EU strategy has a major...
EU strategy has a major goal of turning the EU into a sustainable, inclusive,
and smart growth economy. In the EU agenda, SMART growth implies improving the
EU states’ performances in fostering knowledge, education, research and
innovation, and digital society. Since the inception of the EU agenda, not much
investigation has been done on the performance of different nations in
reference to EU 2020 targets. Hence, the following research focuses on how
Finland is performing relative to its EU neighbors. The research assumes a
cross-sectional study because it aims at comparing the performance among
different EU countries. The significance of the study revolves around the fact
that different member states portray significant variations in their
performances in attaining the objectives of the EU plan. However, the study’s
key focus is Finland. Hence, it compares Finland’s performance in SMART growth
relative to its complementary EU members.
European Commission prepared the Europe 2020 strategy, which was later adopted
by the European Council. The aim of the EU 2020 is to enable European Union nations
to achieve inclusive, sustainable, and SMART growth (Gros & Roth 2012). The
initiative arose at an epoch when debt crisis had hit the Eurozone. In 2000,
the Lisbon strategy was initiated with the goal of turning the EU into the most
knowledge-based and competitive economy globally by 2010 (Walburn &
Saublens 2011). However, due to its focus on market orientation and failure of
the regional actors to be active in the process, the strategy failed to attain
its objectives. Consequently, an innovative strategy, the Europe 2020, came up.
The aim of Europe 2020 is to aid Europe to recuperate from its enduring
economic crisis through enhancing competitiveness, economic convergence, and
cohesion (European Political Strategy Centre 2015). The strategy set targets
for research and development, education, poverty reduction, employment, and
climate policy (Ministry of Finance 2013).
the Europe 2020 is due for mid-term review, there is a need to assess in a
realistic and unsentimental way whether the growth strategy has produced
positive results. The initiative needs to be a medium for dynamic debate and
candid reflection, elucidating on convergence and progress, and informing
policy makers how continual under-delivery influences the future of their
nations. However, the level of progress among nations is quite underwhelming.
Only some member-states are close to attaining the set targets and the gap
between their performances in increasing (Tilford & Whyte 2010). The
European Council approved recommendations for its member-states that would
guide decision-making. As compared to other EU nations, Finland has shown
accelerated reforms to liberalize its economy through SMART growth. Finland has
ranked among the uppermost performers in EU by fostering knowledge, innovation,
digital society, and education. In determining the competitiveness of Finland
among the European member-states, there is a prime requirement to review the
country’s current performance in EU 2020, government policies influencing smart
growth, and the overall impact of the 2020 agenda on Finland.
has portrayed a notable improvement towards the achievement of the targets set
in the Europe 2020 agenda. It has acquired a high rank in the competitiveness
index owing to its robust performance in laying strong foundations for growth.
Finland’s ranking derives from its performance in laying a basis for SMART
growth. It has a strong focus on training and education, knowledge and
innovation, and it leads the world in digital economy. Further, Finland has
managed to channel its resources toward training and education, innovation, and
technological adoption, which are the principal pillars of smart growth within
a competitive environment (Tilford & Whyte 2010).
economy of Finland is rising progressively since the inception of Europe 2020.
It ranks second after Sweden. After constricting for two successive years, the
country’s output assumed stability in 2014, and there followed a steady
recovery in the subsequent two years. Improvements in research and development have
aided in softening the negative effects of the great shrink in investments.
Besides, the national targets of Finland are maintaining R&D expense at 4
percent of GDP and reducing the proportion of school leavers below 24 years to
8 percent (Ministry of Finance 2013). In fact, Finland has the highest score
with 3.78% of the GDP expended on R&D. The lowest performers for the
indicator are Cyprus and Romania with merely 0.48% of GDP (Wegmann 2013).
indicators of Finland’s performance in sustainable growth
rates of ICT investment vary across EU states. While the Netherlands, Sweden,
and Finland have invested higher than the United States in the last ten years,
the UK and Germany have invested an equal share. However, the investment
remains weak in EU’s southern members (Greece, Italy, Spain, and Portugal). The
highest performing EU nations portray impressive intensity of internet use. In
2009, more than 75% of the households in Sweden, Denmark, Finland, the
Netherlands, the UK, and Germany had gained access to the internet. They had
already exceeded the EU average of 65% (Tilford & Whyte 2010).
is among the top innovation powerhouses within Europe (Tilford & Whyte
2010). It is a worldwide leader in progressing toward embracing a digital
economy. Finland has initiated The Digital Agenda policy that endeavors at
promoting productivity and growth throughout the society. The policy is
ensuring digitalization of all sectors of life from education, workplace to
leisure activities and service use. The enhancement of ICT in these sectors has
improved productivity in private and public services.
digital transformation has immeasurable effects on Finn’s well-being and lives.
