya en los noventa, Finlandia sufría graves problemas como consecuencia del frenético ritmo desarrollado durante la década anterior. Parecía que la industria finlandesa crecería de una manera infinita y, en este sentido, se producía un elevado aumento en las demandas de capital, derivando en la solicitud de préstamos por parte de las diversas compañías. No obstante, nadie advirtió que el crecimiento económico se hallaba en su punto de inflexión y que, a partir de este momento, empezaría a descender. Así, a principios de los noventa, el sector industrial finlandés sufría una grave recesión y muchas compañías no pudieron pagar sus préstamos y entraron en bancarrota; la única manera de sobrevivir era mediante más préstamos lo que provocaba un mayor incremento de la crisis (Ruuska y Juntilla, 2000). Nokia no fue excepción y la firma empezó a tener grandes problemas; en 1989, las pérdidas de Nokia sumaban 42 millones de dólares (O´Brien y Jiménez, 2000). Durante esta etapa, las divisiones de telecomunicaciones y de teléfonos móviles ya constituían los pilares fundamentales de Nokia. Pese a la gravedad de la situación, la compañía se recuperó rápidamente cuando su Director General, Simo Vuorilehto, emprendió la modernización y la racionalización de las actividades de Nokia. En 1992, Jorma Olilla fue nombrado Consejero Delegado y Nokia adoptó la importante decisión estratégica de centrar sus actividades en las telecomunicaciones con la visión centrada en la importancia de la incipiente sociedad de la información y deteniendo la inversión en sus actividades secundarias, tratando de evitar los planteamientos de la década anterior que, a largo plazo, habían derivado en nefastas consecuencias para la compañía. Así, las operaciones más recientes se realizaron entre 1995 y 1996 cuando Nokia vendió sus actividades de la industria del cable y televisores para convertirse en la compañía pionera en el campo de la Internet móvil, invirtiendo para ello 5.200 millones de dólares durante la década pasada en materia de investigación y desarrollo, logrando que las ganancias crecieran por término medio un 63% anual desde 1995.

La capacidad de sacar provecho de las oportunidades creadas por el constante cambio tecnológico y de mercado ha permitido, entre otros factores, que Nokia se convierta en la empresa que es hoy día.

La producción de tecnología punta impulsada por Nokia y el encarrilamiento de la economía hacia sectores de alto valor agregado con una fuerte distribución interna de la riqueza han permitido a Finlandia superar el colapso que significó el desmoronamiento de la ex Unión Soviética, de la que su comercio exterior era fuertemente dependiente.

Las acertadas decisiones de Nokia la han llevado a consolidarse como el grupo líder indiscutible en la esfera de las tecnologías digitales a nivel mundial, ámbito en el que se incluyen teléfonos móviles, redes de telecomunicaciones, soluciones inalámbricas para datos o terminales multimedia. Y los resultados son palpables. Desde 1992, el precio de

soluciones inalámbricas para datos o terminales multimedia. Y los resultados son palpables. Desde 1992, el precio de las acciones de Nokia se ha multiplicado unas 435 veces en Helsinki. Así, un inversor que hubiese comprado acciones de Nokia por valor de 1.000 dólares el 1 de enero de 1992 tendría en la actualidad una participación de 500.000 dólares (O´Brien y Jiménez, 2000). En menos de diez años, las inversiones iniciales se hubieran multiplicado por 320 (Meyfredi y Weill, 1999).

El éxito de Nokia ha generado una gran iniciativa por parte de otras firmas de cara a invertir en el campo de la electrónica[vii] y la tecnología computerizada, lo que ha provocado un auge sin precedentes generando, al mismo tiempo, cientos de nuevos puestos de trabajo. Así, Nokia tuvo un profundo impacto en la actitud de los emprendedores finlandeses ya que, sin su impulso, el país no hubiera llegado tan lejos como en la actualidad y no se hubiera convertido en el espejo en el que el resto de países del mundo desean reflejarse.

En este sentido, no son de extrañar ciertas expresiones como las que reconocen que "...el país está inundado de dinero..."[viii] (O´Brien y Jiménez, 2000) o que "...en cualquiera de las cosas que pasan en Finlandia, Nokia es responsable, al menos, de la mitad de ellas..." (Rendon, 2000). Sin ir más lejos, Nokia produce un 40% del total de las exportaciones en Finlandia y financia el 25% del capital invertido en Investigación y Desarrollo en el país.

El éxito de Nokia, a la vez, también se debe a la prioridad que el país ha dado al sector de las telecomunicaciones y al advenimiento de la sociedad de la información así como al empuje de la política liberal impulsada por el gobierno en el área de las telecomunicaciones. Así, en 1995, el gobierno finlandés formuló una política en la que se incluían las medidas necesarias para desarrollar la sociedad de la información en la que se subraya la importancia de la industria de la información como un aspecto esencial para la actividad económica en Finlandia. Así mismo, se destacaba el papel de la tecnología y las redes de la información como herramienta básica de cara a conseguir la renovación del sector público y privado. En este sentido, la política planteada perseguía el ideal de ofrecer a todos los ciudadanos la oportunidad y el aprendizaje para emplear los servicios de la sociedad de la información[ix].

Ya se ha hablado, pues, de "milagro finlandés" (Braginski, 2001) para designar a la visión de futuro que supo valorar la importancia de las telecomunicaciones y la necesaria desregulación de las mismas. Tras tomarse las primeras medidas en 1985, en 1994 la libertad de competencia era ya total. Esto hizo que se sumaran decenas de empresas a competir y a desarrollar tecnología. En este contexto, Nokia encontró un mercado interno pujante donde dar rienda suelta a su inventiva. Hoy día, existen, por los menos, 90 operadores actuando, lo que garantiza precios muy bajos para acompañar al sistema de competencia.

Además, para llevar el país hacia el centro del mundo, el gobierno y las empresas privadas invierten anualmente el equivalente al 3% del PIB, más de la mitad dirigido a las tareas de desarrollo. Así, el Ministerio de Transporte y Comunicaciones dispone de una cantidad anual equivalente a seis millones de dólares para tecnología punta.

La mezcla se completa con un pueblo ávido por las comunicaciones que salió a consumir los nuevos servicios derivados de los celulares. Actualmente, en Finlandia, el teléfono móvil es más que un buen negocio: es una pasión. Prueba de ello es que en el país hay más teléfonos móviles que líneas fijas (Raimondi, 2001).

Hoy, este "milagro" deslumbra a muchos países que pueden encontrar en el ejemplo de Nokia interesantes lecciones que aprender.

3. El por qué del éxito: Las razones ocultas

3. El por qué del éxito: Las razones ocultas

Además de una indudable combinación de sabias decisiones de adaptación a los cambios derivados de una sociedad en constante mutación, el éxito de la empresa finlandesa radica en otros factores muy importantes. Básicamente éstos podrían resumirse diciendo que el éxito de Nokia se ha producido al no aceptar las normas comunes y desarrollar ideas diferentes. Ya en 1997, la empresa disponía de más de 30 tipos de teléfonos con diversos colores y formas (ABC Color, 1997).

Así, una de las principales fuerzas de Nokia radica en las innovaciones de diseño, que le han conferido un par de años de avance con respecto a sus competidores. Así mismo, otra de las tácticas empleadas ha consistido en segmentar el mercado con habilidad, mediante la concepción de modelos para diversos estilos de vida (modelos elegantes y una gama de fundas coloreadas para teléfonos móviles) capaces de subvenir a las necesidades de diversos usuarios. No sólo eso, el contacto con los usuarios finales en los mercados de consumo muy evolucionados de la región nórdica ha permitido a la empresa obtener información directa y responder con rapidez a la demanda, ofreciendo no sólo celulares atractivos sino, también, de fácil utilización.

Del mismo modo, la empresa ha sacado provecho de su emplazamiento geográfico. La región nórdica fue una de las primeras en establecer una norma para un sistema celular (el sistema nórdico telefónico móvil, NMT), creando, de este modo, un mercado para los fabricantes de equipos regionales. Aun cuando el sistema NMT nunca ha llegado a ser una norma dominante a escala mundial, esta circunstancia ha permitido a Nokia adquirir experiencia en la fabricación de teléfonos móviles (ITU, 1999). La empresa se benefició no sólo de su carácter pionero en la creación y el diseño de nuevos productos sino, también, de la popularidad adquirida al haber creado el sistema GSM (el sistema de transmisión de mensajes). En Finlandia, el año pasado, se enviaron aproximadamente unos 500 millones de mensajes, unos 250 por persona.

Al margen de estos factores, el éxito creciente de la firma finlandesa reposa en una cultura empresarial bien definida en la que se desalienta el espíritu jerárquico y los dirigentes más importantes son trasladados de una unidad a otra a intervalos frecuentes para prevenir la apatía. Las nuevas estrategias y políticas se examinan en grupos, en los cuales participan empleados de diferentes partes y categorías de la empresa.

Todo ello puede traducirse en unos resultados que hablan por sí solos: actualmente están operando 750 millones de teléfonos móviles en todo el mundo de los cuales el 30% corresponde a la marca finlandesa; en otras palabras, 30 de cada 100 teléfonos comprados llevan el sello de Nokia (Bonastre, 1999). Las previsiones indican que, en el próximo año, la cantidad de celulares ascenderá a un millón (ninguna otra industria o sector está creciendo a un ritmo semejante), lo que reforzará el acierto en las decisiones de Nokia y, cómo no, acabará llenando aún más sus arcas con cuantiosos beneficios.

4. Algunas reflexiones

Tras lo visto hasta el momento, podemos anunciar sin reparos que Nokia ha sido la primera empresa que ha contribuido a la reestructuración económica finlandesa sabiendo enfrentar la competencia que le presentaban las demás firmas internacionales bien establecidas en el mercado de las telecomunicaciones. Su capacidad de sacar provecho de las oportunidades, creadas por el constante cambio tecnológico y de mercado, le ha permitido situarse a la cabeza del mercado mundial. La historia de la empresa, pues, muestra cómo se llega al éxito tomando las decisiones adecuadas en el momento oportuno y que este éxito se consigue con determinación y previendo los futuros mercados

adecuadas en el momento oportuno y que este éxito se consigue con determinación y previendo los futuros mercados tanto como teniendo la valentía de crear mercados nuevos.

Nokia ha sabido ofrecer en cada momento los productos que el mercado estaba demandando y, como consecuencia de este acierto, la empresa se ha visto recompensada con buenos rendimientos, cada año, a nivel económico. Esta estrategia ha acabado provocando la admiración, en la esfera internacional, sobre la dinámica y el auge de Finlandia en lo que se refiere a la alta tecnología (básicamente, y como hemos estado viendo, en el campo de la telefonía móvil celular y con amplias expectativas de futuro de cara a los llamados celulares de tercera generación y a los avances en el sistema UMTS[x]). Esta admiración no es más que la respuesta ante el asombro desarrollado ante la evolución de un país que ha sabido superar las inclemencias del clima gélido, las dolorosas guerras del pasado que dejaron al país la herencia de grandes pérdidas humanas y económicas.

Nokia se ha convertido en el estandarte de todo este proceso pero, además, se ha consolidado como el vehículo impulsor que, viendo el progreso de la misma, está labrando, con persistencia, la penetración de nuevos mercados.

El caso de Nokia, y por extensión el de Finlandia, nos demuestra que el desarrollo científico‐técnico está intrínsecamente ligado al desarrollo integral de un país. Sin embargo, para muchos países en desarrollo, como los de la región latinoamericana, la dimensión científico‐tecnológica continúa prácticamente imperceptible. Por ejemplo, naciones como Finlandia y Nicaragua muestran entre sí diferencias sustanciales en los indicadores económicos, sociales y, cómo no, en los científicos y tecnológicos que se traducen en diferentes niveles de competitividad (Alvarado Noguera, 2001 a).

Así mismo, teóricos como Maliranta consideran que no se ha llegado a un período de estabilidad en las economías sino que, actualmente, gracias al impulso de las tecnologías de la información nos encontramos en un proceso de plena aceleración. No obstante, el teórico agrega que las nuevas tecnologías no son el mecanismo más considerado en las economías de la mayoría de los países en desarrollo que cubren hoy la esfera planetaria. En este sentido, América Latina no constituye la excepción que rompa la regla a pesar del progresivo avance que se ha dado en los últimos años en materia de nuevas tecnologías de la información y su importancia como herramienta para fomentar el desarrollo.

En los últimos diez años, Finlandia prácticamente ha duplicado el gasto en Investigación y Desarrollo y, en los últimos cinco años, ha escalado doce posiciones en la escala de competitividad (Alvarado Nogera, 2001 a). La razón, obviamente, se encuentra en el factor tecnológico y en el impulso desarrollado desde la esfera pública y el sector privado con ejemplos como Nokia. Y aunque esta influencia es destacada, no es el único factor que cuenta para fomentar el desarrollo de un país. Así, la influencia del sector educativo es fundamental. En Finlandia, hay unas 20 universidades y 33 politécnicos; unos 10.000 grados de maestría y unos 2.000 de doctorado son otorgados cada año (Center for International Mobility, 1998).

En la sociedad de la información, los recursos humanos de elevada calificación constituyen una de las partes más importantes de la riqueza de una nación. La mayoría de países latinoamericanos deberá concentrar una mayor energía en formar a profesionales, buena parte de los cuales, siguiendo ejemplos como el finlandés, deberán tomar las riendas y encabezar el progreso tecnológico del país con la intención de alcanzar el tan anhelado camino del desarrollo.

Para Alvarado Noguera (2001 a) existe una relación especial en el triángulo academia – sector empresarial – organizaciones del gobierno y laborales, que determina el desarrollo económico, sumado todo lo anterior a una buena disponibilidad de recursos, humanos y financieros. También él integra, como elemento fundamental en el engranaje del desarrollo, la importancia de la educación básica. Finlandia, en este punto, es un claro ejemplo a seguir. Así, los

del desarrollo, la importancia de la educación básica. Finlandia, en este punto, es un claro ejemplo a seguir. Así, los pueblos finlandeses disponen de bibliotecas bien nutridas y actualizadas y de escuelas bien equipadas. La educación es continua y variada y existen suficientes computadoras con acceso a Internet y a los bancos de información. En este punto, la región latinoamericana, encuentra una de las principales lecciones a aprender.

Teóricos como Goldenberg (1998) añaden que los países de la región latinoamericana deben contar con la infraestructura científica y tecnológica, así como de recursos humanos bien entrenados, si desean adquirir los niveles de desarrollo que tanto se han perseguido durante la segunda mitad del pasado siglo y lo que llevamos de éste. No obstante, estos objetivos suponen la necesidad de mejores recursos financieros, diversas reformas y tiempo para llevarlas a cabo; por el momento, muchos de los países de la región latinoamericana no han escapado a esta realidad.

Tomando el ejemplo finlandés que hemos ilustrado hasta el momento a través de Nokia, los países de la región latinoamericana deberían tener en cuenta una serie de aspectos esenciales para superar la crítica situación que experimentan y evitar las oscuras previsiones de futuro que les aguardan. En primer lugar, debería optarse por una estrategia de desregulación de manera que se garantizase la competencia entre empresas con la posibilidad de establecer un nivel de precios muy asequibles para los usuarios. En segundo lugar, es imprescindible establecer niveles de inversión, tanto públicos como privados, que garanticen el desarrollo y la implantación de las nuevas tecnologías como uno de los nuevos motores de progreso en las sociedades latinoamericanas. Hasta el momento, esta intención es prácticamente inexistente. Así mismo, este proceso de concienciación debe llegar a los ciudadanos que deben asimilar el avance de las nuevas tecnologías como una de las nuevas herramientas esenciales de cara a afrontar un futuro plagado de grandes retos; hasta el momento, las nuevas tecnologías son vistas frecuentemente como instrumentos de "expansión imperialista" y como algo nocivo. Los gobiernos de los países de la región deben actuar para eliminar esta tendencia y una premisa ineludible debe ser la priorización de las nuevas tecnologías en los campos educativos acompañada por procesos de alfabetización tecnológica capaces de formar nuevas generaciones de ciudadanos comprometidos con el proceso de desarrollo y conocedores de la potencialidad de instrumentos como Internet para lograrlo.

Si bien cada país posee sus especificidades y no podemos establecer pautas generales sin tener en cuenta éstas, progresos como los de Finlandia abren un espectro de posibilidades, a través de la implementación de las enseñanzas indicadas, para que países como los de la región latinoamericana puedan escapar de los crónicos problemas que se han perpetuado hasta el momento y ante los que han fracasado las diversas alternativas previas que habían ignorado las posibilidades de las nuevas tecnologías.

Referencias

ABC COLOR. "El reto ya no es la globalización, sino cómo se compite en el mundo". 24 de octubre.1997. Disponible en:<http://www.abc.com.py/archivo/1997/10/24/eco07.htm>

ALVARADO NOGUERA, R. "Reijo Mantyoja y el `secreto´finlandés". La Prensa. 9 de mayo. 2001. Disponible en:<http://www‐ni2.laprensa.com.ni/archivo/2001/mayo/09/economia/economia‐20010509‐09.html>

ALVARADO NOGUERA, R. La dimensión científico‐tecnológica en los países en desarrollo. Algunas consideraciones. 2001.

BONASTRE, N. "Los nuevos planes de un líder". Cobertura. Nº 18. 1999. Disponible en: <http://www.audiovideomagazine.com/cobertura%20/coberradionokia/coberradionokia.html>

<http://www.audiovideomagazine.com/cobertura%20/coberradionokia/coberradionokia.html>

BRAGINSKI, R. "Mucho para aprender". Clarín.com. 28 de marzo. 2001. Disponible en: <http://www.clarin.com/suplementos/informatica/2001‐03‐28/f‐01106.htm>

BROWN – HUMES, C. "Nokia habla con optimismo mientras su estrella empieza a apagarse". Expansión Directo. 14 de marzo. 2001. Disponible en:<http://www.expansiodirecto.com/2001/03/14/tecnologia/5tec.html>

CENTER FOR INTERNATIONAL MOBILITY. Living in Finland. 1998.

EXPANSIÓN DIRECTO. "Nokia se salva de la crisis del sector y mantiene su previsión de beneficios". 16 de marzo. 2001. Disponible en:<http://www.expansiondirecto.com/2001/03/16/tecnologia/3tec.html>

EMBAJADA DE FINLANDIA EN BUENOS AIRES. Finlandia en breve. 1999.

GOLDEMBERG, J. What is the role of Science in Developing Countries?. 1998

HUÉLAMO, L. "Nokia: principal proveedor de redes móviles". Uno. 2001. Disponible en:<http://www.contenidos.com/Semana32/EMPRESA/EMPRESA/empresa.htm>

ITU. "Nokia: de la pasta maderera a la conexión". 1999. Disponible en:<http://itu.int/ti/publications/wtdr_99/Spanish/resumen_analitico_pagina%207b.htm>

LA NACIÓN LINE. "Tiempos de cambio". 25 de febrero. 2001. Disponible en:<http://www.lanacion.com.ar/01/02/25/e25.htm>

LAPOUGE, G. "Tecnología remove Finlandia do Pólo Norte". Estadao.com. 10 de septiembre. 2000. Disponible en: <http://www.estado.estadao.com.br/editorias/2000/09/10/int952.htm>

MEYFREDI, J. & WEILL, M. Le miracle Nokia. 1999.

NATIONAL SCIENCE FOUNDATION. Graduate Education Reform in Europe, Asia, and the Americas and International Mobility of Scientists and Engineers. 2000.

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RAIMONDI, P. "En Finlandia, el celular apasiona a multitudes". Clarín.com. 28 de marzo. 2001.

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[i] En este sentido es fundamental recordar que Finlandia proclama su independencia de Rusia el 6 de Diciembre de 1917.

[ii]Por ejemplo, durante los meses de invierno, especialmente en enero y febrero, las temperaturas de 20 grados centígrados negativos no son raras. En el norte del país, como consecuencia de la proximidad al Círculo Polar Ártico, el sol desaparece durante 73 días en verano. En esta misma región el sol permanece bajo la línea del horizonte durante 51 días, lo que da origen al fenómeno de la noche polar, a la que los finlandeses llaman, en su lengua, "kaamas".

[iii] En la actualidad, la empresa se encuentra muy por delante de las ventas de sus más directos competidores como la empresa norteamericana Motorola (con 50 millones) o la sueca Ericsson (con 31).

[iv] La influencia de la empresa en el mercado laboral es significativa no tanto por el número de empleados, que supone el 1% de la fuerza laboral del país, sino más por la calidad de éstos, pues absorbe a todos los ingenieros que se gradúan en las universidades.

[v] También podemos oír hablar de "Wireless Valley" ("Valle sin Hilos") en Suecia y Finlandia, donde unas 5.000 pequeñas empresas viven del negocio que generan Nokia y Ericsson. La mayoría de estas empresas crea tecnología y software para los fabricantes y operadores nórdicos de telefonía, como servicios de comunicación entre celulares o gestión de servicios técnicos (El País, 2001). Sólo en Finlandia se calcula que existen 3.000 empresas de alta tecnología, la mitad de las cuales ha sido abierta durante los cinco últimos años (Silva, 2001).

[vi]En 1988, Nokia era el tercer fabricante europeo, en tamaño, de televisiones y la mayor empresa de tecnología de la información de los países nórdicos. Previamente, en 1984, la empresa había lanzado el Mobira Talkman que representó un auténtico avance en su época al ser el primer teléfono portátil.

[vii]Aunque las diversas firmas hayan logrado un gran éxito, algunos investigadores se muestran preocupados ante lo que consideran una estrategia no totalmente acertada: crear una monocultura basada únicamente en el campo de la electrónica puede resultar peligroso al situar el desarrollo nacional en una posición muy vulnerable ante la fluctuación económica.

