OECD Observer Finland 50th Anniversary edition 2019 by OECD

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Finland at the OECD

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CONTENTS Special Anniversary Edition, January 2019

EDITORIALS

A SHORT HISTORY

Three reasons why Finland can stay on top Angel Gurría, Secretary-General of the OECD

A beacon for the next 50 years Anne-Mari Virolainen, Minister for Foreign Trade and Development, Finland

Finland’s cautious path to OECD membership Peter Carroll, Tasmanian School of Business and Economics, University of Tasmania

Finland in the OECD Observer: A selection from the archives

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SPOTLIGHT ON FINLAND

BOOKS

4 Business Brief: Wärtsilä 5 From forestry and heavy industry to a vibrant knowledge-based economy Christophe André Video in Augmented Reality 7 Experimental Finland Clara Young

Why Finland’s running circles around us Christopher Palmberg, Business Finland, and James Philp

The last (plastic) straw? James Philp

OECD Observer Roundtable on Finland Annamari Arrakoski-Engardt, Juhana Aunesluoma, Anni Huhtala, Mari Kiviniemi, Pirita Näkkäläjärvi

Finland leads the climate charge in the Arctic Council Clara Young

When the going gets easier Harri Pursiainen, Permanent Secretary, Ministry of Transport and Communications of Finland

Housing first: How Finland is ending homelessness Juha Kaakinen, CEO, Y-Foundation

The secret to Finnish education Andreas Schleicher

Finland’s mental health challenge Emily Hewlett and Kate Cornford

Offprint of edition No 317 www.oecdobserver.org © OECD January 2019 ISSN 0029-7054 Tel.: +33 (0) 1 45 24 9112 Fax: +33 (0) 1 45 24 82 10 sales@oecd.org Founded in 1962. The magazine of the Organisation for Economic Co-operation and Development OECD Publications 2 rue André Pascal 75775 Paris cedex 16, France observer@oecd.org www.oecd.org

Finnish architecture and design: A natural fit Ruairí O’Brien, Architect

DATABANK Snapshots on Finland Empowering women beyond Finland; Productivity test

Publications: Focus on Finland

Experimental Finland, page 7

Circular economy, page 9

Finland and the Arctic Council, page 16

Finland’s accession to the OECD, page 26

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EDITORIAL

Three reasons why Finland can stay on top We count on Finland to champion international co-operation and multilateralism Angel Gurría Secretary-General of the OECD

In 1969, when Finland became an OECD member, you were delicately balancing between the West and the East. Finland’s road to prosperity was neither obvious nor predetermined. Per capita income was almost 30% lower than in Sweden. In the 1970s and 1980s, Finland rapidly caught up with top performers such as Germany and Sweden in terms of income per capita, with the gap shrinking to less than 10%. But in the early 1990s, the country went through a deep recession: GDP contracted by 10% and the Finnish economy was damaged by a severe banking crisis. That was a painful period, with the unemployment rate reaching nearly 18% in 1994. But Finland showed its resilience–its sisu, as the Finns say. The economy rebounded and became increasingly knowledge-based, as illustrated by the global success of Nokia. Finland then joined the European Union in 1995, which supported economic reforms and boosted trade. When the global financial crisis hit in 2008, Finland’s output per capita had caught up with Germany’s and Sweden’s. However, as in the 1990s, the crisis hit hard. It took 10 years for Finland’s GDP to get back to its pre-crisis level. Economic growth and employment have rebounded over the past three years and optimism has returned. Output expanded at an average annual rate of 2.5% and the employment rate now reaches 72.6%. Today Finland is a global leader in a range of areas. The country is among the best performers in PISA (OECD Programme for International Student Assessment) and an innovation leader according to the European Innovation Scoreboard. Finland enjoys one of the lowest levels of income inequality in the OECD, and gender inequality is among the lowest in the world. Environmental policies are ambitious, renewables now make up nearly a third of primary energy supply, far above the 10% OECD average. Finland is also one of the few countries that are integrating the Sustainable Development Goals (SDGs) into its budgeting cycle. Compared to other OECD countries, the Finns are among the most positive towards globalisation, and have some of the highest levels of subjective well-being, personal security and environmental quality in the OECD. They are also quick to adapt to the shifts of global economic activity, increasing their presence in Asian markets in recent years (15% of exports in 2018). The OECD is proud to have contributed to these positive events. Since 1969, the OECD has supported Finland through delivering data driven, evidence-based and peer-reviewed analysis and recommendations. We have worked together to support Finland on

innovation policy, quality standards in early childhood education, labour market integration of migrants, and on Finland’s integration in global value chains. Next in the pipeline are collaborations to assess the impact of regulations on international investment in Finland and to support the Finnish EU presidency on the economy of well-being. And we are eager to continue to support your success story and work together on issues related to, for example, regional development, small and medium-sized enterprises (SMEs), or inclusive policies for the digital transformation. Looking to the next 50 years, your achievements across the economy must not be taken for granted, particularly given the uncertainty affecting the global scene. While globalisation lifted millions out of poverty and allowed vibrant economies like Finland to thrive, it also made many people feel left behind, triggering a resurgence of populism, nationalism and protectionism, which today threaten growth prospects and disproportionately harm low-income households. Opposition to multilateralism has also risen. Yet in a world of increasingly integrated economies that face urgent global challenges, like climate change and digital security, multilateral co-operation is needed more than ever. We count on Finland to champion international co-operation and multilateralism as it takes over the rotating presidency of the European Council in July. There are three reasons why I am confident that Finland will have a growing global and multilateral relevance in the coming 50 years. First, because you are visionary! Finland is a global leader when it comes to strategic foresight in policy-making. This includes deliberations by Finland’s Parliamentary Committee for the Future, regular futures reviews conducted across government ministries, and significant foresight investments by SITRA, an innovation fund, and others. As a result, Finland is often ahead of the curve on emerging policy issues. Second, because you are innovative! Finland is willing to try out new things. For example, the recent “Elements of AI” initiative joins a list of social experiments that test ideas to make society run better. The initial aim of the initiative was to teach 1% of the Finnish population about machine learning, but its reach is already beyond the initial goals, with new sign-ups in thousands every week in Finland and around the world. Finally, because you are harmonious! I am convinced that the spirit of inclusiveness, sustainability and community is part of the Finnish identity. Safeguarding these core qualities will ensure that Finland is positioned to stay on top and consolidate its role as a global leader. Please count on the OECD to support you, as you design, develop and deliver better policies for better lives over the next 50 years. @A_Gurria www.oecd.org/about/secretary-general/

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Finland joined the OECD on 28 January 1969. Adapted from speech delivered at a symposium, “Will we stay on top? Finland’s next 50 years in the OECD”, marking Finland’s 50th anniversary as a member country, on 15 March 2019; read the original version at https://oe.cd/2x8

EDITORIAL

A beacon for the next 50 years Anne-Mari Virolainen, Minister for Foreign Trade and Development, Finland

was driven by its desire to join its natural reference group of Western, market-based democracies. The OECD has brought us many things. It has been a research institute for high-quality studies into economic and social policies and their impact. From development of statistics and measurements to policy advice, we have been making use of OECD best practices in many fields.

©Lauri Heikkinen/Valtioneuvoston kanslia

The OECD has been a forum for exchanging ideas among countries, which are not just like-minded, but mostly on very similar levels of development. We have been able to form a common understanding regarding questions ranging from competition to taxation, not forgetting corruption, investment policies, export credits and responsible business conduct.

