Lessons for New Zealand in Finland’s success story
Investment in innovation has lifted our Scandinavian counterparts to top of charts
I visited Finland in January 2020 and interviewed several thought leaders. This is what I learned.
The Finnish Prime Minister’s visit to Aotearoa New Zealand, accompanied by a business delegation, is a big deal. It is the first visit by a Finnish Prime Minister. It is also significant for other reasons.
NZ Prime Minister Jacinda Ardern observed that we are natural partners and share similar approaches and views on many issues. While Ardern spoke about the rule of law, multilateralism, sustainability and free and open trade, she recognised that Finland has a “lot more to offer”.
New Zealand and Finland share something unique. They are stable democracies employing a pragmatic blend of socialism and capitalism — an enlightened and caring progressive social and political model that seeks to cater for the overall needs of the population, rather than a small ruling elite.
In 2019, when researching my book, The Power of Wellbeing, I kept coming across a small Nordic country that seemed to over-achieve at just about everything, repeatedly winning titles for the happiest country in the world, the best education system (based on a small gap between lowest and highest performers and where 99 per cent of students at school complete their studies), a healthy democracy, very little corruption, impressive GDP figures etc.
All this at the same time as managing to live alongside its belligerent neighbour, Russia.
How did this small, remote, country with a population largely the same as ours, and limited natural resources — apart from wood and water (two things we also have in abundance, but have largely failed to leverage), become so good at so many things?
To find out, I visited Finland in January 2020 and interviewed several thought leaders. This is what I learned.
Finland and New Zealand are different in some respects. At the same time, we are surprisingly similar. Both countries are proudly egalitarian. Both are relatively large but sparsely populated; Finland has approximately 18 people per square kilometre, New Zealand 19. Both countries regularly top the Democratic Index (well-run democracies) and Corruption Perceptions Index (the least-corrupt nations). Both have outlawed the ownership of automatic firearms by private individuals.
New Zealand is more multicultural and diverse than Finland’s largely homogeneous population.
There is one key difference — Finland’s economic success and development of a high-performance economy that is able to fund and support its extensive wellbeing policies. This is a critical prerequisite for achieving general wellbeing.
In terms of providing the “means” i.e. the economic wherewithal to pay for wellbeing policies, Finland has few natural resources. Even so, it has created a much-vaunted techbased export sector.
Take Kone Corporation. Known for its innovation, dependability and quality, it is a world leader in the elevator and escalator industry. Vaisala Corporation is a global leader in environmental (weather) and industrial measurement. Valmet Corporation is the leading global developer and supplier of technologies, automation and services for the pulp, paper and energy industries. Rovio, Supercell and Fingersoft are world-leading mobile gaming companies.
The Finnish maritime cluster, including shipbuilding — especially icebreakers and cruise ships (Finland has made some of the largest cruise ships in the world), diesel engines (by Wartsila), and cargo-handling systems (by Cargotec), — punches way above its weight in specialist markets.
The common denominator — a firm emphasis on research and development (R&D) and innovation, and unwavering attention to detail and quality.
Sixten Korkman is a professor emeritus at Aalto University in Helsinki. In his view, it is Finland’s comprehensive and inclusive welfare state, based on universalist principles and long-term investment in human capital, including childcare, education and R&D.
One of the key features of Finnish society is its egalitarianism, notably in relation to women. Another is the high level of trust between citizens and in its institutions — which have clear accountability to the people.
Progressive, liberal democracies like Finland and New Zealand can show the rest of the world how to implement forward-looking but affordable social policies that benefit the entire population. We need to learn from our Finnish friends about funding and rewarding R&D and innovation, improving productivity, and reversing our drift towards inequality.