The digital world has provided them with a source of learning and has created
new-fangled social innovations. Besides, by increasing globalization and
bolstering the digital economy, Finland has accelerated the pace of its
economic change. It is ascending on its success route by making the digital
economy a novel pillar for welfare, growth, and competitiveness. Accordingly, the
nation has assumed a leading position in both development and delivery of
digital services, which comprise of infrastructure services, open and public
data, and commercial customer. Open alliance in refining and processing
information has brought about new business openings and innovations. In
addition, the introduction of digital economy has enabled Finland to develop
and realign traditional production practices and processes with the focus
moving from products to services. This technique adds value to services offered
to clients and as well endorses sustainable development. The Finnish
administration has harnessed ICT because it has realized that it causes ripple
effects in combating climate change, enhancing sustainable development, and
improving R&D (Tilford & Whyte 2010).
Research and innovation
Europe 2020 agenda indicated research and development as the measure for
innovation (Gros & Roth 2012). The agenda’s benchmark in R&D has
enlarged to incorporate intangible capital, such as novel financial products,
architectural design, human capital, and scientific R&D and market
research. The rate of investment in intangible capital differs vastly among the
EU member-states whose measures are available. Sweden ranks highest at 10.6
percent, followed by Belgium and the UK at 9.4 percent and 9.02 percent
respectively. Then follows France and the Netherlands at 8.59 percent and 8.44
percent respectively. Finland and Slovenia hold the sixth and seventh position
(Gros & Roth 2012; pg. 27).
to other nations globally, Finland has the highest scores in R&D. This owes
to an increase in R&D intensities in the manufacturing, electronics, and
services sectors. The EU set the R&D target at 3%, and only Sweden and
Finland have met the target (Tilford & Whyte 2010). A majority of the
member states have devoted less than 2% of their GDP to R&D, thus making
their R&D performances lag behind. In 2011, Finland’s R&D expenditure
dropped off to 3.78 percent of GDP from 3.87 percent in 2010, which is,
nonetheless, the uppermost value in EU (European Union 2013). In 2016, Finland
recorded a score of 0.67 in digitalization. Approximately 91 percent of Finnish
population use internet regularly and its workforce have the highest number
(6.7%) of ICT experts in the EU (Digital Single Market). Besides, Finland
exploits digital technology for online services. Finland’s outstanding
performance in R&D results from the fact that its economy is not only
knowledge-intensive but also, it has attained a remarkable and continuous
revolution toward a stronger high-tech and medium-tech specialization. The
state boasts numerous hot spot collections in major technologies related to security,
agriculture, food, materials, ICT, energy, and environment both at EU and
worldwide (Eurostat Statistics 2016). Most regions within South-west and South
Finland portray excellent performance in all the sectors whereas areas within
Northern Finland are performing well in environmental technologies, security,
ICT, and materials. On top of these clusters, Finland has rigorous patenting in
health, biotechnologies, machine tools, pharmaceuticals, and medical
technology. Moreover, Finnish research stands out in the fields of environment,
agriculture and food, energy, and security with the principal strengths being
security and ICT. Conversely, subsequent to its high intensity of R&D
inputs, Finland suffers from a low contribution of high-tech products to the
international trade balance. Hence, the shrink in the telecommunications sector
has caused a decline in commerce R&D investments. To curb the rising
challenges, the Finnish government has resolved to reform its innovation system
by internationalizing it.
and innovation enables EU states to create new services and products that not
only generate jobs and growth, but also assist in addressing social challenges.
Finland’s top economical ranking derives from its powerful focus on building an
attractive digital society. It embraces innovation priority dealings aimed at
diversifying business structures and increasing the quantity of innovative and
growing companies through commercialization of businesses (Anckar, Kuitto,
Oberst & Jahn 2014).. To achieve these objectives, Finland targets the
initiation of new organizations and the development of novel business
operations. The state ensures that SMART growth is realized both at the
regional and at the national levels by allocating investments towards R&D
in the business sector. The research enables the county to identify its strong
sectors as well as the regions facing changes. The operation creates an
opportunity to generate new businesses along with redirecting the expansion of
holds the uppermost position in the training and higher education pillar following
its sharp attention to education in the past decades. It has built its
education policy on the rule of lifelong learning. The basics of the rule are free
basic education and equal access to training and education. The country embraces
approximately 30 polytechnics and 20 universities, and almost 70 percent of
graduates gain entry into institutions of higher education. Nonetheless, the percentage
of higher education graduates between the ages of 25 and 34 years has been low but
the overall number of graduates in on the rise as compared to other EU states.
Finland, the science and education policy is founded on an ultimate learning
principle, which is aligned with the EU 2020 strategy (Baltic Sea Academy,
Jarke & Hogeforster 2015). The policy bases on efficiency, quality, and
internationalization. This has enabled Finland, among other EU member states
such as Sweden, Lithuania, Denmark, the Netherlands, Latvia, and Cyprus to be
able to meet and exceed the EU 2020 targets on enhancing higher education. The
EU endeavors at reaching 40 percent of 30-34
year-olds having graduated from higher-learning institutions by 2020
(Simon 2013). Finland did set a concrete objective to raise its people’s
education level while reducing the number of early school dropouts.