[viii]Por ejemplo, gracias al desarrollo tecnológico, poblaciones como Salo se han convertido en algunas de las más beneficiadas en el interior del país. Cómo anécdota, podemos citar que el "efecto Nokia" ha generado allí 64 millonarios. Siguiendo este ejemplo, podemos anunciar que Finlandia tiene cientos de estos "Nokia‐millonarios".

[ix]Esta convicción se consolidó en los años siguientes. Así, en el Programa de Gobierno presentado por el Ministro Lipponen en 1999 se indicaba el papel central de la sociedad de la información para consolidar la reforma de la economía, reforzar el crecimiento industrial e incrementar la eficiencia de los servicios públicos.

[x]El conocido Sistema Universal de Telecomunicaciones Móviles.

4

Un Estado de Gran Bienestar y muy Competitivo

Cristina Galindo

Referencia Galindo, Cristina.

El País.com. 16/06/2003 http://www.elpais.com/articulo/economia/Estado/gran/bienestar/competitivo/

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Un Estado de gran bienestar y muy competitivo

Finlandia ofrece amplias prestaciones sociales compatibles con un 3,7% de excedente fiscal y altas dosis de eficiencia

CRISTINA GALINDO (ENVIADA ESPECIAL) - Helsinki - 16/06/2003

Paula Lehtomaki tiene sólo 30 años, pero ya es ministra en Finlandia. Fue elegida para el puesto por Anneli Jäättennmäki, jefa de Gobierno desde el año pasado y que lleva las riendas del país nórdico junto a Jarja Halonen, la presidenta. Las mujeres mandan en Finlandia. Su ascenso al poder es en parte fruto de una política de protección social ambiciosa que ha facilitado, entre otras cosas, que las mujeres combinen su vida laboral y familiar. Finlandia disfruta de un fuerte Estado del bienestar que no ha impedido que el país tenga uno de los excedentes más robustos de la Unión Europea (UE) y se haya convertido en la segunda economía más competitiva del mundo, según el Foro Económico Mundial.

"La mitad de mis ingresos son para Hacienda, pero es que yo gano mucho", admite Vappu Taipale, directora general de Stakes, un instituto publico de investigación social con sede en Helsinki. Como a ella, a la mayoría de los finlandeses no parece importarles que su país sea, tras Suecia y Dinamarca, el que soporta una mayor presión fiscal de la UE: los ingresos por impuestos representan un 46,3% del producto interior bruto (PIB), frente al 35% de España. Y tanto el IVA como los impuestos especiales se sitúan entre los más elevados de la UE.

Prioridad al sector público

Taipale está de acuerdo con el hecho de que los impuestos se coman un 48% de su salario (las rentas mas altas pagan un 63%) porque, a cambio, el Estado destina un 42% del gasto público a protección social. Mientras tanto, el 13% va para educación y la sanidad absorbe otro 12%. La escuela primaria y secundaria son gratuitas (y la universidad, casi) y los alumnos reciben una comida gratis diaria. Tampoco hay que pagar la sanidad y, aunque existen quejas por las listas de espera, casi todos prefieren lo público al negocio privado, que tiene una presencia escasa.

"El efecto de estas políticas mejora la vida de los ciudadanos", concluye Taipale. La baja por maternidad alcanza los 11 meses y la mujer llega a cobrar un 75% del salario. En el caso de los hombres, el periodo puede llegar a las siete semanas. Cuando el niño nace, el Estado regala a los padres una cesta con todo lo necesario para cuidar al bebé durante las primeras semanas de vida. La familia recibe al menos 100 euros al mes por cada hijo hasta que cumple 17 años. Hay miles de guarderías municipales gratuitas para niños de hasta siete años y las plazas están garantizadas.

"Estas ayudas han allanado el camino para que las mujeres puedan trabajar y tener hijos", cuenta Taipale. En Finlandia, el 70% de los parlamentarios son mujeres. En el nuevo Gobierno, hay ocho ministras y otros tantos ministros. Casi la mitad de la fuerza laboral (2,5 millones de trabajadores en total en un país de cinco millones de habitantes) es femenina. Además, el Ejecutivo contempla ahora la posibilidad de crear un baja remunerada para que los hijos cuiden de sus padres ancianos.

http://www.atimes.com/atimes/South_Asia/ID25Df01.html

"Nuestro Estado de bienestar ha sido posible gracias a una política económica razonable, el crecimiento del PIB y de algunos sectores clave, como el tecnológico", afirma Erkki Hellsten, de la TT, la patronal finlandesa. La bonanza económica ha sido determinante en los últimos cuatro años. El PIB ha crecido a un 3,8% anual desde 1998, mientras la inflación se mantiene controlada en el 1,7%.

Cuando se pregunta a los finlandeses por su boom económico, lo primero que suelen decir es Nokia. El mayor fabricante de teléfonos móviles del mundo representa un 3% del PIB finlandés y el 20% de las exportaciones. Sobre todo, Nokia simboliza la transformación de una economía basada tradicionalmente en la industria maderera a otra centrada en la alta tecnología.

"El principal problema que tenemos es el paro", advierte Marku Jääskeläinen, del sindicato SAK, único del país. "Sufrimos una dura crisis en la primera mitad de los noventa y la tasa de desempleo se disparó del 2% al 18%", explica. Ahora se encuentra en el 9%, una de las más altas de la UE, que se reparte casi por igual entre hombres y mujeres. La mayor parte de los parados son personas de mediana edad y escasa formación que se vieron engullidos por la revolución tecnológica. Aun así, un desempleado en Finlandia tiene asegurada una paga diaria de 23 euros hasta que encuentra empleo.

Inversión en I+D

El fuerte Estado del bienestar no ha estado reñido con la competitividad y el equilibrio presupuestario. El superávit público ronda el 3,7% del PIB. En 1993, el país nórdico ocupaba el puesto 25 en el ranking mundial de los más competitivos. El Foro Económico Mundial sitúa a Finlandia en el número dos. "Creemos que se está sobreestimando nuestra competitividad real, pero es cierto que es alta, gracias al esfuerzo en una educación de calidad, la liberalización de sectores como las telecomunicaciones y la electricidad, y especialmente la inversión en Investigación y Desarrollo", puntualiza Hellsten. El gasto en I+D representa un 3,5% del PIB (dos tercios de las inversiones son privadas), frente al casi 2% de media europea.

La economía finlandesa tampoco ha escapado de la desaceleración económica que padece Europa y el crecimiento se limitó al 2% el año pasado. El Gobierno ultima un paquete de medidas contra la crisis que contempla una ligera bajada de los impuestos que pagan las empresas y los ciudadanos, con el objetivo de reducir la presión fiscal al 43,5%. Mientras tanto, los ciudadanos no parecen sentirse amenazados por el hecho de que la reforma se pueda traducir en un deterioro del Estado del bienestar. Existe consenso entre Gobierno y agentes sociales de que éste se debe mantener. "Hay margen para bajar los impuestos que gravan la renta de los contribuyentes", señala Jääskeläinen en su oficina del SAK en la capital finlandesa, "pero nuestra filosofía es que no se reduzcan demasiado para que se pueda mantener el sistema". La mayoría de los finlandeses están de acuerdo, al menos de momento, con esa filosofía.

© Diario EL PAÍS S.L. - Miguel Yuste 40 - 28037 Madrid [España] - Tel. 91 337 8200© Prisacom S.A. - Ribera del Sena, S/N - Edificio APOT - Madrid [España] - Tel. 91 353 7900

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5

Educación y Ciencia en Finlandia

Reporte del Ministerio de Educación de Finlandia

Referencia Education and Science in Finland. 2006

MINISTRY OF EDUCATION Communications and Public Relations

PO Box 29, 00023 Government, Finland Ministry of Education publications 2006:15

ISBN:952-485-126-1 (prints) ISBN: 952-485-127-X (PDF)

ISSN:1458-8110 http://www.minedu.fi/export/sites/default/OPM/Julkaisut/2006/liitteet/eng_opm15.pdf

EDUCATION AND SCIENCE IN FINLAND

Opetusministeriö

Ministry of Education

2 Education and Science Elvi Rista

Education and Science 3

EDUCATION AND SCIENCE IN FINLAND1 Trends in Finnish Education and Science Policy 4 2 The Education System 8

3 Administration and Financing of Education and Training 10

4 Financial Aid for Students 14 5 Teacher Education and Training 18

6 Pre-Primary and Basic Education 20

7 Upper Secondary Education and Training 24 General upper secondary education Vocational education and training

8 Higher Education 30 Polytechnics Universities

9 Adult Education and Training 36 10 Research 40

4 Education and Science

TRENDS IN FINNISH EDUCATION AND SCIENCE POLICY

1


Finnish education and science policy emphasises quality,

efficiency, equality and the international nature of sci-

ence and promotes the competitiveness of the Finnish

welfare society. Sustainable economic development

will continue to be the best way to ensure the nation’s

cultural, social and economic welfare in the years to

come. The basic principles of Finnish education and

science policy are in line with the European Union’s

Lisbon strategy.

Fundamental educational rights are enshrined in the

Constitution of Finland. Every Finnish resident is

guaranteed an equal opportunity to obtain education

and develop themselves, according to their abilities

and needs and irrespective of their financial means.

General compulsory schooling and the right to receive

pre-primary and basic education free of charge are

provided by law, but also tuition in other education

and training leading to an educational qualification is

free, including university postgraduate education.

Parliament passes legislation governing education and

science and determines the basic principles underpin-

ning education and science policy. The Government

and the Ministry of Education, as part of it, are re-

sponsible for preparing and implementing education

and science policy. The Ministry of Education is re-

sponsible for education and training funded from the

state budget. The Government adopts a development

plan for education and research every four years.

Objectives

The priorities in educational development are to en-

hance competence and raise the level of education

among the population and in the labour force; to im-

prove the efficiency of the education and training sys-

tem; to prevent social exclusion among children and

young people; and to enlarge adults’ opportunities for

education and training. Special attention is paid to in-

ternationalisation and the quality and effectiveness of

education, training and research.

Lifelong learning is a viewpoint permeating all poli-

cies related to learning with a view to ensuring equal

opportunity in education and a high level of educa-

tion among the population as a whole. This policy

entails that everyone has sufficient learning skills and

opportunities to develop their knowledge and skills at

all ages and in different environments.

To this end, qualification-oriented education and

training is offered to the whole youth age group (16–

21) and measures are taken to upgrade and update

adults’ competencies. As the population grows older,

it is essential to accelerate young people’s transition

to further and higher education and, subsequently, to

the labour market by streamlining student selection

procedures, speeding up graduation and enhancing

recognition of prior learning.

The starting point in the development of general

education is to guarantee basic educational security

for everyone, irrespective of their place of residence,

language and financial status. Two of the foremost re-

forms geared to improve children’s and young people’s

well-being have been to institute the right to pre-primary

education and morning and a system of afternoon ac-

tivities for schoolchildren.

The objective of general upper secondary education is

to provide a good all-round education and to build a

foundation for further studies. In the past ten years,

the upper secondary school has been developed to-

wards greater flexibility and a larger freedom of choice

for students, thereby improving their motivation. The

current focus in development is on content renewal.

TRENDS IN FINNISH EDUCATION AND SCIENCE POLICY


The objective of vocational education and training is to

guarantee access to skilled labour force and to support

industry-driven innovations. Special attention is paid

to improving the quality and effectiveness of train-

ing and its relevance to working life and to increas-

ing appreciation of vocational skills. New challenges

to development arise from European co-operation in

vocational education and training, notably the Co-

penhagen process. Greater mobility among students

and qualification-holders calls for the development of

credit transfer systems and quality assurance in educa-

tion and training.

In recent years, higher education policy has focused

on the implementation of reforms required by the

Bologna process in particular. The degree structures

and scopes of studies at both universities and poly-

technics are based on common European principles.

Universities and polytechnics have developed quality

assurance systems in line with European standards

and practices.

The development of polytechnic education focuses on

internationalisation and the quality of provision. To

this end, measures have been taken to reform degree

structures, step up study processes and facilitate in-

ternational student and teacher mobility. In addition,

polytechnics have enhanced their research and devel-

opment activities which serve regional business and

industry. One aim has been to reduce drop-out rates

and shorten the duration of studies.

The main focus in the reform of university education

and degrees has been to step up internationalisation

and improve the quality of instruction and student

counselling with the aim of shortening study times

and speeding up graduation and entry to the labour

market. The degree structure reform and the introduc-

tion of individual study plans have made university

studies more flexible and promoted lifelong learning.

The role of adult education and training is to provide

working-age and other adults with knowledge and

skills they need for continuous development of their

competencies and for other self-development which

enhances equality and active citizenship. The provision

of qualifying and continuing education and training

geared to the working-age adult population has been

expanded at all levels of education. The enlarged sup-

ply of open polytechnic and university education and

online instruction has been supported by the develop-

ment of information and counselling services and ma-

ture students’ financial aid. Special efforts have been

made both in vocational and liberal adult education

to increase educational opportunities for groups that

are under-represented in adult learning.

Science policy seeks to raise the standard of research

and improve the effectiveness and international visibil-

ity of Finnish scientific research. The aim is to main-

tain the level of Finnish R&D funding on a par with

the world top countries. Input is focused on enhanc-

ing the quality of scientific research and strengthening

researcher training and research infrastructures. Re-

cent development targets include the professionalisa-

tion of research careers, commercialisation of research

findings, and co-operation between higher education

institutions and business and industry. Cutting-edge

research requires both national and international net-

working and close co-operation at all levels.

Results

According to international surveys, Finland is one of

the most competitive countries in the world. This suc-

cess can be attributed to an efficient and open public

sector and an egalitarian, high-quality education and

research system.


According to the OECD PISA survey, young Finns’

knowledge and skills rank among the best in the

OECD countries in mathematics, science and reading

literacy. The proportion of poorly performing pupils

is small compared with other OECD countries, and

regional and inter-school differences are comparative-

ly small.

In adult education and training, the number of par-

ticipants has grown by 200,000 people over the past

ten years to the extent that the participation rate is

now 54% of the working-age population. However,

participation is less evenly distributed among different

population groups than in other Nordic countries.

A research career has attraction in Finland, and there

has been no shortage of gifted doctoral students. More

and more publications by Finnish researchers are ap-

pearing in international publication series and cited

frequently in research. The number of mathematics,

engineering and science students in Finland is high in

international terms.

Future challenges

A future challenge for Finnish education policy will

be to further strengthen the prerequisites of the pub-

lic education system. We must pay constant attention

to enhancing competitiveness and innovativeness by

means of education and science policy. The aim is to

create clusters of expertise of the highest international

standard in fields of major relevance to the national

economy and welfare.

Our network of schools and higher education insti-

tutions covers the country well, but there are some

inevitable reforms we must make in response to the

substantial demographic changes and internal migra-

tion, which is expected to continue to be strong. By

rationalising the school network we also make savings,

which can be channelled back to education and re-

search.

Internationalisation is a precondition for the success

and renewal of the Finnish economy. International

co-operation and interaction is especially important

in education and research. This is something that we

are ready to invest in. Finland welcomes international

students, researchers and teachers!

Antti Kalliomäki Minister of Education


The welfare of Finnish society is built on education, culture and knowledge. All children are guaranteed opportunities for study and self-development ac-cording to their abilities, irrespective of their place of residence, language and financial status. All pupils are entitled to competent and high-quality education and guidance, a safe learning environment and well-being. The flexible education system and basic educational security make for equity and consistency in results.

The Finnish education system has three levels: basic education, comprising primary and lower secondary levels; upper secondary education and training; and higher education. Pre-primary education is available to children in the year preceding compulsory school-ing. Basic education is uniform nine-year general ed-ucation given in comprehensive schools. The upper secondary level comprises vocational education and training and general education. Higher education is provided at polytechnics and universities.

Adult education and training is available at all levels. In addition, liberal adult education offers a wide range of recreational studies and education which develop competencies and citizenship skills.

In Finland, pre-primary education, basic education and upper secondary education and training, comple-mented by early childhood education and before- and after-school activities, form a coherent learning path-way that supports children’s growth, development and well-being.

Students’ transition from one level of education to the next is safeguarded by legislation. Both general and vocational upper secondary certificates provide eligi-bility for further studies in universities and polytech-nics.

Information society skills

In recent years, attention at all levels of education has focused on strengthening knowledge and skills required in the information society and on develop-ing electronic services. The aim is to provide equal opportunities for all citizens to function in a knowl-edge-based society. Input has also been made into developing the use of information and communica-tions technologies (ICT) and electronic materials in research. The goal is an open and secure network soci-ety with a high level of information society skills.

Extensive use of information and communications technologies is encouraged in studies and instruc-tion. Pupils in basic education learn fundamental ICT skills, which are further developed at the upper secondary level; ICT professionals and researchers are trained in higher education. Finland has made special investment in teacher training and the development of virtual teaching materials and learning environments.

THE EDUCATION SYSTEM

2


THE FINNISH EDUCATION SYSTEM


ADMINISTRATION AND FINANCING OF EDUCATION AND TRAINING

Satu Haavisto


Parliament passes educational legislation and deter-

mines the general lines of education policy. The Gov-

ernment and, as part of it, the Ministry of Education

are responsible for planning and implementing educa-

tion policy.

As the highest education authority in Finland, the Ministry of Education is responsible for implement-ing the education policy adopted by Parliament and the Government. The Ministry drafts legislation pertaining to education and training, prepares the education and culture main class for the state budget proposal and drafts government decisions relating to education. Almost all forms of publicly funded educa-tion and training are subordinate to or supervised by the Ministry of Education.

The key education agency is the National Board of Education, which administers matters relating to comprehensive schools, upper secondary schools

and vocational education and training. The National Board issues national core curricula and regulations governing pupil and student assessment.

The regional administration is run by five State Pro-vincial Offices, which also deal with educational mat-ters, notably monitoring education and training and legal protection in the sector. In addition, the State Provincial Offices provide information-based guid-ance for schools and local authorities within their re-gions and evaluate basic services.

The local authorities (municipalities) have a statu-tory duty to provide pre-primary and basic educa-tion. They also arrange upper secondary education and training. Local authorities enjoy self-government guaranteed by the Constitution and their duties and responsibilities are based on legislation. The local lev-el is largely responsible for the organisation and the forms of provision in education. Education providers and maintaining organisations decide on practical ar-rangements, such as teacher recruitment.

Administration of basic and upper secondary education

Administration of the higher education system and research

3


There are several independent expert bodies in the field of education and training. The Matriculation Ex-amination Board is responsible for managing the na-tional matriculation examination taken at the end of upper secondary school and for setting and assessing the tests. Expert bodies in vocational and work-based training include field-specific National Education and Training Committees and a National Co-ordination Group for Education and Training. In addition, there are separate bodies responsible for the evaluation of education and training. The Adult Education Coun-cil appointed by the Government for a term of three years at a time is the advisory body in matters relating to adult education and training.

The Centre for International Mobility (CIMO), oper-ating under the auspices of the Ministry of Education, was established in 1991 to promote international ex-changes in education and training. CIMO co-ordi-nates and implements exchange and scholarship pro-grammes and is responsible for implementing nearly all of the European Union’s education, training, cul-ture and youth programmes at the national level.

Steering

The Ministry of Education steers the implementation of education policy in the entire education system, with the exception of some fields subordinate to other ministries. The main steering instruments employed by the Ministry of Education are legislation, funding, information-based guidance, and licensing policy. ‘Steering’ refers to all mechanisms used to regulate operations and implement stated objectives.

Normative steering comprises Acts, Decrees, the na-tional core curricula and qualification requirements, and other rules and regulations. The funding in-struments include government transfers to local au-thorities and performance management; these are complemented by information-based guidance. The evaluation of education and training has been gaining importance as a steering tool.

The fundamental statutes in general education are the Basic Education Act and Decree, the General Upper Secondary School Act and Decree, and the Act and Decree on Basic Education in the Arts. Other key tools in normative steering are government resolutions on the objectives of education and training and on the allocation of lessons hours, and the national core cur-ricula issued by the National Board of Education.

Vocational education and training (VET) is governed by the Vocational Education and Training Act and Decree. Other important steering mechanisms in-clude authorisations to provide vocational education and training, which are granted by the Ministry of Education; Government and the Ministry of Educa-tion resolutions on the structure of qualifications and the core subjects; and the national core curricula is-sued by the National Board of Education.

In higher education the key steering instrument is performance management. Polytechnics and universi-ties agree with the Ministry of Education on how to promote the objectives of higher education policy in practice. The polytechnics’ and the universities’ per-formance agreements specify targets both for each in-stitution and for the entire higher education sector for a three-year period.

Public expenditure on education and training as a percentage of the gross domestic product, 1995–2004*

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004* Public expenditure on education and training, EUR million 6 500 6 900 7 000 7 300 7 600 8 000 8 400 8 900 9 400 9 700

GDP, EUR million 96 100 99 400 107 900 117 400 120 100 130 900 136 400 140 900 143 800 149 700

Percentage 6,8 % 6,9 % 6,5 % 6,2 % 6,3 % 6,1 % 6,2 % 6,3 % 6,5 % 6,5 %

Source: Statistics Finland, data from the UOE survey (UNESCO, OECD, Eurostat)

Public expenditure on education and training includes expenditure by the central government and local authorities/joint municipal authorities, and government expenditure

on student financial aid.

*Advance data


Normative steering in adult education and training largely rests on legislation governing vocational adult education and training, the financing of education and culture, and liberal adult education. As regards liberal adult education, the Ministry’s main steering tools are authorisations to maintain adult education institutions and resource allocation. Information-based guidance is being piloted in liberal adult educa-tion.

Financing

The Ministry of Education finances general educa-tion, VET, polytechnic education and R&D, univer-sity education and research, continuing vocational and professional education, liberal adult education, and morning and afternoon activities for schoolchildren.