The year 1968 was very important in many respects. There were youth revolts throughout Europe contesting the old order. In Vietnam, the war had intensified. The Prague Spring in Czechoslovakia ended with a Soviet intervention. In addition to all these events, Finland negotiated its accession to the OECD. We became the organisation’s 22nd member in January 1969, and here we are today, celebrating Finland’s 50 years at the OECD. Those 50 years have been very transformative. Finland in 1969 was in the process of evolving from an agrarian society into an industrialised one. One third of the work force was still working in agriculture in the 1960s, but that share was quickly diminishing. There was a strong internal migration from the countryside to the cities, and towards the end of the decade, many hundreds of thousands went to Sweden for work. The next decade brought more urbanisation, more industrialisation, the free trade agreement with the European Economic Community (EEC), and among other things, reform of the school system. The economy continued to open up in the 1980s, which led to an economic boom, but that was followed by a deep depression in the early 1990s. Thereafter came the crucial moment of joining the European Union in 1995, becoming more and more connected, and interconnected, with the rest of the world. We lived the golden years of Nokia’s success of the early 2000s and the structural crisis in our economy of the past decade. Now, conscious of the global challenges that we and everyone else are facing, we’re looking for new sources of growth. And just as in 1969, we are looking for ways of achieving social improvement. The OECD has contributed a lot since we joined. For sure, the reasons for joining the OECD were also political, and Finland

The OECD has been a place for invaluable learning among peers. Its reviews have given us insight into how other countries have tackled tricky social problems. It has given us a platform to show others what we have done well. It has offered us benchmarks to strive for, and to surpass. Take development policy, for example. The OECD’s Development Assistance Committee (DAC), which monitors and tracks bilateral official development assistance, is the standardsetting community for development issues. Currently OECD is supporting its member states to achieve the 2030 Agenda for Sustainable Development, both in development co-operation and beyond. I like to think of the OECD as a lighthouse to show us the way, to improve, to become better as a society, as an economy, and as members of the international community. The OECD motto, “better policies for better lives”, resonates well in Finland. We are about to undergo a massive transformation in the coming decades as well, including changes in world economy, the impacts of climate change and mitigation, sustainable development, urbanisation, migration, digitalisation, artificial intelligence, robotisation, and more. There are many fundamental challenges, and many unanswered questions. And they are not issues that Finland can address on its own. We need to work to find solutions together. In all of this, we find the OECD work extremely important. The OECD has been instrumental in identifying emerging issues for the decades to come and proposing solutions to challenges ahead. Its impartial, independent research is vital in assessing the impact of our policies. As we celebrate Finland’s first 50 years at the OECD today, we are looking forward to the next 50 years, with the OECD as one of our beacons. Edited and adapted from the opening speech delivered at a seminar celebrating the 50th anniversary of Finland’s membership of the OECD, held in Finlandia Hall, Helsinki, 15 March 2019. Share article at https://oe.cd/obs/2zK

OECD Observer Finland 50th Anniversary Edition

Business brief

The global energy market is constantly evolving. Current market trends show the energy landscape is in transition towards more flexible energy systems with a rapidly increasing share of renewable energy, declining inflexible baseload generation and wider applications of storage technology. The decreasing costs of renewables have begun to reduce new investments into coal and other inflexible baseload technologies; a transition which will eventually cause renewables to become the new baseload. In 2017 alone, 14% of electricity generation worldwide was attributed to wind and solar. Wärtsilä aims to accelerate this transition towards a 100% renewable energy future. As a leading global energy system integrator offering a broad range of flexible and efficient solutions for the operational

Wind and solar can become the new baseload once supported by fast and flexible back-up power lifecycle, Wärtsilä can create optimal paths towards a 100% renewable energy future for its customers by analysing customer requirements and building optimal energy systems with total cost of ownership.

The renewable revolution In recent years, market trends have shown a steady decline in the price of renewable energy in the global power sector. Investments into new inflexible baseload generation are also on the decline and price performance data shows that the cost competitiveness of wind and solar is rapidly increasing as compared to traditional thermal generation. In the past 20 years, the cost per kW of wind power plants has decreased by 40% and solar has dropped by 90%. Currently, wind and solar attribute to approximately 1,100 GW of electricity globally, which forecasts indicate will rise to 2,000 GW in 2024.

Moving towards high renewable energy systems Global progress towards achieving a 100% renewable energy future is being made at an incredibly rapid pace. Power providers, utilities

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The path towards a 100% renewable energy future and governments are changing their perspectives towards inflexible generation and existing thermal capacity is being replaced with renewables. This phased transformation, from the global power system operating at 0-20% renewables to a stage where 80-100% renewable energy systems will exist, requires major changes in infrastructure, investments and innovation in technology. The renewables become the new baseload and excess renewable energy is used as raw material for other commodities. This increase in the usage of renewables will require highly flexible thermal capacity to maintain system reliability and energy storage will become a key component in the baseload grid to maintain overall grid balance.

Wärtsilä Solutions for a 100% renewable energy future Flexibility and hybrid solutions are critical components for leading this transition to a 100% renewable energy future. Smart Power Generation plants provide the best means of support to the power system by offering the highest degree of flexibility, enabling major savings, and creating an optimised response to rapid changes in intermittent generation. To enable the transition for its customers, Wärtsilä also provides utility-scale hybrid solutions of integrated energy storage and energy management systems to achieve system stability, and maximises renewable penetration using solar and wind generation. Wärtsilä’s existing engine solutions have the capability to operate using various gas and liquid fuels and are flexible to also function on synthetic biofuels and traditional biofuels. Wärtsilä develops smart technologies and participates actively in the development of Power to X technologies. www.wartsila.com

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From forestry and heavy industry to a vibrant knowledge-based economy Christophe André, OECD Economics Department

Video: Happy 50th anniversary, Finland at the OECD! In 1969, Finland became an official member of the OECD. Since then, this Nordic nation has transformed into an innovative, knowledgebased society. https://oe.cd/obs/2zI For Augmented Reality scan with SnapPress Download the app for free

On a cold, dark Helsinki winter’s day in 2014, I was waiting for OECD SecretaryGeneral Angel Gurría and my other colleagues in a black limousine in front of the austere parliament building. The scene could have come out of a John le Carré thriller. It was late in the day. The OECD delegation I was waiting for was meeting Alexander Stubb, then the minister for European affairs and foreign trade. One of Finland’s most europhile and tech-savvy statesmen, Mr Stubb soon became prime minister. How things had changed in 50 years. In 1969, when Finland became an OECD member country, Cold War tensions were still running high. The decade had started with the Cuban missile crisis and building of the Berlin Wall. Finland was a small country squeezed between the Soviet and US superpowers. President Urho Kekkonen, who held office for a quarter of a century

(1956-81), was striving to keep a delicate balance between East and West. Finland’s road to prosperity and integration with the West has been long and bumpy. The first OECD Economic Survey of Finland, published in 1969,

Finland’s road to prosperity and integration with the West has been long and bumpy noted that “the heavy weight of agriculture both in terms of output and employment is still an important feature of the Finnish economy.” At that time, less than 65% of Finns lived in cities compared to 80% of Swedes. Agriculture still employed a quarter of the Finnish workforce. Industry accounted for more than a third of employment, dominated by the wood and pulp and paper sectors, as well

as metal industries, such as shipbuilding and lifting, transport and electrical equipment. Finland’s income per capita was almost 30% lower than in Sweden, to where many Finns were emigrating to find better jobs. During the 1970s and 1980s, Finland rapidly caught up with Germany and Sweden in terms of income per capita, with the gap shrinking to less than 10% (see chart). But in the early 1990s, Finland went through a deep recession: GDP contracted by 10% between 1990 and 1993. The collapse of the Soviet Union had disrupted trade links. The Finnish economy was damaged as well by a severe banking crisis caused by poor supervision following financial market deregulation in the late 1980s. Finland and other Nordic countries buttressed their financial systems in the following years. Alas, many other countries around the world failed to learn from the Nordic

OECD Observer Finland 50th Anniversary Edition

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experience, and let financial imbalances accumulate until they triggered the global financial crisis in 2008.