Subsequently, the rate of school completion has been developing auspiciously in
the country’s education system. The rate of completion is 87% in upper
secondary, 71.3% in vocational training, 67.8% in youth polytechnic and
Bachelor’s degrees, and 70.3% in Master’s degrees (Ministry of Education and
Culture 2012). Moreover, the EU established compulsory school-attendance for
four-year-olds. By 2020, participation rates must not be below 95 percent. In
2011, more than 13 member states had already attained the target. However,
Finland, Poland, Greece, Slovakia, and Croatia recorded the least rates of
between 70 and 80 percent (European Commission 2013).
Government policies for SMART
Finnish government has devised policies to ensure that its smart is in
proportion with the EU 2020 strategy. The government has set up a research and innovation
policy whose major theme is innovation-driven entrepreneurship. In this
context, the economic strategies that the government adopts must support
innovation. Accordingly, the government ensures that all enterprises in the
country have innovation activities allied to processes and products. In this
milieu, the Finnish government set up the Vigo accelerator program for
innovative and high-growth companies, which has drawn direct foreign investors
into the country. The overall innovation policy encourages companies to seek
novel growth markets on top of renewing businesses through commercialization of
services and incentives. Besides, the government uses support system to ensure
that innovation policies remain core to business processes.
education sector is sustained by system-level policies encouraging equity and
quality. The policy ensures that the government adopts an equitable education
system. Therefore, basic education encompasses compulsory schooling for nine
years and one voluntary year. Furthermore, the Finnish government has formulated
structural transformations to education financial aid. To begin with, the
government offers free education, textbooks, and daily meals for students. Additionally,
it has reformed the financial aid system to support full-time studies as well
as the hastened completion of studies. Financial aid has been made better in
terms of sufficiency through index boost on top of loan guarantee and study
grant. Consequently, the level of participation in training, apprenticeship,
and vocational education, and basic education remains high. Besides, the
government invented the structural policy program in 2013 to ensure that a
significant amount of government expenditure goes to education (Ministry of
Finance 2013). The policy has made it easy for the decentralized local
authorities to make important choices regarding spending on education. Moreover,
it is prompting improvements in primary education, vocational education, and
the use of ICT in the education system.
research and innovation council has outlined R&I (research and innovation)
policy measures for 2015-2020 (European Commission 2016). The purpose is to boost
Finland’s competitiveness and citizen’s well-being through bracing the effectiveness
and quality of R&I activities. The policy summary provides an R&I
reform program endeavored at inspiring the establishment of innovation system
measures and structures. The program encompasses of themes and development
targets, which include implementation of a radical reform of higher education, promotion
of utilization of R&I outcomes, improvement of overall knowledge-base, and
adequate funding of R&D. The government aims at increasing R&I funding to
better meet global competition, while making sure that the funding strengthens Finland’s
employment, knowledge base, and economy. To realize the program, the Council
suggests that the central government’s funding on R&D be increased by 2
percent annually during the period between 2015 and 2020 (European Commission
2016). The funding is aimed at supporting quality R&I activities, endorse
experimentation, get rid of inefficient structures, and improve the use of
R&I results. Consequently, the program will enable the government to find innovative
sources of growth, reinforce state competitive advantage, and create globally
attractive expertise centers.
of the 2020 Agenda on Finland
has benefitted terrifically from the EU 2020 agenda. The strategy has assisted
the country to recover from the implications of the deep recession. The country
has assumed a top position in digital innovation, knowledge, and education
among EU states. On top of having positive development in its economy, Finland
has also gotten a strong voice internationally. Finland can easily play the
role of an arbitrator, offering solutions to other nations.
to WEF (World Economic Forum), Finland has managed to secure second position in
the overall EU index and the fourth position among the top competitive nations
in the world following the initiation of EU 2020 objectives. It has endorsed a
digital society that promotes business creation through commercialization of
the business sector. Besides, the agenda has enabled Finland to focus strongly
on education, thus channeling its resources into training and education. The approach
not only equips the workforce with the vital skills required to adapt rapidly
to the revolutionizing environment, but it also lays the basis for high-tech
innovation and adoption. Accordingly, Finland has become Europe’s innovation
powerhouse. It also boasts an excellently performing labor market, healthy
social inclusion, reduced social inequality, and healthy sustainable practices.
Additionally, the country’s efficient infrastructure, stable economy, highly
educated workforce, ideal international routes, and business-friendly
environment offer numerous opportunities for investors.
Ministry of Finance 2013
2020 plan presents an opportunity for EU states to rediscover their future by
making sure that their policies are aligned with the objectives of the
commission. Since the inception of Europe 2020, many member states have
experienced profound reforms that are producing a development dividend. Finland
portrays significant improvement in its competitiveness in the sector of SMART
growth as designed by the Europe 2020. While the country’s productivity remains
stable, it still has an opportunity for improvement compared to fellow EU
member states. Although technological innovations are channeled towards
societal challenges linked to health and environment, there is a disturbing
decline in health-allied technologies. Nevertheless, Finland shows considerable
progress in Europe 2020 SMART goals, including R&D innovation, knowledge, IT
infrastructure, and education as compared to its complementary EU members.
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