World Bank Country Office, Kiev, Ukraine

Ukraine Knowledge Economy Training Initiative

Video Conference, ILO, Geneva, Switzerland, 22 January 2008

CREATING FINLAND’S KNOWLEDGE ECONOMY

Professor Jorma Routti

Helsinki University of Technology & CIM Creative Industries Management

Former President of Sitra & Director General of European Commission Research DG

www.cimfunds.com jorma.routti@cimfunds.com

Finland Europe World

Stages of Industrial and Economic Development

FOREST-BASED INDUSTRIES

MACHINERY, ENGIN. IND.

FOREST-BASED IND

ICT, ELECTRONICSMACHINERY, ENG.FOREST-BASED INDCHEMICALS

Lisbon strategy

Research

Growth and Jobs

Education Innovation

S&T contributes to the Lisbon objectives: economic growth, employment creation, environmental protection, social challenges: fight poverty, improve human health and quality of life (GSM, remote working, safe roads, etc.)

Finland—Basic Scorecard

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

19

81

19

84

19

87

19

90

19

93

19

96

19

99

20

02

20

05

Finland

Japan

USA

EU

Sw eden

China

R&D expenditure, % of GDP

Industrial Productionat 2000 prices

0

2

4

6

8

10

12

1951

1955

1959

1963

1967

1971

1975

1979

1983

1987

1991

1995

1999

2003

Bill. EUR

Electronics

Metals and engineering

Pulp and paper

Chemicals

Textiles and apparel

Sources: Statistics Finland, ETLA.

Telecommunications and Nokia's Change

1988 1998

Mobile Phones 60% Infrastructure 33% Other 7%

Floorings 1%

Chemicals 2%

Machinery 4%

Electrical Wholesale 4%

Rubber 6%

Information Systems 23%

Cables 9%

Paper 10%

Consumer Electronics 31%

Mobile Telephones 5%Telecommunications 5%

Mobile Telephones 5%Telecommunications 5%

2000

Net sales USD 5.2 billion 1988 Market capitalization USD 1.4 billion at year end 1988

Net sales USD 19.9 billion 1999Market capitalization USD 236.5 billion, as of February 28th 2000

Services in the Mobile Information Society

Information

Entertainment

e-shoppingand banking

Voice

Corporate access and e-mail

e-education

Video

MARKETS quality

competitiveness price

competitiveness environmental

expertise

F O R E S T I N D U S T R Y

Pulp and paper technology

Wood products industry

Machines, machinery and processes

A11/ 99-08

Securing competitiveness inthe Forest Industry

FORESTRY

CONSTRUCTION AND WOOD TECHNOLOGY modification of wood construction

technology andarchitecture

logistics, assembly

MANUFACTURING TECHNOLOGY forestry machines process and production machinery material technology

BIOTECHNOLOGY enzymes rot prevention gene technology

ENERGY AND ENVIRON-MENTAL TECHNOLOGY biofuels, combustion technology ecobalances closed cycles energy-saving and

emissions

CHEMICAL TECHNOLOGY paper and bleaching chemicals surface treatment

substances pigments, adhesives

INFORMATIONTECHNOLOGY sensors, measuring

and control computational

intelligence,simulation andmachine vision

multimedia and telecommunication tomography

Forest Industry Cluster & Niche Strategies

Brasil, South Africa, China, Indonesia

Manufacturing and Operations

Valmet Paper Machines• Design, manufacturing

and remote operations

Production • Focus on specific market

segments and products

World wide marketing

Paper, cardboard, packaging material

Poyry Design and Consulting

Pulp Mills Sunds

Design, manufacting and maintenance

Timberjack Forest Harvestors

Co-operation between companies and universities and research institutes

Norway

UK

Sweden

FINLAND

Portugal

Austria

Netherlands

Ireland

Italy

France

Denmark

Germany

Belgium

EU

Norway

UK

Sweden

FINLAND

Portugal

Austria

Netherlands

Ireland

Italy

France

Denmark

Germany

Belgium

EU

0 20 40 60 %

Share of innovative companieshaving co-operation agreements

with universities (1994-1996)

Share of innovative companies havingco-operation agreements with public

research institutes (1994-1996)

Source: Eurostat, Enterprise DG, 2nd Community Innovation Survey

J05/ 00-06

0 20 40 60 %

Innovation and Funding System

Pri

vate

Basic research Applied research Business R&D

Business developmentMarketingInternationalisation

Company R&D

Business Angels

Pu

blic

UniversitiesResearch Institutes

Technology Funding

Venture Funds

Sectorial research

ResearchCouncils

s

SOCIAL & HUMAN CAPITAL

TECHNOLOGY & INNOVATION

RE

SE

AR

CH

CA

PA

CI

TY A

BS

OR

TIO

N C

AP

AC

ITY

SUPPLY USERS

CREATORS DEMAND

s

SOCIAL & HUMAN CAPITAL

TECHNOLOGY & INNOVATION

RE

SE

AR

CH

CA

PA

CI

TY

AB

SO

RT

ION

CA

PA

CIT

Y

SUPPLY USERS

CREATORS DEMAND

JAPAN

USA

IRL

ITA

SWE

DE

FR

UK

FIN

CURRENT STATE

V I S I O N

S W

O T

ECONOMY

SAFETY

SUSTAINABILITY

SOLIDARITY

SKENARIOS FOR

OPERATING ENVIRONMENT

CONSENSUS PROGRAMS IN FINLAND ECONOMIC POLICY AND NATIONAL STRATEGIES

Participants: Members of Parliament, Media Leaders, Civil Servants Labour Movement, Industry Organizations, Academia

Objectives: Growth, Employment, Balance, Low Inflation

Instruments: Fiscal Policy, Taxation, Incentives, Echange Rates, Interest Rates

Topics: Globalization, Integration, Trade, Social Policy, Regional Policy, Education, Research,

Industry, Agriculture, Banking, Environment, etc.

Government: Consencus Building, Trade-offsSimulation Models, Economic Advisors

Adoption: Baltic Countries, New EU Members, Latin America, WB