What has OECD membership brought to Finland? Policy advisers and economists point to the political importance of joining a club of western democracies 50 years ago, leading to closer international integration and convergence. They value the OECD’s contribution to Finland’s public policy debate in a widening zrange of areas, with comparable data, benchmarking, research-based evidence and comparative analysis. The OECD provides a valuable “outsider’s” view on policies and fosters continual exchanges of views with member countries’ analysts and policymakers. As an OECD economist, I greatly value

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of Nokia, which in the 1990s became one of the world’s leading brands in mobile phone handsets. Finland joined the European Union in 1995, which supported economic reforms and boosted trade. When the global financial crisis hit in 2008, Finland’s output per capita had caught up with Germany’s and Sweden’s. But, as in the 1990s, the crisis hit hard. The effects of the global economic downturn were compounded by the collapse of Nokia’s mobile phone business, a sharp fall in demand for paper and a recession in Russia. It took 10 years for Finland’s GDP to get back to its pre-crisis level. But economic growth and employment have rebounded over the past three years and optimism has returned.

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Finland offers a wide range of best-practice examples, from education to innovation and inclusive growth

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The 1990s crisis was painful. The unemployment rate peaked at nearly 18% in 1994. But Finland showed its resilience–its sisu, as the Finns say. The economy rebounded and became increasingly knowledge-based, as illustrated by the spectacular success

Finland’s 50 years of progress GDP per capita, US$, constant prices, 2010 purchasing power parities (PPP)

Source: OECD Economic Outlook Database

the very open, constructive and stimulating debates I have with my Finnish counterparts. They are rightly proud of Finland’s successes and of what their country brings to fellow OECD members. Finland offers a wide range of best-practice examples, from education to innovation and inclusive growth. It is among the best performers in PISA–the OECD’s worldwide education test among 15-yearolds. It is an innovation leader according to the European Innovation Scoreboard. It enjoys a level of income inequality that is among the lowest in the OECD. Finland is also one of the most genderequal countries in the world. When I started working on my first OECD Economic Survey of Finland in 2011, Tarja Halonen was the president of Finland and Mari Kiviniemi, who was later to become a deputy secretary-general at the OECD, was prime minister. But having two women in the country’s top jobs was not surprising for the first country in the world to elect women as members of parliament, in 1907 (Finland was, then, an autonomous Grand Duchy, part of Russia).

Today, Finland faces new challenges, not least having to cope with a rapidly ageing population and rising global economic and political uncertainties. During what has been nearly a decade on the Finland desk at the OECD, I have been impressed by how Finnish policymakers and economic stakeholders more broadly address challenges in a very rational and pragmatic way, as well as their ability to build consensus on decisive issues. This gives me confidence that Finland will achieve as much over the next 50 years as it has since 1969, and that it will continue to inspire its OECD peers and others beyond in the pursuit of better policies for better lives. References OECD (2018), OECD Economic Surveys: Finland 2018, OECD Publishing, Paris, https://doi.org/10.1787/eco_ surveys-fin-2018-en. European Innovation Scoreboard 2018 at https://ec. europa.eu/growth/industry/innovation/facts-figures/ scoreboards_en Share article at https:/oe.cd/obs/2tG

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Experimental Finland

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Clara Young, OECD Observer

Start-up event, Helsinki, Finland Most people spend their evenings kicking back with a book or whatever’s on Netflix. In Finland, they’re teaching themselves artificial intelligence (AI). In the summer of 2017, computer scientist Teemu Roos heard that the government was looking for ways to teach ordinary people the basics of artificial intelligence. It would be a continuing education initiative–not necessarily to train people to become machine-learning engineers, but to understand how neural networks work and grasp how AI is changing the way we do things. Roos teamed up with the tech firm Reaktor to design an easy-to-follow massive online course that rolled out in May 2018. Some 90,000 people signed up. By the following September, 7,500 people had completed the 30-hour course and graduated. The goal the Finnish government has set is to educate 1% of its population about machine learning.

“Elements of AI” is just one of Finland’s many pilot projects and social experiments, big and small. This is something the Finns are really good at: carefully designing long-running, society-wide experiments with broad grassroots participation that test ideas for making society run better. The radical idea was to turn this penchant into a national experimental culture. What the government has called “Experimental Finland” came into being in 2015 in the prime minister’s office. The goal was to set up small “sandbox” projects and larger formalised policy trials in the areas of circular economy, digital workforce skills and artificial intelligence over the next 10 years. A small Experimental Finland team was put together to call for new ideas and oversee experiments at all different levels of government, from municipal to national, and across the country. Projects

and trials that pass muster are funded by the government or co-financed by the public and private sector. Finland has taken a systems design approach in its policymaking. And it’s telling its civil servants not to be afraid to try out new ideas. Finland’s complicated social security, for instance, is a system in need of new ideas. Finland started out with a small residence-based pensions programme and universal child benefits after World War II. Today, it provides mandatory day-care services for families with small children and home-care benefits for those looking after members of the family who are ill or elderly. But Finland’s welfare state needs streamlining. And the current system of tying people’s social protection to their jobs is rapidly growing outdated: people are turning to temporary jobs,

OECD Observer Finland 50th Anniversary Edition

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increasingly working as independent contractors, or, perhaps as a fall-out of automation, not able to find work at all. Like some other countries in the world, Finland thinks universal basic income (UBI) is something worth looking into, and now it has. Preparation for a formalised trial on universal basic income began in 2015. Among the more innovative ways the government elicited research on basic

The current system of tying people’s social protection to their jobs is rapidly growing outdated income models was to organise a two-day Basic Income Hack. For 32 hours straight, 10 teams composed of coders, researchers, politicians, communications specialists, graphic designers, activists and information designers brainstormed about basic income. Some of their ideas, including a basic income game that simulates how certain life choices affect public finance, shaped the design of the UBI trial. On 1 January 2017, the two-year trial began. The Finnish social security agency, Kela, paid a randomly sampled, non-voluntary group of 2,000 unemployed people aged between 25 and 58 a monthly basic income of €560, unconditionally

and without means-testing. This replaced their usual unemployment benefits. The control group was also unemployed but received their benefits in the traditional way. The experiment ended on schedule on 31 December 2018. The following February, Kela released its preliminary findings: “The basic income experiment did not increase the employment level of the participants in the first year of the experiment. However, at the end of the experiment the recipients of a basic income perceived their wellbeing as being better than did those in the control group.” Based so far only on data from the first year of the trial, there was no difference between the group that received basic income and the control group in terms of finding work. Both groups also worked an average of 49 days during that year, with the UBI group earning €21 less than the control group. Findings from the second year of the trial will be published in 2020. To encourage more experiments of this kind, the government has opened a digital platform called kokeilunpaikka. It means Place of Experiment. Here, people can read up on results and analyses of past experiments, find out what sorts of projects the government is looking for, and go through a step-by-

step process of submitting their own experiment. In healthcare innovation, for example, a group of nurses is testing robotic vests that may help them lift up patients more easily. In another project, a game is being piloted that helps prepare medical patients for diagnostic testing. Sometimes experiments can run into snags because of legislative obstacles. The government hopes to smooth these out by bringing out a guide that helps navigate through these situations. Finland is always ready to take something new out for a spin. Where else could a pulp and paper company have come up with what was, for a time, the world’s most coveted cell phone? But innovation is typically a private sector asset. Turning it into a public sector one too is perhaps the grandest experiment of all. Further reading Read about Finland’s UBI experiment at www.kela.fi/web/ en/basic-income-experiment-2017-2018 Learn more about Finland’s kokeilunpaikka digital platform at www.kokeilunpaikka.fi/en/ Ilkka Taipale (ed) (2018), 100 Social Innovations from Finland, Finnish Literature Society, Helsinki OECD (2017), OECD Reviews of Innovation Policy: Finland 2017, OECD Publishing, Paris, https://doi. org/10.1787/9789264276369-en Share article at https://oe.cd/obs/2yx