The government grants statutory and discretionary fi-nancing for operating costs and for construction and renovation projects to local authorities and other edu-cation providers. Government funding for local au-thorities is not earmarked, which means that the local authorities are free to decide how to use it. Statutory government funding covers 45% of operating costs.

Funding is based on certain quantitative indicators, such as the number of pupils/students, other quanti-tative criteria, and unit costs determined each year in advance.

Local authorities provide almost all pre-primary, basic and general upper secondary education. About half of the vocational education and training providers are lo-cal authorities or municipal education consortia. In addition, registered associations and foundations may function as education providers.

Evaluation

Education providers have a statutory duty to evalu-ate their own operations and participate in external evaluation. The purpose of evaluation is to collect in-formation in support of education policy decisions, information-based guidance and performance man-agement. The purpose of evaluation is to bring about continuous improvement of the quality of education, training, research and other activities. Evaluations relating to education and training are carried out at local, regional and national levels. Finland also par-ticipates in international reviews.

Evaluation of universities and polytechnics is the re-sponsibility of the Finnish Higher Education Evalua-tion Council (FINHEEC), which operates in conjunc-tion with the Ministry of Education. The FINHEEC is an independent expert body responsible for helping higher education institutions and the Ministry of Ed-ucation to evaluate higher education institutions.

The expert body in evaluation of general, vocational and adult education is the Finnish Education Evalua-tion Council, which functions as a network of experts. The duties of this independent Evaluation Council in-clude evaluation of education, training and learning, development of evaluation and promotion of research into evaluation and assessment. Evaluation activities support the Ministry of Education, education provid-ers and educational institutions.

2006 State Budget: Education and science

3


FINANCIAL AID FOR STUDENTS

Selja Eskonen


Finland guarantees post-compulsory studies for the

whole school-leaving age group. The aim is to improve

people’s life careers and their quality of life, prevent

social exclusion and safeguard effective functioning

of society and the labour market. Everyone has equal

opportunity for education and training regardless of

their financial situation.

Financial aid and other social benefits make for

efficient studies. Financially secure students can plan

their studies and study full-time, which shortens study

times. Student financial aid ensures subsistence for the

duration of full-time study. The financial aid system is

developed in line with education policy objectives.

Schools monitor the health and well-being of their pupils and students. Pupils in basic education and at the upper secondary level have the right to welfare services free of charge, such as school health care and multiprofessional support for their growth.

Pupils in basic education and students at upper sec-ondary level also receive free daily meals, and higher education students have access to subsidised meals. Pupils in basic education are entitled to free school transport on certain conditions. In addition, upper secondary students can apply for school travel sub-sidy.

Instruction is provided free of charge by all publicly funded educational institutions at all levels of educa-tion. Upper secondary and higher education students buy their own textbooks.

Student financial aid for full-time studies

Student financial aid consists of a study grant, a hous-ing supplement and a government-guaranteed stu-dent loan. Financial aid is granted for studies in up-per secondary schools and vocational education and for degree students at the higher education level. To receive financial aid, which is means-tested, students must study full-time and progress in their studies. In higher education, student financial aid depends on the student’s own income, whereas the support of upper secondary students aged under 20 depends on their parents’ income.

The amount of aid depends on the student’s age, the type of accommodation, the level of education and means-testing. It is also possible to receive student fi-nancial aid for studies abroad, as long as these corre-spond to studies eligible for aid in Finland.

Student loans are guaranteed by the government up to 300 euros per month in higher education. Students do not need any other securities for the loan. Inter-est and other loan terms are agreed by students and their banks. The repayment period is usually twice as long as the loan period. Students starting their higher education studies in or after the 2005/2006 academic year are entitled to a tax concession upon graduation, provided that they complete their degree within the normative time and have used their loan to finance their studies.

Information on the social and financial situation of higher education students in Finland and ten other European countries is available in ‘Eurostudent Re-port 2005’, which can be accessed at www.his.de/eu-rostudent.

Expenditure on student financial aid in 2005 (EUR million)

FINANCIAL AID FOR STUDENTS

4

Source: The Social Insurance Institution of Finland


Beneficiaries of student financial aid in 2005

Study grant No. of beneficiariesUniversities 87 000 Polytechnics 87 100 Vocational institutions 82 600 Upper secondary schools 26 100 Other educational institutions 5 700 Foreign educational institutions 4 400

Total 292 900 Housing supplement 194 000 Beneficiaries of government loan guarantees 117 600 Beneficiaries of school transport subsidy 49 600

Financial aid for adult students

There is a special scheme for supporting people who take leave of absence from their work to pursue full-time studies. This adult students’ financial aid is based on the level of income before studies. Its purpose is to ensure a moderate income during studies. In addi-tion, those eligible to receive adult students’ financial aid can also apply for government-guaranteed student loans. Adult students who are not eligible in the adult student scheme may be granted regular student finan-cial aid for the duration of their full-time studies.

Adults can pursue self-motivated studies during a job alternation leave, which is based on an agreement between an employee and an employer. The employee receives an allowance during the leave of absence, which is equivalent to 70–80% of their unemploy-ment benefit. Unemployed adults who want to pursue self-motivated studies receive training allowance.

Amount of aid (€/month) Vocational or Higher general upper education secondary education Study grant 259 21–213 Housing supplement 179 179 Study loan 300 160–220

Total 738 181–612

4




Financial aid for adult students

There is a special scheme for supporting people who take leave of absence from their work to pursue full-time studies. This adult students’ financial aid is based on the level of income before studies. Its purpose is to ensure a moderate income during studies. In addi-tion, those eligible to receive adult students’ financial aid can also apply for government-guaranteed student loans. Adult students who are not eligible in the adult student scheme may be granted regular student finan-cial aid for the duration of their full-time studies.

Adults can pursue self-motivated studies during a job alternation leave, which is based on an agreement between an employee and an employer. The employee receives an allowance during the leave of absence, which is equivalent to 70–80% of their unemploy-ment benefit. Unemployed adults who want to pursue self-motivated studies receive training allowance.

Satu Haavisto


TEACHER EDUCATION AND TRAINING

Elvi Rista


Finns hold the teaching profession in high esteem and

only a small proportion of those applying for teacher

education are admitted. Teachers are educated at uni-

versities, where they complete a higher university de-

gree (Master’s). Teacher education is provided by 11

universities, one of which is a Swedish-language insti-

tution. University teacher education aims to provide

students with resources to function independently as

teachers, instructors and educators.

Class teachers teach all subjects in years 1–6 of basic education (primary level). They may also work in pre-primary education and as instructors of extracurricu-lar morning and afternoon activities. Class teachers major in education sciences. The scope of the degree is 300 ECTS credits. Class teachers can also study for a subject teacher qualification.

A Master’s degree is also the basic requirement for subject teachers working with year-classes 7–9 of ba-sic education (lower secondary level), for upper sec-ondary teachers, for teachers of general subjects in vocational education and training, and for teachers in adult education and training. The degree is 300–350 ECTS credits. In addition to studies in the major and minor subjects, subject teacher qualifications com-prise pedagogical studies of at least 60 ECTS credits, including teaching practice.

Universities also educate special-needs teachers and guidance counsellors. Special-needs teachers work in basic education and in vocational education and training. Guidance counsellors mostly work with yearclasses 7–9 of basic education, upper secondary schools and vocational institutions.

Vocational teacher education

Vocational teachers are trained by five vocational teacher education colleges attached to polytechnics. These provide pedagogical education for those who want to teach in vocational institutions, polytechnics, liberal adult education, and adult education and train-ing.

The training is 60 ECTS credits, comprising stud-ies in education, vocational pedagogy and teaching practice. It provides knowledge and skills needed to

instruct different kinds of learners and to develop teaching in response to changes in occupations and the world of work.

Teachers’ continuing education

Teachers already active in working life can update their professional competence on an ongoing basis. The purpose of continuing professional education is to maintain and update teachers’ pedagogical skills. It has been found that continuing education also promotes teachers’ satisfaction at work. Continuing training is voluntary for teachers, but the majority participate in training every year. This training is pro-vided free of charge for teachers, who also receive full pay during training days. The responsibility for teachers’ in-service training mainly rests with employers, who usually are local au-thorities. They have an obligation to provide teachers with a minimum of three days of training every year. In addition to this, the central government arranges continuing training, mostly relating to the use of ICT in education. Other topical themes are counselling and guidance; development of special-needs educa-tion; curricular development; virtual pedagogy and media education; mathematics and natural sciences; languages; and development of vocational education and training.TEACHER EDUCATION

AND TRAINING

5


PRE-PRIMARY AND BASIC EDUCATION

Elvi Rista


Comprehensive school pupils in 2005

Grade: Pre-primary 1 2 3 4 5 6 7 8 9 Additional education education 57 986 57 546 59 867 60 941 63 466 65 070 65 238 67 365 66 474 66 545 2 385

Total 632 883

Pre-primary and basic education create a foundation

for lifelong learning. Pre-primary education promotes

children’s growth, development and learning oppor-

tunities equally throughout the country. It develops

children’s social and ethical skills, oral expression,

language awareness and skills relating to literature and

mathematics.

The objective of basic education is to support pupils’

growth into humane and ethically responsible mem-

bers of society and to provide them with knowledge

and skills they will need in life. Education must

promote civilisation and equality in society and en-

able pupils to participate in education and otherwise

develop themselves during their lives. Another aim

is to guarantee educational equality throughout the

country.

The key development targets in education are to

consolidate the basic educational security, develop

educational contents and teaching methods, enhance

well-being and learning environments, prevent social

exclusion, and strengthen the steering system in edu-

cation.

All children permanently residing in Finland have a statutory obligation to complete the basic educa-tion syllabus. Children can do this either by attend-ing comprehensive school or by acquiring equivalent knowledge and skills in some other way. Virtually all children (99.7%) complete basic education. Children can participate in pre-primary education in the year preceding compulsory schooling.

Pre-primary education

Local authorities have a statutory duty to provide pre-primary education. For children participation is voluntary, but almost all children go to pre-primary school, which usually starts at the age of six. Pre-pri-mary education is geared to develop children’s learning skills as part of early childhood education and care.

Early childhood education and care is an entity of care, education and instruction. The methods used in it – play, physical activities, problem-solving and con-crete experiments – support children’s all-round devel-opment. The average length of a pre-primary school day is four hours.

Basic education

Finnish children start their actual schooling at the age of seven at a comprehensive school. Basic education is provided free of charge for all and the nine-year edu-cation is the same for all pupils. By completing basic education, pupils have done their compulsory school-ing. It does not lead to any specific qualification, but the leaving certificate gives eligibility for all types of upper secondary education and training.

A school year is 190 school days, starting in mid-August and ending in early June. The summer holi-days are over two months.

The maximum duration of a school day is five lessons during the first two years of basic education and up to seven lessons after that. This makes between 19 and 30 hours a week, depending on the pupils’ age.

The government determines the national objectives of basic education and the allocation of lesson hours be-tween different subjects. The National Board of Edu-cation draws up the national core curriculum, which individual local authorities and schools use as a basis for their own curricula.

The language of instruction is mostly Finnish or Swedish, but also the Sami, Roma or sign language

6

Source: Statistics Finland


may be used. Foreign languages may also be used in instruction, provided that it does not jeopardise pu-pils’ learning. Sami-speaking pupils residing in the Sami home area in Lapland have the right to be taught primarily in the Sami language. Pupils with hearing impairments must be taught in sign language, where necessary.

Subjects in basic education • Mother tongue and literature• Foreign language (A language)• Foreign language (B language)• Mathematics• Environmental studies• Biology and geography• Physics and chemistry• Health education• Religion/Ethics• History and social studies• Music• Visual arts• Craft• Physical education• Home economics• Guidance counselling• Optional subjects

In years grades 1–2, 3–4, 5–6 and 7–9, the mini-mum number of weekly lessons is 19, 23, 24 and 30, respectively.

Special-needs education and additional basic education

Finnish schools provide special-needs education and additional education in support learning. A pupil who cannot follow education owing to a disability, illness, delayed development or some other reason can be admitted or transferred to special-needs edu-cation. Whenever possible, special-needs education is intergrated into regular education or given in a special class. It is also possible to extend the duration of com-pulsory schooling for special-needs pupils, in which case compulsory schooling starts in the year when the child turns six and lasts 11 years.

Young people who have completed the basic educa-tion syllabus can continue their education for one extra year. This voluntary ‘10th grade’ is intended to help and encourage young people to continue their studies at the upper secondary level.

Morning and afternoon activities and basic education in the arts

Local authorities also organise voluntary extracur-ricular morning and afternoon activities for first and second year pupils and for all special-needs pupils in basic education. The purpose of these diverse, super-vised activities is to support home and school educa-tion and promote children’s well-being and emotional and ethical growth.

One form of these activities is extracurricular basic ed-ucation in the arts. It is goal-oriented education pro-gressing from one level to the next. It teaches children skills in self-expression and capabilities needed for vo-cational, polytechnic and university education in the chosen art form. The objectives and core contents are determined in national core syllabi devised by the Na-tional Board of Education for nine different art forms. The network of government-funded art education in-stitutes comprises 88 music institutes and 23 schools in other arts. Moderate fees may be charged both for morning and afternoon activities and for basic educa-tion in the arts.

International comparisons of education

Finland has fared well in international comparisons, such as the OECD Programme for International Stu-dent Assessment (PISA), which assesses mathematics, science, reading literacy and problem-solving skills among 15-year-olds. In PISA the learning results of Finnish basic education pupils rated at the top of the list in the key subjects, while differences between pu-pils, schools and different regions were comparatively small.

There are many reasons for this success. The Finnish education system guarantees children and young peo-ple equal basic education, irrespective of their social status, gender and ethnic background. Education is provided free of charge, and the comprehensive servic-es, such as school meals, school transport subsidies and pupil welfare services, are available to everyone free of charge. Teacher education guarantees instruction of a high standard. Responsibility for education rests with local authorities, in other words close to children and their homes. Finns believe in the benefits of education and there are long traditions for co-operation between homes, schools and different authorities.

One factor contributing to the high rate of reading literacy in Finland is the comprehensive library net-work. There are almost a thousand public libraries in

6


Finland, where everyone can borrow materials free of charge. In 2004, the number of loans exceeded 100 million, which makes about 20 loans per inhabitant.

Regardless of the good and consistent learning out-comes, Finland also has its share of pupils and students whose well-being and learning pose a major challenge to the education system. Early intervention and pre-ventive action are a compassionate and economically profitable way to tackle the problem.

Providers of pre-primary and basic education

The network of comprehensive schools (3,579 in 2005) covers the entire country. The majority of pu-pils attend medium-sized schools with 300–499 pu-pils. The smallest schools have fewer than ten pupils and the largest over 900 pupils.

Local authorities provide education for children of pre-primary and compulsory school age living in their areas, and the central government shares the costs by granting statutory government transfers to education providers. The calculation of the statutory government transfer is based on a unit cost (€/pupil) determined annually by the Ministry of Education. In 2005, the government paid 57% and municipal authorities 43% of the cost of basic education.

Basic education for adult students

It is possible for adults to complete the entire basic education syllabus (44 courses) or study individual subjects. Basic education for adults is provided by adult upper secondary schools and folk high schools authorised by the government to provide basic educa-tion.

Development of average performance scores in PISA 2000 and PISA 2003 assessments

Placement of comprehensive school leavers in further education immediately after completion

of basic education in 2004

Source: PISA


24 Education and Science Elvi Rista


The post-compulsory upper secondary level is divided into general education and vocational education and

training. Both forms generally take three years and provide eligibility for further studies at universities and

polytechnics.

The general upper secondary school provides non-vocational all-round education. Towards the end of the

school, students usually take the national matriculation examination and receive a matriculation certificate in

addition to the school-leaving certificate. Students in vocational education and training study for a vocational

qualification. It is possible to take the initial qualification and further and specialist qualifications as a compe-

tence-based qualification, in which there are no requirements concerning the way in which the knowledge and

skills were acquired.

UPPER SECONDARY EDUCATION AND TRAINING

7GENERAL UPPER SECONDARY EDUCATIONGeneral upper secondary education develops all-round

general knowledge. Its objective is to support students’

growth into balanced members of society and provide

skills and knowledge needed for further studies. In ad-

dition, the upper secondary school equips students for

lifelong learning and self-development.

General upper secondary education is course-based and ends in a national matriculation examination. The upper secondary school does not provide any spe-cific qualifications but gives eligibility for studies in universities, polytechnics or vocational institutions.

The admission requirement for general upper secondary education is a school-leaving certificate from basic educa-tion. Students apply to general and vocational education in a joint application system. If the number of applicants exceeds the places available, the selection is based on stu-dents’ school reports. The drop-out rate is low.

Some upper secondary schools specialise in a certain subject, such as sports, art or music. In addition, some

upper secondary schools provide education for and end in an international examination.

General upper secondary studies

Upper secondary school students are typically aged between 16 and 19 and generally complete the syl-labus in three years. Adults can study upper second-ary syllabi and take the matriculation examination in adult upper secondary schools and in special adult programmes provided by ordinary upper secondary schools. Adult classes are usually arranged in the eve-nings. It is also possible to study only one or some subjects either for self-improvement or in order to raise former grades.

General upper secondary school studies are in the form of courses, which are 38 lesson hours on aver-age. The entire upper secondary school is a minimum of 75 courses. Adult upper secondary education com-prises a minimum of 44 courses of 28 lesson hours on average.


The general objectives and allocation of lesson hours between different subjects, subject groups and guid-ance counselling are decided by the Government. The National Board of Education decides on the aims and core contents of instruction, recording them in a na-tional core curriculum, which education providers and schools then use as the basis for their curricula.

Tuition is provided free of charge for students who complete the entire upper secondary syllabus. Fees may be charged for studies in individual subjects. Stu-dents buy their own textbooks and pay a fee for the matriculation examination

Matriculation examination

The national matriculation examination held at the end of upper secondary school assesses the achieve-ment of the knowledge and maturity defined in the curriculum and the objectives set for upper secondary education. The matriculation examination is arranged twice a year, in the spring and autumn. Students can take all the tests in one examination or over a maxi-mum of three successive examination periods.

The matriculation examination includes four tests at minimum. The only compulsory test is the mother tongue test (Finnish/Swedish/Sami). For the three other tests, the candidates have a choice between the

second national language (Swedish/Finnish), a foreign language, mathematics and general studies. It is also possible to take more than four tests.

The matriculation examinations are managed and the tests are set and assessed by an independent Matricu-lation Examination Board, which is appointed by the Ministry of Education for a period of three years at a time.

Providers of general upper secondary education

General upper secondary education is provided by lo-cal authorities, municipal consortia or organisations authorised by the Ministry of Education. The central government co-finances education with statutory gov-ernment grants based on student numbers and unit costs per student. The majority of the 435 upper sec-ondary schools in Finland are run by local authorities.

Number of upper secondary school students and certificates 2002 2003 2004New students 41 020 42 610 43 000Matriculation examination certificates 36 200 35 170 34 620Number of students 124 160 120 870 118 530

Number of upper secondary school students and certificates




VOCATIONAL EDUCATION AND TRAINING

The vocational education and training sector com-

prises initial and further and continuing training. It

provides skills required for working life and a wide

knowledge base for lifelong learning and self-develop-

ment. A topical priority in further vocational training

is to strengthen its role in developing and serving the

world of work and to meet the skills needs of the SME

sector in particular. Education and training for the

vocational qualifications is provided in educational in-

stitutions and in the form of apprenticeship training.

Vocational education and training (VET) is intended both for young people leaving comprehensive school and for employed adults. Adults may study for the same qualifications as young people. They can also participate in further vocational training, which is up-grading built on an initial vocational qualification.

Vocational qualifications provide extensive basic skills for jobs in their fields and more specialised compe-tence required in a specific sector. A vocational quali-fication gives eligibility for further studies at universi-ties and polytechnics.

Number of students and qualifications in upper secondary and further vocational education and train-ing

Upper secondary VET

2002 2003 2004 New students 60 280 60 090 61 300 Qualifications awarded 32 440 35 220 37 610 Number of students 143 620 147 410 149 340 Further training

2002 2003 2004 New students 20 540 23 910 24 000 Qualifications awarded 13 150 14 957 15 000 Number of students 36 990 42 120 43 000

Vocational qualification

VET provides vocational competence needed to enter the labour market and for self-employment and entre-preneurship. The majority of students are comprehen-sive school-leavers, but about a fifth of VET provision is intended for adults who have prior knowledge and work experience.

VET is mostly provided by educational institutions, but apprenticeship training is also increasingly popu-lar. Instruction is based on national core curricula pre-pared in co-operation with the world of work and ap-proved for each qualification by the National Board of Education. VET providers devise their own curricula on the basis of the core curriculum.

VET is provided in eight fields and qualifies for more than a hundred occupations. There are a total of 116 study programmes leading to 52 different vocational qualifications. The qualifications have been developed in co-operation with working life representatives.

Young people generally apply for VET in the national joint application system. As a general rule, the entry

7Source: Statistics Finland


requirement is a school-leaving certificate from basic education. Upper secondary school graduates can also study for a vocational qualification. Their training takes a shorter time because some general studies in-cluded in the matriculation examination are counted towards the qualification.

The largest component in the vocational qualifica-tion is vocational studies. The overall extent of the qualification is 120 credits, comprising 90 credits of vocational studies, 20 credits of general core subjects and 10 credits of free-choice studies. All vocational qualifications include at least 20 credits of on-the-job learning. One credit is equivalent to 40 hours of work, including both instruction at school and independent study. The vocational qualification usually takes three years.

On-the-job learning

VET includes on-the-job learning of 20 credits or more. On-the-job learning means supervised, curricu-lar training at a workplace, during which the students learn practical skills included in their qualification. The education provider and the employer’s repre-sentative agree with the student on the objectives of on-the-job learning and its supervision.

