Global competitiveness report puts Finland first - and emphasises importance of innovation
Finland heads the list of the most competitive countries in the world, beating the USA into second place, according to the 'Global competitiveness report 2001' released by the World economic forum. It is the first time that Finland leads the table, a position based on it coming first in the table's two subsections - the growth competitiveness index and current competitiveness index. This indicates that Finland is not only in the best position in terms of current growth, but also leads in having the best growth potential over the next five years. The data for the survey was drawn from the 75 countries included in the table, as well as interviews with 4,600 business leaders. It was completed in close collaboration with Harvard university, USA. '[Finland is] evidence of how quickly an economy's prospects can be transformed by strong political institutions, a focus on technology and sound macroeconomic management,' the report concludes. Other European countries which figured highly are Sweden, the Netherlands and the UK. The report emphasises that, globally, one of the main aims is to reach a knowledge-based economy and highlights that there are many elements needed to attain this. In a section which largely relates to European economies, the report pinpoints the measures needed. 'In most economies, the evolution from middle income to high income status involves the transition from a technology-importing economy to a technology-generating economy, one that innovates in at least some sectors at the global technological frontier,' it says. 'For high income economies at the innovation-driven stage of economic development, global competitiveness is critically linked to high rates of social learning (particularly science-based learning) and the rapid ability to shift to new technologies.' Once this stage has been reached, the challenge is to ensure high rates of innovation and commercialisation of technologies, something which Finland has excelled at. Other factors which come into play are quality of governance, societal capacity to advance its technological capacity, more advanced modes of competition and evolving forms of organisational structure, according to the report. It also found that innovation plays a dominant role in medium-term economic growth. The role of government in achieving this goal needs to centre on fostering a high rate of innovation through both public and private investments in research, a focus on higher education and improvements to both capital markets and the regulatory systems that help assist hi-tech start-ups. 'Special tasks are required for countries attempting to move from technology-using to technology-innovating economies: for example, a venture capital sector as well as other improved financial and legal arrangements for new start-ups, increased government spending on R&D (research and development), and improved legal tools for intellectual property rights.' The presence of world class research institutions is required to attain the highest innovative level, 'along with strong research collaboration with universities, venture capital availability, truly sophisticated demand conditions and intense local competition,' according to the report.