ic for finland: beyond the nokia success · 2017-05-05 · ic for finland: beyond the nokia success...

IC for Finland: Beyond the Nokia Success

The First World Conference on Intellectual Capital for Communities, June 20, 2005

World Bank Office

Prof. Pirjo StåhleLappeenranta University of Technology

Pirjo Ståhle 2005 2

Content

• Facts about Finland• ”The Finland Phenomenon”• Finland from perspectives of

competitiveness and IC • Nokia’s influence• The future challengies of Finland• Some forgotten dimensions of IC


Facts about Finland

• independent republic since 1917, current president mrs Tarja Halonen

• joined the EU at the beginning of 1995 • population is 5.2 million, sixth largest country

(338 000 sq.km) in Europe• about two thirds of people live in urban areas• the capital is Helsinki, 560 000 residents• neighbouring countries are Sweden, Norway,

Russia and Estonia


Facts about Finland (2)

• forest covers about 75 % of Finland, water covers almost 10 %

• 190,000 lakes and about 180,000 islands• 20 universities and 29 polytechnics• the metal, engineering and electronics

industries account for 50 % of export revenues, the forest products industry for 30 %.

• one of the leading countries in Internet use, more mobile phone than fixed network subscriptions


”The Finland Phenomenon”1990-2000

• From deep depression to top competitiveness.• One of the main reasons to quick economic recovery

was the transformation of the industrial structure in 1990s.

• It took less than a decade for electronics and ICT to become a biggest industry in Finland. Its contribution to the growth of GNP in 1995-2000 is about 0,85 % of which Nokia covered alone almost 0,7 %.

• There is no other case in the post war history where either one branch of industry or one company would have influenced in a country’s economy as strongly as this.


Finland from Perspective of the Competitiveness Reports

• According to WEF, Finland was the most competitive economy in theworld in 2004.

• IMD ranks Finland 6th in overall competitiveness in 2005. The threemost competitive countries were USA, Hong Kong and Singapore.

• Based on the Lisbon Review, Finland was the most competitive country in the EU in 2004, followed by Denmark and Sweden.

• Based on the comparisons of the European Commission, Finland wasamong the leading countries in investing into and performance of the knowledge-based economy.

Sources: WEF, The Global Competitiveness Report 2004-2005 and The Lisbon Review 2004; IMD, The WorldCompetitiveness Yearbook 2005; EU, Science, Technology and Innovation Key Figures 2003-2004 and

The European Innovation Scoreboard 2004; United Nations University, The Millennium Project 2001;OECD, Program for International Student Assessment PISA 2003


• The European Innovation Scoreboard 2004 shows that Sweden, Finland,Germany and Denmark are the leading innovative countries in the EU.

• In a comparison made by the University of United Nations, Finland was ranked second in overall ranking. Finland was also ranked second in education,technology and information indices.

• According to the OECD PISA 2003 study, young Finns were among the OECD top in mathematics, science and problem-solving.

Sources: WEF, The Global Competitiveness Report 2004-2005 and The Lisbon Review 2004; IMD, The WorldCompetitiveness Yearbook 2005; EU, Science, Technology and Innovation Key Figures 2003-2004 and

The European Innovation Scoreboard 2004; United Nations University, The Millennium Project 2001;OECD, Program for International Student Assessment PISA 2003


IMDTotal compe-

titiveness2004 2005

2214

177

201058

19693

13

WEFBusiness

competitiveness2003*2002

112354967

118

15121310

22153

10946

13121115147

2004*1123456789

1011121314

WEFGrowth

competitiveness

USASwedenTaiwanDenmarkNorwaySingaporeSwitzerlandJapanIcelandGreat BritainNetherlandsGermanyAustralia

FinlandFinland

* Applying 2003 formula

661

14117

1538

214

2213239

Competitiveness 2002-2005Total rankingTotal ranking

Sources: IMD, The World Competitiveness Yearbook 2005 andWEF, The Global Competitiveness Report 2004-2005


Competitiveness in technology and science2002-2004

2003 20022004USATaiwan

SwedenJapanDenmarkSwitzerlandIsraelNorwayGermanyCanadaEstoniaAustraliaGreat Britain

FinlandFinland

12

45678

101213151718

22

13

45879

131411101916

12

45

1167

10128

149

15

33

WEFTechnology

17

1096

152313144

282017

IMDTechnology Science

18

42

135

15263

17392514

1111 1010

20042004

33

Sources: IMD, The World Competitiveness Yearbook 2004 andWEF, The Global Competitiveness Report 2004-2005.