Vocational skills demonstrations

In VET leading to a vocational qualification, student assessment includes vocational skills demonstrations arranged in practical work situations or as practical assignments. The demonstrations are used to deter-mine how well a student has learnt skills required in working life.

The objectives and assessment criteria of vocational skills demonstrations are determined in the national core curricula. The demonstrations are designed and implemented in co-operation with business and in-dustry. A special body appointed by the education provider awards certificates for vocational skills dem-onstrations, which are recorded in and attached to the qualification certificate.

Competence-based qualifications for adults

Since the mid-1990’s, working-age adults have been able to take competence-based qualifications, which assess knowledge and skills acquired in working life and/or in formal training. Adults can sit an exami-nation for a competence-based vocational, further or specialist qualification, or for qualification modules. There are no national core curricula for competence-

Number of students in vocational education and training by field

Placement in 2003 of those gaining vocational qualifications in 2002




based qualifications; the candidates must fulfil speci-fied requirements, drawn up in co-operation with ex-perts from the world of work.

The qualifications are composed of modules. The re-quirements for a competence-based qualification are the same in level as a corresponding school-based vo-cational qualification. Further qualifications provide knowledge and skills corresponding to a skilled work-er’s competence, while specialist qualifications require in-depth vocational competence.

Even though it is possible to take competence tests without any preparatory training, most students par-ticipate in some training before the test. The need for preparatory training and its content and scope are de-termined in an individual learning plan drawn up for each student. The plan is based on an assessment of the student’s prior learning in relation to the qualifica-tion requirements to ensure that the mature students do not need to study topics that they already master.

The number of competence-based qualifications has been growing rapidly. At present, there are over 100,000 students in preparatory training for compe-tence-based qualifications, including apprenticeship training. There is also other vocational training for upgrading and updating skills needed in work, which does not lead to any specific qualifications.

The network of vocational education providers

The network of VET providers is composed of multi-field institutions, which are often regional. They pro-vide both initial and further vocational training and serve small and medium-sized enterprises and entre-preneurs who want to upgrade their knowledge and competencies.

VET is either provided by vocational institutes, which is mostly contact teaching and on-the-job learning, or as apprenticeship training. Vocational institutes co-operate closely with business and industry.

At present, there are about 220 VET providers. The provider network is being developed further with a view to sufficiently large and diversified, or otherwise strong, institutions capable of developing working life and responding to its skills needs.

Practical arrangements are decided by VET providers, whose operations are governed by the objectives set

in legislation and in the national core curricula. VET may be provided by local authorities, municipal train-ing consortia, registered associations, foundations, the government or state enterprises.

Providers of qualification-oriented VET are accred-ited by the Ministry of Education. The authorisation to provide VET defines the fields provided and the number of students entitling to statutory government transfers. Providers decide independently on the use of funds granted to them and on the type of educa-tional institution and units they run.

The impact of VET is measured by indicators such as placement of qualification-holders in employment and in further studies and the graduation rate. Part of funding is allocated on the basis of performance, which is measured by these indicators. One of the tools used to develop quality assurance is the Com-mon Quality Assurance Framework (CQAF), devel-oped within the Copenhagen process.

7

30 Education and Science Petri Väänänen


The mission of polytechnics is to provide higher edu-

cation based on the requirements of working life and

its development as well as on research and artistic

premises and to prepare students for professional ex-

pert assignments. In addition, polytechnics carry out

applied research and development work that supports

the world of work and regional development and takes

the economic structure of the region into account.

The polytechnic system was set up during the 1990s, when the level of education in former vocational and higher post-secondary colleges was raised and they were compiled into larger entities. The piloting of polytechnics got underway in 1991–1992 and the first polytechnics started to operate on a permanent basis in 1996. Polytechnics are multidisciplinary and regional higher education institutions focusing on the world of work and regional development.

There are currently (in 2006) 29 polytechnics, seven of which are maintained by local authorities and 11 by joint local authorities and private organisations. In ad-

dition, there are Åland University of Applied Sciences, operating in the autonomous Åland Islands, and the Police College of Finland, which is subordinate to the Ministry of the Interior.

In their objectives, polytechnics emphasise the devel-opment of learning processes, quality enhancement, innovation and internationalisation.

The Finnish higher education system consists of two complementary sectors: polytechnics and universities. The

mission of polytechnics is to train experts to serve the world of work and carry out R&D in support of educa-

tion and regional development in particular. The mission of universities is to conduct scientific research and

provide instruction and postgraduate education based on it.

The objective of higher education policy is to meet society’s educational needs and produce a sufficient number

of highly educated experts to meet the needs of business and industry and other social sectors. In a society

increasingly based on knowledge, universities and polytechnics have an important role in promoting economic

growth, welfare and new employment. In international terms, Finland makes significant input into higher

education.

HIGHER EDUCATION

8POLYTECHNICS


Source: AMKOTA

Polytechnic fields of education by number of polytechnic Bachelor’s degrees in 2005

No. of degrees Humanities and Education 272

Culture 1 748

Social Sciences, Business and Administration 4 771

Natural Sciences 1 102

Technology, Communications and Transport 5 588

Natural Resources and the Environment 672

Social Services, Health and Sports 5 558

Tourism, Catering and Domestic Service 1 432

Total 21 143

Polytechnic Bachelor’s and Master’s degrees: entrants, degrees awarded and student numbers

Polytechnic Bachelor’s degree 2002 2003 2004 2005

Entrants 31 420 32 840 32 690 33 260

Degrees 20 480 20 500 20 670

Number of students 126 360 129 220 130 910 131 250 -of whom foreign students 3 130 3 480 3 800 4 320

Polytechnic Master’s 2002 2003 2004 2005 Entrants 160 310 240 630 Number of students 160 450 610 1050

Studies and degrees

Studies leading to polytechnic degrees are organised as degree programmes comprising core and professional studies, elective studies, work placement and a final project.

Holders of the Bachelor-level polytechnic degree, who has additionally gained work experience, can upgrade their degree in a polytechnic Master’s programme. The polytechnic Master’s provides the same qualifica-tions as a university Master’s degree. In addition to a polytechnic degree, admission to polytechnic Master’s programmes requires three years of work experience.

The polytechnic degrees are between 210 and 240 ECTS credits (3.5 to 4.5 years), and the polytechnic Master’s from 60 to 90 ECTS credits (1.5 to 2 years) on top of it.

Each student has an individual study plan (ISP), which facilitates the monitoring of progress in studies.

Source: AMKOTA


8

Placement in 2003 of those gaining polytechnic Bachelor’s degrees in 2002


National joint application

All students apply to polytechnics through a national polytechnic application system. Polytechnics them-selves decide on the selection criteria, the arrangement of entrance examinations and student admissions. Al-most 90% of applications are submitted in electronic format via the internet.

The entry requirement to education leading to a poly-technic degree is a secondary school-leaving certificate or the matriculation examination, a vocational quali-fication or equivalent studies abroad.

Steering of polytechnics

Polytechnics are municipal or private institutions and their operating licences are granted by the Govern-ment. Polytechnics have autonomy in their internal affairs.

The Ministry of Education, the polytechnics and their maintaining organisations conclude three-year performance agreements, in which they agree on ob-jectives and the monitoring of their achievement and on major national development projects. Intakes and project funding are determined on an annual basis.Central and local governments co-finance the opera-tions of polytechnics. Government allocates resources as core funding, which is based on unit costs per stu-dent, project funding and performance-based fund-ing. In addition to this, polytechnics have external sources of funding.

Polytechnics also provide adult education and open polytechnic education geared to maintain and develop working life skills. The teaching and other arrange-ments in polytechnic adult education enable students to pursue degree studies alongside work. Adult stu-dents account for about 16% of all polytechnic stu-dents.


UNIVERSITIESUnder the Universities Act, universities must promote

free research and scientific and artistic education, pro-

vide higher education based on research, and educate

students to serve their country and humanity. In car-

rying out this mission, universities must interact with

the surrounding society and strengthen the impact of

research findings and artistic activities on society.

All the 20 universities in Finland are state-owned. They comprise ten multidisciplinary universities, three schools of economics and business administra-tion, three universities of technology, and four art academies. In addition, there is a National Defence College operating within the Ministry of Defence sec-tor. Universities receive most of their funding from the state budget. Their operations are built on the freedom of education and science and university autonomy.

University degrees

Universities confer Bachelor’s and Master’s degrees, and postgraduate licentiate and doctoral degrees. In the new degree system introduced in 2005, students first study for the lower Bachelor’s degree and then for the higher Master’s degree.

The scope of studies is determined in ECTS credits. One year of full-time study is equivalent to 60 ECTS credits. The lower degree is 180 credits and its nor-mative duration is three years of full-time study. The higher university degree is 120 ECTS credits, which is equivalent to two years of full-time study on top of the Bachelor’s. In some fields, such as Medicine, the degrees are more extensive and take longer to com-plete.

Each student has an individual study plan, which fa-cilitates the monitoring of progress.

University postgraduate education aims at a doctoral degree, which usually takes four years of full-time study. In addition to the required studies, doctoral

students prepare a dissertation, which they defend in public. In Finland it is possible to study for an inter-mediate postgraduate degree called the licentiate be-fore the doctoral degree.

Number of university students and degrees

2002 2003 2004 2005University Bachelor’s and Master’s degrees New students 21 876 20 936 19 931 20 084Degrees awarded 14 690 15 290 15 310 15 832Number of students 144 310 147 090 149 170 151 824- of whom foreign students 2 840 2 890 3 050 3 250

(estimate)

Doctoral degrees Degrees awarded 1 220 1 260 1 400 1 420Number of postgraduate students 21 940 22 960 22 110 22 200- of whom foreign students 1 310 1 490 1 580 1 690

(estimate)

Student selection

Universities select their students independently by means of different types of entrance examinations. An admitted student may only accept one student place in degree education in a given academic year. With a view to simplifying student selection procedures, a joint universities application system will be adopted in the 2008/2009 academic year.

Steering of universities

In addition to policy defined in the Government Pro-gramme and the Development Plan for Education and Research, university activities are governed by three-year performance agreements signed with the Ministry of Education based on performance negotia-tions. The agreements specify the objectives of uni-versity operations, such as degree targets, resources, monitoring and evaluation of target achievement, and development targets. During the annual performance negotiations, the universities receive feedback, first orally and later in writing, on their previous year’s performance and on development needs.

8 Source: KOTA


Financing of universities

Universities receive their core funding from the gov-ernment. The operational appropriations are largely determined on the basis of degree targets and the number of degrees awarded. The resources allocated by the Ministry of Education consist of core fund-ing, project funding and performance-based funding. Direct government funding covers about 64% of uni-versity budgets.

Core funding is calculated by means of a core funding formula, which is based on criteria relating to educa-tion and research and to interaction with society. The cost coefficients used in the formula allow for differ-ences between various fields of study. The Ministry of Education grants discretionary project funding for major development needs. Performance-based funds are used to reward universities for the quality, effec-tiveness and efficiency of their operations.

Basic research in the Ministry of Education sector is largely financed by the Academy of Finland. The Academy is also responsible for the evaluation of re-search. Universities receive substantial external fund-ing from various external sources for research projects and other purposes. Universities also have income from commercial services, such as continuing profes-sional education.

Lifelong learning at university University studies and degrees have been developed to enable people participate flexibly in education accord-ing to their life situations. Many fields offer Master’s programmes and graduate-entry education tailored to different working life needs.

In addition to degree education, universities offer open university education, continuing professional education, and adult education funded by the labour administration.

Degrees conferred by universities by field of study in 2005 Master’s % of Doctoral % of degree women degrees women Theology 208 61 25 32 Humanities 1 704 80 113 55 Art and design 219 63 12 75 Music 133 61 11 45 Theatre and Dance 82 57 2 100 Education 1 583 83 83 69 Sport Sciences 91 49 5 40 Social Sciences 1 253 74 119 50 Psychology 228 87 19 89 Health Sciences 336 96 40 85 Law 414 54 15 40 Economics and Business Administration 1 734 55 89 46 Natural Sciences 1 558 53 272 44 Agriculture and Forestry 247 61 39 44 Engineering and Architecture 2 450 25 277 25 Medicine 460 70 248 59 Dentistry 54 67 20 75 Veterinary Medicine 48 92 11 73 Pharmacy 94 80 20 60 Fine Arts 24 75 2 0

Total 12 920 60 1 422 49 Source: KOTA

Placement in 2003 of those gaining higher university (Master’s) degrees in 2002



ADULT EDUCATION AND TRAINING

Pirjo Hammarberg, Noste


Adult education policy is designed to provide diverse

study opportunities for the adult population. Fin-

land offers excellent conditions for lifelong learning.

Adult education and training is available at all levels

of education and is geared to respond to adults’

diverse educational needs, notably self-development,

the upgrading of qualifications and the updating of

competencies.

The Government has set an aim to raise the participa-

tion rate in adult education and training to 60% by

2008 and to narrow the qualifications gap between

different age groups. The ageing of population and

rapid changes in working life heighten the importance

of adult education and training. A key consideration

in a large and sparsely populated country is regional

accessibility of education. Adult education and train-

ing is an important tool for promoting social coher-

ence, equality and active citizenship.

In recent years, adult education policy has focused on

raising the level of education among untrained adults.

The aim is to enable gainfully employed adults be-

tween 30 and 59 years of age to acquire a vocational

qualification or ITC skills required at work.

Finnish educational institutions offer a wide range of adult education and training. It is an important part of their operations. All educational institutions except comprehensive schools and upper secondary schools intended for young people provide adult education, which means that it is available at all levels of the edu-cation system. In addition, adults can study a great variety of subjects in liberal adult education.

With the exception of further and specialist vocational qualifications, adult education and training leading to qualifications is provided free of charge. The govern-ment also subsidises other forms of education and training intended for adults in order to keep student fees at a reasonable level.

Additional and continuing vocational training

Rapid changes and growing skill requirements in the labour market increase the significance of additional vocational training. The stated aim to prolong work careers and promote occupational mobility entails a wide range of opportunities for adults to maintain and develop their competencies. Vocational skills can be updated in further and continuing vocational training.

In Finland, virtually all vocational and higher educa-tion institutions offer further and continuing training, from short-term courses to extensive and demanding extension programmes.

Qualifications in adult education and training

Adults can study for a comprehensive school-leaving certificate and the matriculation examination and parts of them in flexible arrangements geared to em-ployed people.

The VET sector offers competence-based qualifica-tions of three different levels: vocational qualifications, further qualifications and specialist qualifications. For a vocational qualification, the mature student demon-strates command of the knowledge and skills required for a given occupation; for a further qualification vo-cational skills required of a skilled worker; and for a specialist qualification knowledge and skills needed for the most demanding work assignments in the field.

There are no formal training requirements for com-petence-based qualifications. An adult sitting a com-petence test can rely on knowledge and skills acquired in former training, in working life and in leisure pur-suits, but most candidates participate in some prepar-atory training. The competence-based qualifications are supervised by qualification committees represent-ing employers, employees and teachers. Competence-based vocational qualifications are equivalent to corre-sponding vocational qualifications intended for young people.

In polytechnics, adults study for the same polytechnic degrees as young people. The difference is that the arrangements in adult education are flexible and allow adults to study alongside work. As the entry to poly-technic Master’s programmes requires at least three years of work experience after the polytechnic degree, they are typically adult education. Universities do not

9


Adult education and training and participant numbers (2004) Qualification-oriented Other education and training education and training and parts of qualificationsGeneral upper secondary education General upper secondary Upper secondary school education for adults subject studies 12 900 13 800

Vocational education and training Preparatory training for competence- Additional vocational training not based qualifications, incl. apprenticeship leading to a qualification training 42 500 Preparatory training for further and specialist qualifications, incl. apprenticeship training 66 200

Polytechnics Adult education leading to polytechnic Open polytechnic degrees 10 700 21 500 Polytechnic Master’s Polytechnic specialisation studies 600 8 100

Universities Separate Master’s programmes Open university 82 300 University specialisation studies 4 300 Continuing professional education 83 300

have specific degree programmes for adults; instead, working-age adults study with other students.

It is also possible for adults to study parts of qualifica-tions and degrees, which they may later include in a qualification. Adults may study different general up-per secondary courses and modules included in com-petence-based qualifications.

There is an extensive provision of open studies which conform to the requirements of university and poly-technic degrees. They are intended to facilitate access to higher education studies. Open university educa-tion may also be provided by other educational organ-isations besides universities, but the education always follows university syllabi and is supervised by univer-sities. An open university student who fulfils certain criteria may be admitted to study for a degree.

Liberal adult education

Liberal adult education supports personal develop-ment and provides knowledge and skills adults need as active members of their community. In Finland, liberal adult education means the provision of a net-work of institutions which has evolved over a long his-torical period. The aims and contents of liberal adult education are not set externally or from top down but determined by the institutions and the organisations that run them. The maintaining organisation may represent a given ideological or religious outlook or operate on the basis of local and regional educational needs.

The range of liberal adult education is wide. Even though the primary aim is personal development, many courses also provide knowledge and skills the students need in working life and as members of work communities.


The providers of liberal adult education include adult education centres, folk high schools, study centres, sports institutes and summer universities. These in-stitutions may also be authorised by the Ministry of Education to provide general upper secondary educa-tion or VET.

In the coming years, the focus in liberal adult edu-cation will be on information society studies, immi-grants’ language instruction and cultural education, and studies promoting active citizenship. Liberal adult education institutions are also important providers of open university education.

Students in liberal adult education 2002 2003 2004Adult education centres 1 036 840 1 034 610 1 059 010Folk high schools 134 490 138 900 147 780Study centres 309 900 299 360 338 550Summer universities 73 450 71 450 75 370Sports institutes 84 900 87 280 79 770

Total 1 639 580 1 631 600 1 700 480Source: Statistics Finland

Counselling and guidance for adult students

One of the priorities in recent adult education policy has been counselling and guidance. Effective counsel-ling and guidance services are a prerequisite for raising the participation rates in adult education and train-ing. Specific development targets are flexible transi-tion from one stage of education to the next, recogni-tion of prior learning, and electronic counselling and information services.

Financing of adult education and training

Qualification-oriented adult education and training is co-funded by the government and the local authori-ties; the exception is degree education at universities, which is totally financed by the government. Training leading to further and specialist qualifications is most-ly publicly funded but may charge reasonable fees.

About half of liberal adult education costs are covered by the government and the rest mostly comes from student fees and from the maintaining organisations.

The purpose of state funding is to guarantee the larg-est possible provision without burdening the students with high fees. About 12% of the Ministry of Educa-tion main class in the state budget is allocated to adult education and training. Almost half of this funding is channelled to vocational adult training and one fifth to liberal adult education.

Employers purchase in-service training for their staff from adult education institutions and firms. The la-bour administration purchases a great deal of different training for unemployed people and for those at risk of unemployment.

Participation in adult education and training, people aged 18–64 (2000)

Age N % of the age group18–64 1 754 057 5425–64 1 528 644 5550–64 406 033 42

Gender Male 798 731 49Female 955 326 59 Level of education Primary or lower secondary education 340 450 37Upper secondary education 725 994 51Tertiary education 687 614 76


9


RESEARCH

Karoliina Paatos


Finland invests in research and development. Educa-

tion, science and technology policies have been de-

veloped on a long term with a view to strengthening

the national innovation system. The aim is to pro-

mote knowledge and to raise the level and visibility of

Finnish research. Finland supports the international

success of Finnish research by funding high-quality

research and promoting the establishment and devel-

opment of creative research environments. Public re-

search funding is used to strengthen the competence

base underpinning sustainable economic growth and

welfare.

The objective of science policy is to promote science,

ensure positive development of the quality, effective-

ness and internationalisation of research and post-

graduate education, and to bring about an efficient

and balanced research system. The development of

scientific research is based on the Development Plan

for Education and Research and policy formulated by

the Science and Technology Policy Council of Fin-

land.

The principles and legislation governing science, technology and innovation policies are decided by Parliament. The Government and its ministries are responsible for planning and implementing science and technology policy. The Ministry of Education’s remit includes matters concerning education and sci-ence policy, whereas the Ministry of Trade and Indus-try is responsible for matters relating to industrial and technology policies.

The Science and Technology Policy Council plays a key role in promoting research, technology and sci-entific education. It develops and co-ordinates science and technology policy and prepares relevant plans and proposals. The Council is composed of the Prime Minister, who is the chair; the Minister of Education and Science and the Minister of Trade and Industry, who are vice chairs; the Minister of Finance and up to four other ministers; and representatives of funding organisations, universities, research institutes, busi-ness and industry, and employees.

Organisations in the research system

* Finnish National Fund for Research and Development

Research investments

In 2004, Finland invested 5,300 million euros in R&D activities. The total R&D expenditure repre-sented 3.5% of the gross domestic product, which places Finland among the OECD top.

R&D is financed by the private sector (68%), the public sector (29%) and from foreign sources (3%). The electrical and electronics industries provide about half of overall corporate R&D investments.

Finland and Sweden are the only EU member states whose R&D investments already exceed three per cent of the GDP, which is the jointly agreed EU objective to be achieved by 2010. Finland and Sweden have also reached the target to raise the share of private invest-ment to two thirds of the overall R&D activities.

Finnish scientific research has been productive, cur-rently representing around 0.6% of global R&D ac-tivities. Publications and articles by Finnish researchers represent one per cent of all scientific publication and the citation rate is about 1.15% of all references.

During the past ten years, the number of R&D per-sonnel in Finland has grown from 40,000 to nearly 80,000. This makes two per cent of the entire labour force, which is the highest proportion in the OECD. The number of doctoral degrees has doubled over the past decade.

10

*


Quality and internationalisation

Finland enhances the quality and impact of research through international co-operation. Measures are tak-en to promote international co-operation all levels of the research system.

