Finland: A Turnaround Success Story

Written by Subhash Agrawal | Updated: Jul 2 2004, 02:40am hrs
There is old Europe and a new Europe and then there is a country that is neither, or perhaps both. This is Finland, a country that was throughout history the battlefield of major European military conquests and imperial expansion but treated as no more than a territory. It was ruled by the Swedes for 600 years and then by the Russians for 150 years, only to be ignored during most of the 19th century European conclaves between the great powers that tried to apportion the continent among themselves.

In common continental and British literature of the early 20th century, Finns featured as a buffer-race between West and East, being more civilised and less submissive than the Russians yet not European enough. The Finn stood as the odd character stubborn, defensive and sulky, with a language quite apart from all others on the furthest border of Europe, a bridge between Western civilisation and Cossack hordes. In many ways, Finns were projected with a mix of patronising and uncharitable stereotyping. Till well into the 1970s, few Europeans knew Finland, and most treated it as the poor cousin if not as an outsider.

The Finns are all too aware of their painful history and undeserved image, but this is one country that appears to hold few grudges. In an amazing combination of steady resolve and forward perspective, the country has moved on successfully to build a new identity, prosperity and pride for itself, all revolving around that magic phrase: knowledge economy. While other countries flaunt their cuisine, wines, landscape, architecture or culture, Finland flaunts its technology labs and global patents. In so many ways, Finland appears to be near or top of the technology heap. In fact, in just a short span it has repositioned itself as a technology wonderland, a nation on the move thanks to innovative companies and a highly-skilled workforce.

There are so many indicators that point to this progress. Finnish per capita income is now about the highest in Europe, and the latest World Economic Forums Global Competitiveness Report ranks Finland as having the worlds most competitive economy, edging out the US. Nokia is no longer just a wonderful discovery that is worthy of a Harvard case study, but has gone on to dominate the global mobile market and to become one of the most recognisable brands in the world. In fact, Finland is to mobile and wireless technology what Sweden is to pop music, a breeding and testing ground for new products.

But Finnish success goes beyond mobiles, and includes forestry and shipping, areas where their companies are dominant players. Plus, there are a host of firms in niche technologies, such as Kemira, a chemical company doing leading-edge research in fire-retardant products, or Suunto, which makes precision sporting equipment for scuba divers that can save your life (their company byline is wonderfully succinct and creative: Replacing Luck). And this is just the front-end. Behind this are many public and private organisations that support R&D, not just theoretical but real products and real workplace processes. Finland has the highest number of technology patents awarded per capita and is ranked first among Western countries in scientific talent. Helsinki has the highest concentration of technology workers in all of Europe.

Technological innovation is at the heart of the national impulse, so much so that the Finnish Parliament even has a Future Committee. The reputed social thinker, Manuel Castells, has co-authored a book on The Information Society and the Welfare State - the Finnish Model which shows how Finland has adopted technology as a key political objective further than any other nation. The knowledge economy is far more than mere economic strategy, it is a project to build a new and confident Finnish identity.

Thus, it was altogether appropriate that Finland recently launched the Millennium Technology Award, a biannual prize for outstanding innovation that directly improves the quality of human life and encourages sustainable economic development. This is the Finnish version of the Nobel Prize in fact it carries a higher purse and in line with Finlands effort to identify itself with technology that matters. In a glittering event held two weeks ago, the first recipient was Tim Berners-Lee, the inventor of the World Wide Web.

In so many surveys, multinational executives find Finland one of the most professional countries to work in. Why Because the business environment offers a rare combination of superb infrastructure, official support, American can-do approach, European grace and Nordic decency.

Of course, not everything is perfect. Finland ranks high in talent and technology, but its tolerance is yet to be fully tested since immigration is kept very low. It has to eventually cope with a declining demography and how to turn a homogeneous culture into a more multiethnic but dynamic society. But this is a country which instead of bemoaning an unfair past has combined hard work with effective public-private partnership to become a real turnaround success. Something India could learn.

The author is an analyst of Indian political and business trends and the editor of India Focus, a political risk report for international investors