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Why Finland’s running circles around us

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Christopher Palmberg, Business Finland, and James Philp, OECD Directorate for Science, Technology and Innovation

What do toothpaste and ice-cream have to do with a circular economy? If you live in Finland, quite a lot. CP Kelco, a multinational company with facilities in Äänekoski, Finland, recycles waste pulp from the city’s pulp and paper mill into carboxymethyl cellulose, a natural polymer used to thicken ice-cream and toothpaste. Minimising waste or converting it into useful products like this is one of the three central tenets of a circular economy. The other two are processing products in the most resource-efficient way and making things that have a much longer life-span– disposables are the villains in a circular economy. And, when manufacturing uses biological raw resources or biotechnological means in the process, as is the case with CP Kelco’s toothpaste

and ice-cream, what is circular is not just the economy but the bioeconomy. Due to climate change and resource depletion, we need to redesign industrial processes to reduce carbon emissions, waste, and contaminants. Finland is embarking on this, making it one of the great champions of a circular economy. It was the first to create a national circular economy roadmap, in 2016, and is one of seven EU member states to have a dedicated bioeconomy strategy. It hosted the first world circular economy forum, with 90 countries attending, in 2017. Its innovation fund, SITRA, together with the European Climate Foundation (ECF), then commissioned a report, Re-configure: The Circular Economy–a Powerful Force for Climate Mitigation, which was released last year. Its findings were radical: switching to

a circular industrial production of cement, steel, aluminium, and plastics, particularly in the construction and passenger car industries, could reduce EU industrial

Finland is leading the way in developing a circular economy, and drawing valuable lessons too emissions each year by 56% (296 million tonnes of CO2 out of a total of 530) by 2050. This could take the EU more than halfway towards net zero emissions. Finland can show us the way. One of the most advanced bioeconomies in the world, Finland’s forestry sector accounts for over 20% of its export revenue, and over half of the Finnish bioeconomy. Other than toothpaste and ice-cream thickener, another use of timber and forest residues

OECD Observer Finland 50th Anniversary Edition

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is pulp-based fabrics, which is a burgeoning new industry. The Metsä Group pulp and paper mill, for one, is experimenting with this, also in Äänekoski. Finland, of course, continues to manufacture paper from wood though this is an industry that has been troubled by the transition to paperless digital media. Still, 25% of the paper industry’s valueadded is now achieved through circular bioeconomic processes. Biodegradable packaging and bio-based chemicals, plastics and, as mentioned earlier, textiles, are just some novel products of waste streams from paper manufacturing. But it is the replacement of high carbonemitting, high energy-use cement with renewable timber in large-scale building construction that will make the biggest dent in the country’s carbon budget. In 2011, the Finnish government set a target of increasing the market share of domestically-sourced wood multi-storey construction from 1% in 2011 to 10% by 2015. In 2015, an 8-storey timber-frame building was completed in Finland, one of the first high-rise examples of prefabricated cross-laminated timber (CLT) construction in the world. Finland’s investment in bioeconomy is such that it now represents 16% of the national economy. And the Finnish bet is paying off handsomely: besides conjuring economic wealth from things previously thrown away, it has also created jobs. In 2014, the bioeconomy generated revenues exceeding €60 billion with more than 300,000 people employed in it. Finland aims to bring this number up to €100 billion by 2025 and add another 100,000 jobs–a growth of about 4% a year. And beyond that? Estimates suggest another €2-3 billion in potential added value to the Finnish economy by 2030. And another 75,000 additional jobs as the economy gets more and more circular. What is truly ground-breaking, however, is the way in which Finland is pioneering new circular bioeconomy business models. It is creating circular bioeconomy hubs

around biorefineries. These are the “factories”of the bioeconomy, which convert raw materials like wood into products like fuels, chemicals, plastics and textiles. Finland has been savvy in embedding their biorefineries

Beside conjuring economic wealth from things previously thrown away, bioeconomy has also created jobs geographically within an ecosystem or cluster of companies. The biorefineries are close to the feedstock; in Finland, this is more often than not, forests. The bioproduction mills convert this feedstock and feedstock waste into fuel or chemicals that the nearby companies use in creating their own products. These are then consumed locally or exported, and eventually, when products have reached the end of their life, recycled. Äänekoski, with its traditional pulp mills, is one such hub. Metsä Group has developed a €40 million test plant in Äänekoski that is experimenting with converting papergrade pulp into fabric. The Metsä Group hub also includes two chemical plants: CP Kelco, mentioned above, and Minerals Nordic, as well as the Valio cheese factory. Valio makes use of the heat generated by a pulp mill in its cheese production. Other typical pulp mill by-products are tall oil, which is used in adhesives, rubbers, inks, soaps, lubricants, and emulsifiers and the turpentine found in solvents, paintthinners and fragrances. Äänekoski has been so successful that it is pursuing even more circular bioeconomy business opportunities. EcoEnergy SF now produces a unique biogas as well as biofuel pellets from the mill’s wastewater treatment plant sludge. Another company, Aqvacomp, may build a plant at Äänekoski that processes pulp into a biocomposite that can replace plastic in the electronics and automotive industries. And lastly, the mill itself gasifies tree bark into a bio-based natural gas to fuel the mill, replacing fossil-fuel energies. It captures

a portion of its CO2 emissions, converting them into pigments, and has pioneered a process by which it converts noxious gases into sulphuric acid for the mill’s own use– a world first. Äänekoski aims to create bioproducts that use 100% of its raw wood and production side streams. This will create some 2,500 new jobs and a whole lot less carbon emissions. Bioindustrial clusters like Äänekoski are the future, now. With refineries that are close to feedstock and companies that produce goods for local and export consumption, these hubs create ecologically virtuous circles. Äänekoski shows that if, like in Finland, there is the political will, there will be a circular bioeconomy way. References European Commission (2018), A sustainable bioeconomy for Europe: strengthening the connection between economy, society and the environment, European Commission, Brussels International Renewable Energy Agency (2018), Bioenergy from Finnish forests: Sustainable, efficient and modern use of wood, International Renewable Energy Agency, Abu Dhabi Hetemäki, Lauri, et al. (2017), “Leading the way to a European circular bioeconomy strategy”, From Science to Policy 5, European Forest Institute, Joensuu, Finland Ministry of Employment and the Economy (2014), Finnish Bioeconomy Strategy, www.bioeconomy.fi OECD (2019), Innovation for a sustainable bioeconomy: innovation ecosystems, OECD Publishing, Paris, forthcoming OECD (2018), Meeting Policy Challenges for a Sustainable Bioeconomy, OECD Publishing, Paris, https://doi.org/10.1787/9789264292345-en Philp, James. and David E. Winickoff (2018), Realising the circular bioeconomy, OECD Science, Technology and Industry Policy Papers, No. 60, OECD Publishing, Paris, https://doi.org/10.1787/31bb2345-en Sitra (2016), “Leading the cycle: Finnish road map to a circular economy 2016–2025”, Sitra Studies 121, Helsinki, Finland Wijkman, Anders and Skånberg, Kristian (2015), “The circular economy and benefits for society. Jobs and climate clear winners in an economy based on renewable energy and resource efficiency. A study pertaining to Finland, France, the Netherlands, Spain and Sweden”, Club of Rome, Winterthur, Switzerland

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The last (plastic) straw? vegetable bags, coffee capsules, tea bags, and mulch films for growing fruit and vegetables. To date, their market penetration is minimal. And yet they can add value in a circular economy: they can be processed in industrial composting facilities or contribute to biogas generation for renewable energy.