Ranking of EU countries

DenmarkSwedenUKNetherlandsGermanyLuxembourgFranceAustriaBelgiumIrelandSpainItalyPortugalGreece

Infor

mation

socie

tyInn

ovati

on

and R

&DLib

eralis

ation

Finan

cial

servi

ces

Enterp

rise

Social

inclus

ionSus

taina

ble

deve

lopmen

t

Networ

kind

ustri

es

132647598

111014121315

142673

13598

1011121415

12635847

109

1211131415

412873569

101512131114

13427856

10119

12131415

32517

1069

1284

11151314

21284

125976

1011131415

143762895

101312111415

The Lisbon reviewThe Lisbon review

Source: WEF, The Lisbon Review 2004

FinlandFinland

Totalrank

123456789

101112131415


Finland from IC perspective

• Human focus• Market focus• Process focus• Renewal and development focus


Persons with Tertiary Educationproportion of population aged 25-64 in 1999

FinlandSweden

NorgeDenmark

Island

NetherlandsBelgium

United KingdomSpainIrland

ItalyAustriaGreece

LuxemburgPortugal

PolandFrance

GermanySwitzerland

Czech RepublicHungary

0 5 10 15 20 25 30 35Source: Statistical Yearbook of Finland 2004, Statistics Finland


People with a Tertiary or Working with Science and Technology Occupations(in 2003, per cent of the population aged 25-64)

DenmarkSwedenFinland

NetherlandsGermany

FranceIrelandSpain

SloveniaAustria

Chech RepublicSlovakiaHungary

ItalyPolandGreece

%

0 10 20 30 40 50Occupation and education Total

Source: Eurostat, New Cronos


Public Educational Expenses in 2002

%

Percent of GDP

* =2001

DM 36054 and 3806501-2005 Copyright © TekesSource: OECD, Eurostat 2004

0 1 2 3 4 5 6 7 8 9 10

JapanGreece

LuxembourgIreland*Czechia

SpainGermany*

ItalyNetherlandsEU 15 & 25*

USAHungary

PolandEstonia*Austria*France

PortugalBelgium*

FinlandSweden

Denmark

Great Britain*


GDP and the Well-being Index

0,000

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,0 52,5 55,0 57,5 60,0 62,5 65,0

GDP per capita in 1999, (corrected for purchasing power)US dollars

FINLAND

Luxembourg

USA

DenmarkGermany

Norway

Sweden

Iceland

Austria

SwitzerlandCanada

Sources: Robert Prescott-Allen (2001): The Wellbeing of Nations: A Country-by-CountryIndex of Quality of Life and the Environment; Human Development Report 2001.

The United Nations Development Program.

50.0 52.5 55.0 57.5 60.0 62.5 65.0WI=Well-being Index

DM 36054 and 3806504-2002 Copyright © Tekes


Foreign PhD StudentsForeign PhD students as a percentage of total PhD enrolment in 2001

%0 5 10 15 20 25 30 35 40 %

DM 3605401-2005 Copyright © Tekes

SwitzerlandGreat Britain

BelgiumUSA

AustraliaSweden

Denmark *)Canada **)

NorwayAustriaIceland

SpainNew Zealand

CzechiaPortugal **)

FINLANDTurkey *)Slovakia

KoreaMexico

Italy*) 1999 **) 2000

Source: OECD Science, Technology and Industry Outlook, 2004


Exports´ Share of GDPin 2002

%

Source: Statistics Finland.