Finland participates in the activities of major interna-tional bodies and organisations involved in research co-operation and is an active player in European co-operation. Finnish researchers and research organisa-tions have fared well in the European Union’s Frame-work Programmes for Research and Technological Development. Finland contributes to the develop-ment of the European Research Area by actively net-working national research programmes.

One means used to improve the quality of research is competitive public funding, which is mostly chan-nelled through the Academy of Finland and the Finn-ish Funding Agency for Technology and Innovation (Tekes). These organisations allocate more than 40% of public research funding.

In the Ministry of Education sector, the Academy of Finland is a major source of funding for scientific research. Its role is to raise the quality and visibility of Finnish scientific research through competitive research funding. Most of the Academy funding is channelled to university research. The Academy finances research projects and programmes, Centres of

Excellence in Research, researcher posts, postgraduate education, and international co-operation. The Acad-emy has four Research Councils, which decide on re-search funding in their respective fields.

Polytechnic and university research

Polytechnics mostly conduct R&D which is geared to the needs of business and industry and usually linked to the structure and development of the regional economy. Current development targets are to pro-mote interaction between education and R&D, staff development and networking between polytechnics, universities and research institutes.

Polytechnic R&D has expanded in recent years. The most important source of funding for polytechnic R&D is the EU Structural Funds.

The two main missions for universities are scientific research and research-based higher education, includ-ing postgraduate education. Doctoral degrees are only awarded by universities.

About half of university research funding comes directly from the state budget and is intended to safe-guard infrastructure and other basic prerequisites for research. Universities allocate these resources inde-pendently. The other half of university research fund-ing is external financing, which is mainly competitive

R&D personnel by sector in 2005 R&D investment in some OECD countries (% of GDP)

10

Source: OECD



public research funding. The main sources of external funding are the Academy of Finland and Tekes, while EU sources account for about 9%. The total univer-sity research expenditure was about 900 million euros in 2005.

Graduate schools

Postgraduate education provided by universities was enhanced in 1995 with the establishment of a gradu-ate school system. Its foremost aims are to assure the quality of postgraduate education, shorten the time spent on writing doctoral dissertations and increase international co-operation.

The mission of graduate schools is to provide system-atic instruction and guidance for doctoral students, who study full-time on a salary, aiming to finish their doctoral dissertations within four years. At the be-ginning of 2006, there were a total of 124 graduate schools with almost 1,500 places available for post-graduate students. One third of graduate school stu-dents complete their doctorates before reaching the age of 30.

Equality in the research sector

Finland has actively promoted equality in all sectors of society. Women have been in the majority among university students since the 1970s. The number of female doctors has been increasing steadily. During the past ten years, the number of women with doc-toral degrees has more than tripled.

Finland is one of the pioneer countries in the develop-ment of women’s research careers within the European Union. The number of women working in the R&D sector has risen steadily. In 2003, women accounted for about one third of all research personnel and about half of university research staff. The proportion of fe-male professors in Finland is among the highest in the European Union.

Library and information services in support of research

The Ministry of Education promotes support serv-ices in scientific research by funding the development and maintenance of research equipment, information

networks, scientific computing, and the operations of scientific libraries. The Centre for Scientific Comput-ing (CSC) is a state-owned IT centre for science and administered by the Ministry of Education.

The scientific libraries, i.e. university libraries, poly-technic libraries and specialist libraries, support high-er education, studies and research.

R&D funding in the 2005 State Budget

Share of total research R&D funding funding € million % Universities 417 26Polytechnics 6 0.3Academy of Finland 224 14Tekes 448 28State research institutes 259 16University central hospitals 38 2Other research funding 202 13

Total 1 594 100


MINISTRY OF EDUCATION Communications and Public RelationsPO Box 29, 00023 Government, Finland

Ministry of Education publications 2006:15ISBN:952-485-126-1 (prints)ISBN: 952-485-127-X (PDF)ISSN:1458-8110

Layout: Kemiön tehdas OyPhotos: Photography students at Lahti University of Applied Sciences (except pp. 30 and 36)Translation: IntertextPrint: Helsinki University Press

7

La Visión Prospectiva

Áreas de enfoque que delinean las futuras prioridades de I+D e Innovación en Finlandia del 2008 – 2015

Referencia Ms Pirjo Kyläkoski, Foresight Manager

Tekes

http://www.tekes.fi/eng/tekes/focusareas2008.htm

New Knowledge and Competence forTechnology and Innovation PoliciesProACT Research Programme 2001–2005

Final Report

Edited by Pekka Pesonen

Technology Programme Report 6/2006Helsinki 2005

Summary

ProACT (Research Programme for AdvancedTechnology Policy) was an innovation and tech-nology policy research programme jointly fi-nanced by Tekes, the Finnish Funding Agency forTechnology and Innovation and the Ministry ofTrade and Industry, and implemented between2001 and 2005.

The following targets were set for the pro-gramme:■ to generate information and increase under-

standing of the impacts of technology, researchand technology policy on society and on busi-ness and conversely of the impacts of societyon technology development;

■ to use the results of the programme efficientlyin the development of technology manage-ment, the research community, business andbusiness policy;

■ to promote researcher training in the field.

It was further hoped that the research would focuson significant changes and phenomena such aschanges and development needs in the innovationfunding system, the renewal of innovation pro-cesses in companies, the need to improve the re-search system in the context of further internation-alisation, and the challenges for productivity andtechnological competitiveness in the new economy.

ProACT brought together nearly everyone in-volved in innovation research and technology andinnovation policy in Finland. It comprised a totalof 44 research projects, with combined fundingof EUR 11 million, and involved 158 innovationresearchers at universities, research institutionsand consultancy companies, and 55 informationusers at ministries and other bodies using the re-sults of the programme.

In the course of running the programme, it cameto be structured around five interactive fora. Theresearch projects were grouped around fivethemes within which dialogue on the challenges

and opportunities facing technology and innova-tion policy took place between researchers andusers. Indeed, one of the principal outcomes ofthe programme was the emergence of a new kindof interaction between researchers and the tech-nology administration. The programme was ex-tremely broad in terms of themes and sectors cov-ered, and thus it was important and effective inmarshalling research efforts and in discoveringpotential for synergy.

The Globalisation and innovation theme coveredFinland’s position in the global innovation net-work and the progress of innovation internation-alisation and its effects. The studies identifiedchallenges for Finland’s innovation policy such asthe importance of technological expertise in multi-national companies’ location choices for innova-tion functions, the new challenges for customer-ori-ented innovation in innovation management, theneed to develop business-to-business services, andthe desirability of shifting academic research to-wards the more international and innovative.

The Innovation policy theme consisted of pro-jects studying the challenges posed for renewal ofinnovation policy by history, power, responsibil-ity, structures, the economy and society. The es-sential nature of Finland’s innovation policy is il-lustrated well by the core term ‘innovation sys-tem’, which emphasises that it is networked andpermeates the whole of society. This is an experi-mental concept, and has changed and been re-vised over time, but these studies show that it haslaid a framework for operations and a vision ofwhat it forms part of. The ideal new-style innova-tion policy was described as ‘comprehensive’.Such an innovation policy would take into ac-count the needs of both the economy and society;link policy sectors horizontally; involve citizensand other actors; and take into account the power,rights and responsibilities of various parties in thedevelopment of technology and innovations, onthe one hand, and in the acceptability of technol-

ogy, on the other. Furthermore, research ground-ed in the history of IT shows how importantlong-term investments tolerant of failures are inthe introduction of new expertise.

The projects under the Emergence of innovationstheme investigated the environment for the emer-gence of innovations from a number of view-points including the significance of policy in theemergence of ecological innovations; the effectof social capital, networks and expertise capital incompanies on innovation activeness and growth;the effect of the operating environment and birthof companies on their innovations; the changingshapes of innovation; and the regional aspect ofinnovation. The studies show, for example, thatFinland can be divided into a western area, whichfocuses on entrepreneurship and innovation, aneastern area, which focuses on R&D andsub-contracting, and a southern area, which iswhere the expertise capital is concentrated.

The From innovation to business theme consistedof projects studying the impact of innovation onbusiness development at a sectoral level and inthe form of special issues in corporate innovationprocesses. Major company-level issues includedprotection of expertise, partnerships and customer-expert relations in innovation development, inno-vation capacity in individual enterprises, and up-dating of expertise. The impact of innovation,technology and R&D on sectoral developmentwas studied both as a structural issue and, for ex-ample, from the viewpoint of development of theservice sector.

The common thread for the projects under theNew modes of co-operation theme was the evolu-tion of co-operation in innovation environmentsand innovation processes. Corporate innovationnetworks and their management constituted oneimportant topic, but studies were also conductedon the evolution of co-operation at the level of re-gional innovation systems. Innovation environ-ments were also examined from the point of viewof citizens and businesses, and other projects in-vestigated the relationship between technologyand everyday life and the importance of the neweconomy and technology for women’s entrepre-neurship.

The results of the programme largely constitutescientific articles and theses. ProACT projectsyielded a total of 13 doctoral dissertations, 66 sci-entific articles and over 300 other publications.Through long-term research, the capability forresponding to urgent demands for informationhas been improved, thus enhancing the quality ofthe information available to support deci-sion-making. ProACT also played a significantrole in the training of innovation experts. Thir-teen researchers completed a doctoral disserta-tion under the auspices of the programme, and afurther dozen will be completing theirs in 2006–2008.

The programme generated a new kind of interac-tion between producers of information (research-ers) and users of information. Cross-sectoral ap-proaches (between sociology, economics, and in-dustrial engineering and management) helpedgenerate co-operation between the scienceswhich was partly organised into research insti-tutes that were set up in the course of the project(HIST and TASTI). For researchers, the pro-gramme provided opportunities for long-term re-search and potential for making use of the net-works generated by the programme. New, re-search-based information was generated to sup-port decision-making in technology and innova-tion policy.

An interim evaluation of the programme was con-ducted by Bengt-Åke Lundvall, Ulrike Felt andEsko-Olavi Seppälä in 2003. The final evaluationof the programme was being planned at the Min-istry of Trade and Industry at the time of this writ-ing. The concluding seminar in the programmewill take the form of an Innovation Pressure con-ference in March 2006, with some 150 foreign in-novation researchers participating in addition tothe Finnish delegates.

Alongside the final report on the programme, an-other report has been prepared to analyse andsynthesise the material generated in the pro-gramme projects. This report was drawn up byPetri Honkanen, Jyrki Ali-Yrkkö, Sampsa Hyy-salo and Johanna Uotinen, and has been pub-lished in the publication series of the Ministry ofTrade and Industry.

Contents

Foreword

Summary

1 The ProACT research programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Basis and objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Shaping the programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 Special features of ProACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.4 Organisation of the programme . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.5 Meetings and seminars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.6 International co-operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.7 Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.8 ProACT providing graduate training and expert coaching . . . . . . . . . 61.9 Annual evaluation and interim evaluation. . . . . . . . . . . . . . . . . . . . . 71.10 The projects and their results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2 Globalisation and innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92.1 The Regionalisation and Internationalisation of Innovation

Services – RISE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.2 Multinational Enterprises and the Finnish Innovation System

– Mefis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122.3 Finland’s Position in the Globalisation of Innovative Activities

– FINGIA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.4 Challenges and Opportunities for the Utilisation of Research

Results – Tuhti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162.5 The International Dimension of the Finnish Science and

Technology System – Tutkain . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182.6 Diffusion of Technological Knowledge within and between

Firms and across National Borders . . . . . . . . . . . . . . . . . . . . . . . . 212.7. Internationalisation of R&D – Implications for Science and

Technology Policy – STIRD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

3 Innovation policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273.1 Information Technology in Finland after World War II:

the Actors and their Experiences – TIESU . . . . . . . . . . . . . . . . . . . 283.2 Decision-making Process Models in Technology and

their Consequences for Democracy – INNOPOL . . . . . . . . . . . . . . 303.3 Communicative Order in the Age of Information Technology. . . . . . 333.4 Towards a Multipurpose Technology Policy – MONI and

the Challenge of an Integrated Innovation Policy:the Unsolved Problem of Employment – INTEGRO . . . . . . . . . . . . 35

3.5 Rights and Responsibilities in Biotechnology – OIVA . . . . . . . . . . . 393.6 Intellectual Property Rights Issues in the Context of

Innovation – IPRI and Policies for Research and Innovationin the Move towards the European Research Area – PRIME . . . . . . 42

3.7 Acceptability and Interaction as a Challenge for TechnologyProjects – Comparison between Biotechnology andNuclear Technology – BiNTech . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

3.8 Digital Hubris - On the Mental and Moral Dimensions ofthe Computerised Network Society. . . . . . . . . . . . . . . . . . . . . . . . 46

4 The emergence of innovations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494.1 Increasing Eco-Efficiency – an Analysis of Factors Generating

Innovations – EcoInno . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 504.2 Social Capital and Innovations – SPINNO . . . . . . . . . . . . . . . . . . . 524.3 Innovation Processes and Innovation Networks of Firms

in Rural Areas and Small Centres – INNO . . . . . . . . . . . . . . . . . . . 554.4 The Relationship between Firm Formation, Growth and

Innovation Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574.5 Dynamic Patterns of Innovative Activities among Finnish Firms . . . 594.6 The Impact of Publicly Funded R&D on Innovation Output and

Innovation Outcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624.7 Human Capital as the Base for Innovativeness and Growth . . . . . . 634.8 Supporting Regional Competitiveness and Innovations . . . . . . . . . 674.9 R&D and Changes in Input-output Structures . . . . . . . . . . . . . . . . 71

5 From innovation to business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735.1 Value Creation and Renewal of the Knowledge Base of

the Corporation. Foresight, Renewal, Leverage andShaping – VCR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

5.2 Informal Ways to Protect Intellectual Property . . . . . . . . . . . . . . . . 765.3 IP Protection and Management in KIBS and their Collaborative

Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785.4 Public-Private Partnership in Market Construction – PPP . . . . . . . . 815.5 Innovative Partnership in Service Development – Juureva . . . . . . . 835.6 V2C - Building Business from Venture to Capital . . . . . . . . . . . . . . 855.7 Assessing and Developing the Innovation Capability of

Finnish SMEs – InnoPro. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875.8 Knowledge-intensive Business Service Provision:

Public-sector Influence on KISA-Client Co-production – JOINT. . . . 895.9 Biotechnology as Part of the National Innovation System. . . . . . . . 915.10 Sustainable Biotechnology Development. . . . . . . . . . . . . . . . . . . . 945.11 Processes and Boundary Conditions for Embedded Foresight

in Innovation Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

6 New modes of co-operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996.1 Technology Policy, Citizenship and Everyday Life – Tekar . . . . . . . 1006.2 A Rhetoric of Innovation in the Case of Welfare Cluster

Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1026.3 Producer-user Collaboration and New Forms of Innovation

Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1046.4 Technologies, Strategies and Women’s Entrepreneurship

in the New Economy – Nates . . . . . . . . . . . . . . . . . . . . . . . . . . . 1066.5 Managing Transepistemic Innovation Processes – ManTra . . . . . . 1096.6 The Networked Business Concept of the Actor-oriented

Innovation Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1126.7 Innovation System in Action: an Analysis of Techno-economic

Development Projects in the Oulu Region – INTO . . . . . . . . . . . . 115

Appendix1 Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Tekes Technology Programme Reports in English. . . . . . . . . . . . . . . . . 138

2 Globalisation and innovation

Globalisation is one of the biggest national challenges. In today’s world both researchand development and businesses are already global to a high degree. ProACT researchon the internationalisation of the Finnish innovation system focuses on its developmentand implications for Finnish innovation policy. Internationalisation is directed both out-ward, by building networks with international centres of expertise and firms, and inwardby attracting foreign experts and investments to Finland.

9

Project Organisation Duration Volume, EUR Man-years

1. The Regionalisation andInternationalisation ofInnovation Services – RISE

University of Tampere 2004–2005 200 000 4,6

2. Multinational Enterprises andthe Finnish Innovation System– Mefis

Etlatieto Oy 2002–2003 453 000 5,4

3. Finland’s Position in the Globalisationof Innovative Activities – FINGIA

Etlatieto Oy 2004–2005 400 000 4,6

4. Challenges and Opportunities for theUtilisation of Research Results – Tuhti

VTT, Technical ResearchCentre of Finland

2003–2005 175 000 1,2

5. The International Dimension ofthe Finnish Science and TechnologySystem – Tutkain

University of Tampere 2002–2005 333 000 7,2

6. Diffusion of Technological Knowledgewithin and between Firms and acrossNational Borders – Diffusion

The Research Institute ofthe Finnish Economy (ETLA)

2004–2005 238 000 2,2

7. Internationalisation of R&D – Implicationsfor Science and Technology Policy– STIRD

Gaia Group Oy 2004–2005 170 000 1,5

2.1 The Regionalisation andInternationalisation ofInnovation Services – RISE

University of Tampere, Research Group for Science,Technology and Innovation Studies (TASTI) andWork Research Centre, Research Institute forSocial Sciences

Project manager Mr. Mika Kautonen; Research team:Ms. Marja Hyypiä, Ms. Katariina Kovanen, Mr. MikaelAndolin and Ms. Riina Niemi.

Co-operation partners: SC-Research (Dr. Jari Kuusisto,Ms. Soile Kotala and Ms.Kirsi Höglund) and Professia Oy(Dr. Kari Kankaala).

Objectives

The aim of the research project was:■ to produce research information on the inter-

nationalisation of chosen KIBS (knowl-edge-intensive business services) sub-sectorsinternationalisation in Finland, including theinternationalisation of both the Finnish KIBSand service FDI and networks in chosensub-sectors, together with development trends,scale and modes, problems and bottlenecksplus their impacts on the Finnish innovationsystem;

■ to evaluate the differences and similarities be-tween firms and sub-sectors in different re-gions of Finland; and

■ to define the implications for innovation poli-cies. The KIBS sub-sectors studied were man-agement consultancy and marketing services.

Background

Knowledge-intensive business services (KIBS)are known to play an important role in the abilityto produce, apply, disseminate and commercial-ise knowledge. For instance, it has been shownthat the growth performance of an economy is re-lated to the size of its KIBS sector. Qualitatively,in addition to their role as integrators of local in-teraction and networks of innovation (‘localbuzz’), KIBS may act as ‘global pipelines’, alsocreating connections to the national and interna-

tional elements of innovation systems. However,there are major differences in the internationali-sation of service sub-sectors, and this may havesignificant impacts on the knowledge dissemina-tion capacity of a national innovation system.

The theoretical background of the research pro-ject was multidisciplinary, its main viewpointsand background theories being related to at leastthe following themes:■ The role and significance of business services

for clients and in innovation systems■ Processes of business service internationalisa-

tion■ Agglomeration tendencies and effects of busi-

ness services■ The concept of proximity and its many dimen-

sions in producer–client relationships.

Project implementation

The research project was primarily explorative innature. It consisted of three main lines of study: 1)statistical review, 2) qualitative study of execu-tive and expert interviews, and 3) theoreticalanalysis.

The statistical review and analysis (1) were basedon international and national statistical data (Euro-stat, OECD, World Bank, United Nations, WTO,Statistics Finland, etc.). On that foundation, a sta-tistical review investigated the Finnish businessservices sector (NACEs 72, 74) in terms of its posi-tion in world trade and especially in comparisonwith other European Union member countries(EU-15 excl. Greece). This review was publishedin January 2006 as a report in the publishing se-ries of the Ministry of Trade and Industry.

The qualitative study (2) consisted of 50 inter-views with executives and experts. These repre-sented firms in target industries (advertising andmarketing, business consultancy) and some cli-ent industries (high-technology industries, de-sign-intensive industries). About half of the firmsin the sample were among the largest and mostprominent firms and business units in Finland. Inaddition, interviews were conducted at trade as-sociations, universities and public business sup-

10

port organisations such as Tekes, FinPro, EEDCand Finnvera. Using a multidimensional ap-proach, the interview themes charted executives’views on and experiences of business serviceinternationalisation. The outcomes of this studywill be published in a research report in Febru-ary–March 2006.

The theoretical analysis (3) has already resultedin publications. These are so far the following:

Hyypiä, M. & Kautonen, M. (2005). Dimensions ofProximity in Relationships between Knowl-edge-Intensive Business Service Firms and TheirClients.

Hyypiä, M. & Kautonen, M. (2005). Expertise, Prox-imity and KIBS–Client Relationships.

Two conference papers comprising a synthesis ofquantitative and qualitative research findings willbe included among other publications presentedat the ProACT Conference ‘Innovation Pressure’in March 2006. In addition, the research projectgenerated such a large amount of other usefuldata that several international articles will be pro-duced later.

Main results

1. A statistical index of the European businessservices sector’s level of internationalisationbased on the statistical analysis indicates thatthe Finnish and Portuguese sectors are thelowest among the EU-15 (excl. Greece) interms of size of the sector, international trade,and both inward and outward foreign direct in-vestments. There are many explanations forthis in Finland’s case, including the relativelylate structural change in the economy frommanufacturing to services; the slow pace ofoutsourcing among large Finnish manufactur-ing enterprises; the small size of the economy,with its limited demand for specialised ser-vices, and the strong role of public sector inproviding many business services.

2. Among other things, challenges for Finnishbusiness service internationalisation derivefrom the country’s remote location and manycultural factors such as language, the mostlysmall size of service firms, the frequent reluc-

tance among key personnel to do intensive in-ternational travelling, and the lack of capitalfor internationalisation. As such, Finnish busi-ness service firms are considered to be com-petitive yet mostly to lack any specific com-petitive advantages (especially in the sectorsstudied in the project, i.e. business consul-tancy and advertising and marketing).

3. Although key industrial firms do not seriouslylack business services in Finland as they are ina position to either produce them internally orto outsource them at home or abroad, it ishighly likely that the SME sector would bene-fit from a more vibrant national business ser-vice sector, as many interviewees stated thatgeographical proximity still matters in knowl-edge-intensive service relationships.

