A Renewed Policy to Promote Innovation

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Helsinki, 4 April, 2003 — The positive development of the Finnish economy during the past decade has been driven by high technology and by its effective application. This has generated continuous increases in exports, most clearly of high tech goods and services.

The positive development of the Finnish economy during the past decade has been driven by high technology and by its effective application. This has generated continuous increases in exports, most clearly of high tech goods and services.

As a consequence, Finland has achieved top rankings in numerous international comparisons - in particular in those focusing on the overall economic competitiveness. Fortunately these achievements have not incurred at the cost of other important policy-areas, such as the environmental sustainability.

Finland can well be considered to be a knowledge society, or at least fast progressing towards one. From a policy perspective, this can be regarded as a consequence of a long-term commitment to the society, which facilitates and promotes knowledge creation and diffusion. Instead of looking at education, science, or technology separately, there is a tradition in Finland to look at these as an operational entity – as a dynamic innovation system. In the light of international evaluations, this approach has proven to be successful.

Determined Input into Research and Development

One distinctive feature of the Finnish science and technology policy has been the strong growth of public sector’s and, in particular, the private sector’s research funding. The information and communication cluster has been at the very core of this growth, as roughly half of all the national research input is used in or for the benefit of this cluster. In higher education the proportion is nearly the same: some 35 per cent of all the university and polytechnic graduates have an education in ICT or its neighbouring fields. Pooling of resources of this magnitude would not have been possible without good co-operation between the public and private sectors.

In 2001, altogether more than 4.5 billion euro were spent on research and development in Finland – an amount that equals to 3.4 percent of the Gross Domestic Product. This proportion puts us among the leading countries of the OECD. In absolute terms however, Finland will always remain a marginal operator in the global research and development, as our investment volume accounts merely for 0.7 percent of the OECD total. The long-term development is also encouraging. The volume of research and development in Finland has grown ten-fold since the early 1970’s.

Besides research investments, the number of research personnel in Finland has increased and the education level of research personnel has risen. At least two issues have influenced this positive development: the starting of national graduate schools in 1995 and the increased participation of women in research work. Today, there are approximately 70,000 persons carrying out research in Finland. This equals to nearly three percent of the labour force and is clearly the highest share among the OECD countries.

Sustaining the advantage achieved with the knowledge-intensive industries presents a major challenge for a small country like Finland. In this respect, it is crucially important to extend the economic base to new knowledge intensive fields, while at the same time co-operation should be enhanced with the more traditional fields. Maintaining the competitiveness of the innovation environment and improving the employment situation will require continuous input in increasing both the overall level of knowledge in all fields, as well as ensuring the availability of skilled labour force in fast growing, knowledge intensive fields.

Finland as Part of the Global Community

Today, science, technology, and innovation develop regardless of geographical borders. Policies must take into account much wider view than the national operating environment, as internationalisation permeates the whole innovation system. Among other things, this means internationalising national research and development institutions, their activities, measures, and programmes. The challenge is to make the most of globalisation by exploiting the positive aspects of the trend.

In the field of European research, internationalisation is shown most clearly in the construction of the European Research Area. This offers European researchers and research organisations more possibilities to operate outside their home countries. It is anticipated that the increased number of international research projects and the closer networking of centres of excellence will amplify European research and eventually further improve its quality.

The integration and enlargement of Europe will also have concrete influences on how science and technology policies evolve within the member states. One foreseeable consequence will be the increased mobility of human resources. In this respect, Finland still has much to improve, as our share of foreign researchers and experts is well below the EU average. Keeping in mind the upcoming retirement of larger age groups and our limited own resources, there is a need to make better use of the international expertise.

Towards a National Strategy

Keeping on the knowledge path will require continuous and versatile development of the national innovation system. According to the Science and Technology Policy Council, an innovation policy with a wide spectrum of measures should form the core of the Finnish national strategy for the coming years. The key topics of the proposed strategy touch upon the following development issues.

It is of utmost importance that the Finnish major knowledge and know-how assets – national competencies – can be further developed. Today, these competencies relate particularly to the information and communications cluster, the forest cluster, and the metal cluster. Alongside the current competencies, there is a need to widen the competence-base by investing in other promising research fields and to achieve a sufficient volume and quality in those.

Besides technological innovation, systematic input into social innovation is also needed to prevent societal and social development from diverging from economic and technological development. In this respect, it is for the Ministries to assume greater responsibility as strategic development organisations and users of social innovation.

What comes to public research organisations, their future role is seen as active and dynamic cooperation partners for business and industry. Similarly, universities’ legal and operational environment should better encourage active development of education, researcher training, and research and to promote the utilisation of research findings.

The Science and Technology Policy Council of Finland, chaired by the Prime Minister, advise the Finnish government and its ministries in questions relating to science and technology. The Council is responsible for the strategic development and coordination of Finnish science and technology policy as well as of the national innovation system as a whole. The membership consists of seven other Ministers and ten other members well versed in science and technology.

The Council adopted its latest review “Knowledge, Innovation and Internationalisation“ in December 2002. The review examines the development challenges facing Finnish science and technology policy in the coming years and outlines relevant policy, with particular attention paid to the rapidly internationalising innovation environment.

More information about the Council and its policy recommendations on the Council's wwww site. www.research.fi

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