5.1 Finland in a changing world economy
5.2 What is the National Economy invested in?
5.3 R&D and internationalization
5.4 ICT Finland
5.5 Nokia - a big company in a small country
5.6 ICT cluster in Finland - A historical perspective
5.7 The World's most competitive nation?

5.7 The World's most competitive nation?

As a result of the developments of the past decade, Finland has specialized in the global competition in the high technology sector, particularly information and communications technology. Because of ICT cluster exports, Finland's high-tech foreign trade runs more of a surplus than any other EU country besides Ireland. In the early '90s this trade still showed a bigger-than-average deficit.

International studies in the 1990s (IMD and WEF) have indicated that Finland is one of the world's most competitive countries. The main reasons are science and technology as well as the high level of education and rapid internationalization. Finland is one of the most advanced producers and users of information and communications technology. The basic structure of the economy (including both the technological and social infrastructures) raises the nation's competitiveness above average in comparison studies.

International competition is changing into competition for high technology investments and skilled labour. Countries and regions are competing for capital and highly educated personnel. Thanks to technological developments, Finland has significantly improved its advantage as a corporate location.

However Finland also has clear weaknesses in this competition. According to the international competitiveness studies, these include its remote location, high tax rate and public debt. High unemployment also reflects deficiencies in the functioning of the labour market.

The large public sector and comprehensive social security in this society, which aims for equality, may slow economic change. On the other hand, they are indicators of the social capital that is needed in global competition.

Most decisive for the future competitiveness of Finland and the rest of Europe will be how effectively ICT can be adapted to various fields. Finland has advanced far as a producer and user of communications technology. In applications of information technology, though, Finland is clearly behind the United States, for instance. As a result of technological development, media, IT and telecommunications are merging into one sector, partly controlled by large multinational companies. In this story, the role of Finland will be specialization and networking of companies, and alliances with domestic and international partners.