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James Philp, OECD Directorate for Science, Technology and Innovation

Dustin Hoffman (left) in The Graduate, 1967 “I just want to say one word to you. Are you listening? Plastics.” This infamous advice, delivered to Ben, played by Dustin Hoffman in the 1967 film, The Graduate, foresaw a great career in plastics. And indeed, plastic is one of the most successful materials ever produced. So much so that about 300 million tonnes are produced each year. But the gloss has faded a little too, because of severe environmental problems which plastics pose. They are generally not biodegradable and hang around in the environment for decades or much longer. In 2018, a Pacific

Ocean garbage patch was estimated to be 16 times larger than previously thought–it is twice the size of France. In the oceans, they can break down to microplastics, which can be taken up by, and interfere with, marine life. A report in January 2019 showed that every marine mammal in a survey contained microplastics, and the effects of this are largely unknown. If things do not change, by 2050 there will be more plastic waste in the oceans than fish. Biodegradable plastics can fill important niches, such as packaging, fruit and

A Finnish start-up, Sulapac, makes a packaging material that has plastic-like properties, yet biodegrades completely and leaves no microplastics behind. Made of sustainability-certified wood and natural binders, it can be used, for example, in cosmetics packaging to replace plastic jars. A new product for this Finnish company is a microplasticfree, marine biodegradable and massproduceable drinking straw, an alternative to the oil-based plastic straws currently consumed by the billion each week. Who knows, they may even make a great career for graduates in the future. Further reading Nelms, Sarah E., et al. (2019), “Microplastics in marine mammals stranded around the British coast: ubiquitous but transitory?”, Scientific Reports 9: 1075, doi.org/10.1038/s41598-018-37428-3 OECD (2018), “Realising the circular bioeconomy ”, OECD Science, Technology and Industry Policy Papers No. 60, November 2018, https://doi.org/10.1787/31bb2345-en Share article at https://oe.cd/obs/2yz

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OECD Observer Finland 50th Anniversary Edition

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OECD Observer Roundtable on Finland

Towards ever better marine protection Annamari Arrakoski-Engardt, Secretary-General, John Nurminen Foundation

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To mark Finland’s 50th anniversary as a member of the OECD, we have invited a range of representatives to answer the following question: What Finnish achievement would you most celebrate from the last 50 years, and what would you see as the main policy challenge for the next 50?

into our inland sea in amounts it couldn’t handle. We caused eutrophication, which is a serious problem.

There are great ideas to be tapped in big and small businesses. We will have to introduce flexibility in administration and taxation, by creating new funding mechanisms and lowering the threshold for corporate funding. By matching funding and willingness to pay, we can set new records, with Finland leading from the front.

Who owns the Baltic Sea? Well, it’s everyone’s and no one’s, which makes its protection a formidable task! There are nine coastal states on the Baltic Sea, with close to 90 million people living in its catchment area. Since the Second World War, in our efforts to build a brave new world, we cultivated land and put as much fertilizers as we could into it to produce good crops. We built factories and we moved to cities in great numbers. But we have since woken up to realise that we are pushing nutrients and waste

Looking forward to the next 50 years, we must keep the Baltic Sea clean for the future generations. After all, we and our forebears are guilty of causing this crisis, so surely we should solve it. We face complicated tasks. In agriculture, for instance, we have to figure out how to sustain the nutrients in soil. One innovation worth mentioning here is gypsum treatment of fields, which is fully a Finnish innovation. We have to find innovative methods for rescuing the Baltic Sea. Could we, for instance, find a way to retrieve the nutrients that are stored on the sea bed?

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Can Finland be top of the class on ageing too? Juhana Aunesluoma, Historian, Research Director, Centre for European Studies, University of Helsinki.

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We are fighting back now, though, thanks to organisations like ours, corporations, and local authorities. Nowadays wastewaters are properly treated before they reach the Baltic Sea. In the Gulf of Finland, we have managed a massive 75% reduction in the annual phosphorus load in the sea. This record achievement was the result of international co-operation, and the key was our active focus on two major hot spots in Gulf of Finland: Saint Petersburg and, also in Russia, a major fertilizer factory near the city of Kingisepp.

Finland’s top achievement in the last half-century is its education system. From the late 1960s onwards, it has built a well-functioning and comprehensive

OECD Observer Finland 50th Anniversary Edition

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Twitter: @aunesluoma Visit www.helsinki.fi/en/networks/centre-for-europeanstudies

Making progress on the environment, but what about equal rights of access? Anni Huhtala, Director General, VATT Institute for Economic Research The relationship between economic growth and the environment is controversial. Global warming can be

Visit https://vatt.fi/en/environment-energy-and-climatepolicy

Anni Huhtala

seen as evidence that humans are short-sighted and greedy. In contrast, the enormous progress made in providing urban sanitation and improvements in water and air quality are examples of continuing advances in the human condition, which have been made possible by technological developments. Finland is known as the land of a thousand lakes. As recently as in the 1960s, a quarter of the population lived near badly polluted water bodies. At that time, Finland was a relatively poor country, compared with our neighbour Sweden, for example. The growth of the Finnish national economy was accompanied by a shift in environmental and industrial policy that aimed to foster improved water quality. Efficient treatment of wastewater discharges started in municipal plants in the 1970s. However, some large lakes were too polluted to swim or fish in. As new pulp and paper mills surged, providing jobs and other economic opportunities, such environmental deterioration was simply considered as the price of progress. The turning point came in 1980s. Today, water quality is classified as excellent or good across 80% of the total area of Finland’s lakes. In particular, waters near industrial facilities have become cleaner in recent years.

Reforms to maintain our well-being Mari Kiviniemi, Managing Director, Kaupan liitto–Finnish Commerce Federation*

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The biggest challenge the country faces now is its ageing population. Current demographic trends put pressure on its labour markets and for the financing of its health and social services. Finland needs immigration to replace and renew its workforce, but faces difficulties in setting the goals and priorities regarding its immigration policy. Its public services are under financial pressure, and a comprehensive social security reform is needed, but slow to come. The risk is that, with ageing, publicly funded health and social services will consume an increasing share of its public sector spending, allowing less room for developing its education, training and research and development systems and its economic and business infrastructure. This is crucial for the country to be able to maintain its Nordic style welfare state and social safety net, indeed, its basic social model, in the future.

An interesting question is: who actually benefits most from this improved water quality and the increased recreational opportunities? Do the rich benefit more than the poor? Nordic countries like ours differ fundamentally from many other countries in that their institutions include a common right of access to all natural areas. Undesirable, unequal provision of environmental amenities can be avoided only if such distributive issues are taken into account in environmental planning. This is one of the key challenges for future Finnish environmental policy, as we address global warming and work towards a reduction of greenhouse gases.

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school system that provides high-quality education for the whole population. It covers geographically the whole country, including less populated areas, and the schools are socially and culturally inclusive. Learning outcomes have been on a very high level by international comparison. In addition to this, Finland has a competitive research and development sector building on the strengths of its higher education system and on its investment in basic research. For a relatively small country, Finnish universities and Finland-trained academics and professionals punch above their weight.

Finland has become one of the world’s best performing countries in so many areas, it is hard to single out just one. The country scores highly in most dimensions of the OECD’s Better Life Index. It stands out for well-being, education and skills, environmental quality and personal security. Also, Finland’s income inequality, as measured by the Gini coefficient, is among the lowest in the OECD. Finland tops many unofficial ratings, too, like the Good Country Index and the UN’s World Happiness Report.

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These results tell the same story: that Finns have been able to develop their country, their economy and the whole of their society in a comprehensive and inclusive manner.

