Transcript Four (five) stages of competitiveness of a country

A market driven approach for innovation in Finland
Timo Kekkonen
Director, Confederation of Finnish Industries, EK
• Some facts and features of the Finnish Innovation
System
• Stages of competitivity – elements of knowledge-based economic
growth
• What has been done – what should be done ?
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R&D Input in some OECD countries
Percentage of GDP
Israel
Sweden
FINLAND
Japan
Iceland
South Korea
USA
Denmark
Germany
Austria
OECD
France
Singapore
Canada
Great Britain
Norway
China
5.0
5,0
4.5
4,5
4.0
4,0
3.5
3,5
3.0
3,0
2.5
2,5
2.0
2,0
1.5
1,5
1.0
1,0
0.5
0,5
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
Est.
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R&D in Finland
Billion euros
6,0
6.0
Enterprises
Universities
5,0
5.0
Other public
research
4.4
4.6
4.8
5.0
5.3 5.4
3.9
4.0
4,0
3.4
2.9
3.0
3,0
2.2
2,0
2.0
1.5
1,0
1.0 0.9
1.7 1.8
1.1
0.0
0,0
85
87
89
91
93
95
97
98
99
00
01
02
03
04
05
Est.
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R&D Input in Finland by Sector
Total 3.8 billion euros in 2005
Billion
4,0
euros
4.0
3,5
3.5
Other sectors
3,0
3.0
Other industries
Pulp and paper
Chemical industry
Metals and
engineering industry
2,5
2.5
2.0
2,0
1.5
1,5
Electronics
industry
1.0
1,0
0.5
0,5
0.0
0,0
95
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96
97
98
99
00
01
02
03
04
05*
Competitiveness -Total ranking 2005-2006
Switzerland
Finland
Sweden
Denmark
Singapore
USA
Japan
Germany
Netherlands
Great Britain
Hong Kong
Norway
Taiwan
Iceland
Israel
Canada
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WEF
Global
competitiveness
2006 2005
1
4
2
2
3
7
4
3
5
5
6
1
7
10
8
6
9
11
10
9
11
14
12
17
13
8
14
16
15
23
16
13
WEF
IMD
Business
Total compecompetitiveness titiveness
2006
2006
4
8
3
10
7
14
5
5
11
3
1
1
9
17
2
26
6
15
8
21
10
2
14
12
21
18
13
4
19
25
15
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Sources: IMD, The World Competitiveness Yearbook 2006 and
WEF, The Global Competitiveness Report 2006-2007
DM 36054
10-2006 Copyright © Tekes
Science, Technology and Innovation in Finland
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High R&D investment (3.5% of GDP – 30/70 public/private ratio)
Long term political commitment
Strong cooperation & networking between industry and academia
An effective and dynamic public innovation environment
Finland is ranked high in international competitiveness
comparisons
High level of education
Productivity in our industry has developed rapidly
Rapid growth of the high tech sector
Global competitivity of most industrial sectors
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Long term development of Finnish industry and
science/technology/innovation policy (1/2)
1950’s establishment of basic industries for domestic needs
1960’s gradual diversification of industrial base
opening up foreign trade
1970’s rapid development of traditional industries
industrial policy to encourage investments/regional development
setting up new universities
1980’s beginning of modern science and technology policy
technology financing systems and organisations were set up
first targets regarding the share of RTD of GNP were set
special attention was paid to education and training
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Long term development of Finnish industry and
science/technology/innovation policy (2/2)
1990’s rapid growth of knowledge intensive sectors (ICT)
rapid growth of RTD investments especially by the private sector
increase of international cooperation
adaption of the Finnish educational system to changing needs
2000’s new global division of labour continues rapidly
globalization of the Finnish industry increases
the share of services increases of Finlands GDP increases
the shift from technology policy to innovation policy continues
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• Some facts and features of the Finnish Innovation System
• Stages of competitivity – elements of knowledgebased economic growth
• What has been done – what should be done ?
25.04.2007
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Timo Kekkonen
Four (five) stages of competitiveness of a country
PROGRESS
Concentration
on Innovation
Concentration
on Investments
Concentration on
Knowledge
Concentration
on Prosperity
Concentration
on Production
Factors
DECLINE
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Public Policies During the Different Stages
Investment based growth
Knowledge-based growth
Innovation-based growth
Channelling of capital
Investments into knowledge capacity – education, research
Development of the operational environment:
Regulatory framework, structures, finances, public services etc.
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Drivers for growth and conditions for their
utilisation
Investments are the
drivers for growth
 Education
 Research and
development
 Innovations
 Capital
Conditions for the utilisation of drivers
for growth
 Opening up of markets
 Flexibility of structures and regulations
 Incentives
 for the success of innovative companies
 for private risk investments
 Macroeconomic policies
The impact of drivers for growth remain minor
without continual structural reform.
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DM 218475
09-2006 Copyright © Tekes
• Some facts and features of the Finnish Innovation System
• Stages of competitivity – elements of knowledge-based economic
growth
• What has been done – what should be done ?
25.04.2007
14
Timo Kekkonen
Some International Trends Within Innovation
Policies
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National strategic choices are made (focus)
Promotion of new networks (open innovation)
University structures are changed (specialization – flexibility)
The use of financial incentives broadening (non-linear innovation model)
The use of taxation as a R&D incentive is increasing
Demand-driven innovation policy – the use of public procurement
etc.
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What have we done/should we do in Finland ?
• Continue to increase public R&D investments
• Make further efforts to internationalize our innovation environment
– especially our university system
• Make strategic choices – implent the SCSTI-strategy – reform our
university structure – reform our public research institutes
• Encourage development of ”radical innovations”
• Mobilise private capital for start-ups and growth companies ( eg.
by introducing tax incentives)
• Promote the productivity within the service sector (private &
public)
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What is our competitive advantage in the future?
Each company has to continuously find a competitive advantage
- each country / region has to develop a competitive advantage –
What could be the competitive advantage of the Finnish
Innovation System
• The ability to create a growing number of radical innovations
• Ensuring a world-class knowledge-base (in selected areas)
• An excellent capability to transform knowledge into a competitive
advantage … into innovations
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