0 10 20 30 40 50 60 70 80 90

USAGreeceJapan

SpainItaly

FrancePortugal

IcelandGermany

NorwaySwitzerland

DenmarkFinland

KoreaSwedenAustria

EUNetherlands

HungaryCzechiaIreland

Belgium

Great Britain

DM 32186, 36054 and 3806512-2004 Copyright © Tekes


Size and Growth of the ICT Sector

0 5 10 15

Greece **Germany

ItalySpain

AustriaPortugal *

France Denmark

NorwayEU

CanadaJapan

HungaryOECD

BelgiumNetherlands

SwedenUSA

New ZealandGr. Britain **

Korea *Finland **

Ireland *

%

Share of ICT value added in business sector value added in 2000

* 1999** 2001

ICT manufacturing

DM 3605411-2004 Copyright © TekesSource: OECD, Technology and Industry Scoreboard 2003

ICT services


0 2 4 6 8 10 12

PortugalSpain

CzechiaGermany

Australia **Italy

Korea *EU

USAAustriaOECD

DenmarkHungary **Norway **

France Belgium

UK **Netherland

Japan *Canada **

SwedenFinland **

%* 1999** 2001

ICT manufacturing

Share of the ICT Sector in Business Sector Employmentin 2000

DM 3605411-2004 Copyright © TekesSource: OECD, Technology and Industry Scoreboard 2003

ICT services


Labour Productivity in IndustryValue added per hour workedValue added per hour worked

20

30

40

50

60

70

80

90

100

110

74 76 78 80 82 84 86 88 90 92 94 96 98 00

FINLAND

SwedenNetherlands

Great Britain

FranceGermanyJapanCanada

USAUSA 2000 = 100USA 2000 = 100

DM 36097 and 36054 08-2004 Copyright © TekesSource: University of Groningen


Growth in Labour Productivity 1990-2002

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5

SwitzerlandSpain

New ZealandNetherlands

IcelandCanada

USAFrance

BelgiumDenmark

ItalySwedenGreeceJapan

GermanyGreat Britain

AustraliaFinlandNorway

PortugalKorea

IrelandGDP per hour worked, annual change

Source: OECD Science, Technology and Industry Scoreboard 2003 DM 36097 and 3605401-2004 Copyright © Tekes

The whole national economyThe whole national economy

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 %


Countries with the Least Corruption

DM 3605410-2004 Copyright © Tekes

0 1 2 3 4 5 6 7 8 9 10

Hong KongGermany

LuxembourgAustriaCanada

Great BritainNetherlands

AustraliaNorway

SwitzerlandSweden

SingaporeIceland

DenmarkNew Zealand

Finland

Nocorruption

Totallycorrupted

Source: Transparency International Corruption Perceptions Index 2004

Grade in 2004Grade in 2004


EIS 2004 - Summary Innovation Index

Source: European Innovation Scoreboard 2004

0,00 0,25 0,50 0,75

PolandGreece

HungaryCzechia

LuxembourgPortugal

SpainItaly

EstoniaAustriaNorway

EU 15Ireland

NetherlandsFrance

BelgiumGreat Britain

DenmarkGermany

SwitzerlandUSA

FinlandSweden

Japan

0.00 0.25 0.50 0.75


0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04

OECD

Est.

R&D Input in Some OECD Countries

Sources: OECD, Main Science and Technology Indicators and Statistics Finland.

