Finns explain what makes them world leaders in ICT

Brussels, May 2004

At an information session on Finnish/EU ICT and IST Strategy in Brussels on 26 May, participants outlined Finland's strategy over the next four years for remaining the lead producer and user of information and communication technology (ICT).

While there are many opportunities for Finland in this field, all participants emphasised the need to tackle threats and global challenges without delay.

The Finnish government has been very active in this field, and has developed an information society programme, as well as a new body, the Information Society Council, aimed at defining the goals for the Finnish information society, and ensuring it remains competitive on the global scene.

'The strength of Finland is that everyone is involved in the development of the information society: citizens, industry, academia and government,' explained Ilpo Reitmaa, a Finnish IST (information society technologies) Committee delegate. 'There is an extensive debate and a clear commitment from all parties involved,' he added. This close cooperation between the public and private sectors and different policy areas is essential for the development of the information society.

'Furthermore', he explained, 'trust between the different players, and pragmatism, are two essential elements that explain Finland's success.'

'Now,' said Mr Reitmaa, 'the facts to build on are Finland's extensive experience in the EU and its framework programmes, its high percentage of R&D [research and development] expenditure, and the firm steps Finland has taken towards a technology-oriented knowledge based society.'

Pekka Silvennoinen the executive director of the Technical Research Centre of Finland (VTT) agreed, stating that Finland must now rise to the challenge presented by the changes at the global and local level.

The main factors to keep in mind, said Mr Silvennoinen, are that 'quality of life becomes the foremost criterion; we are entering a DigiWorld: all services and processes will be digitalised as much as feasible; ICT contributes to the re-engineering of an increasing amount of services and processes; data and information masses are distributed all over and the added value of data refinement and knowledge and knowledge sharing increases.'

Mr Silvennoinen expressed the opinion that Finland should focus on a few areas, such as media technology, digital content, tools for independent living and well-being, industrial information systems, ICT systems for building and logistics, and human interaction technology.

Leo Laaksonen, director of technology industry in Finland agreed with Mr Silvennoinen's call for a focus on a few core areas. 'Finland has put its bets on getting involved in the best innovation platforms,' he added. 'They will be small scale but world class, integrating key technologies and other know-how into innovative systems.'

Mr Laaksonen explained that the Finnish ICT industry has identified several development targets for 2008. These are 'investing in RTD with a focus on topics relevant for industrial innovation; high quality education to ensure sufficient human resources with a special emphasis on encouraging girls to study ICT, immigration of the top foreign talent; the genuine promotion of entrepreneurship in SMEs [small and medium sized enterprises]; public incentives such as taxation and increased access to venture capital and strategic business management and international networking.'

The only weakness in the Finnish ICT industry, he added, is the lack of multisectoral cooperation. 'This is one of the weaknesses for engineer orientated companies,' he explained. 'The challenge is now for companies to cooperate between different business sectors. We need to create new horizontal business clusters.' Mr Laaksonen also emphasised the need to create a synergy between large EU programme platforms and regional small scale project consortia for applied R&D.

The Finnish strength is its vision, he went on to add. 'Finns don't always develop new technology, but are very good at applying it. The strength of Finland is its ability to create, network and rapidly apply new technologies.' Finland also benefits from a heritage of high technical competence, he added.

Kari Tilli, the Technology Director at the National Technology Agency (TEKES) added that the Finnish innovation system is flexible and open to international cooperation.

He warned however, that although ICT is an important source of productivity in Finland and there is no 'significant slowing of technological development in ICT foreseen in Finland', there are some threats to Finland's world-leading position. He explained that there is increasing diversity and complexity on the global scene, which will require large investment. Unfortunately, small Finnish companies do not have the appropriate resources and will therefore face structural problems. Furthermore, he added, 'global competition is increasing and so is the loss of jobs due to relocation and outsourcing. As the innovation system becomes more global and open, so the Finnish role in the value added chain changes. Thus, international cooperation is essential because as international R&D cooperation and subcontracting increases, only a fragment of the value chain is located in Finland.'

However, Mr Tilli applauded the fact that 'Finland is able to synchronise selected future ICT programmes according to the priorities set at the European level.'

'The essential elements of the Finnish information society model are high R&D investments, public and free education, creativity and social inclusion. We see that these basic elements are working for most of Europe as well,' he added.

The conference ended with Dr Silvennoinen explaining that 'the R&D paradigms in micro- and nanoelectronics and software development are changing. To make a real impact one should be prepared to make substantial increasing investments in the infrastructure.'

Furthermore, as ICTs are rapidly changing, so foresight and roadmapping work are becoming more important, he explained. Joint efforts at EU level should therefore be expanded, particularly through technological platforms, believes Dr Silvennoinen.

'Industrial logistics, production costs and economies of scale often dictate that production facilities are placed outside Europe. We can still fight this China syndrome by creating and managing intellectual property, even by often accepting, albeit reluctantly, that mass production takes place outside Europe. However, all too often, a promising start-up enterprise is acquired by a multinational and less emphasis is given to the development of new products of the following generation. Could there be a European policy on venture capital availability to prevent this?' Dr Silvennoinen asked.

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