The major domestic challenge is how to maintain our high level of wellbeing. To reach this objective, structural reforms restoring competitiveness, raising productivity and boosting employment will be needed. The labour market needs to function better and work incentives need to be further strengthened. Science, technology and innovation are more than ever crucial to boosting growth and jobs, and to addressing the grand challenges of our time, from development, to climate change to global health. That’s why continued support and sufficient financial resources will be needed for R&D and education. Maintaining our willingness and capacity for reform and keeping Finland’s economy and society operating at a high level will also be a challenge. The OECD’s role in informing and inspiring our efforts will be needed again in the future. *Mari Kiviniemi is a former Deputy Secretary-General of the OECD Visit https://kauppa.fi/eng/

The achievement of Sámi parents Pirita Näkkäläjärvi, Journalist, Sámi of the Year 2017 One of the most important achievements in Finland is the teaching of Sámi

A lot remains to be done. For example, there is a lack of funding for Sámi teaching materials. Most textbooks are quite old, some of them pushing 20 years. We expect the government to assume more responsibility in our joint effort by making sure that the three Sámi languages in Finland are maintained and developed.

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Still, Finland faces both external and domestic challenges. As a small open economy, Finland’s future development and economy can be harmed by geopolitical tensions and protectionism, both of which are growing. Free trade and active participation in global value chains is a prerequisite for guaranteeing Finland’s future well-being. And the EU’s weakened ability to deal with multiple challenges could have negative effects on Finland’s future as well.

were the first two children in Finland to receive tuition in Sámi–when my nieces started school after 2015, Sámispeaking classes were already bigger than the Finnish-speaking classes in Inari.

Pirita Näkkäläjärvi languages in basic education to Sámi children and in the Sámi region. This is a right, and it would have never happened without the initiative of their parents. We Sámi are an indigenous people. The borders of the Finnish, Norwegian, Swedish and Russian nation states divided up the Sámiland. Our culture, language, history and worldview are distinct from the majority populations. In Finland, we speak Northern, Inari and Skolt Sámi languages.

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Our parents are the heroes of this story. They fought to ensure that we have an opportunity to learn how to read and write in our mother tongue, and to receive tuition in Sámi. When the basic education was established in the 1970s, legislation was passed to organise teaching of the Sámi language–if parents so demanded. Due to anti-Sámi sentiments and racist undertones in Finland, it required a lot of courage to demand Sámi-language teaching for your child. Since then, the development of the teaching has been a joint effort of parents, teachers, Finnish authorities, and the Sámi parliament. When I was eight years old in 1986, my cousin and I

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Finland leads the climate charge in the Arctic Council

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Clara Young, OECD Observer

Marine experts in Tornio, northern Finland, drill holes on 5 February 2016 in the sea-ice and inject dye into the water to study how it flows, to model how an oil spill would behave underneath the arctic ice. If you think the ice looks a little greyer in the Arctic, your eyes are not deceiving you. A five-year study by international researchers has found that diesel-engine vehicles, coal-burning factories and other such fossil-fuelled activities spew out soot, which circles around in the cold air before landing on the snow, turning it from white to sometimes black. White ice reflects heat; black ice absorbs it, and this is melting Arctic ice faster than scientists had anticipated. Researchers say that this soot, otherwise known as black carbon, may account for a half a degree Celsius of Arctic warming. And when the north warms up, the rest of the planet pays.

The Arctic Council, comprising eight circumpolar states including Finland, the US and Russia, has zeroed in on

The Arctic Council’s emphasis on the environment owes much to Finnish foresight reducing black carbon. “Throughout its chairmanship, Finland has dedicated most of its efforts on implementing the Council’s framework programme on black carbon and methane,” writes Timo Koivurova, who is director of the Arctic Centre at the University of Lapland. “The Arctic states were able to agree in the 2017 Fairbanks Arctic Council Ministerial Meeting on a collective

political goal to reduce black carbon emissions by at least 25-33% below 2013 levels by 2025.” Targeted reduction of black carbon and other pollutants can cut Arctic warming by 0.2°C by 2050. Black carbon is just one of the many polar issues the Arctic Council weighs in on. Although the black carbon agreement is voluntary, the Arctic Council has succeeded in catalysing legally binding agreements. The same Fairbanks Declaration includes the Agreement on Enhancing International Arctic Scientific Co-operation whereby members have pledged to co-operate on easing access to the Arctic for scientific research. It joins two other binding

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agreements ratified by members of the Arctic Council since its founding in 1996: one on marine oil preparedness and response, and another on search and rescue operations in the Arctic. The Arctic Council’s track record in brokering agreements is important. As the polar ice has been melting and the seas opening up, so strategic interest

With activity ramping up, the Arctic needs its peoples and states to co-operate all the more in the Arctic has been intensifying. There is the commercial promise of shipping routes, fishing, and oil and gas exploration, and military interests too. In fact, compared to the Antarctic, which is protected by the Antarctic Treaty signed in 1959, the Arctic is more or less up for grabs. And as the highest-level multilateral institution in the far north, the Arctic Council will have its hands full keeping members co-operative. The body now accommodates 13 official nonArctic Observer states, including France, China and India, and the number is sure to grow. The Arctic Council’s emphasis on the environment owes much to Finnish foresight. “Finland invited the seven other states (Canada, Denmark, Iceland, Norway, Sweden, the US and the USSR) with territories above the Arctic Circle for negotiations that ultimately led to the adoption of the Arctic Environmental Protection Strategy (AEPS) in Rovaniemi, Finland in 1991,” Koivurova remarks. This led to the founding of the Council five years later. Since then, Finland has twice served as the chair of the Arctic Council, which rotates among members every two years. The first time was from 2000 to 2002. Its second chair ends May 2019, after which the gavel will be passed on to Iceland. The Arctic Council makes no forays into security concerns, but by setting

this aside, it has been able to broker agreements and push research on matters like telecommunications infrastructure, biodiversity and health and mental well-being in Arctic communities. One of Finland’s priorities during this second chair is tackling climate change. It organised the Arctic Resilience Forum in September 2018, during which participants in the region worked on practical ways to increase resilience to risks posed by climate change. Finland has also pressed for greater meteorological co-operation between the Arctic states and the World Meteorological Organization to achieve more accurate climate scenarios.

country members–they are Permanent Participants–they help shape the agenda. The Council’s unique hybrid structure and history of working together has produced important Arctic norms in the past 23 years. But with activity ramping up, the Arctic needs its peoples and states to co-operate all the more. What the Arctic Council has accomplished so far is, hopefully, just the tip of the iceberg of what is to come.

Finland is also leading important work on methane, and raising global awareness that black carbon has a strong warming impact. Curiously, black carbon levels are not regulated under the UN climate change regime whose purview is over molecules like CO2 that linger in the earth’s atmosphere for a long time. In contrast, a particle of soot stays in the atmosphere for a much shorter time–about a week–and is regulated by air pollution laws instead. Yet, the effect of soot on Arctic ice so profoundly influences global warming that black carbon may be included in future commitments on nationally determined contributions under the Paris Agreement. Following the 2017 Fairbanks Declaration, the Arctic Council is now preparing another set of recommendations to be presented to foreign ministers in May 2019.

Baylor University, “Fossil fuel combustion is the main contributor to black carbon around Arctic.” ScienceDaily. 20 February 2019. www.sciencedaily.com/ releases/2019/02/190220121935.htm

Further reading Read more about the Arctic Council at https://arctic-council.org/ Read the Agreement on Enhancing International Arctic Scientific Co-operation at https://oaarchive.arctic-council.org/handle/11374/1916

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The Arctic Council’s influence goes beyond the far north, since the 13 observer-status countries may also undertake black carbon and methane reductions in their own countries. Some are already providing black carbon and methane inventories and reporting on their black carbon reductions. Some six indigenous organisations also sit on the Arctic Council. Although these actors do not have the same status as

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OECD Observer Finland 50th Anniversary Edition

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When the going gets easier

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Harri Pursiainen, Permanent Secretary, Ministry of Transport and Communications of Finland

Digitalisation, climate change and urbanisation are changing our lives and forcing us to find new ways to move people and goods. We must cut down on carbon emissions, and make traffic safer and more efficient than before. Digital tools will help us with this. After all, small, wallet-sized devices now enable near-instant data transfer and internet connections all over the world. Mobile phone technology provides us with services we could not even have dreamt of a few years ago.

