Column : Imagined in Helsinki

Written by Renuka Bisht | Updated: Nov 2 2011, 09:18am hrs
Last month saw a Finnish nuclear power consortium make the worlds first announcement of a new site since the Fukushima disaster, which had persuaded many countries to reconsider their nuclear programmes. Despite intermittent environmentalists protests, Finnish lawmakers have largely united behind the proposed Pyhjoki reactor. This is only one reflection of a broader national consensus on renewable energyit already accounts for 25% of total energy use and is expected to contribute a 38% share by 2020.

Admittedly, the Finns consume 12 times more energy per capita than Indians. But, besides coping with a harshly cold climate, they are forced to import nearly all of their fossil fuelswith all of their natural gas coming through the Russian interconnection. Energy independence is, therefore, a key renewables driver. The second one is also a factor of geography. With 70% of the country still under forest cover, Finland has historically been heavily reliant on heavy energy industries. Even Nokia started life as a paper producer in 1866. So it was no wonder that the lakes that cover nearly one-tenth of the country became heavily polluted by the 1970s. The wonder is that they are much cleaner today, thanks to a host of regulatory interventions and innovations since the bad old days. Pollution loads from industry, municipal waste and agriculture have been effectively reduced by means of biological treatment plants, separation technologies, advanced processing of biomasses etc, with positive spin-offs like consuming less freshwater and creating reusable water. The wonder is also that a lot of the cleantech science has been home-grown, which the Finns are now aggressively pitching abroad and especially beyond the saturated EU markets.

With its stated objective of adding $33.8 billion worth of renewable-based power generation capacity during 2012-17, in addition to the hundreds of billions of dollars expected to be invested in energy efficiency and other cleantech solutions, India provides an attractive target for innovative Finns. So, big players like Kemira are putting up factories here. This water industry giant says it is relying on the fact that only 27% of household and 60% of industrial wastewater is currently treated to sell its accumulated expertise in creating production processes that require less water, energy and other invaluable resources. Another example is Vacon that says its AC drives helped save the energy equivalent of 7 nuclear plants last year, which is looking at customers ranging from airports and malls to power stations and solar grids, with its USP being that full use of AC drives and energy-efficient motors would provide savings of up to 30% in the energy consumption of the electric motors that consume about 30% of the electric energy produced worldwide. Its customers list already includes the likes of Reliance Industries Ltd and Steel Authority of India.

While most players retain design and monitoring centres in Finland for what they say are efficiency and cost reasons, some of the smaller entities are beginning to buck this trend. A case in point is Incap, which contract manufactures energy efficiency solutions for its worldwide customers via a design team based in Bangalore.

None of the above are anywhere close to becoming a household name in India. But Nokia is, and its no exaggeration to say that this company is central to the Finns imagining of their country and its future. Its the Nokia phenomenon that is credited with lifting the Finns out of recession in the early 1990s. While they await a new Nokia, the companys fortunes have declined and the pressure on the Nordic welfare state has become magnifiedgiven that the smoke-stack industries are outsourcing production to countries like China and the baby-boom generation is set to retire just the same as in the US. But there is a fall-back programme in place, and its core defining factor is intellectual capital. The thing that the Finns are really counting on in a post-Nokia world is that all their investment in education is going to pay off as world markets enter a prolonged phase of uncertainty. Not only is primary and secondary schooling free and of a high standard (regularly raking in high PISA scores), even university tuition is close to nil. Nokia used to account for 25% of the countrys R&D investments, and companies like Kemira are big on R&D spends now. The state is also pitching in substantially as Nokia does cost-cutting. The Finnish funding agency for technology and innovation, Tekes, says its budget continues to be enough to support all good projects. Results havent yet come up to Nokia expectations, but lawmakers remain committed to Tekes by reminding themselves that Nokia Electronics made a loss in every one of its first 17 years.

In Imagined in America, Thomas Friedman wrote last month that when labour-intensive assembly jobs look like they are never coming back from China, one needs to focus on multiplying more people at the high-value ideation and orchestration end of the supply chain. Finland is doing this. We could sigh that it can do this because its GDP per capita is 32 times ours (at current prices). But there really is no free lunch. Finns pay up tax revenues amounting to 43% of GDP, as compared to 15% and 24% for Indians and Americans, respectively.