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Advansis 20106.4.20101

Finlands new national innovation strategy

Tarmo Lemola

Director, Advansis Ltd., Finland

Cofisa closing conference, Gauteng, South Africa, February 17, 2010

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http://www.tem.fi/?l=en&s=2411

Finnish National Innovation Strategy2008

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Finnish National Innovation Strategy 2008

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National Innovation Strategy 2008 focuspoints

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Advansis Ltd 20094

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Main factors behind the strategy

Innovation as a key driver of long-run economic growth

A shift in the geography of innovation The notion of innovation has broadened

Empowering people to innovate

Applying innovation to global challenges

Improving connectivity between actors and factors Improving governance

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Innovation drives long-run economicgrowth

Much of the rise in living standards is driven by innovation and

this has been the case for a long time. Innovation entails the production of new knowledge. It results

from a range of complementary assets which go well beyondR&D, such as software, human capital, new organisationalstructures etc.

The combined role of investment in intangibles, investment in ICTand multi-factor productivity growth (joint productivity of capitaland labour) accounts for between two-thirds and three-quartersof GDP growth in several OECD countries.

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Geography of innovation is shifting

Traditionally R&D has strongly concentrated on the biggest and

most developed countries (USA, Europe,Japan), and on bigcompanies of these countries.

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34 %

25 %

13 %28 %

USA

Europe

Japan

Rest of the

World

5,1

5,2

5,3

5,4

5,5

5,6

R&D Bi /A

Microsoft

General Motors

Pfizer

Toyota

Nokia

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The rise of developing countries hasstarted

China is in the lead:

Its share of R&D expenditure of the world is 13 % I has more than million researchers (almost as much as in USA and

Europe)

Its number of researchers has doubled in ten years

Its share in scientific articles has grown from 1,6 % in mid-1990s to 6% of today

It is second biggest in scientific articles in nanotechnology

Its growth in number of patents has been 30 % in the last ten years

.. Next come South Korea, Russia, India, Brazil, and South Africa, too.

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South Africa and Finland in comparison

South Africa Finland

R&D expenditure ($ billion 2009) 4,6 6,7

% of GDP (2007) 0,9 3,4

Share of Business Enterprise Sector 58 72

R&D personnel 17 303 39 000

R&D personnel/1000 employees 1,5 16,6

Scientific articles/1 million inhabitants 51,0 917,2

Patents/1 million inhabitants 0,63 53,04

WEF ranking 2009-2010* 45 6

*World Economic Forum 2009, The Global Competitiveness Report 2009-2010

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The notion of innovation has broadened

Innovation

Product innovation

Process innovation

Service innovation

Marketing innovation

Organisational innovation

Social innovation Design innovation

Innovation is also more and more an interactive process thatoccurs through collective or collaborative processes involving a

range of actors (firms, users, researchers, consumers, non-profitorganisations, NGOs, etc.).

The innovation process has opened up (open source movement,open innovation,user communities, living labs etc.)

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Empowering people to innovate

People are at the heart of any innovation process.

There are several channels through which human capital spurs innovation:

Generation of new knowledge

The adoption and adaption of technologies and ideas

The ability to adapt to change and to learn new things

As production becomes increasingly globalised, societies can not sustain a model

where innovation is driven by a small trained elite and supported by a large bodyof relatively low skilled production workers.

The knowledge, skills, ideas and creativity of all workers must be encouraged andengaged in innovation (Employee Driven Innovation).

Local communities must be active participants in the technology and innovationdevelopment process and not merely passive recipients of innovations developedfor them by outsiders.

Fostering entrepreneurship is a crucial and critical compoment of capacitybuilding for innovation.

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Applying innovation to global challenges

Innovation is increasingly perceived as a critical part of the

solution with tackling global challenges: Poverty

Bridging the gap in economic development

Climate change

Global health challenges

Empowering new players to address global challenges (socialentrepreneurship)

Governments and international organisations must provide astable policy regime which provides incentives to a large range of

actors to address global challenges through innovation.

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Improving connectivity between actorsand factors

What is urgently needed in innovation in practically all countries

is simply improving connectivity between actors and factors ofthe national innovation system:

Public private parnerships

Collaboration ventures of any kind

Intersectoral (-ministerial) collaboration

Integration of users and customers with innovation processes

Innovation forums

Innovation and technology platforms at national, regional and locallevels

Let all flowers bloom!

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Improving governance

The time has come to develop a strategic approach to fostering innovation toachieve the core objectives of public policy.

The strategy should take a broad, system-wide approach to innovation, bringingtogether policies and principles in a mutually supportive manners.

Successful implementation of the strategy demands full and visible commitmentof the highest political level.

Involvement of the wider innovation (STI) community (stakeholders) is a

necessary precondition for fruitful policy design and implementation. All societies are knowledge based societies. Only people can know and only

activity in individual brains can lead to a change in knowledge.

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Everything is simpler than you think and atthe same time more complex than youimagine.(Johan Wolfgang von Goethe)

It does not matter where you start, as long asyou start. John Cage

Final words to von Goethe and John Cage

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www.advansis.fi

Thank you!All the best!