00 International Perspect

International Perspectives Kalle Lyytinen and Seymour Goodman Finland: The Unknown Soldier on the IT Front uring the same week in of Finns use the Internet every turn its high levels of technology August 1998 two Finns week to pay bills or to buy ser- adoption into a competitive asset. Dappeared on the covers of vices. Only a handful of other Ireland and Finland are the only Fortune and BusinessWeek. Linus countries have 10 percent of their two European countries with posi- Torvalds was acclaimed by Fortune population using the Internet in tive trade balances for IT products as the master of network-based any minimal way, much less for and services [9]. Finland has software development and the regular e-commerce (and a large strong export positions in mobile new role model for cyber- fraction of these countries are in phones, base stations and programmers. The father of the Nordic region). switches, is Europe’s largest manu- Linux, age 28, has become a Finland has also been able to facturer of PCs (through ICL Per- world-renowned guru on sonal Computers) and has operating system platforms. recently created some suc- BusinessWeek profiled Nokia cessful software products. CEO Jorma Ollila, who Moreover, exports of Finnish brought Nokia from the IT products and services are brink of collapse to a leading expected to double by 2002. international company in Finland has evolved from mobile communications and a peripheral European coun- services. try producing paper and tim- These men and their ber into a nation with per accomplishments exemplify capita IT production and use Finland’s rapid rise as one of ranking among the highest the most networked nations in the world. In Finland, we in the world [1, 4]. A larger have a rare example of a fraction of Finns have mobile small country that is able to phones (50%) than in any spawn a successful, entirely other country, and Finland indigenous, multibillion dol- was the first country where lar IT company [3]. To the income from wireless understand how this came communications exceeded about, it is necessary to that from land lines. Tele- review some Finnish history phone costs are among the and policies that have taken world’s lowest, and phone ser- the country from some very vices are fully digitized. The hard times to its present number of Internet hosts per position. We also have to capita is the world’s highest, examine aspects of the insti- as is the per capita volume of tutional environment of Internet use. Internet-based Scandinavian societies since TERRY MIURA commerce is such that 10% the late 1960s, dramatic COMMUNICATIONS OF THE ACM March 1999/Vol. 42, No. 3 13 changes in technology in the learning skills, literacy, and atti- the mid-1980s and in the early 1980s, and specific features of the tudes toward learning—all 1990s, and a third will take place Finnish management culture that arguably factors in achieving suc- between 1998 and 2000. By the all contributed to the radical cess in adopting IT—are well end of 1996 IT topics were taught transformation. developed. In a recent Institute for in 15 universities that annually Finland’s five million people Management Development graduate about 600, five-year live in a large, sparsely populated (IMD) survey on the competitive- M.S. degrees and 40 Ph.D.’s. Fin- stretch of land between Sweden, ness of nations [5], the quality of land also has an extensive network Russia, and the Arctic Circle. His- Finland’s educational system and of polytechnics that produce over torically Finland has been part of the quality of its workforce were 2,000 degrees each year in com- both Sweden and Russia, becom- ranked second after Singapore. puting and engineering. ing independent in 1917 after About 60% of the population is Research activity in IT has been Czarist Russia’s collapse. A nation expected to complete tertiary edu- steadily growing over the last without many natural resources, cation institutions, including uni- decade. The productivity index of largely unsuited for advanced agri- versities and polytechnics. IT-related publications per one culture, it has also suffered from The Finnish educational system million inhabitants was highest in several wars during this century. has actively promoted IT skills. By Finland, followed by the U.S. in Due to all these factors, it has his- 1999 all Finnish schools will have 1995 and 1996 [10]. Finnish torically had a relatively low eco- Internet connections. Primary and research has achieved world-class nomic standard of living. In 1948, secondary schools have offered results in neural computing, com- Finland’s GNP per capita was half computing since the mid-1980s. putational theories, cryptography, of Sweden’s. Traditionally, Fin- Finland’s extensive public library digital signal processing, program- land’s economy had wooden legs, system is now completely linked ming languages and compilers, dependent on its forests. Since to the Internet, providing virtually telecommunication protocols, World War II, Finland has devel- every