AN INNOVATION STRATEGY FOR WALES - LESSONS FROM FINLAND

Last week, I attended a conference organised by the Massachusetts Institute of Technology (MIT) to examine the future of manufacturing.

It was a timely event, as I am currently undertaking research into the development of advanced manufacturing in Finland during the last thirty lessons and the lessons that other small economies can take from this experience.

We heard from a range of experts in the field, including Professor Martin Schmidt of MIT, who has been advising President Obama on a new emphasis on manufacturing within the US economy.

The report from his review is fascinating, mainly because of the differences in the philosophy regarding economic development as compared to most parts of Europe. In fact, the conclusions to the report to ensure American leadership in advanced manufacturing comprehensively rejected a picking winners policy, either in terms of individual companies or specific sectors. Instead, it proposed pursuing an innovation policy for advanced manufacturing that would provide the best environment in which to do business, ensure that the most powerful new technologies are developed in the USA and that technology-based enterprises have the infrastructure required to flourish.

Given the way that manufacturing in the USA and many other advanced countries has been ignored in the last decade as financial services became the favoured sector and there has been rush to move production to low cost countries such as China, this report is long overdue.

Yet, during the two days in Brussels discussing the future of advanced manufacturing, there seems to be little appreciation of an example within Europe that could also act as a model for developing more innovative and competitive economy.

During the last fifty years, Finland has changed itself from an economy that was based largely on primary production and an unskilled agrarian workforce to one that is recognized as one of the most competitive in the World, particularly in the field of high technology manufacturing within key sectors such as information communications and telecommunications (ICT).

Most of this change took place during the early 1990s when the Finnish economy endured a major economic recession that included a major banking crisis, unemployment rates of 15 percent and high levels of government debt.

In response to these issues, the Finnish Government took a bold long-term view to focus its strategy on innovation and promoting, in particular, facilitating the development of high technology sectors such as ICT. Since 1995, the Finnish economy has been one of the fastest growing in the developed world, with an average growth rate of 3.5 per cent. Unlike other rapidly growing economies, most of the growth within Finland has been generated by the development of domestic companies.

Therefore, through indigenous growth in a number of key sectors, Finland has become recognised as one of the most innovative and competitive nations in the World and the World Economic Forum’s Global Competitiveness Report 2012-2013, which assesses the competitiveness landscape of 144 economies, ranked Finland third in the World in terms of a range of different factors driving productivity and prosperity.

And one of the main driving forces behind this success has been a specific government body that has driven and developed innovation throughout the Finnish economy.

Established in 1983, TEKES is responsible for administering public support for private and public sector R&D and innovation in Finland. Its mission is to promote the development of industry and services by means of technology and innovations. Its impact has been tremendous, being responsible for supporting more than half of Finnish innovations during the last thirty years. The latest report on its impact on innovation is shown below.


Whilst its programmes have been focused very much on supporting technology within companies and public institutions, there have been additional positive effects such as increased networking between companies and R&D organisations in targeted clusters and increased collaboration between researchers across different disciplines. Simply put, the focus on the innovation policy that the US Government now recognises as being critical to its own manufacturing sector has been one of the key successes in turning a small peripheral nation into one of the most competitive economies in the World.

And there are certainly lessons for Wales from this experience.

Indeed, whilst there are those who still hanker for the return of the Welsh Development Agency, it is clear that during its existence, its focus on attracting large foreign direct investment did little to support the long-term innovation performance of our nation. Its subsequent integration into the Welsh Government has also had a minimal impact on ensuring that Wales becomes the “small clever nation” which politicians have been calling for since the advent of the National Assembly.

As the Minister for Business is currently examining the development of an innovation strategy for Wales, one option in creating a more competitive Welsh economy would be to consider establishing a Welsh TEKES that would be an arms length organisation that would focus on developing the innovative potential that exists within this nation.

If we were to get only a fraction of the success that the Finnish economy has enjoyed during the last three decades, then it would be one of the more astute policy decisions that the Welsh Government will have made in developing the economy.

RECRUITING OVERSEAS STUDENTS - THE FINNISH WAY

Having been in Finland for the past few days,  I managed to catch up with a former flatmate from Dublin, Jonne Saivosalmi, who now runs a company called Place Marketing, a media company that focus on promoting towns and regions in Finland.

Some of the work they do is groundbreaking and I would love to see them pitch for work in Wales, especially given their quirky and innovative approach which is a million miles away from the advertising usually procured by Welsh organisations.

Take, for example, their campaign to promote higher education to overseas students in Oulu in Northern Finland. 

Not an easy sell, I can assure you, but they bring it off perfectly for their target market as the videos below demonstrate.



1. Jason from Oulu on Vimeo.



Yu-hsuan from Oulu on Vimeo.




Gisbert from Oulu on Vimeo.

Shanila from Oulu on Vimeo.

UNIVERSITY MERGERS IN WALES - LESSONS FROM FINLAND?

Last week, I spent some time in Finland working on number of joint projects that have been developed between Turku University, where I have a visiting professorship, and the Global Academy.

During my week there, I had the opportunity to visit Helsinki and the new academic institution known as Aalto University. It was a fortuitous visit, given that Aalto University was created out of a merger, two years ago, between three specialist academic institutions, namely the University of Art and Design Helsinki (1,900 students), the Helsinki University of Technology (14,000 students) and the Helsinki School of Economics (3,200 students).