USA

Japan

Denmark

Sweden

Canada

France

Singapore

FINLAND

Germany

Israel

IcelandSouth Korea

Austria

ChinaNorway

Percentage of GDP

Great Britain

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5


European Applications for Patents (EPO)

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320

LithuaniaPoland

PortugalSlovakia

LatviaGreeceEstoniaCzech

HungarySpain

SloveniaItaly

Ireland

EU25France

BelgiumUSA

JapanAustria

LuxembourgDenmark

NetherlandsGermany

FinlandSweden

Applications per million inhabitants in 2002

DM 36052 and 3605409-2004 Copyright © TekesSource: OECD, Eurostat 2002

Great Britain


Applications for High Technology Patentsin Europe

Source: OECD, Eurostat 2002

0 20 40 60 80 100 120

PolandCzech Latvia

PortugalSlovakia

LithuaniaGreeceEstonia

SloveniaSpain

HungaryItaly

LuxembourgAustria

EU25Ireland

BelgiumFrance

Great BritainJapan

DenmarkGermany

USASweden

NetherlandsFinland

Applications per million inhabitants in 2002

DM 36052 and 3605409-2004 Copyright © Tekes


0,0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1,0

ItalyPolandGreece

SpainAustria

GermanyIrelandEU 25EU 15

PortugalNetherlands

BelgiumFrance

NorwayGreat BritainSwitzerland

IcelandDenmark

FinlandUSA

Sweden

Venture Capital Investments in Seed and Start-up phases


0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0

Average 2002-2003

Per thousand of GDPDM 36104 and 36054

03-2005 Copyright © Tekes


SMEs Participating in InnovationCooperation

%0 5 10 15 20 25

SpainItaly

GreecePortugal

EUGreat Britain

AustriaGermany

FranceNetherlands

BelgiumEstoniaIcelandNorwaySweden

DenmarkFinland



Inclination for Entrepreneurship

0 10 20 30 40 50 60

FinlandNetherlands

BelgiumSwedenAustria

DenmarkGermany

Great BritainFrance

EU15Greece

ItalySpain

IrelandUSA

Portugal

%

Willingness for self-employment

DM 3605404-2005 Copyright © Tekes Source: Flash Eurobarometer 160, 2004


Effects of Nokia and the ElectronicsIndustry on the Finnish GDP Growth

Sources: Nokia Oyj, Statistics Finland, National Board of Customs


(Ali-Yrkkö et. al., 2000, 13)


Finland’s Challenge on Some Crucial Areas of Competitive Edge

The level of know how compared to international top level

R&D Production Commercialization

The international top level of performance

Source: Sitra 2005


From Information Society to Knowledge-value Society

-1.00-0.80

-0.60-0.40

-0.200.000.20

0.400.60

0.801.00

Informationindividual, technicalcompetencies

Knowledgecapable organizations

Knowledge-valueinnovative society

FinlandSwedenDenmarkNetherlandsGermanyUKUSAJapan

Naumanen, 2005


IC for Finland

• The potential of national intellectual capital extremely high

• Nokia has been a major driver, as well as the whole ICT sector

• Weaknesses in mastering the knowledge based value chain -> to realize the IC potential

• No new nokias in sight, the only possibility is to support innovativeness further and to learn how to extract value from it


Organizational competence

Organizational renewal

Intangible assets

POTE

NTI

AL

IPRsBUSINESS APPLICATIONS

HUMAN CAPITAL

STRUCTURAL CAPITAL

STRATEGIC CAPABILITY

INNOVATIVENESSCONNECTEDNESS

Value Creation of a Public CompanyMarket Value

Market/Shareholder

Communication

Market Expectations

Physical Capital Intellectual CapitalFinancial Capital

Customers

Innovations

AD

DED

VA

LUE

Brand

Market Efficiency


The Forgotten Dimensions of IC

• the meaning of strategic capability– competitiveness is context dependent -> strategic

capability and renewal capability are crucial– (high political and citizen based consensus on

national knowledge society strategy in Finland)• renewal capability needs to be better

operationalized– relationship and overlap of competitiveness and IC

need to be clarified ->potential and realized IC– clear conseptualization -> better indicators from

forsight perspective – (development going on in Finland)


The Forgotten Dimensions of IC (2)

• the meaning of systemic features– drivers (Nokia)– global connectedness: links to global flows

of knowledge and financial capital (difficulties for Finland to attract foreign investments, as well as using foreign licensing)

– cumulation of know-how

ic for finland: beyond the nokia success · 2017-05-05 · ic for finland: beyond the nokia success...

Documents