At present, it is too early to make any exact state-ments concerning the scientific significance ofthe research outcomes, especially as the key re-sults have not yet been published. It can be as-sessed, however, that the study has increased andwill increase our understanding of the processes,potential and constraints of business serviceinternationalisation. It will contribute to the inno-vation system approach and related approaches interms of presenting business services and interna-tionalisation as a key prospective theme on the re-search agenda.

The project also marked a beginning of the doc-toral dissertation process among the younger re-searchers involved. More formal plans for doc-toral studies are already being made, especiallyby researcher Marja Hyypiä and research assis-tant Katariina Kovanen.

Although there have been studies on knowl-edge-intensive business services from 1998 on,this research project was a pilot that substantiallyfacilitated the launch of a new stream of research(internationalisation of business services) withinthe Research Group of Science, Technology andInnovation Studies. During the project, the groupjoined the international service research networkRESER (www.reser.net), and one outcome of thisinteraction is the intention to organize a jointRESER Conference in Finland in 2007. This link

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http://www.reser.net

with a prominent international network will serveas a substantial springboard for internationalcomparative research projects on this and otherthemes.

Conclusions

The results presented above indicate consider-able policy relevance: based on a statistical analy-sis, Finland’s international comparative positionis rather weak in terms of the internationalisationof the business service sector, and although thisresult can be explained by a number of factors(produced internally in other sectors, etc.), thismay also have a considerable impact on Finlandin the future. This is because business service in-dustries are among the fastest growing interna-tionally speaking and because they have specificeffects on the competitiveness of other industries.Specific policy implications will be outlined inthe forthcoming research reports.

The results of the research project can be capital-ised both in innovation policy decision-makingand in the future research activities of the group.The two main final research reports will bemailed to the firms that participated in the inter-views, and as such, will provide the firms with in-formation and insight that they can use when for-mulating their views on the business service sec-tor’s future development and their own firms’po-sition therein. Specifically, the executive inter-views generated new insights and thinking due totheir somewhat provocative style, as many of theinterviewees considered the study to be of greatrelevance. Most of the executives among theleading firms allowed their own and their firms’name to be used in the reporting, which contrib-utes to transparency and will hopefully lead tofurther constructive debate after publication.

For a country like Finland, knowledge-intensiveservices will probably be even more important inthe future than at present, so it is crucial to knowhow to nurture and maintain a favourable milieuin which such services can emerge, grow andprogress.

2.2 Multinational Enterprisesand the Finnish InnovationSystem – Mefis

Etlatieto Oy

Project manager Mr. Pekka Ylä-Anttila; Researchteam: Mr. Jyrki Ali-Yrkkö and Mr. Mika Pajarinen.

Co-operation partners: Helsinki School ofEconomics (Prof. Raimo Lovio); VTT TechnologyStudies (Dr. Sirkku Kivisaari); Finpro (Mr. MichaelLovejoy, Mr. Jarmo Karesto and Ms. Katriina Knuuti)and TE Centre of Kuopio (Dr. Jari Jääskeläinen).

Objectives

The goal of the project was to analyse the glob-alisation of technology development by multina-tional companies. In addition, the impact of thisglobalisation was also studied. The main researchquestions were:■ In which countries are the foreign R&D units

of Finnish companies located?■ What kinds of challenges have Finnish compa-

nies faced in managing global R&D networks?■ From the viewpoint of the Finnish innovation

system, what positive and negative impacts hasglobalisation development had?

■ What kind of local impacts have foreign-owned companies had?

Background

The project was inter-disciplinary and broad inscope, and therefore drew on three major theoret-ical frameworks at the intersections of new eco-nomic geography (Krugman 1991a and 1991b),OLI-theory (Dunning 1977 and 1993) and the na-tional innovation system concept. The key ques-tion addressed in new geography theory is: whydo certain industries agglomerate? OLI-theory, inturn, explains the internationalisation of firm-specific and country-specific factors. Due to thefirm-specific nature of knowledge, it is difficultand expensive to transfer this knowledge to otherorganisations. Thus, firm-specific knowledgecan be exploited by internationalisation.

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The project was modularised to ensure the cover-age of different viewpoints and methodologies onthe role of multinational companies in the Finnishinnovation system. Further, the modularisationensured continual reporting of intermediate re-search results and also contributed to the draftingof a final report comprising a collection of the keypublications of the project. The title of the final re-port is: Ali-Yrkkö, Lovio and Ylä-Anttila (2004):Multinational Enterprises and the Finnish Inno-vation System.

The use of different methodologies was also im-portant in order to ensure triangulation duringdata gathering, interpretation and analysis, aswell as to facilitate generalisation of the results.Depending on the study, quantitative or qualita-tive methods were utilised.

Main results

1. Though Finnish firms have expanded theiroverseas R&D, Finland is still one of the majorlocations of technology development activi-ties. In general, the most commonly used entrymode has been mergers and acquisitions butspecifically Nokia R&D units in developingcountries have often been established asgreenfield operations.

2. During the past 15 years the number of for-eign-owned companies has increased. Earlier,these companies were studied mostly by ana-lysing financial statements without consider-ing the local impacts of foreign-owned enter-prises. Our case study on the city of Varkausshowed that the major motives for acquisitionswere the technical and other knowledge of thetarget companies. Further, the results suggestthat the new owners have impacted the man-agement style of the business units concernedin several ways: a) the management time scalehas contracted, b) the demands for businessperformance and reporting have grown, and c)stock market quotations have become the keyfactors dictating acquisitions, divestments andR&D activities.

3. The study focusing on the internationalisationof biotechnology and ICT firms shows thatICT and biotechnology industries differ interms of their business nature and develop-ment stage. Typically, R&D activities requireconsiderably less time in the ICT sector than inthe biotechnology sector. Further, the interna-tionalisation strategies of these industries dif-fer substantially. Within the ICT industrygroup, the major motives for internationalisa-tion are close cooperation with key customersand networking with strategically importantpartners. Among biotechnology companies,international operations focus on research andproduct development. In general, Finland isconsidered a good environment for the bio-technology business, and the smoothness ofinternational cooperation reduces the need forforeign subsidiaries.

The research results mainly have implications forthe business and policy communities. Nonethe-less, they have also been/will be presented at in-ternational conferences. Their scientific signifi-cance can be judged as follows:■ The majority of the existing literature concern-

ing foreign ownership is based on the analysisof financial statement data. However, such datadoes not allow behaviour differences betweenforeign and Finnish-owned companies to beanalysed. The case study focusing on the city ofVarkaus showed that the behaviour and man-agement style of the targets changed after theywere acquired by foreign-owned companies.

■ Only a few studies have focused on the interna-tionalisation of headquarters. Almost all exist-ing studies deal with Swedish companies. Ourstudy focusing on the internationalisation ofFinnish companies’headquarters makes an im-portant addition to the little existing literature.

Conclusions

The research results mainly have implications forthe business and policy communities.

Our headquarters study provides decision makerswith information about the location factors af-fecting headquarters. Using this knowledge,

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policymakers can analyse ways in which theycan affect the location of headquarters.

The results show that the ICT and the biotechnol-ogy industries differ substantially when it comesto the development stage, nature and modes ofinternationalisation of SMEs. Both industriesare, however, technology driven and their inter-nationalisation modes differ from the traditionalmodel. Particularly from the viewpoint of Finpro,it is essential to understand the change from tradi-tional and export-driven internationalisation tothe rapid and globally generated type of interna-tionalisation.

2.3 Finland’s Position in theGlobalisation of InnovativeActivities – FINGIA

Etlatieto Oy

Project manager Mr. Jyrki Ali-Yrkkö; Research team:Dr. Christopher Palmberg and Mr. Mika Pajarinen.

Visiting researcher Ms.Vicky Long (Royal Institute ofTechnology (KTH), Sweden)

Co-operation partner: Helsinki School of Economics(Prof. Raimo Lovio and Mr. Matti Nojonen).

Objectives

■ To what extent and why do Finnish firms out-source technologies/knowledge and partici-pate in the global division of R&D throughstrategic alliances, mergers and acquisitions?

■ In terms of patents, how have the foreign R&Dunits of Finnish firms performed?

■ Within which industrial and technology fieldsdoes Finland have the greatest potential/oppor-tunities to attract foreign R&D units and as-signments, and how could this be enhancedfurther?

Background

The project was inter-disciplinary and broad inscope and therefore drew on multiple theoreticalframeworks at the intersections of internationalbusiness theory, transaction cost economics, and

resource-based views (see especially Dunning(1997), Williamson (1985), Teece (1986, 1992)and Dunning and Boyd (2003)).

Previous research in Finland has mainly focusedon the internationalisation of innovation from theviewpoint of R&D expenditures as an input mea-sure. The project has approached the issue fromthe viewpoint of innovation output indicators andrelated activities, and thereby also provides newinsights into the nature and effectiveness of theglobally dispersed R&D of Finnish firms. It hasalso extended extant research on the internation-alisation of in-house R&D and innovation activi-ties to cover collaborative external R&D throughstrategic alliances of Finnish firms and therebyprovides new insights into Finland’s position inglobal ‘alliance capitalism’. Finally, the projecthas addressed how the rise of China and India tothe forefront in R&D and innovation both chal-lenges and creates new opportunities for FinnishICT firms both at home and abroad.

The project has also contributed to internationalresearch by filling a void that has existed regard-ing Finland in these contexts.


The project was modularised to ensure the cover-age of different viewpoints and methodologies onFinland’s position in the globalisation of innova-tion. Further, this ensured continual reporting ofintermediate research results and also contrib-uted to the drafting of a final report comprising acollection of the project’s key publications .

In addition to collaboration with the HelsinkiSchool of Economics, the project also developedlinkages to other Nordic universities and researchgroups. In August 2004 Etlatieto organised aworkshop entitled ‘The Nordic ICT sectors: pastdevelopments and future challenges’ which alsopondered the new competitive threats and oppor-tunities that Finnish ICT faces in the new phase ofglobalisation. The workshop included partici-pants from the Chalmers University in Sweden,Aalborg University in Denmark, StockholmSchool of Economics, the Technical University

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of Denmark and the Norwegian School of Eco-nomics, among others.

The use of different methodologies was also im-portant to ensure triangulation during data gath-ering, interpretation and analysis, as well as to fa-cilitate generalization of the results. In somemodules the project relied on an extensive newdatabase covering patenting, mergers and acqui-sitions, and the strategic alliances of Finnishfirms, and took a step forward in statistical andeconometric analysis. These quantitative projectmodules were complemented with qualitativemodules that relied on in-depth structured inter-views with the R&D/technology managers of thefirms included.

Main results

1. The primary locational advantages that firmsseek through their foreign R&D sites relate toproximities to scientific and technologicalcentres of excellence and customers on localmarkets, while the Finnish home base pro-vides a skilled pool of engineers, close ties touniversities and social capital emanating froma common culture, norms and institutions (in-cluding the public R&D infrastructure). Com-pared with other developed countries, the costlevel of R&D is competitive in Finland. How-ever, particularly in the ICT sector, Asia andEastern Europe are increasing their attractive-ness as a location.

2. The recent trend of increasing internationali-sation in R&D is also evident in terms of theglobal generation of innovation output (mea-sured by patent data) by Finnish firms, al-though less so compared with other smallcountries. Nonetheless these innovations(measured by patents) appear to be more origi-nal in terms of their technological content.

3. When the internationalisation of R&D islooked at in terms of strategic alliances it isclear that Finnish firms have also been activeon this front, although the dominance of ICTfirms is particularly clear. There is a cleartrend for looser types of non-equity alliancesto be more prevalent than equity types overtime; these mainly concern the R&D activities

of firms in some combination with marketingor production activities. Finland thus appearsto participate in alliance capitalism mainly asan explorer rather than an explorer of technol-ogies. Firms seek risk-sharing and comple-mentary technologies through their alliances,and the major challenges relate to general net-work management and IPR issues.

The research results mainly have implications forthe business and policy communities. Nonethe-less, they have also been/will be presented at in-ternational conferences and published in interna-tional journals. Their scientific significance canbe judged as follows:■ The first set of results advances general under-

standing of the changing nature of internation-alised R&D and contributes to specific newqualitative insights into the locational advan-tages of firms from a small-country’s viewpoint(cf. Research Policy Special Issue (1999),Serapio and Hayashi (2004), for instance).

■ The second set of results provides new insightsinto the relationships between the nature of alli-ances and their organisation, and into the exter-nal diversification of firms in dynamic andhighly uncertain industries (cf. Casciaro (2003)and Giuri et al. (2005) in particular.

■ The scientific significance of the project is alsoreflected in already published and forthcomingarticles in journals. The workshop ‘The NordicICT sectors: past developments and futurechallenges’ is giving rise to a Special Issue ofthe INFO – Journal of Policy, Regulation andStrategy, to be published in 2006.

Conclusions

From the viewpoint of firms, the project resultshighlight recent trends in the global dispersion ofinnovation that can have practical implicationsfor the organisation of R&D. It provides newin-depth insights into locational advantages inR&D as perceived by senior R&D managers ofmajor Finnish firms and these can be of impor-tance as both small and larger firms contemplatetheir R&D localisation options. The project alsohighlights the relevance of strategic alliances inaccessing complementary knowledge and share

15

risks in R&D activities, and provides insights intohow major Finnish firms manage the alliance net-works and IPR issues which are the biggest chal-lenges in this context. Further, it provides originalinsights into both the activities of Indian firms inthe Finnish ICT cluster and the emergence of theChinese ICT industry.

From the viewpoint of innovation/industrial pol-icy the project provides valuable insights into thelocational advantages that Finnish firms valuehighly in Finland, as well as possible deficienciesto be addressed in future policy.

The results relating to strategic alliances providenew insights into an increasingly important andsignificant aspect of the internationalisation offirms. They also provide a qualitative view of themajor challenges that Finnish firms face in ‘alli-ance capitalism’and highlight the fact that IPR is-sues should be taken into account in the design oftechnology programmes, for example. Further,the project results have implications for policiesspecific to the ICT cluster in terms of Finland’sposition in ICT convergence.

2.4 Challenges andOpportunities for theUtilisation of ResearchResults (Tuhti)

VTT Technology Studies

Project manager Ms. Pirjo Kutinlahti.

Co-operation partners: University of Tampere(Dr. Mika Nieminen and Dr. Erkki Kaukonen);University of Jyväskylä (Prof. Jussi Välimaa);Professia Oy (Dr. Kari Kankaala) andAdvansis Oy (Mr. Tarmo Lemola).

Objectives

The present study examines the emerging entre-preneurial role of universities by focusing on theinteraction between Finnish universities and in-dustry, and university engagement in commer-cialising research in the late 1990s and early

2000s. Of particular consideration is how scien-tific and entrepreneurial goals are intertwined.

Background

The study relates to the ongoing debate on thetransformation of universities. Instead of focus-ing on Mode 2 knowledge production or the Tri-ple Helix of university, industry and government,the study departs from the concept that academic,economic and societal rationales for science canbetter explain the emergence of an entrepreneur-ial role at universities. By highlighting these ra-tionales, the study aims to highlight both internaland external factors affecting university-industryinteraction and the commercialisation of re-search. Also, the study further develops DonaldStokes’ (1997) typology concerning the struc-tural, cultural and organisational elements char-acterising a university’s exploitation of academicresearch. According to this model, four types ofacademic orientation can be identified. These areconventional ‘Mertonian’ academic orientation,pragmatic academic orientation, societal aca-demic orientation and entrepreneurial academicorientation.


The primary explanatory data for the analysis ofuniversity responses is drawn from three differentpostal surveys sent to Finnish participants in-volved in EU framework programmes. These sur-veys covered their experiences of the Fourth andFifth Framework Programmes. In addition, alto-gether 78 university leaders and research staffwere interviewed in 1999 and 2000. The leaders(N=36) were the heads of university departmentsand research centres, while the research staff in-cluded both senior and junior researchers.

As complementary data related to university/in-dustry research partnerships in EU programmes,survey data on 98 Finnish small and me-dium-sized enterprises and research-based com-panies, and interviews with four representativesof small and medium-sized enterprises are in-cluded. Both the survey of innovative small and

16

medium-sized enterprises and the interviewswere conducted in the autumn of 2002.

With respect to the policy perspective, empiricaldata is provided by an expert workshop discuss-ing the universities’ ‘third function’ held in theautumn of 2003. The intention of the workshopwas to discuss the third function of universitiesand, especially, the university’s role in commer-cialisation.

Main results

1. Research findings in this study support theview that scientific and utilitarian (commer-cial or societal) goals can be intertwined, al-though potential tensions and conflicts of in-terest between academics and entrepreneursmay arise. These tensions are not, however, re-garded as an actual threat to the universities’autonomy. Conflicts of interest between uni-versities and private-sector partners emergerather from the confrontation between re-search cultures and normative structures thanfrom essential divergences between basic andapplied research. Indeed, the use of researchresults in universities is a question of reconcil-ing cognitive differences and similarities, andrights and opportunities, as well as balancingdifferent demands and responsibilities.

2. The contributions of universities and govern-mental research institutes to EU-funded pro-jects were remarkably similar, suggesting anoverlapping and blurring of research roles atthese institutions. It seems that some Finnishuniversities increasingly carry out applied re-search while, at the same time, governmentalresearch institutes direct their activities to-wards mission-oriented strategic researchwhich is close to basic research. The old divi-sion of labour between fundamental and ap-plied or problem-oriented research is disap-pearing, and with it, the functional distinctionsbetween universities and public labs.

3. In the light of responses from industry, pri-mary interests in universities seem to be re-lated to supplying an educated workforce andassisting industry in solving fundamental re-search problems that industry itself has neither

the competence nor the resources to deal with.Public support for university-industry collab-oration, in particular, is of higher additionalityvalue to SMEs than to larger firms. The major-ity of research projects carried out by SMEswith university partners would not be possibleat all without public funding. EU funds had en-abled the small firms surveyed to overcomecertain resource constraints on their involve-ment in large-scale formal links with public re-search organisations.

The findings of the study show that scientific andentrepreneurial goals can be intertwined, al-though tensions and conflicts of interest mayarise. The latter may emerge from the confronta-tion between different research cultures and nor-mative structures, rather than because of any di-vergences between basic and applied research.Knowledge exploitation is a question of reconcil-ing cognitive differences and emphasising simi-larities, as well as balancing different responsi-bilities and demands.

Conclusions

These findings offer considerable support for theconcept of an interactive innovation process inwhich public research will sometimes lead tech-nological development, but, more typically, willalso downstream research and development. Theintertwined relationship between basic and ap-plied research contradicts the linear thinking ofresearch, development and innovation.

Entrepreneurial behaviour has become integral touniversities and may have consequences for thevisions and roles of universities in our knowl-edge-based society. As the research interests ofdepartments are, after all, bound to their tradi-tions, there may be tensions between old and newtheoretical orientations. Solving these problemscreatively represents the principal challenge forthose universities that aim to benefit from themarket opportunities without losing their integ-rity in the process. If the operating principles be-hind the entrepreneurial activities are not clearand transparent, they may weaken the social in-tegrity of the university. Therefore, making com-

17

mercial activities more transparent, both insideand outside the universities, as well as balancingacademic, economic and societal activities, areimportant challenges for universities.

The process of bringing together two quite di-verse kinds of judgement shapes the agendas ofuse-inspired basic research, i.e. scientific re-search, and societal needs challenge the Finnishfinancing system for research and development,which has remained almost unchanged for thepast 20 years, following the linear innovationmodel. Within the innovation studies tradition,networks, interdisciplinary research and links be-tween private and public actors have been identi-fied as key factors in the exchange and distribu-tion of knowledge as a means to supporting inno-vation. In this respect, it is justified to ask how rel-evant and effective the present funding system isin promoting ‘multi- and interdisciplinary’ or‘use-inspired’ basic research as the quadrantmodel proposes.

2.5 The InternationalDimension of the FinnishScience and TechnologySystem – Tutkain

University of Tampere, Research Group for Science,Technology and Innovation Studies (TASTI)

Project manager Dr. Erkki Kaukonen; Research team:Ms. Johanna Hakala, Mr. Pasi Koski, Ms. MaritaMiettinen, Ms. Hanna-Mari Pasanen andMr. Tatu Piirainen.

Objectives

The aim of this research project was to■ describe changes occurring in the international

activities of Finland’s public science and tech-nology system in the 1990s and onwards,

■ analyse factors explaining the internationalisa-tion of research at Finnish universities andgovernment research institutes, and

■ identify the main internationalisation chal-lenges of Finnish universities, government re-

search institutes, and organisations responsi-ble for national R&D policy.

Background

In general, there are relatively few studies ofinternationalisation in the public research sector,and especially at Finnish government research in-stitutes. In addition, the theoretical conceptuali-sation and analysis of internationalisation in pub-lic research are underdeveloped. There is a widerange of empirical data on this phenomenon, butit is very fragmented. The focus in studies ofinternationalisation at universities and govern-ment research institutes has been on the follow-ing subjects:■ Internationalisation of higher education (e.g.

Teichler 1996, Halliday 1999, Penninkilampi2001, Bartel 2003, Enders 2004a)

■ Mobility of researchers (e.g. Avveduto 2000,Mahroum 2000, Smith et al. 1994)

■ Bibliometric studies of international publica-tions (e.g. Oksanen et al. 2003, Okubo & Zitt2004, Wagner & Leydesdorff 2003)

■ The effects of EU research policy on nationalresearch policies and research done in EUmember countries (e.g. Luukkonen & Hälikkä2000, Niskanen 2001, Hakala et al. 2002, Uotilaet al. 2004)

■ Internationalisation of science and researchand national S&R policies (e.g. Edler & Boek-holt 2001)

■ The effects of the specific features of scientificresearch on the internationalisation of research(e.g. Hakala et al. 2003, Wendt et al. 2003,Kyvik & Larsen 1994, Kerr 1991)

■ Internationalisation of researcher training (e.g.Kyvik & Tvede 1998, Enders 2004b)

The focus of the Tutkain project has been on theinternationalisation of Finnish universities’ andgovernment research institutes’ research activi-ties at the level of their research-performingunits. There are very few studies which have ex-amined the internationalisation of Finnish publicresearch at this level. One exception is the re-search done by Hakala et al. (2003), in which theinternationality of Finnish universities’ researchactivities was one sub-theme.

