Innovative Activity in the Times of Crisis – Experiences of Finland. Petri Rouvinen ETLA, The Research Institute of the Finnish Economy World Bank’s Knowledge Economy Forum VIII INSEAD, Fontainebleau, France April 28 – May 1, 2009.
Innovative Activity in the Times of Crisis – Experiences of Finland
ETLA, The Research Institute of the Finnish Economy
World Bank’s Knowledge Economy Forum VIII
INSEAD, Fontainebleau, France
April 28 – May 1, 2009
Take Home Message Whatever you do (as a country), do not cut (public) investment in knowledge in times of economic hardship.
Counter-cyclicalpublic expenditure+ Better opportunities+ Lower (opportunity) cost+ R&D/educ. Is 50–100% wages & related overhead Full immediate local stimulus with upside potential
A stylized view of the real educational expenditure in Finland
Billions of euros,year 2000 prices
This ETLA stylized view is based on Arto Kokkinen(forth-coming), Human Capital and Finland’s Economic Growth in 1910–2000, European University Institute.
in volume in the
last 50 years
1890 1950 2000
Rapid & eventually complete
opening up of the economy
Collapse of the Soviet Union Trade disruption
Mismanaged liberalization Banking crisis
Domestic real estate & securities bubble
Downturn in forest-related industries
Finland hit mostly by the contraction in global demand
rather than directly by the financial crisis per se.
Domestic financial crisis,booming global demand
Strategy: Export-led recovery, re-industrialization
Policy: From macro to micro
Unutilized human capital
1/10 of R&D outsourced
Basic knowledge jobs
Global financial crisis,contracting global demand
Strategy: Domestic demand, boost competences, “sit out”
Policy: Micro-micro (?)
Weak entrepreneurial spirit
1/4 of R&D outsourced
Advanced knowledge jobs
Evaluation of the Finnish Innovation System to Be Completed by September 2009www.evaluation.fi
Rouvinen & Ylä-Anttila: Case Study: Little Finland's Transformation to a Wireless Giant. In Dutta, Lanvin & Paua (Eds.), The Global Information Technology Report 2003-2004. World Economic Forum.
Dahlman, Routti & Ylä-Anttila 2006: Finland as a Knowledge Economy. World Bank Institute.