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KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor Jorma Routti Helsinki University of Technology & CIM Creative Industries Management Helsinki, Finland www. cimfunds . com [email protected]

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Page 1: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

KE FINLAND WB WORKSHOP

Helsinki, Finland, 30-31 August 2004

RESEARCH AND INNOVATION IN FINLAND –TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY

Professor Jorma Routti

Helsinki University of Technology &

CIM Creative Industries Management

Helsinki, Finland

www.cimfunds.com [email protected]

Page 2: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

CURRENT STATE

V I S I O N

S W

O T

ECONOMY

SAFETY

SUSTAINABILITY

SOLIDARITY

SKENARIOS FOR

OPERATING ENVIRONMENT

Page 3: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Fundamental changes taking place

GlobalizationKnowledge-based

economiesDigital revolution

Page 4: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor
Page 5: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

R&D input in some OECD countries

Sources: OECD, Main Science and Technology Indicators database, Statistics Finland (Finland 2002) and Statistiska centralbyrån (Sweden 2001, estimate). Docs 36109

02-2003

USA

Japan

Germany

Sweden

Great Britain

France

Austria

FINLAND

Denmark

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02

OECD total

3.5

3.0

2.5

2.0

1.5

1.0

4.0

Percentage of GDP

est.

Canada

Israel4.5

0.5

Iceland

South Korea

Singapore

China

Norway

Page 6: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Exports of Finnish high tech products totalled9.9 billion euros in 2001, i.e. 21 % of total exports of goods.

Exports of Finnish high tech products totalled9.9 billion euros in 2001, i.e. 21 % of total exports of goods.

Source: Statistics Finland, according to the OECD product catalogue defined in 1995

The share of high tech exportsin some OECD countries 1988-2001

Norway

USAJapanUnitedKingdomNetherlandsFINLANDSwitzerlandFranceSwedenGermanyDenmark

Docs 32187B 03 /02-03

0

5

10

15

20

25

30

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

% of total exports of goods

EU

Page 7: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Competitiveness scoreboard

* Based on earlier competitiveness index of micro economy

Total rankingTotal ranking

WEFTotal growth

competitiveness

IMDTotal competitiveness

20002001

WEFCurrent

competitiveness1999*20002001 199920002002 2001 1999

USAFINLANDLuxembourgNetherlandsSingaporeDenmarkSwitzerlandCanadaHong KongIrelandSwedenIcelandGermanyFranceJapan

21..4965

111622

717

31514

21..3

1085

111822

616

41215

12..3

12758

2117

422

69

14

16342

1410

785

1324152221

21..84

1415

31311

916172021

211

791

17653

101918252314

14632

1378

125

149

112224

123456789

101112152230

13452

1510

9678

13122526

1534297

1068

1413122324

Sources: The World Competitiveness Yearbook (IMD) and The Global Competitiveness Report (WEF)Docs 36107

04-2002

Page 8: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

JapanKorea

IrelandSweden

SwitzerlandUnited States

BelgiumFINLAND

OECDGermany

Czech Rep.EU

DenmarkUK

NorwayAustriaCanada

NetherlandsFrance

AustraliaSpain

ItalyIcelandTurkey

HungaryPoland

N. ZealandPortugal

GreeceMexico

R&D financing

R&D expenditures by source of funds

Source: OECD, MSTI database, April 1999

0 20 40 60 80 100 %

J07/ 00-06

Business enterprisesPublic sectorOther nationalresourcesAbroadNo breakdown

Page 9: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

MARKETS quality

competitiveness price

competitiveness environmental

expertise

F O R E S T I N D U S T R Y

Pulp and paper technology

Wood products industry

Machines, machinery and processes

A11/ 99-08

Securing competitiveness inthe Forest Industry

FORESTRY

CONSTRUCTION AND WOOD TECHNOLOGY modification of wood construction

technology andarchitecture

logistics, assembly

MANUFACTURING TECHNOLOGY forestry machines process and production machinery material technology

BIOTECHNOLOGY enzymes rot prevention gene technology

ENERGY AND ENVIRON-MENTAL TECHNOLOGY biofuels, combustion technology ecobalances closed cycles energy-saving and

emissions

CHEMICAL TECHNOLOGY paper and bleaching chemicals surface treatment

substances pigments, adhesives

INFORMATIONTECHNOLOGY sensors, measuring

and control computational

intelligence,simulation andmachine vision

multimedia and telecommunication tomography

Page 10: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Co-operation between companies and universities and research institutes

Norway

UK

Sweden

FINLAND

Portugal

Austria

Netherlands

Ireland

Italy

France

Denmark

Germany

Belgium

EU

Norway

UK

Sweden

FINLAND

Portugal

Austria

Netherlands

Ireland

Italy

France

Denmark

Germany

Belgium

EU

0 20 40 60 %

Share of innovative companieshaving co-operation agreements

with universities (1994-1996)

Share of innovative companies havingco-operation agreements with public

research institutes (1994-1996)