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The methods employed in the study were bothqualitative and quantitative. The research wascarried out in two phases. Firstly, case studies andinterviews with key actors were conducted at sev-eral university units and government research in-stitutes located in Helsinki, Jyväskylä, Turku andTampere. Secondly, a large survey was carriedout among the heads of units at Finnish universi-ties and government research institutes (N=873).The response rate of the universities was 42% andthat of the research institutes 51%.

Main results

1. Diversity of internationality

There were noteworthy differences between themajor fields of science in the international re-search activities of universities and governmentresearch institutes . This could be detected mosteasily in the case of universities. Internationalpublications and participation in internationalconferences were the most common modes of in-ternational research activity at those universityunits representing medical and natural sciences.Longer visits to and from other countries werethen again most typical at the units for natural sci-ences, engineering and technology and interdis-ciplinary science. Short-term visits to and fromother countries were most common in units repre-senting the humanities. International researchprojects were most typical in the units of naturalsciences and interdisciplinary science. Overall,the most international in their research activitieswere the natural science units and the least inter-national the social science units. Internationalityof research was surprisingly narrow in the field ofmedicine, mostly taking the form of contribu-tions to international publications.

In addition to the fields of science, the nature ofthe research object, the nature of the research ac-tivity and the research partners also showed astrong correlation with the internationality of re-search. In general, the units studying mostly uni-versal objects were more international than thoseexamining mostly national or local phenomena.Likewise, the units doing mostly basic research

were more international than the units perform-ing mostly applied research. Close co-operationwith foreign universities and research institutesshowed a positive correlation with several dimen-sions of international research. Then again, inten-sive co-operation with the Finnish national andmunicipal administration system correlated neg-atively with the various dimensions of interna-tional research.

Internationality opportunities and needs some-times varied significantly between units with dif-ferent research characteristics . From this it fol-lows that a policy supporting internationalityshould be both context-sensitive and flexible. Inother words, internationality should not be con-sidered separately from the actual context of re-search, including both the internal and the widerexternal context. Also, instead of having one gen-eral internationality goal and set of criteria for as-sessment, several goals and different criteria suit-able for various fields of research are needed.

2. International mobility

The international mobility of researchers hasbeen put forward as one of the main goals of Finn-ish science, technology and innovation policy.This includes increasing the number of longer re-searcher visits to Finland from abroad and revers-ing the falling trend in visits abroad from Finland.

The most typical researcher visits abroad andfrom abroad were short-term periods of less thantwo weeks. The most untypical visits were me-dium-term periods (duration 2-4 weeks) and inparticular long-term visits (duration more thanmonth). In other words, short research visits seemto be emphasised at Finnish universities and gov-ernment research institutes.

According to the heads of units at universities, thepercentage of foreign personnel who worked forat least six months in the unit was above 10% in2003.The corresponding figure at government re-search institutes was just below a quarter of thispercentage. The proportion of foreign personnelwas probably increased at universities by thenumber of foreign post-graduates. There, the pro-portion of foreigners was clearly highest in engi-neering and technology and in humanities and

19

lowest in social sciences and medical sciences. Atgovernment research institutes, the engineeringand technology units had the highest percentageof foreigners, and social sciences (incl. humani-ties and interdisciplinary science) had the lowestpercentage. The main reasons restricting at-tempts to encourage or recruit foreigners into theunits were the lack of funds suitable for recruitingforeigners (e.g. the poor applicability of projectfunding for this purpose), family reasons (oppor-tunities for employment of the spouse and for anychildren’s education ), the northern climate anddistant location of Finland, language problems andthe fact that the unit is not well-known enoughabroad. The low wage level of researchers in Fin-land was a more significant hindrance for researchinstitutes than for universities in this respect. Themain reasons that advanced the gravitation of for-eigners towards the units were personal contactsabroad, a high level of research within the unit andthe good reputation of the unit abroad.

The percentage of personnel who worked abroadfor at least one month in 2003 was lower than 9%in university units and about 4.5% in governmentresearch institute units. At both universities andresearch institutes the main reasons reducinglong-term visits abroad were family reasons, in-sufficient human resources at the unit, whichmakes it impossible for senior researchers to goabroad, financial difficulties and the researchers’lack of time. At government research institutes,the low interest of researchers in going abroadalso decreased the number of these visits.

3. Geographical orientation of researchco-operation

For the universities, the five most typical coun-tries for research co-operation were Sweden,Germany, the USA, Great Britain and Russia.The significance of the USA, Sweden and Ger-many was expected to grow particularly fast infuture. For the government research institutes,the five most common countries were Sweden,Great Britain, Germany, the USA and France.Specifically the significance of the USA andSweden was expected to increase in future.

A recent structural account concerning Finnishuniversities (Rantanen 2004) proposed that uni-

versities should engage in broad internationalco-operation with the Nordic countries, the EUcountries and countries in North America andAsia. The results of the study showed that the re-search co-operation of Finnish universities andresearch institutes focused predominantly onSweden among the Nordic countries and on a fewWest European countries in the EU. They also en-gaged in quite a lot of co-operation with Russia.Both the universities and the government re-search institutes reported relatively minor re-search co-operation with Asian countries, mostlywith Japan and China, although the significanceof China in particular is expected to rise in future.

There is considerable and wide-ranging empiri-cal data on the internationality of public research,but it is very fragmented. Also, no one has pro-duced a general survey of the phenomenon. Theresults of the Tutkain project are scientificallysignificant, because they permit a general view ofinternationalisation of the public R&D systemand the factors affecting it. The project has alsoproduced some totally new information on theinternationality of government research insti-tutes. Theoretical modelling of the internation-ality of public research has also been developedfurther.

Conclusions

A rise in the internationalisation level of the Finn-ish public research system has been consideredone of the most important development needs ofthe Finnish innovation system. Several criticalpoints related to the internationalisation processin public research are brought out by the findings.These findings therefore promote the develop-ment of Finnish internationalisation policy, par-ticularly in relation to the research activities ofuniversities and government research institutes.

The findings provide a basis for developing Fin-land’s national science, technology and innova-tion policies to ensure that they could better sup-port the internationalisation of the public re-search sector. Finnish universities and govern-ment research institutes could also utilise thesefindings as they develop their research activities.

20

3 Innovation policy

Innovation policy has traditionally focused on promoting research and development.This, however, is not enough any more. Innovation policy needs an enlarged scope toinclude economic, educational, environmental, energy and taxation policy. Also the ac-ceptability of technologies faces policy-making with new requirements. As citizens arebecoming more and more interested and involved in policy-making they will needbetter information on technology development and the effects of new technologies.

27


1. Information Technology in Finland afterWorld War II: the Actors and theirExperiences – TIESU

University of Turku 2002–2005 391 000 6,6

2. Decision-making Process Models inTechnology and their Consequencesfor Democracy – INNOPOL


2004–2006 175 000 1,1

3. Communicative Order in the Ageof Information Technology

University of Helsinki 2002–2005 189 000 3,7

4. Towards a Multipurpose Technology Policy– MONI and the Challenge of an IntegratedInnovation Policy: the Unsolved Problem ofEmployment – INTEGRO


5. Rights and Responsibilities in Biotechnology– OIVA


6. Intellectual Property Rights Issues in theContext of Innovation – IPRI and Policies forResearch and Innovation in the Move towardsthe European Research Area – PRIME


2004–2005 254 000 1,8

7. Acceptability and Interaction as a Challengefor Technology Projects – Comparisonbetween Biotechnology and NuclearTechnology – BiNTech

University of Tampere andUniversity of Jyväskylä

2001–2005 505 000 12

8. Digital Hubris – On the Mental and MoralDimensions of the Computerised NetworkSociety


3.1 Information Technology inFinland after World War II:the Actors and theirExperiences – TIESU

University of Turku, Department of Cultural History

Project manager Prof. Hannu Salmi; Research team:Ms. Satu Aaltonen, Mr. Petri Paju, Mr. Jussi Parikka,Dr. Petri Saarikoski, Ms. Tanja Sihvonen andProf. Jaakko Suominen.

Objectives

Information technology is not an issue of the re-cent past alone, but has its roots embedded in alonger development. The project aims to create amultilayered and comprehensive portrait of theformation of Finnish information technology af-ter World War II by focusing on the actors in-volved in that process and their experiences.

In analysing the social and cultural position ofthese processes it is essential to pay attention bothto the meanings that have been attached to infor-mation technology and its use in the media, and tohow the actors involved in information technol-ogy – who, in the end, have formulated these defi-nitions – have been defined, e.g. according to so-cial class, gender and age.. It is, thus, possible toposition the computer in Finnish society not onlyas an artefact but also as a cultural construction.

Background

During recent decades, there has been a shift ofemphasis in technology studies towards the ideaof technology as a communicative process (e.g.Thomas P. Hughes, Bruno Latour, Michel Callon,Wiebe Bijker, Trevor Pinch): attention has beenpaid to users and consumers, constructors and pol-iticians, material and immaterial actors, and socialand cultural structures, in addition to machines.The TIESU project was inspired by Latour,Callon, Bijker and Pinch, but the main effort hasbeen to outline a cultural historical approach totechnology. This approach does not mean that re-search emphasises only reception of technology,i.e. the reactions that micro-computers or Internet

connections, for example, have evoked. It is essen-tial to focus at the same time on the aspects of pro-duction and consumption of technology. It isequally important to remember the different tem-poral rhythms of historical processes. Even thougheconomic conditions and technological innova-tions can have rapid cultural consequences, thereare often long-term phenomena, especially whenemotions, experiences and mentalities are in-volved. The aim of this project has been to concen-trate on long-term development.

Before the TIESU project there were only a fewbooks on the history of Finnish information tech-nology (Martti Tienari 1993, Martti Häikiö 2001),and these did not emphasise the cultural historicalapproach. TIESU has had close contacts with re-search projects in other Nordic and Europeancountries, but in terms of its wide approach andperspective it is a unique project even by interna-tional standards.


In its theoretical approach to technology, TIESUhas been inspired by both social sciences and cul-tural studies, but first and foremost it has em-ployed the methods of historical research. Impor-tant source material includes archival documents,interviews, oral contributions, newspapers andmagazines, advertisements, strategies, and mate-rial artefacts. The project has also aimed to map,gather, preserve and document important materi-als on the history of Finnish information technol-ogy. It has made a number of interviews and hasalso launched an Internet survey on popular expe-riences of information technology.

In its practical implementation the project was di-vided into four phases, through which a widerview of the history of Finnish information tech-nology could be achieved.

The first part (Petri Paju’s study) emphasised theinnovation process of the Finnish ESKO mathe-matic machine. This process tells us not onlyabout the visions of information technology inthe 1950s and early 1960s but also about how theshift from punched card machines to ‘electronic

28

brains’ took place. The second part (JaakkoSuominen’s study) dealt with media coverage ofinformation technology in Finland prior to the1970s. The use of computers expanded from pro-fessional circles through the whole of society andpenetrated everyday life. The third part (PetriSaarikoski’s study) concentrated on the first stepstaken by home computing in the 1980s and1990s. The computer was transformed into con-sumer electronics, and computer games became apopular hobby. The last part (Tanja Sihvonen’sstudy) emphasised the central role of digital cul-ture during the 1990s and the beginning of thenext decade, and focused especially on howagency was constructed in the field of informa-tion technology. In 2004, Jussi Parikka enteredthe project team, and his study analysed the roleof computer accidents and the problem of virusesas an elementary part of the information society.

In addition to these phases, TIESU has workedconstantly to create a comprehensive picture ofthe history of Finnish information technology.Satu Aaltonen gathered statistical material andalso analysed the Internet questionnaire whichwas circulated in 2003–2004. The results werepublished as a book in Finnish called ‘Tunteita,tulkintoja ja tietotekniikkaa’ (2004, 124 p.).

Main results

As a whole, the TIESU project has generatedbetter understanding of the connections betweeninformation technology and its social and cul-tural context during the post-war period.1. In his licentiate thesis Petri Paju has recon-

structed a failed innovation process in detail(the ESKO machine that was intended to bethe first Finnish computer) and also describedthe beneficial by-products that emerged at thesame time, in the 1950s. In his PhD disserta-tion, to be published in 2006, he analyses hownew technology, especially information tech-nology, was argued for and justified as a na-tional issue in the Finland of the 1950s. Thiscultural and social impetus to promote tech-nology proceeded slowly but created an essen-tial basis for the science and technology policythat strengthened during the 1960s and be-came a consistent field of development.

2. In his PhD thesis, Jaakko Suominen states thatmedia coverage paved the way for home com-puting long before the 1980s. Suominen’sbook is the first comprehensive account of thedevelopment of Finnish information technol-ogy from the 1920s to the 1970s. During theperiod from the ‘20s to the ‘50s, informationtechnology was presented as an attraction: thequalities of electronic brains and robots werewidely discussed, and wondered at. The 1960sstressed the themes of automation and integra-tion, and also the central role of computer sys-tems and computer constructors as makers ofthe future. During the 1970s, the personal as-pect of computing came into the fore, andquite often the relationship between man andmachine was described in an intimate way.

3. Petri Saarikoski shows in his PhD thesis thatthe period before the 1990s, when informationtechnology became an integral part of every-day life, was essential for the breakthrough ofmicrocomputing. Saarikoski’s book was thefirst monograph on computer hobbyism, com-puter clubs and computer subcultures. It por-trays an independent agency that has oftenbeen neglected in connection with the historyof the information society.

In addition to Saarikoski, Tanja Sihvonen andJussi Parikka have also written on the recent his-tory of information technology. Sihvonen hasconcentrated on the early phases of the Internetand its linkage with popular culture, whereasParikka has analysed computer viruses as generalaccidents of digital culture. Viruses and wormsare not randomly occurring anomalies but areclosely bound up with capitalism, the media andtechnology.

The publications of the TIESU project have cre-ated an accurate and thoughtful image of the heri-tage of present-day Finland in the field of infor-mation technology. In 2002–2005, the projectmembers published two PhD dissertations, onelicentiate thesis, two other books, 69 scientific ar-ticles and 15 other scholarly publications.

TIESU’s scientific relevance can be approachedon the basis of individual studies. Paju’s studyhelps us to understand how ‘technological Fin-

29

land’ was constructed both mentally and con-cretely after World War II. Without persistent –and sometimes seemingly useless – investmentsin domestic technological research, Finland’s po-sition as a leading producer of high technologywould never have been attained.

Suominen’s study confirms that the cultural di-mension plays an important role in the formationand construction of technology. It also shows thatthere can be contemporary illusions about tech-nology. The future of technology is often de-scribed in clichés and simple characterizations,although technological change always involvescomplex social and cultural mechanisms. Evi-dently, a critical stand on technological discoursehas both scholarly and practical relevance.

Parikka, in turn, shows that computer viruses andother forms of infotechnical accidents cannot beregarded as technical anomalies; rather, theyform an essential part of the cultural history of in-formation technology. A historically and cultur-ally contextualised approach is necessary in orderto understand how viruses work as media-ecolog-ical parts of security and networks.

Conclusions

In many respects, the information technology ofthe past is different from the one we know today.This strangeness might have influenced the wayinformation technology is reacted to, even if thesource of the feeling of strangeness has been for-gotten, or even disappeared. The project has out-lined Finnish society’s past experiences of infor-mation technology. From the perspective of tech-nology policy, it is crucial that research shouldnot only be conducted on the history of the privateor public sectors, but also broadly analyse thefield. Social innovations and ‘best practices’ canalso be found among computer hobbyists andmembers of computer subcultures.

Saarikoski’s study reveals that hobbyism hasplayed an essential role in the innovation historyof information technology. Hobbyism has gener-ated surprising, commercially applicable solu-

tions that have usually been seen as coming fromnowhere (e.g. the Linux phenomenon).

The results can be used to help in understandingand developing the social and cultural shaping oftechnology. TIESU widens the basis of experi-ence out of which technology policy could alsospring. Paju’s studies indicate that the emphasisof technological research and development wasby no means self-evident, or a winner strategy,during the 1950s. There would have been quickerways to modernize Finland. Luckily, however,the development of domestic technology at-tracted long-term investments. In the present-daysituation, when policy tends to be short-sighted, itseems to be justified to rethink how we could takethe long-term perspective into better consider-ation.

3.2 Decision-making ProcessModels in Technology andtheir Consequences forDemocracy – INNOPOL

VTT Technology Studies

Project manager Dr. Soile KuitunenCo-operation partner: Nordregio (Dr. KaisaLähteenmäki-Smith and Ms. Riikka Ikonen).

Objectives

30

4 The emergence of innovations

The emergence and diffusion of innovations is a complex and often slow process. Manyactors in different roles and interaction networks participate in technology develop-ment. Understanding the needs of consumers and users is one of the basic require-ments for successful innovations. In addition to technological innovations, social inno-vations such as new forms of co-operation, an efficient public administration, sustain-able development and social cohesion are needed.

49


1. Increasing Eco-Efficiency – an Analysis ofFactors Generating Innovations – EcoInno

Finnish Environment Institute(SYKE)

2001–2005 579 000 6,9

2. Social Capital and Innovations – SPINNO University of Jyväskylä 2002–2006 249 000 4,7

3. Innovation Processes and InnovationNetworks of Firms in Rural Areas andSmall Centres – INNO

University of Jyväskylä 2002–2005 402 000 5,7

4. The Relationship between Firm Formation,Growth and Innovation Activities

Pellervo Economic ResearchInstitute

2004–2005 150 000 2,3

5. Dynamic Patterns of Innovative Activitiesamong Finnish Firms

Statistics Finland,VTT, Technical ResearchCentre of Finland

2002–2005 416 000 3,3

6. The Impact of Publicly Funded R&D onInnovation Output and Innovation Outcome


2004–2005 88 000 0,7

7. Human Capital as the Base forInnovativeness and Growth

The Research Institute of theFinnish Economy (ETLA)

2004 98 000 0,7

8. Supporting Regional Competitivenessand Innovations


2005–2006 110 000 0,8

9. R&D and Changes in Input-outputStructures


2002 80 000 1,0

First and foremost, the analysis conducted in thisproject only looks at the direct effects of publicfunding. It does not take account of effects thatmight occur elsewhere outside the funded firms,such as network effects, knowledge spill-overs,and the increase in national capacity to innovate.These go beyond what can be tackled with thegiven data. However, the effects are certainly notbeyond what is generally feasible and interestingto the researcher and policy-maker alike.

Second, this study confined itself to an analysis ofthe average. The effects that occur at a few firms,or just one firm, are not recorded as significanthere. By using the set of econometric tools as theyare, we completely override the argument that insome cases a single success story may make awhole funding programme worthwhile. More de-tailed analysis with data from other sources, suchas data gathered by the funding agency, may alle-viate this concern.

4.7 Human Capital as the Basefor Innovativeness andGrowth

The Research Institute of the Finnish Economy (ETLA)

Project manager Dr. Hannu Piekkola; Research team:Mr. Eero Siljander and Ms. Anni Heikkilä

Objectives

The aim was to evaluate the competitiveness ofFinnish regions at the Nuts-4 level. As back-ground, another aim was to examine knowledgecapital as an engine for growth at the firm level.

Background

The research continues earlier studies financedby Tekes: ‘Human Capital and Wage Formation’and ‘Human Capital Utilisation under TechnicalChange: Profit Sharing and Wage Dispersion’.

The project uses the following data: linked em-ployer-employee data using Confederation ofFinnish Industries employee statistics for 1996–2002, innovation activity in Statistics Finland

data and its 2002 human capital enquiry involv-ing unions of engineers and economists. Thecompetitiveness index was calculated as an aver-age of the sub-indices and by using the hedonicapproach, in which each sub-index is weightedaccording to its contribution to growth.


The research method takes advantage of recenteconometric analysis of linked employer-em-ployee data starting from the Abowd, Kramarzand Margolis Econometrica article in 1999. Theresults for human capital factors explaininggrowth are therefore comparable up to very re-cent research in the field. The research group ledby John Abowd at Cornell University has evalu-ated human capital using the percentage of work-ers in a firm that are in the highest quartile in theoverall distribution of human capital over all thefirms included. We apply this methodology to ourevaluation of experience human capital and un-observed human capital in the firm. The educa-tion capital is calculated in efficiency units (aver-age of the education human capital in 9 educationgroups). The research results are also comparableto findings in education economics.

The findings of the project have been presented atvarious seminars including the annual meeting ofthe Finnish Society for Economic Research andthe following international conferences: Ameri-can and European Association of Labour Eco-nomics joint world conference SOLE/EALE 2.–5.6. San Francisco and International EconomicAssociation IEA world conference 26.8.–2.9.2005 Marrakech. Three studies have been sub-mitted to international journals: the basic article‘Knowledge capital as a source of growth’ ap-peared in the Oxford Bulletin of Economics andStatistics and the article ‘Public funding of R&Dand growth: firm-level evidence from Finland’ isabout to be published in Economics of Innovationand New Technology.

Co-operation with other ProACT programmeswas intensive, especially those involving ETLAresearchers. We did not incorporate any work byvisiting researchers into the project. The present

63

project relates to the later project Supporting Re-gional Competitiveness and Innovations’, whichis being financed by Tekes as part of the ProACTprogramme.

Main results

1. Education human capital, occupation humancapital and agglomeration of the two are themost important constituents in knowledgecapital. R&D activity is also an important fac-tor explaining firm-level growth; however,spill-over effects on other firms in the regionare not great.

