Opening address by President of the Republic of Finland Tarja Halonen at the Innovation Seminar in Sydney, 16 February 2007

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It is certainly a great pleasure to attend and open this Innovation Dialogue between Finnish and Australian participants. There is a real interest in Finland to intensify contacts with Australia in the field of innovations and this is clearly shown by the very high level innovation delegation accompanying me on our state visit to Australia.

I think that it is appropriate to say that this innovation team is by no means the first Finnish innovators to visit Australia. Mr. Herman Dietrich Spöring of Finnish origin visited these shores already 237 years ago as a member Captain Cook’s team. Times and innovations were different at Captain Cook’s time, but I hope that we Finns still carry some the same curiosity and open-mindedness as did Mr. Spöring.

In recent years, there has been quite extensive international interest in the Finnish innovation and education system. Many delegations have visited our country to observe what is called the "Finnish model". And now we want to share our experiences here in Sydney.

I would like to outline some of our experiences in building a knowledge economy based on social justice. Finnish approach highlights the importance of developing a vision, encouraging creativity and working on consensus-building.

We Finns are only five million and Finland is a relatively large country, so we can never compete with quantity, only with quality. For this, we need expertise and expertise is generated through investments in education, in research and development, and in support for innovation.

We have often been asked how it was possible for Finland to become a technology-intensive, knowledge-based economy in such a short time in the late 1990’s and the early years of this century. Actually, the answer is the opposite, it has taken a rather long time to build up the system.

For decades, the Finns have been fast appliers of new technologies. A small nation struggling with severe climatic conditions has simply had to apply new technologies as fast as possible. For instance, the Finlayson weaving shed was the first place in Northern Europe to install electric light in 1882. Only six years after Bell patented his invention, the major cities in Finland had functioning telephone companies. In the early 1920’s, Finland had both a national airline and a broadcasting company in operation. Later, Finland became a forerunner in use of the mobile phone and the internet.

One of the crucial factors behind the Finnish "success story" is that education, science and research have traditionally been widely appreciated in the society and therefore they have become political priorities. Also, public-private partnerships have been used whenever they have been considered suitable.

Our modern research and development policy goes back to the beginning of the eighties, and was greatly inspired by recognition that Finland would not be able to compete successfully through traditional industry only. Knowledge intensity and technology were seen as areas on which to build our future strategies. All the major public and private stakeholders in society participated in the development of the Finnish model.

Today – 25 years later, Finland is not only one of the most open economies in the world, but also one of the leading knowledge-based economies. Finland is close to the top in many international rankings – for example for competitiveness, environmental sustainability, technology, industry-science relations and research and development expenditure. Spending on research and development relative to GDP is today one of the highest in the world – at about 3.5%. It is interesting to note that at the time of deep recession in the 1990’s, public investments in research and development actually increased.

Success is dependent not only on making decisions and choosing the right development paths at the right time, one also needs to have good luck. Progress in science and technological advancement usually takes place quite slowly and step by step. In order to exploit the real benefits of research, we need to be patient and far-sighted, and to invest in a sustained manner equally in education, science and technological development.

For developed countries, the knowledge-based economy – if socially just – allows further specialisation and improvements in productivity. Human and knowledge capital is the only asset that can grow without limit.

I want to raise some key challenges we are facing in Finland and in Europe. Firstly, we have to respond to harder international competition. Secondly, our population is ageing very rapidly – in Finland even more rapidly than elsewhere in Europe. Thirdly, we have to address the ecological challenges – in particular, the state of the environment, climate change and energy resources. In order to tackle these challenges successfully, we certainly need to improve our innovation systems further on.

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Finland has been a member of the European Union since 1995. In 2006 we carried the responsibility of European Union Presidency for the second time. In line with our national focus on innovation we made during our presidency dedicated efforts to push forward with a new, broad-based European approach to innovation policy.

The European Union’s framework programme for research and technological development represents one of the success stories out of all EU programmes. The framework programme enjoys continuing popularity among researchers. It is a remarkable achievement on a global scale, involving more than 30 European countries with full rights and obligations. It also serves as a platform for European cooperation with other countries like Australia. The previous framework programme for instance involved 12 projects where both Australians and Finns participated. This is a relatively good number, but we could do better.

Throughout the years the EU research funding for Finnish organisations has clearly exceeded Finland’s estimated contribution to the research framework programme’s budget. While the framework programmes have proved a success story within the EU, we can say with assurance that the participation of Finnish companies, universities, research centres and other actors in the programmes has also represented a success story.

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Knowledge capital is the only asset that can grow without limits. Sharing knowledge with other nations, companies and persons does not diminish the knowledge of the original owner. Knowledge is a non-rivalrous good that can be used at same time all over the world.

All countries are more and more dependent on access to knowledge and technology that are invented and produced outside one’s national societies. This is a basic economic motivation for more intense international communication and collaboration. Finland is a small country and we know well that international networking is essential for us.

I am convinced that this kind of bilateral exchange of experiences will contribute to the improvement of the innovation system in our countries. I wish you every success and hope that the event provides you with an opportunity for many fruitful discussions.