Opening address by President of the Republic of Finland Tarja Halonen at the Innovation Seminar in Auckland, 19 February 2007

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I am very pleased to open this Finland – New Zealand Innovation Seminar. The role of smaller countries like Finland and New Zealand in the global division of labour is quite evident. Small home markets forces firms to specialize and seek foreign markets already at an early stage. We cannot compete with low labour costs but we can do so through creativity and innovations; quality before quantity. Smallness can be a benefit as it makes networking and diffusion of new knowledge much easier.

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

Finland is a relatively large country but we are only five million, 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 current 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 has become 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.

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%. Even 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 the so-called 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.

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Necessity is the mother of innovation: Limited natural resources and energy supplies as well as harsh climate and long transport distances are natural reasons why Finland has been forced to operate with high efficiency. We have learned over the centuries to make most out of the least.

Sustainable development is a prominent part of our domestic and international policies. Finns are environmentally conscious people. In Finland, environmental technology is an integral part of our development work and investments. This clearly shown by the fact that one third of the total value of Finnish exports consists of environmentally friendly technologies.

Knowledge capital is the only asset that can grow without limits. All countries are more and more dependent on global knowledge diffusion – that is, on knowledge produced outside our own national economies. This is the basic economic motivation for more intense international communication and collaboration.

I am convinced that today’s bilateral exchange of experiences will contribute to the improvement of the innovation system in our two countries. So far there is only one project where both New Zealand and Finland participated in the European Union’s framework programme for research and technological development. I think that we could find ways to improve our cooperation.

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Innovation needs encouragement. Therefore, Finland has established the Millennium Technology Prize. The Millennium Technology Prize is a Finnish joint venture of public and private sectors. The government and private industry have together formed an endowment to award every second year a prize to celebrate technological innovations that have a major impact on quality of life and wellbeing. The prize amount is one million euros, making the Millennium Technology Prize the biggest technology prize in the world!

The first one million euro prize was presented in 2004 to Tim Berners-Lee, the inventor of the World Wide Web. In 2006, the prize was presented to Professor Shuji Nakamura, the inventor of new revolutionary light sources.

Candidates for the 2008 Millennium Technology Prize are sought from around the world and all fields of technology. I welcome wholeheartedly nominations and nominees also from New Zealand for the 2008 prize.

I wish you every success and hope that the event provides you with an opportunity for many fruitful discussions and future cooperation.