The monthly theme is written by Timo Hämäläinen from Sitra.
Translation by Tomi Leivo.
Finland got lucky in the recession of the 1990s. During recovery, the fallen production domains were instantly replaced with the booming telecommunications industry, with exponentially growing exports that lifted the Finnish national economy out of the recession. This new financial support structure was the result of several bold decisions made during the 1970s and the 1980s. With these decisions, Finnish companies and the public sector together committed to long-term development of a new domain in electronics and information technology.
For the public sector the commitment meant, for example, loosening the regulations for the industry, building new infrastructure, investing in research & development and mobilising domestic expert networks to solve the bottlenecks of the emerging technologies. Finland also actively participated in the Nordic and European standardisation work (NMT and GSM) and promoted international cooperation in technology. The highest political governance in Finland provided strong political support for developing new technologies; for example, TEKES was founded in 1983 and Finland started to purposefully increase the University education and research in electronics and information technology.
Today, we are facing a new recession and the traditional industrial domains are disintegrating. This time, there is no emerging growth industry in sight. Since the 1990s, the Finnish trade and innovation policies have focused on boosting existing old industrial domains (including telecommunications) and developing the operational frameworks of the companies. Determined and extensive investments, as the ones made in the 1970s and 1980s, for creating new business domains have not been made. Strong decisive actions for renewing the financial structure have been considered too risky and have not been made.
This strategy appeared to work out just fine, up until recently. Now the situation has changed. The globalisation of economy has reached the next stage where the traditional business industries are more and more moving their operations outside Finland. This is a worrying trend, as the closed factories and offices will not be replaced with any major investments in new domains. There are growing cracks in the economical foundation of the Finnish welfare.
There are also additional reasons for re-thinking the policies regarding economy. Among the industrialised countries, there are several good examples of successful creation of new financial support structures through the cooperation of the private and public sectors. These examples include Chilean wines, Brazilian aeroplanes and the laptop computers from Taiwan. The success stories for these countries bear similarity to the rise of the Finnish telecommunications industry; a long-term cooperation between the companies and public administration was successfully created as the different parties left no stone unturned when searching for the best possible prerequisites for local production. In addition, the countries were not afraid to take initiative and to have faith in the future. We need something similar in Finland as well.