As such, it seems a relevant case study to examine the impact of university mergers that, as most of you are aware, are seen as the panacea to some of the challenges facing Welsh Higher Education. Talking to various individuals, it became clear that the first issue that was important in terms of the Aalto merger was that it had a specific vision that was linked into a national policy towards innovation and competitiveness.

Its aim, once formed, was to create an institution that would be a world-class rival to Helsinki University, which is regularly ranked amongst the top 100 universities in the world. Unfortunately, there has been a total failure to elaborate a similar national ambition within Wales for its university mergers. Instead, the emphasis on regional economies and efficiencies of scale rather than any significant educational or economic reward.

And even though the academic status of those Welsh institutions currently involved in merger discussions is somewhat different to the Aalto triumvirate, there has been little information on how educational quality could be improved as a result of organisational change, even though this should be a major part of any higher education merger. There have been arguments made, as in the case of Finnish Universities, that the diversity of programme offerings would be increased as a result of the merger. However, there is also the danger of rationalisation, rather than specialisation, especially in areas such as business studies where high levels of duplication are likely.

Another key factor in the apparent success of Aalto University is undoubtedly the funding provided by the Finnish Government to ensure that a successful new institution hits the ground running, receiving a one-off cash injection of half a billion euros on the condition that it raises another 200 million euros from the private sector.

In Wales, there seems to be no money available to support the development of further collaboration or merger between institutions, with the Welsh Government suggesting that universities have to show their worth to the public purse from an ever decreasing funding settlement. Another key ingredient in ensuring that Aalto University succeeded from its first day of operations was that the new management was able to identify and satisfy the skills needs of the key stakeholders in their region and ensure broad external support.

Again, this has not been the case in Wales, with an increasing number of organisations supporting the independence of certain institutions over any proposed merger. Indeed, the ability to come up with a compelling story so that stakeholders would buy into the concept of a merged institution has been one of the real successes of Aalto University, enabling key reforms to take place over a short period of time.

This has enabled the institution to deal directly with issues that would undoubtedly be faced by Welsh institutions. These include increased workload for staff as the merger develops, higher levels of bureaucracy, fears of redundancy, lost of academic identity for the smaller partners; disruption of teaching styles as mass lecturing takes the place of student-oriented learning and geographical distances between campuses. Of course, Aalto was designed in order that a multi-disciplinary innovation culture could be developed across all three institutions where science, arts and business could merge to create a truly innovative world-class university.

Has anyone yet made a similar case be made for any merger within the Welsh university sector? If not, then why go ahead with an expensive and time consuming exercise that could instead be enhanced through further collaboration and increased sharing of services. In fact, have those in favour of greater rationalisation created an overwhelming argument for actual organisational merger or it is largely symbolic, given the distances between various campuses?

These are serious questions that need addressing by those calling for the further merger of higher education institutions in Wales. Certainly, if they wished to strengthen their case, it would be not bad thing if they were to visit Finland to examine the challenges faced by universities not only in planning a merger but in dealing with its consequences afterwards.

Western Mail column, March 31st 2012.

START-UP SAUNA

Given my love for all things Finnish, this is one new programme that policymakers could and should be emulating.

The Aalto Venture Garage, part of the newly formed Aalto University, is a co-working space and seed accelerator in the Nordics and Baltics, providing a free 700m open space for hackers and startups. It operates from a big industrial hall whose interiors have been optimised for entrepreneurs to work together. Shipping containers have also been brought in to create extra rooms, with even their roofs being transformed into office space, with stairs leading to the top and onto a maze of chairs and tables.

Its programmes include the Startup Sauna, which claims to be the leading open sourced seed accelerator for early-stage startups in Northern Europe and Russia. Startup Sauna pushes the selected startups develop to a stage where they are ready to take over the international markets, using coaching from some of the region’s best serial entrepreneurs, investors and other professionals.

EDUCATION IN WALES - LEARNING FROM THE FINNISH WAY

There is a great debate going on about the state of education in Wales not only at the university level, but also at primary and secondary levels as well.

As many have pointed out, there seems to be one particular country that Wales could learn from and that is Finland, the international trailblazer in the field of education.

As a regular visitor to Finland for the past 15 years, I have experienced, at first hand, the high quality of university student coming through the system. Yet, it is only recently that other nations have begun to sit up and take notice of what is going on.

One excellent point of reference for the so-called Finnish Way is the work of  Pasi Sahlberg. His writing and lectures on this subject are worth having a look at, such as this presentation on what a Canadian province can learn from Finland in the field of education.

Essentially, Sahlberg argues that the rest of the World is trailing Finland in five key areas of education, namely:

• Teaching core subjects vs Broad and creative learning 
• Standardisation vs Personalisation 
• Test-based accountability vs Professional responsibility 
• Market-based management vs Educational leadership 
• Data and control vs Collaboration and trust 

As he said on his blog yesterday, "The Finnish education system has progressed steadily since the 1980s because we prepare teachers to improve their students’ learning as well as their own work in collaboration with their colleagues. We see teachers as knowledge workers, not technicians who implement instructions or standards mandated by someone else. The Finnish Way is unique also because it has been able to accomplish educational excellence and equity simultaneously".

The video below also demonstrates the state of education in Finland.

The question, of course, is whether the Welsh Government will even look at this proven model as a way forward in revolutionising the educational system in Wales over the next few years? Certainly, that is where Finland started, by learning from other countries. As Sahlberg himself points out "An important lesson from Finland is that its educational success is a result of deliberate and continuous learning from other education systems, their practitioners, policy-makers and researchers". Perhaps that is the most important lesson of all for Wales educationalists and policy-makers from the Finnish Way.