2. Competitive regions may have many competi-tive small and medium-sized firms which donot obtain sufficient weight in traditional com-petitiveness indices based on averages of ag-gregate figures. The usual competitiveness in-dices that give very high emphasis to agglom-eration effects are therefore alone not enoughto evaluate regional competitiveness. Theanalysis also uses a hedonic approach, in

which each sub-index is weighted accordingto its contribution to productivity and eco-nomic growth. The hedonic approach providesa tool for appropriately valuing micro-level in-novation activity.

3. Finnish regions have diverged in growth since1995; see Figure 2 below. In areas where thereis little knowledge capital, it is usually impos-sible to catch up on the top firms in the indus-try in terms of productivity; see Figure 3 be-low. High-productivity firms have continuedto grow fast in areas with knowledge capital.In Espoo and Helsinki, the annual productivitygrowth explained by knowledge capital is atleast 7%, while growth explained by other fac-tors is slow. Catching up is faster in small andmedium-sized firms. The fact that large firmsfail to catch up also explains the divergence ingrowth.

In Figure 2, the horizontal axis shows the GDPper capita level in 1996 and subsequent growth inGDP per capita in 1996–2002.

64

Helsinki

Espoo

Hki kehyskunnat

Lohja

Tammisaari

TurunmaaTurku

Vakka-SuomiRauma

Pori

Pohjois-Satakunta

Hämeenlinna

Riihimäki

Forssa

Luoteis-Pirkanmaa

Etelä-Pohjanmaa

Tampere

Lounais-Pirkanmaa

Lahti

Heinola

Kouvola

Kotka-Hamina

Länsi-Saimaa

Imatra

Mikkeli

SavonlinnaYlä-Savo

Kuopio Varkaus

Outokumpu

Joensuu

Jyväskylä

Jämsä

Jämsä

SuupohjaSeinäjoki pohjo

Seinäjoki etelä

Härmänmaa

Vaasa

Sydösterbotten

Pietarsaari

Kaustinen

Kokkola

Oulu

Raahe

Koillismaa

Kajaani

Rovaniemi Porvoo

Loviisa

Vantaa

Kemi-Tornio

0

1

2

3

4

5

6

7

10 000 12 000 14 000 16 000 18 000 20 000 22 000 24 000 26 000 28 000 30 000 32 000

Euro 2000

%

Figure 2. Initial GDP per capita and GDP growth per capita in Finnish regions in 1996–2002.

Figure 3 uses an econometric estimation of pro-ductivity growth at the firm level explained byknowledge capital. The model is used to explainregional rather than firm-level growth. The re-gions are aggregates of Finnish regions at theNuts-4 level (55 regions instead of 84) and rankedfrom 1 to 55 according to their productivity. Notethat this has been evaluated relative to the averagein each industry, so the value depends greatly onthe industrial composition of the manufacturingsector in the region.

Publications are reported together with those pro-duced in ‘Supporting Regional Competitivenessand Innovations’, which include four reports inthe ETLA (The Research Institute of The FinnishEconomy) discussion paper series. The firststudy ‘Knowledge capital as a source of growth’No 972 deals with knowledge capital as an enginefor growth. The firm-level findings are used to ex-plain regional growth. The study ‘Competitive-ness and human capital in Finnish regions: Doescompetitiveness indicate the tools for stronggrowth?’ (forthcoming) includes a broad graphi-cal analysis of the regional distribution of pro-ductivity and knowledge capital. The study ‘Re-gional distribution of the professional compe-tence of highly educated in Finland’ No 961 ex-plains the distribution of human capital based ona human capital enquiry. The study ‘Public fund-ing of R&D and growth: firm-level evidence fromFinland’ (forthcoming) explains the effects ofpublic subsidies from Tekes on productivity andemployment. The research will also form part ofbook called ‘Knowledge capital as the source ofgrowth: competitiveness of Finnish regions’,which was published in the ETLA B-series and inthe Ministry of Finance series in January 2006.This also contains a deeper evaluation of the com-petitiveness of Finnish regions, viewed from thestandpoint of the competitiveness of Finland’s 20growth centres.

Conclusions

The study has developed methodology for use inapproaching innovation activity. The definition isbroader than usual, as it does not only cover R&Dactivity. Innovation activity also covers educationhuman capital and much other human capital.The study has also analysed intangible capital infirms, including the organisational arrangementof human resources. This is measured by the ex-tent of rent sharing, among others. The broadconcept of knowledge capital was also used as thestarting point to explain the effectiveness ofTekes subsidies in promoting growth. Innovationactivity has been examined in different areas us-ing all these concepts and not only those based onthe innovation surveys.

The findings are applicable in practice, since re-gional differences in growth are prominent andhave not been similarly explored before. Also, thefactors explaining the catching-up process havenot been thoroughly analysed earlier. Thehedonic approach had never been used at all be-fore in Finland. This is a better tool for analysingcompetitiveness in small regions, since accessi-bility and agglomeration are less emphasised. Itis expected that the results relating to the rankingof Finnish regions will attract considerable pub-licity.

The approach used is a new one and is currentlygaining attention in economic analysis. The re-search can easily be extended to cover regionalanalysis in greater depth. The weights in thehedonic approach could be obtained by explain-ing future rather than past growth, as was donehere. The competitiveness index could also in-clude a wider range of sub-indices, especiallyoutside manufacturing, and these are availableusing Statistics Finland data. This study relies es-pecially on data on Finnish manufacturing. Theservice sector is thus partly ignored although it isvery important for the future growth and successof Finnish regions.

65

5 From innovation to business

Lack of entrepreneurship and the scarcity of small firms has been considered one of thebasic problems of the Finnish economy. Particularly in the context of the current tech-nological transition, lack of entrepreneurs is seen as problematic: technology providesopportunities for new innovations but there are not enough entrepreneurs to act onthem. Also, public and private-sector service industries will offer more and more oppor-tunities for new firms and entrepreneurs.

73


1. Value Creation and Renewal of the KnowledgeBase of the Corporation. Foresight, Renewal,Leverage, and Shaping – VCR

Helsinki University ofTechnology

2002–2006 504 000 7,7

2. Informal Ways to Protect Intellectual Property Seinäjoki Polytechnic 2002–2004 299 000 4,0

3. IP Protection and Management in KIBSand their Collaborative Networks

Seinäjoki Polytechnic 2004–2006 187 000 2,2

4. Public-Private Partnership in MarketConstruction – PPP


2002–2003 265 000 2,2

5. Innovative Partnership in ServiceDevelopment – Juureva


2004–2005 220 000 1,3

6. V2C – Building Business from Ventureto Capital

Tampere University ofTechnology

2004–2005 186 000 3,1

7. Assessing and Developing the InnovationCapability of Finnish SMEs – InnoPro


2003–2006 290 000 2,2

8. Knowledge-intensive Business ServiceProvision: Public-sector Influenceon KISA-Client Co-production – JOINT

Seinäjoki Polytechnic 2004–2006 183 000 2,3

9. Biotechnology as Part of the NationalInnovation System


2002–2003 259 000 1,5

10. Sustainable Biotechnology Development * Etlatieto Oy 2002–2005 200 000 2,5

11. Processes and Boundary Conditions forEmbedded Foresight in Innovation Networks

Nokia Research Centre 2002–2003 144 000 1,5

* Together with the NeoBio Programme

5.1 Value Creation and Renewalof the Knowledge Base ofthe Corporation. Foresight,Renewal, Leverage andShaping – VCR

Helsinki University of Technology, Institute of Strategyand International Business

Project manager Prof. Markku Maula; Research team:Mr. Henri Schildt, Mr. Juha Uotila, Mr. Robin Santavirta,Mr. Yihua Jiang, Mr. Karri Lehtovuori, Mr. MikkoJääskeläinen, Mr. Jonathan Beaudette, Mr. MatiasStenvall, Mr. Thomas Schwyter, Mr. Heikki Saukolaand Ms. Veera Lattunen. Henri Schildt was a visitingresearcher at the Stern School of Business, New YorkUniversity in 2005.

Co-operation partners: York University, Canada(Prof. Thomas Keil); University of Minnesota, USA(Prof. Shaker Zahra), Nokia Oyj (Dr. Jukka-PekkaSalmenkaita, Dr. Mikko Uusitalo); Penn StateUniversity, USA (Prof. Raghu Garud) andNew York University, USA (Prof. Theresa Lant).

Objectives

For Finnish high-technology firms, proactivetransformation and rapid adaptation to changingenvironments are increasingly critical challenges.In this project, we have investigated how largefirms manage proactive transformation throughcorporate venturing. Increasingly, even less tech-nologically advanced industries are characterisedby systemic innovation, which requires simulta-neous innovation by customers, suppliers andfirms producing complementary goods. Thisforces corporations to manage their external de-pendencies and become more flexible. In the sec-ond phase of the project, we have therefore fo-cused on the corporate venturing and renewal offirm capabilities in such systemic industries.

The aim of the project has been to generate viableknowledge on corporate venturing and corporateR&D processes and their outcomes in systemicindustries, using theory development and empiri-cal research. The target audiences include man-agers of corporate venturing and R&D activities,academics, and policy-makers.

Background

The project has focused on how corporations re-new and manipulate their knowledge base. Thefive important theoretical frameworks that havebeen used in the analysis comprise:1. the resource dependence perspective,2. organisational learning theories,3. dynamic capabilities and action theory,4. institutional theory, and5. social network theory.

These perspectives provide complementary ex-planations for how firms interpret and influencetheir future to create value. The project has alsobuilt on and contributed to prior research on thevarious corporate venturing methods used bycompanies to create new business and to renewexisting core businesses.


The project included several data collection ef-forts. Employing advanced quantitative methods,we compiled two large data bases of cross-sec-tional time series data from secondary databases.In addition, we employed novel automated con-tent analysis methods that allowed us to addressthe cognitive and sense-making perspectives offirm venturing behaviour. We have also em-ployed qualitative methods to supplement thequantitative study and address sub-research ques-tions in which qualitative methods are superior.

The research has been conducted in close collab-oration with international colleagues, especiallyProfessor Thomas Keil (York University) andProfessor Shaker Zahra (University of Minne-sota), who have contributed data to the projectand have co-authored most of the articles writtenin the project. Dr. Jukka-Pekka Salmenkaita(Nokia Multimedia) has also been involved insome publications.

The research carried out in this project has re-sulted in several important papers that contributeto a better understanding of the dynamics andlinkages between different corporate venturingactivities, contextual factors and performanceimplications. Most of the papers have been sub-

74

mitted to, or accepted for publication by, topmanagement journals. Several studies have alsoreceived best paper awards at major research con-ferences in the field, the Strategic ManagementSociety conference and the Babson-KauffmanEntrepreneurship Research Conference.

Main results

In the first phase of the VCR project we focusedon corporate venturing activities as a mechanismfor learning and renewing the knowledge base ofthe corporation. In our collaboration with a re-lated BEFINE project in the first phase of theProACT programme, we started to explore thespecial characteristics of systemic innovations.These were joint projects in the second phase ofthe ProACT programme. We found that systemicinnovation also takes place increasingly in indus-tries traditionally considered less technologicallyadvanced, thereby increasing the need of, and al-tering the means available to, corporations tomanage the dependencies of their business.

In the second phase of the VCR project we fo-cused on the foresight, renewal, leverage andshaping activities of the corporations, examiningthe linkages between corporate R&D and ventur-

ing activities. A conceptual framework illustrat-ing the tools for foresight and shaping in manag-ing the business environment of a corporationwith different time horizons in industries depend-ent on systemic innovations is presented in Fig-ure 7 below.1. External corporate venturing is an important

source of organisational learning and renewal.2. External corporate venturing modes should be

understood as a ‘toolbox’ for creating newbusiness and renewing existing core busi-nesses, with different tools for different pur-poses.

3. Strategy and external corporate venturing areinterrelated. Environmental and organisa-tional contingencies and path-dependenciesinfluence the outcomes of venturing.

Conclusions

The project has attempted to contribute directlyto giving Finnish firms the necessary tools tocompete in dynamic environments. The contribu-tions made by the research are especially relevantto action to improve the ability of large firms totransform their businesses. Particularly in thecurrent economic climate, external pressuresmight induce firms to cut venturing efforts that

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Current corebusiness New technologies

and standardsNew venturesand platforms

Newproducts

0 years 5-10 years2-5 years0-2 years Horizon(years)

Shaping

Businessdevelopment

and intelligence

Businessdevelopment

and intelligenceExternal

venturingExternal

venturing

Researchcollaboration

andstandardization

Researchcollaboration

andstandardization

Foresight

Newproducts

Figure 7. Tools for foresight and shaping in managing the business environment ofa corporation with different time horizons in industries dependent on systemic innovations.

only provide long-term benefits and ultimatelymight hamper their renewal capability. Our find-ings have the potential to help firms to improvetheir ability to capture value from venturing andthereby help sustain these activities and securethe future competitiveness of some of the mostimportant corporations in the Finnish economy.The results of the project have also provided inputfor designing policy measures that encourage andsupport the renewal activities of large firms.

The findings have been presented at a large numberof presentations, seminars, and discussions withseveral important Finnish companies. They havebeen used by several major companies in their deci-sion-making concerning investments in and use ofvarious tools and programmes related to corporateventuring in new business development and re-newal of their core business. Through publication,university courses (at both the Helsinki Universityof Technology and several other Finnish and inter-national universities and business schools), execu-tive education, presentations, seminars and theirincorporation into various project papers andtheses conducted by people working in Finnishindustry, the findings of the project have contrib-uted to improved awareness and understanding ofvarious tools available to support new businessdevelopment and renewal of the core business ofcompanies.

5.2 Informal Ways to ProtectIntellectual Property

SC-Research, Seinäjoki Polytechnic

Project manager Dr. Jari Kuusisto; Research team: Dr.Selina Päällysaho and Ms. Riikka Kulmala.

Objectives

This report summarizes the key results of thisstudy, which is investigating intellectual property(IP) protection and management within small andmedium-sized businesses. The aim is to explorehow SMEs manage and protect their intellectualproperty (IP) using informal practices. These in-formal methods include a wide range of protec-

tion ‘tools and methods’, other than formal intel-lectual property rights (IPR). Hence, the reportcreates better understanding of the informal waysof protecting intellectual property, its strengthsand weaknesses and ways of improving existingpractices. The research also provides new infor-mation on the dynamics that determine differentforms of IP protection.

Background

In a knowledge-driven economy, IP protectionhas become an essential ingredient in businesssuccess. The Intellectual Property ResearchProgramme (IPRP), carried out in 1996–1999 inthe United Kingdom, is one of the biggest studiesever made on intellectual property and its protec-tion. The present research programme focused oncurrent systems for protecting intellectual prop-erty, particularly in small and medium-sizedcompanies. One major conclusion of the study isthat formal IP regimes are applicable and usefulonly for a limited range of business activities,typically large manufacturing businesses. In thecase of SMEs and the rapidly growing servicesector, patenting and formal IPR rarely providean effective way to protect IP. Rather, such busi-nesses prefer a wide variety of informal IP pro-tection and management methods, since they areperceived as more effective and practical to use.


The qualitative data for this research was col-lected in Finland and the UK in personal inter-views at 55 independent owner-managed enter-prises, which employed 2 to 55 staff. Semi-struc-tured interviews were carried out with businessmanagers representing three knowledge-inten-sive and dynamic business sectors: manufactur-ing, software products and knowledge-intensivebusiness services (KIBS).

The research will provide a solid base for quanti-tative research; it provides a substantial amountof data and allows for statistical analysis andwider generalisations of the research outcomes(IP Protection and Management in KIBS andtheir Collaborative Networks).

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Main results

1. An analytical description of a range of differ-ent types of informal IP protection methods

2. Identification of different IP-protection strate-gies and their key dimensions

3. A comparative analysis of country and busi-ness-sector specific differences

This study demonstrates the complex nature ofintellectual property as such. As a result, SMEshave adopted various different ways to protecttheir IP. It is evident that most of the businessmanagers interviewed were well aware of the dif-ferent types of (mainly informal) IP protectionpractices. Thus, in addition to formal protectionmethods, intellectual property is also protectedby means of informal practices that are extremelyheterogeneous in nature. Depending on the busi-ness context and individual needs, SMEs had de-veloped a range of different strategies to manageand protect their IP. These strategies are at bestsimple, easy to control and economical to use,

and are often embedded in the normal daily work-ing practices of the business. The primary aim ofinformal protection methods are to:■ decrease the risk of losing core knowledge■ prevent the leaking of confidential knowledge

to outsiders■ reduce the risk of incidents which could cause

knowledge leaks■ reduce the risk of being copied or imitated

by competitors■ prevent the risk of losing a key employees or

minimize the harm from employee mobility■ create a ‘lead-time’ advantage over

competitors■ promote the patenting process■ increase business efficiency and

innovativeness (proactive use)

These protection methods are either targeted atprotecting the business against internal threats,such as the departure of key personnel (methodssuch as personnel commitment, documentationand circulation of tasks), or against external

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Formal

Informal

PatentsTrademarksDesign Rights

CopyrightsContracts

Membership in professionalorganisations

Database & networkprotectionFast innovation cycleTechnical protectionPublishingDocumentationSecrecy

Restricting accessto informationCompartmentalisationof tasksCirculation of tasksVerbal communications& knowledge sharing

Cultivating loyaltyamong personnelConfidentialityClient relationshipmanagement

Figure 8. Protection methods by level of formality

threats, such as competitors (methods such astechnical protection, fast innovation cycle and se-crecy). Besides, some methods have multi-di-mensional functions and the motives behind theuse of certain practices vary greatly betweenbusiness sectors and even between individualbusinesses.

It seems that informal and formal protectionmethods are not mutually exclusive or even mu-tually competitive, but rather support each other.It can be argued that systematic use of formal andinformal methods may provide the optimum levelof protection for the firm. However, respondentsperceive that both informal and formal protectionpractices have some positive and negative as-pects. The key weakness of informal protectionpractices relates to the fact that they do not usu-ally offer legal forms of protection. This meansthat many informal methods are not valid in thejuridical sense. Figure 8 illustrates some of themost important protection methods and their de-gree of formality.

This study provides an analytical description ofIP protection and management among the SMEsstudied. The results of the research demonstrate avariety of IP protection methods as well as thevarious motivations that SMEs have for IP pro-tection. Furthermore, the different dimensions ofprotection are underlined. The research identifiesand describes the most common IP protectionmethods adopted in various business sectors andshows that the strategies vary greatly betweensectors. It also highlights the fact that the strate-gies used in different countries show some majordifferences.

Conclusions

Previous studies have indicated that knowledgeand innovations are key determinants of eco-nomic performance. Better understanding of IPprotection enables more effective management ofknowledge and innovation in SMEs and in theservice sector. The study points out that informalprotection methods are extremely important, es-pecially when innovation is characterised by in-tangibility and a relatively short life-cycle. In

such cases, formal methods such as patenting areeither impossible or too slow a process to offerany meaningful benefit for the business. How-ever, the major weakness of informal practices isthe relatively weak legal protection that they typi-cally offer.

The study provides a new perspective on and un-derstanding of the use of informal protectionpractices. Furthermore, it enables more effectiveintellectual property management in the servicesector. Overall, it is important to recognise thatinformal and formal protection IP methods arenot mutually exclusive or even competitive;rather they support one another in a number ofdifferent ways.

5.3 IP Protection andManagement in KIBS andtheir CollaborativeNetworks

SC-Research, Seinäjoki Polytechnic

Project manager Dr. Jari Kuusisto; Research team:Dr Selina Päällysaho and Ms. Riikka Kulmala.

Objectives

The aim of the research is to provide new infor-mation and deeper understanding regarding intel-lectual property (IP) protection in the knowl-edge-intensive business service (KIBS) sectorand related networks. The research concentrateson both registrable and non-registrable ways toprotect intellectual property, though the main fo-cus is on informal protection practices. Further-more, it reveals the diversity of IP protection andmanagement practices in situations in which theknowledge and innovations are mainly intangibleand co-produced by the supplier and the clientfirm.

Background

IP management and protection is extremely rele-vant for KIBS, since co-production of knowledgeand development of innovative solutions for their

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7

La Visión Prospectiva

Áreas de enfoque que delinean las futuras prioridades de I+D e Innovación en Finlandia del 2008 – 2015

Referencia Ms Pirjo Kyläkoski, Foresight Manager

Tekes

http://www.tekes.fi/eng/tekes/focusareas2008.htm

Focus areas The focus areas outline future priorities for R&D and innovation in Finland. A more comprehensive publication in English will be published by the end of March 2008.

The key message is crystallised in the title of the publication presenting the new strategy focus areas: People - Economy - Environment. The prioritisation is based on the challenges and opportunities arising from people and their well-being. The economy creates opportunities for needs satisfaction and the environment brings restrictions and challenges while also creating opportunities for new activity and well-being. Finland is part of the global economy with value networks that are becoming fragmented and that challenge us to participate in new types of activity. Renewing innovation calls for openness and end user involvement

The choices focus on eight focus areas: well-being and health; knowledge society for all; clean energy; scarce resources; built environment; intelligent systems and environments; service business and innovations; and interactive media.

Focus areas

Crosscutting competences and technologies

The choices made will guide research, development and innovation prioritisation for the coming years. Their purpose is to assure Finnish wellbeing and the competitiveness of our economy will continue to develop steadily. Tekes will implement the choices through its programmes and Strategic Centres for Science, Technology and Innovation.

There were around 200 decision makers, influencers and experts representing Finnish business, research and stakeholder groups actively participating in the process. Tekes also utilises every day project discussions – totalling around 1,500 every year – in strategy formulation. The resulting choices communicate Tekes view and interpretation of the discussions and other interaction that have taken place.

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