B as frictionlessly as possible. The Finnish Act on Transport Services regards the entire transport system as a single entity.

transport modes to that of transportation as a service for the customer–hopefully the best one.

It requires all transport service providers to open up their essential data, such as information on routes, stops, timetables, prices, availability and accessibility in a machine-readable form via open interfaces. By sharing data, service providers can use their transportation fleet more effectively in moving goods and passengers.

This is the principle of the new Transport Act.

Today, I would like to see this same, amazing change happen in the transport sector. I believe that digitalisation enables us to transform our transport sector into a sustainable, customer-centric mobility system that is more efficient.

The act also requires transport service providers to have compatible systems and grant each other access to their ticket and payment system interfaces. The government has given service providers an incentive to do this by making interoperability a criterion for public procurement. Service providers can sell customers tickets for other transport modes–a train vendor can sell you a train as well as the bus ticket you need to get to your destination from the train station, for instance. This makes going from A to B as easy and user-friendly as possible. Called Mobility as a Service or MaaS, this shifts the notion of transportation from a traditional one of separate, autonomous

From data to new services Data is key to changing our transportation system and Finland’s new landmark transport legislation is paving the way. Finland is the first country in the world to use legislation in such a way as to mesh together all different transport modes from taxis and city trams to long-distance trains and bike shares so that users can get around and transport goods from A to

Most parts of the act entered into force in July 2018, and so far, it has largely met our expectations. In keeping with the data regulation in the act, mobility service providers have opened up a large number of interfaces for exchanging essential data and the opening of sales interfaces has also started. According to feedback from operators, new services and systems have been actively developed: we are witnessing a promising start. Mobility as a Service (MaaS) makes it easier for people and goods to move around, but it will also cut down on carbon emissions. This new system transforms mobility into a travel chain that combines public transport with private mobility services in a way that is user-driven, cost-efficient, attractive and sustainable. Why sustainable? Because a system that makes it easy to get from A to B by using

OECD Observer Finland 50th Anniversary Edition

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Housing first: How Finland is ending homelessness a combination of, for instance, metro, shared bike and taxi is an attractive alternative to driving your own car. Moreover, this system encourages users to choose transport options with the lowest emissions by making it the easiest and cheapest way to travel.

Juha Kaakinen, CEO, Y-Foundation

MaaS can be a viable solution in rural areas too. Several interesting pilot projects are tackling the challenge of combining

Mobility as a Service makes it easier for people and goods to move around, but it will also cut down on carbon emissions rides and transport in collaboration with public and private transport operators. Have a look at the Open Arctic MaaS project in Lapland as well as the Alpio project. Both experiment with different ways of organising mobility services in less densely populated areas.

Although what has been described here is a local, Finnish solution, the challenges we face are global. So should the solutions. I am confident that we can find common ways and best practices–the OECD’s horizontal project on digitalisation has proven that in many fields undergoing digital disruption. We need to have the courage to change the way we do the most fundamental things, even if it might not please everyone. In the history of transport, many things we now take for granted started out as radical, daring ideas. References and links Visit https://maas.global/ Visit www.lvm.fi/en/home Share article at https://oe.cd/obs/2yF

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Do we dare take a holistic view? Legislation is only one part of the solution. It can enable change but, alone, it is not enough to make it truly happen. That requires co-operation between public and private operators, as well as among different industries and levels of government.

It was seven years ago when Arvo (not his real name) first walked into this building. Back then, it was a hostel for homeless men run by the Salvation Army and had a certain reputation. Arvo can still remember opening the door to his dormitory. There were three men sitting on their beds, their faces sullen and melancholy. This would be his new home for a while. Arvo had been down and out already for a while, staying with some of his few remaining friends and occasionally hanging around in public places, stations and staircases. His ex-wife and their

daughter were now just a fading memory. Staying at the hostel was better than nothing, but hardly more than that. Today, Arvo is opening another door– except this time it is to a rental flat of his own. It’s still the same building but it has been converted into independent rental flats, completely renovated and new. The building is well-located in the city. And while the flat is not big, it has everything Arvo needs, like kitchen facilities and bathroom, and an affordable rent. When Arvo moved in, he barely slept the first few nights. He kept expecting someone to come in without knocking on the door.

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But no one came, it is now his home, his kingdom. Since moving in, Arvo seldom drinks anymore–he doesn’t want to run the chance of losing his home. Tomorrow is a big day: he has a job interview. Maybe this time he’ll be in luck on the work front too. He feels hopeful, there are reasons to live, and still a future for him. Arvo’s is just one of many stories at Alppikatu 25, a supported housing unit in Helsinki, which now has 81 rental flats for long-term, homeless people. Built in 1936, the building was completely renovated in 2012 at a cost of €9.2 million,

An important lesson we have learned during the last 10 years is that you can’t have Housing First without actually having housing first financed by a 50% investment grant from the Housing Finance and Development Centre of Finland. It provides independent apartments, common facilities and on-site support for tenants. Alppikatu 25 is a kind of a flagship for Finland’s new policy to end homelessness. It illustrates the aspirations and concrete measures of the National Programme to End Long-term Homelessness (PAAVO), which was started in 2008. One of PAAVO’s cornerstones is the strategy of replacing temporary accommodation with permanent housing based on rental contracts. This has fundamentally changed the structure of services and housing solutions available for homeless people. In our thinking, people living in temporary shelters and hostels are still homeless. Only permanent housing can provide a safe, sustainable solution to homelessness and a foundation for a decent life. The change in the service structure has been quite dramatic. In 2008, there were

almost 600 beds in shelters and hostels in Helsinki. Now there is only one permanent service centre for emergency accommodation with 52 beds (in winter time extra temporary accommodation is provided if needed). An important lesson we have learned during the last 10 years is that you can’t have Housing First without actually having housing first. This means providing independent, permanent rental flats unconditionally and with support if it is needed and wanted. It is also important to provide different housing alternatives. Most homeless people prefer an independent flat in scattered housing. Others prefer living in their own rental flats in a more communal structure with in-house support. This may be because they fear the isolation and loneliness of scattered housing, or their support needs are intensive. In recent years, Finland has been one of the few countries where homelessness has decreased. The Finnish success has been explained by this national strategy, targeting the most vulnerable, long-term homeless people. Even more important has been the way in which PAAVO was nationally implemented. Co-ordinated by the Ministry of Environment, these programmes have been carried out in wide partnerships between ministries, cities and civil society groups. The work is carried out together according to mutual agreements and plans with shared financial responsibility of the state and cities. In 10 years, over 7,290 homes have been provided for homeless people. All possible channels have been used: scattered flats bought on the private market, rental flats from social housing and new supported housing flats built or renovated in housing units. The role of affordable social housing has been crucial as this housing stock is also the most important structural measure of homelessness prevention.

