REFORM OF THE CENTURY
- Expanding the Creativity of the Nation
Ladies and Gentlemen
The challenge today is not simply to evolve in a changing world, but to do so in a world where the rate of change is unprecedented. This acceleration has created a broadening gap between our traditional structures of knowledge and the nature of problems we are confronted with. We are also confronted with growing global competition.
How can a small country like Finland keep its position as a forerunner in the changing world? How can we build conditions for continuous sustainable success?
It is clear to us that without constant renewal we will not be the forerunners for long. We should not be blinded by the present day admirable rankings Finland holds in global innovation and competitiveness reports. They can fade away quickly as we all know.
The key instrument in addressing these challenges is the renewal of the Finnish Innovation Strategy, which was presented to you by Mr. Esko Aho, President of SITRA. The Innovation Strategy is a core element of Prime Minister Matti Vanhanen’s cabinets program and currently under preparation in the Ministry of Employment and the Economy. The Parliament will discuss it in a few weeks' time.
Addressing Internal and External Challenges
Besides the external challenges Finland has two fundamental internal challenges in the future. Finland is becoming gray faster than any other European society. In this respect Finland and Turkey are in a very different situation. The share of people in Finland over 65 years will be by 2030 over 25%, which is a 10% increase to the present situation. Thus, the labor force will shrink rapidly.
The other challenge is connected with the size and resources of the Finnish society. The total R&D investment in Finland is approximately 6 billion euro. This is in global comparison a very high share of the GNP, but very small amount in absolute terms. Many companies put more yens, dollars and euros to R&D than the whole Finnish society.
Our 6 billion is equal to the investment of companies like Ford and Pfizer. In this respect, too, Finland and Turkey are in a very different situation. We have to be able to use our resources more effectively, be more focused, more dynamic and have a better innovation capability than others in order to survive in the growing global competition.
Paradigm Shift in Innovation Thinking
When the young Finnish students demonstrated last spring loudly in front of the Finnish Parliament against the new Innovation University their slogan was “Make love, not innovations”. For them innovation meant only business, technology and product development.
Even if love is not the solution the students were right in one aspect. It is very true that in the past our strategy has been technology lead: turning technology into new products, services and businesses. This strategy has been a true success story.
Finland has grown from an importer of technology to a global exporter of high tech. The mobile communication giant Nokia is the flagship of this amazing story. It is a combination of visionary thinking, advanced technology, cutting edge design and excellent business strategy.
The new strategy aims at strengthening the core competencies of Finland through a radical university reform. And it is turning innovation thinking 180 degrees around to human-centric thinking. It does not lessen the importance of technology and business know-how, but in the future the innovation drivers are stronger tied to the needs of users and the opportunities on the market. The shift to user-driven innovation highlights the importance of design. Design has a huge and very new potential for innovation.
The new strategy promotes also the idea of open innovation systems, which would expand the innovation base by involving all actors in the society to the innovation processes. The strategy emphasizes also our connections to the global knowledge networks. Finland is actively developing at the moment research networks between the centers of excellence of several countries in nanotechnology, digital technology, energy, wellbeing, environmental sciences and functional materials. The strategy also wants to build a research and innovation environment, which would attract the best researchers, students, innovators and investors to Finland.
Global Hunt for Talents
In essence the new innovation strategy is very close to the thinking of the hottest international creativity guru Richard Florida. His formula of successful regions and countries is simple: attract, develop and retain. Attract the best talents, give them first class education and make them stay and contribute to the development of the society.
The City of Helsinki has also revised its thinking and is putting much effort in increasing the attractiveness of the city center. The Lord Mayor Jussi Pajunen talks enthusiastically of vivid student life and a creative urban culture. In the past students were only an expense and they were pushed to live on the outskirts of the city.
Richard Florida also claims that the most successful and competitive societies will be the ones, which can expand the creativity to the whole society, where everyone can use his or her creativity and contribute to the success of the society. In this respect the new innovation strategy follows Florida’s advice and the thinking of Finland’s President Mrs. Tarja Halonen.
The Finnish University Reform
Innovation is defined in the new strategy as “a knowledge-based competition advantage, which has been utilized”. In the strategy the application area in which innovations should be utilized is broadened from business, to societal applications and wellbeing. This aims at renewal of the whole Finnish society.
