Olli Rehn and the Economical Development at Finland

Olli Rehn (the minister of employment and the economy) held a speak today about "Competitiveness of Work and Economics and Innovations in Finland". Here are some of my take offs. 

Minister Rehn started with emphasizing the effects of universities. In Finland, the universities are located all around the country. This has enabled the different regions to benefit from externality of universities in many places. This has balanced the regional growth rates. Minister Rehn mentioned that the size of an university does not directly limit the level of performance. Instead, the ability to focus on own strengths is more important.

The best performances of Finland were enabled by free education: accumulating a lot of knowledge capital. Minister Rehn says that now the focus on knowledge hasn't anymore promoted enough growth. Exports are at a low level and the whole global economy is in the middle of structural change. Minister concludes that we are far behind Germany and Sweden: our problem has been inability to make changes. 

Thus, minister Rehn concludes that our medicines should be targeted in structural changes. "When we think about where the growth comes from, the answer is companies". Rehn underlines that in good conditions the companies invest and hire. Therefore the government aims to support a better business environment. The Finnish government is focusing only in cost competitiveness (where we actually have never been good) and using the unit costs as the measure. After the speak there was a comment about efficiency consisting from many more parts than costs. As I did my Master's thesis on competitiveness of a country, I can only agree on the comment: even competitiveness is far more complex than the unit costs. As Petri Rouvinen defines: A competitiveness of a country is the current and the future level of well-being of citizens'.

The Employment rates: Finland is far behind.

GDP per person. Filand is the lowest (green) line, German and Sweden are clearly higher.

This slide presents how the new packet will make cost competitiveness better in Finland than before, i.e. lower the costs (Suomi P). It is approximated that Finland could achieve the level of Germany in 2020.

This is sadly in Finnish, it presents the acts that are the main objects of the government. One main aim is to support entrepreneurship.
The government aims to cut bureaucracy.

At regional level, government aims to support specialization into own strengths.. One aim is to make labor move more, that could mean faster connections, like faster trains that prof Piekkola is currently working on. 


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