Finn with free access and databases, operating systems, oped a machine industry, which some help with Internet use. In information systems, and software produces luxury cruisers, paper the early 1990s Finland intro- engineering. machines, and lifts. Forests and duced the “IT Driver’s License.” The Ministry of Education was machines still account for 50% of This is a publicly developed and the major funding agency in the Finland’s exports, while another maintained national test to evalu- 1980s when the Finnish Univer- 25% now comes from electronics ate IT skills among the workforce. sity Network (FUNET) was and IT. By 1997 GNP per capita The model is currently being developed and it soon connected equaled Sweden’s. adopted within the entire Euro- all universities and research insti- pean Union (see www.tieke.fi/ tutions. This led to a rapid Educational Policies and tieke/ajokortti/). increase of use of the Internet in Funding in Computing and University education in com- institutions close to universities, Networks puting started when the first chair including high schools, hospitals, By international standards, in computing was established in municipalities, ministries, and Finnish society achieved full liter- 1965. Although teaching resources libraries. Consequently, the com- acy relatively early (in the late were insufficient for a long time, mercial Internet service market 19th century) and has since paid the early start provided an ade- became highly competitive. Now much attention to public educa- quate basis for educating a compe- basic access to the Internet can be tion. Among the Organization of tent Finnish IT workforce. Similar obtained for U.S. $8 per month. Economic Cooperation and developments have taken place in The post office plans to provide Development (OECD) countries, related fields: electrical engineer- every citizen with an individual Finland uses the largest portion of ing, telecommunications, and email address. Some widespread its GNP for primary education applied mathematics. Growth of Internet services have been of and is among the top five in sec- teaching personnel has been twice Finnish origin, including the ondary education [5]. Therefore, boosted by national programs in Internet Relay Chat (IRQ). 14 March 1999/Vol. 42, No. 3 COMMUNICATIONS OF THE ACM International Perspectives Technology Policy and The reason why Finland was Strategies Before the mid-1980s, the Acad- able to be so successful requires an emy of Finland, an institution similar to the U.S. NSF, funded understanding of the changes in small pockets of basic IT-related research. Some industry-oriented the institutional and technical R&D was conducted in the state- owned Technical Research Center, environment. which also is funded through the state budget. Since the mid-1980s it has operated a research labora- funding after joining. The importance of these pro- tory in IT. The R&D system changed grams in fostering industry-based In the mid-1980s, the state when the Technology Develop- R&D cannot be overestimated. adopted a long-range planning ment Center of Finland (TEKES) They created a tradition and mode and monitoring system. This was established in 1983. TEKES of close industry-university inter- adoption changed the role of the has played a vital role in fostering action more advanced than in National Science and Technology industry-oriented R&D. Its most European countries. There- Council, which had been estab- annual funding currently is about fore Finland was ranked the best lished in 1963. The Council was U.S. $400 million, of which in industry-university cooperation transformed into a top-level pol- almost U.S. $160 million is allo- among all countries in the IMD icy-making body chaired by the cated to IT. TEKES offers fund- survey [5]. Finland helped to prime minister. The Council has ing for selected areas for develop a critical technology base representatives from major min- companies alone, or for joint for the growing IT industry in istries and institutions who play research projects between universi- many areas, including radio fre- important roles in the national ties or other research institutions quency and antenna technologies, innovation system. In addition, and industry. TEKES has focused digital signal processing, applica- the council has members from its research programs in selected tion-specific integrated ciruits, industry and labor organizations. domains to create synergies in operating systems, groupware During the last decade, the coun- learning and to achieve world- products, telecommunication soft- cil has been crucial in shaping class competence. During the ware, and software engineering long-range plans and sustaining a 1980s and early 1990s, it funded [6]. In both IT and telematics of steady growth in investments in several programs in software engi- the IV Framework program of the R&D, even during the deep neering, telecommunication sys- EU, the Finnish share of received recession in the early 1990s.

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