The key element of the strategy is the first part of the previous definition: we are preparing the society to knowledge-based competition. As the increase of our productivity cannot be based on growing labor force, the only way to grow is through advanced knowledge and human creativity. Therefore the university reform mentioned before has become the key project of the present government. It has been rightly called the “Reform of the Century”.
The reform is basically similar to what was done in Japan in 2004. Our 20 universities, which are all public universities and now government offices, will become financially and legally independent by January 1, 2010. The number of universities will drop to fifteen.
The reform gives on one hand greater autonomy to all universities and on the other hand it tries to strengthen their resources though mergers. The government has also promised to increase significantly the financial resources of all universities, which has not usually been part of similar reforms in other countries.
The spearhead project of the university reform is the innovation university. It has been named the Aalto University, according to the world famous Finnish Architect Alvar Aalto. The Aalto University is a foundation, which was established on June 25th, this year by the government and the industry.
The Foundation is an independent, multi-disciplinary arts and science community active in the fields of technology, economics, and applied art as well as other closely associated fields. For the first time both public and private bodies have joined their forces in education and research to secure success of our society. The active role of the industry has been important in pushing the reform forward.
The Aalto University will be formed through the merger of three existing universities all with 100 years of history. The University of Art and Design Helsinki, the Helsinki School of Economics and the Helsinki University of Technology. They are all leading universities in Finland with high international reputation in their respective areas.
Ambitious Goals, Investment and Schedule
The ambitions and schedule of the Aalto University are both equally challenging. It should grow in ten years to be one of the prime universities in the world and it starts operating in ten months time, in August 2009.
The government and industry will give the foundation an endowment of 700 million euro. This is not much compared to Harvard, Stanford, MIT, Oxford, Cambridge and many of the other leading universities, but in the Nordic context it is a very large amount and lays a foundation to the financial independence the Aalto University.
In addition to this, the government has promised to increase the funding of the annual running costs of the Aalto University by 100 million euro by 2012. This is a 60% increase to the present level. The size of the investments and the reform as a whole tell clearly of Finland’s will and its unique capability to implement radical reforms rapidly through good collaboration of different actors in society. That is one of the secrets of our success.
The new university will get a dynamic governance system and is lead by a Board consisting of seven high caliber members all with a doctorate degree. They have extensive experience from research, education, business, management, society and culture. Three of the seven are women. Two of the members come from leading universities in USA, from MIT and the Boston University and one of them is Director of the European Science Foundation. None of the Board members are employees of the university.
The Board has just launched an international search of the first President of the University. If you know potential candidates, I hope you will pass the word to them.
The Chairman of the Board, Dr. Matti Alahuhta, and the CEO of Kone Corporation has said that art and design and their creative tradition make the combination unique in the world. This will turn the cultural assets and the great design tradition of Finland to key drivers of the new innovation thinking.
Aalto University is an Answer to the Big Picture Problems
The new innovation thinking in Finland connects us to the global grand challenges and also to the global opportunities. This thinking has been well manifested by the President and CEO Curtis R. Carlson of SRI International at Stanford University and the President of the University of Tokyo, Professor Hiroshi Komiyama in his book Vision 2050.
For Carlson and Komiyama the buzzword means breakthrough innovations, which change the world. How do we use our knowledge and skills to solve the grand problems we share: energy, climate, food and poverty? How do we turn the challenges into new opportunities and to a sustainable future?
The Aalto University is an answer to the “big picture problems”, which defy single discipline approaches. Our society has been served successfully by deep and narrow specialties, but the nature of today’s “big picture” challenges fall at the intersection of what we know. Not unlike cooking, the solution today is not in any one ingredient, but in the mix. The key idea of the Aalto University is build education and research on the synergy between design, technology and business.
Because the key decision makers cannot always see a complete synthetic whole, they are often blind-sided by the unintended consequences of their action. As an integrative human centric discipline, design is uniquely positioned to fill this strategic need. Therefore, design is one of the key assets of the new user-centric and need-driven innovation strategy and of course to the Aalto University, too.
New Opportunities of Collaboration
There are many well working university and research contacts between the best institution in Turkey and Finland. The Finnish university reform gives new opportunities to expand and deepen these contacts in key areas of knowledge. The renewal of our societies provides us exciting opportunities to share our experiences to build future success.
Thank you for the opportunity to participate in this forum and the opportunity to present the actions Finland has taken to tackle the global knowledge and innovation challenges.