Source: Eurostat, Enterprise DG, 2nd Community Innovation Survey

J05/ 00-06

0 20 40 60 %

Page 11: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Nokia's Change

1988 1998

Mobile Phones 60% Infrastructure 33% Other 7%

Floorings 1%

Chemicals 2%

Machinery 4%

Electrical Wholesale 4%

Rubber 6%

Information Systems 23%

Cables 9%

Paper 10%

Consumer Electronics 31%

Mobile Telephones 5%Telecommunications 5%

Mobile Telephones 5%Telecommunications 5%

2000

Net sales USD 5.2 billion 1988 Market capitalization USD 1.4 billion at year end 1988

Net sales USD 19.9 billion 1999Market capitalization USD 236.5 billion, as of February 28th 2000

Page 12: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Services in the Mobile Information Society

Information

Entertainment

e-shoppingand banking

Voice

Corporate access and e-mail

e-education

Video

Page 13: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

FOCUS IN THE VALUE CHAIN

CONSUMERCONTENTCREATORS

CONTENTPRODUCERS

CONTENTDISTRIBUTORS

CREATES IDEA

HOLDS IPRs

TECHNOLOGY DRIVEN IDEAS

DEVELOPSCOPYRIGHTS

PACKAGES IPRs

PROGRAMMINGCONTENT

DISTRIBUTESCOPYRIGHTS

MARKETS / BRANDS IPRs

DISTRIBUTIONPLATFORMS

TICKETSMAGAZINESBOOKS, CD,VIDEO, DVD,RADIO, TV

NET, WAP/3G

Page 14: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor
Page 15: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

s

SOCIAL & HUMAN CAPITAL

TECHNOLOGY & INNOVATION

RE

SE

AR

CH

CA

PA

CI

TY A

BS

OR

TIO

N C

AP

AC

ITY

SUPPLY USERS

CREATORS DEMAND

Page 16: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

SOCIAL & HUMAN CAPITAL

TECHNOLOGY & INNOVATION

RE

SE

AR

CH

CA

PA

CI

TY

AB

SO

RT

ION

CA

PA

CIT

Y

IRELAND

USERS

Page 17: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

SOCIAL & HUMAN CAPITAL

TECHNOLOGY & INNOVATION

RE

SE

AR

CH

CA

PA

CI

TY

AB

SO

RT

ION

CA

PA

CIT

Y

FINLAND

SUPPLY

Page 18: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

s

SOCIAL & HUMAN CAPITAL

TECHNOLOGY & INNOVATION

RE

SE

AR

CH

CA

PA

CI

TY

AB

SO

RT

ION

CA

PA

CIT

Y

SUPPLY USERS

CREATORS DEMAND

JAPAN

USA

IRL

ITA

SWE

DE

FR

UK

FIN

Page 19: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

Composition of Regional Economies United States, 2001

Traded ClustersTraded ClustersTraded ClustersTraded Clusters Local ClustersLocal ClustersLocal ClustersLocal Clusters Natural Resource-Natural Resource-Driven IndustriesDriven Industries

Natural Resource-Natural Resource-Driven IndustriesDriven Industries

31.6%31.6%

1.7%1.7%

$44,956$44,956

133.8133.8

4.5%4.5%

144.1144.1

21.721.7

590590

31.6%31.6%

1.7%1.7%

$44,956$44,956

133.8133.8

4.5%4.5%

144.1144.1

21.721.7

590590

67.6%67.6%

2.8%2.8%

$28,288$28,288

84.284.2

3.7%3.7%

79.379.3

1.31.3

241241

67.6%67.6%

2.8%2.8%

$28,288$28,288

84.284.2

3.7%3.7%

79.379.3

1.31.3

241241

0.8%0.8%

-1.0%-1.0%

$33,245$33,245

99.099.0

2.0%2.0%

140.1140.1

7.27.2

4848

0.8%0.8%

-1.0%-1.0%

$33,245$33,245

99.099.0

2.0%2.0%

140.1140.1

7.27.2

4848

Share of Employment

Employment Growth, 1990 to 2001

Average Wage

Relative Wage

Wage Growth

Relative Productivity

Patents per 10,000 Employees

Number of SIC Industries

Note: 2001 data, except relative productivity which is 1997 data.Source: Cluster Mapping Project, Institute for Strategy and Competitiveness, Harvard Business School

Page 20: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

$15,000

$25,000

$35,000

$45,000

$55,000

50 100 150 200 250 300

Average Regional Wage, 2001

Share of Traded Employment in Strong Clusters (LQ > .8), 2001

y = 96.736x + 16218R2 = 0.377

New York, NYBay Area, CA

Boston, MA

Determinants of Regional Prosperity Cluster Strength and Wage Levels

Source: County Business Patterns; Michael E. Porter, The Economic Performance of Regions”, Regional Studies, Vol. 37, 2003

Page 21: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

TIME – ENERGY - INFORMATION

E = 0

I = 0 T = 0

I = maxT = max

E = max [email protected]

Page 22: KE FINLAND WB WORKSHOP Helsinki, Finland, 30-31 August 2004 RESEARCH AND INNOVATION IN FINLAND – TRANSFORMATION INTO A KNOWLEDGE-BASED ECONOMY Professor

E enlightenment

W wisdom

U understanding

K knowledge

I information

D data

[email protected]