Ambassador Jorma Julin was invited to give a presentation at three Japanese universities. Ambassodor focused on the strong points with which Finland has gained success in international comparisions.
Ambassador Jorma Julin visited Fukushima University at Kyushu, Hiroshima University and the Sophia University during one week in the turn of November and December. (picture: Ambassador Jorma Julin)
Here are main points from Ambassador's presentation under the title: Finland 2006 - A country combining clean environment with world top competitiveness and education system.
Finland’s world top positions in international rankings:
• in competitiveness (World Econonomic Forum)
• in absence of corruption (Transparency International)
• in students’ performance (OECD’s Pisa study)
• in environmental sustainability (World Economic Forum)
World Economic Forum's Global Competitiveness Reports 2003-6
• Finland the most competitive economy in the world in 2003-5 and 2nd in 2006
• Special areas of strengths:
- well managed economic policy
- first class public institutions
- private sector that adapts quickly to new technology and innovations
- high level of investments in R&D (research and development)
Finland and sustainable development
• in 2005 Finland was ranked first in the world in environmental sustainability out of 146 countries according to World Economic Forum study (made by the US-based Yale and Columbia Universities)
• study uses 21 indicators covering past and present pollution levels, natural resource endowments, environmental management efforts, contributions to protection of the global commons, society’s capacity to improve its environmental performance over time
• Japan 30th, US 45th, UK 66th, ..
Key factors behind Finland‘s success
1. Quality education with equal opportunity
• free and universal high-level education from comprehensive school to university
- equal opportunity - a chance for gifted individuals irrespective of family wealth
• importance of education stressed since independence (currently 6% of GDP directed to public education)
• rationale: small country with scarce natural resources, important to mobilize and make use of all human and intellectual resources as well as possible
Finland’s success in international comparisons on educational system
• OECD/ PISA, no. 1 in learning achievements of junior high school students for 2nd time in a row
• maths, science, and reading rated the best among the forty countries studied
• differences between the best and weakest pupils are smaller than the OECD average
• however, Finnish students had the smallest number of hours of instruction between 7 and 14 years
Background for good results
• equal opportunities for education irrespective of domicile, sex, economic situation or mother tongue
• instruction, books and other school material and welfare services free of charge
• comprehensive, non-selective basic education, no streaming
• teachers highly qualified (master’s degree)
• profession valued
• individual support for the learning ,welfare of pupils, student counselling. If needed, special education is given aimed at inclusion.
• development-oriented evaluation and pupil assessment: sample-based national testing of learning outcome, no ranking lists
• broad political consensus on education policy and its high importance
• strong autonomy of municipal authorities in providing and organising education
• role of home-school relations and co-operation between schools and other authorities and society are important - the idea of partnership
• philosophy of education, core curriculum and teaching methods are learner-oriented
Gender equality
• Finland one of the most advanced countries in the world in gender equality:
President and nearly 40% of parliamentarians are women (Japan less than 10%)
• High participation of women in the work force contributed to the success of the Finnish economy
2. High level of investments in R&D for technology development
• high R&D intensity that is in constant rise
- 2005: 3,5% of GDP to research and development;
2nd highest in the world (Japan is close with 3,4%)
• Finland among the top performing countries in patents granted / applied per capita
• Finland one of the most active scientific publishers in the world (4th among the OECD countries in 2002) per capita
• close triangular co-operation between:
– universities/research institutes
– enterprises
– central and local governmental institutions
• important to lower barriers between public, private & academia,
• co-financing of research by public and private actors
• 22 science parks and technology centres
• 12 centres of excellence in universities
• incubators
3. Good regulatory framework and efficient public service
• overarching goal: increase competition by expanding the room to manoeuvre for private sector
• sound and predictable regulatory framework is important for business to thrive
• reliable and efficient public sector and service: impartiality, transparency, lack of red tape
4. Open economy: competition has to prevail
• investment in education and R&D & good regulatory framework are necessary but not sufficient conditions for success . Others are:
• access to foreign markets in order to export
– descriptive of Finland: almost 40% of GDP derived from exports
• foreign direct investments are welcome:
capital and know-how
• allowing imports force domestic actors to continuously improve their performance in order to stay competitive
• high degree of specialisation necessary for Finland:
• many companies selling over 90% of their production overseas
• Finland much dependent on imports of quality components and parts
• Finland keen on liberalization of trade barriers
• convinced that globalisation offers more opportunities than drawbacks:
- adaptation and tapping new opportunities
5. Social model: social market economy, welfare society
• welfare state - despite high taxation involved - has played a central role in creating our competitiveness: skilled labour force, strong social cohesion, etc
• so far it has been possible to combine top competitiveness and high level of taxation
• however, in the era of globalisation and increasing competition - welfare state needs reshaping but not abolition
Drawbacks of the model
• high taxes pointed out as one of Finland's relative weaknesses by WEF
• Finland's tax to GDP ratio at 44.3 % in 2004 5th highest in OECD (Japan 2003: 25,3% )
• key issue to find and maintain the right level in taxation; Finland is now adjusting downwards
• very essential is also how tax money is used; if efficiently and for good purposes the level can be higher
• wide public support of social model as the system is considered to benefit all citizens: money used relatively efficiently and quality services rendered for citizens
Benefits of the model
• providing access to all to health, elderly and day care services, education with free tuition, unemployment benefits
• important for our ability to mobilize all our human resources and to guarantee the quality of the labour force
• the social safety net provided also significantly contributes to maintaing social cohesion and stability of our country
Reshaping and streamlining the welfare state from early 1990’s
• while maintaining the precious core of the welfare state more emphasis has been put on individual responsibility
• some welfare benefits have been reduced
• public debt has been driven down from 80% to current 39% of GDP, which has been greatly easing the tax burden (in Japan now 170%)
• pension reforms already executed: pension age raised and payments somewhat lowered
Conclusions
• Finland's strengths as stated by the WEF were well managed economic policy, first class public institutions and a private sector that adapts quickly to new technology and innovation
• they continue to be part and parcel of our strategy and policies aimed at addressing the key challenges we are facing: globalisation, new emerging players in world economy, ageing society
Case Finland particularly suggests:
• playing an active part in the global economic system is essential to excel
• excluding foreign competition from domestic markets is not good for any country in a long term
• mobilising and educating all human resources - also women - is very important for all
• we continue to think that it is possible to continue to maintain high competitiveness and welfare society with relatively high taxation level. But,
• in Finland public understanding has grown that we need a somewhat slimmer welfare state in order to be able to preserve its precious core
• our policy choices cannot necessarily be replicated as such in other countries with different environment
• however, Finland might offer for some an interesting point of reference and for
• ingredients for building ’a beautiful country’ which PM Abe has set as the goal for Japan
• our policy choices cannot necessarily be replicated as such in other countries with different environment
• however, Finland might offer for some an interesting point of reference and for
• ingredients for building ’a beautiful country’ which PM Abe has set as the goal for Japan
Future direction for Finland
• already a thriving high-tech country Finland aims to become a knowledge-based information society
• For a small nation with limited natural and human resources, this strategy is the only road to success and prosperity in today's very competitive world.