In 1987, there were 1,370 homeless families and 17,110 single homeless persons in Finland. Compare that to the

The Finnish example shows that homelessness is not a law of nature latest tally (2017): 214 homeless families and 6,615 single homeless persons of whom 5,528 are living temporarily with friends or relatives. We can’t be sure that the numbers will continue to go down, but we know that it is possible with continuous, determined work. The Finnish example shows that homelessness is not a law of nature. It is possible to decrease and even end homelessness. It is a question of recognising housing as a basic human right and having a determined government who will lead the way. Reference Learn more about the Y-Foundation at https://ysaatio.fi/en/housing-first-finland Share article at https://oe.cd/obs/2yG

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The secret to Finnish education Andreas Schleicher, Director, OECD Directorate for Education and Skills

Some argue that this unusual trust-based culture makes it impossible to derive any real lessons from Finland. But that trust is at least as much the fruit of policy decisions as it is a cultural pre-condition. The respect teachers have historically enjoyed in Finland creates a solid base on which to build reforms, as well as creating a virtuous circle of productive

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Finland has turned teaching into a sought-after career with high social status

Relaxed learning environment at Helsinki University Library Finland has consistently been one of the most successful countries in global education rankings. For some, its name has become synonymous with educational excellence. While Finland is not alone in achieving world-class educational standards, what makes the country unique is that all of its schools are, effectively, elite schools: performance differences between Finnish schools account for just 5% of the total variation in student performance. This means parents can rely on quality schooling wherever they enrol their children. The Finnish system is based on the assumption that all students can succeed, irrespective of their social background, and that all schools, no matter where they are located, should be of high quality. Finland also shows that there are different paths to success. This is a system where students spend less time in school than in many of the highly competitive Asian systems. Finnish schools also tend to assign little homework and no longer have to undergo school inspections. Finland has turned teaching into a sought-after career with high social

status. It is difficult to get into teacher training courses, which are in high demand. In fact, only about one in ten applicants is accepted on average. Those who don’t succeed often turn to law or medical school instead, which indicates the prestige of the teaching profession. It is a job for people with master’s degrees, appealing to the brightest graduates. Once teachers are deployed to schools, they are expected to continuously upgrade their skills– professional development is compulsory. While not particularly highly paid (per-pupil budgets and teachers’ salaries are mid-range, by European standards), teaching is seen as an important and well-respected profession, and teachers are trusted and given great independence. The significant investment Finnish leaders make in the professional development of their teachers is a critical part of the equation. Prospective teachers undergo rigorous preparation and, once certified, are given exceptional decision-making authority over things like curriculum and assessment. Finnish teachers command the same level of trust and autonomy that professionals in other fields do, such as medicine or law.

and innovative learning environments. The government’s trust, coupled with teachers’ status as university graduates from highly selective programmes, empower teachers to pursue their profession in ways that deepen the trust accorded them by parents and others in the community. In turn, the high level of policy coherence, meaning that decisions will be followed through across electoral cycles and political administrations, reinforces the trust Finnish teachers have in their education leaders. Finland’s success in education did not happen overnight: it took many decades to achieve. It slowly and deliberately built itself into an education superpower through a series of reforms and in response to changing economic needs. In the late 1960s, shortly before Finland joined the OECD, there was a decision to move to a comprehensive system, making high-quality education available to all students, not just to the few selected for grammar schools. Implementation was not complete until the late 1970s. To make the transition successful, and to allay concerns about the changes, there was an accompanying drive to significantly improve the quality of teaching, notably by transferring teacher training to the universities and making it much more rigorous. The economic context also served as impetus for change. In the early 1990s, Finland lurched into a deep recession. Unemployment figures reached nearly

FINLAND

Finland’s mental health challenge 20%, GDP was falling and public debt rising. Education offered a means of reshaping Finland’s economy, with a shift away from old industries such as pulp and rubber towards technology and the growing global market in telecommunications. The number of Finns

Finland slowly and deliberately built itself into an education superpower through a series of reforms and in response to changing economic needs working in research and development grew rapidly, in tandem with the rise of companies such as Nokia, which went from a 19th-century pulp-mill business to becoming one of the biggest names in mobile phones in the late 20th century, and now a 21st-century leader in telecommunications systems.

Emily Hewlett and Kate Cornford, OECD Directorate for Employment, Labour and Social Affairs At some point in just about everyone’s life, we are affected by poor mental health. In the EU, an estimated one in every six people experience a mental health problem. In Finland, which has the highest estimated incidence of mental disorders in the EU, close to one in five are affected. Mental illness has a high economic cost–the cost of treatment, social security programmes, lower employment and lost productivity add up to a total average of 4% of GDP in EU countries. In Finland, it is higher still: an estimated 5.3% of GDP in 2016. What is mental health? When we talk about good mental health, we mean someone who can cope with

the normal ups and downs of life, work productively, and contribute to their community. On the flip side, mental illness is the loss of mental health, and of that ability to cope. In Finland, like in other EU countries, the most common mental disorders are anxiety and depressive disorders, which affect 4% and 6% of Finns, respectively. Drug and alcohol use disorders also affect 4% of the Finnish population– well above the EU28 average of 2.4%. These illnesses, along with conditions such as bipolar disorder or schizophrenia, which typically affect a smaller number of people–around 1-2% of the population–can affect people for only a short time, like a couple of weeks

Suicide is an area on which Finland has had remarkable success, thanks to a concerted policy effort over the past 30 years

And yet, at a time when the kinds of things that are easy to teach and test have also become easy to digitise and automate, the Finnish school system faces important challenges. Over the last decade, Finland has slipped on the OECD’s Programme for International Student Assessment (PISA) rankings, both in absolute terms but also because other education systems, notably in Asia, have rapidly improved. Moreover, as successful as Finnish schools are, youth unemployment is high, signalling that Finland needs to work harder to realign its education system with a rapidly changing world. Given Finland’s track record of change, there is good reason to hope that in the digital age, it can aim for top of the class again. References and links

For more information on the OECD’s Programme for International Student Assessment (PISA), visit www.oecd.org/pisa Share article at https://oe.cd/obs/2tE

©Sylvie Serprix

OECD (2018), Education at a Glance 2018: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/eag-2018-en

OECD Observer Finland 50th Anniversary Edition

FINLAND

Bipolar disorders and schizophrenia

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Source: OECD/EU (2018): Health at a Glance: Europe 2018

The good news is that more people are talking about mental health in OECD

OECD (2015), Fit Mind, Fit Job: From Evidence to Practice in Mental Health and Work, Mental Health

160 and Work, OECD Publishing, Paris, 140 https://doi.org/10.1787/9789264228283-en 120 100 OECD (2014), Making

Mental Health Count: Social and Economic Costs of Neglecting 60 Mental Health Care, OECD Health Policy Studies, 40 OECD Publishing, Paris, 20 https://doi.org/10.1787/9789264208445-en

80 The

Patel, Vikram, et al. (2018), “The Lancet Commission on global mental health and sustainable development”, The Lancet, 2018 vol: 392 (10157) pp: 1553-1598, https://doi.org/10.1016/S0140-6736(18)31612-X 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16

this progress, about 750 Finns still 100 die every year from suicide. The gap 80 in mortality rate between the general 60 population and those diagnosed with 40 a mental disorder, of which suicide is 20 0 one driver, is significant. Finland has established a new National Mental Health Strategy, which includes €300,000 for suicide prevention, but there is room for more investment in mental health, if only to further reduce the high costs of these illnesses.

OECD/EU (2018), Health at a Glance: Europe 2018: State of Health in the EU Cycle, OECD Publishing, Paris/EU, Brussels, https://doi.org/10.1787/health_glance_eur-2018-en

20 05

160 140 Despite 120

References and further reading

With suicide rates particularly high 8 men, policies reached out to among vulnerable young men with campaigns 6 like “Time out! Back on track” (Aikalisä! 4 Elämä raitelleen). Has this strategy had 2 any effect? Interestingly, between 1986 0 and 2016, antidepressant consumption– an admittedly crude measure of mental health treatment rate–increased 13-fold, with much of the increase in the first 20 years. Consumption has stabilised over the past decade or so.

countries. This is a major step forward in reducing the stigma around mental illness, and helping people get the support and treatment they need and deserve. But more work needs to be done in Finland and the rest of the OECD to prevent the onset of mental illness, improve the lives of those living with mental ill-health, and prevent premature mortality linked to mental disorders.

set up an online Mental Health Hub, which provides therapies such as cognitive % behavioural therapies for low-threshold 14 disorders, for the whole of Finland. 12

20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16

Preventing and treating mental illness One reason for this success is that, rather than focusing only on preventing suicide, Finland chose instead to broadly improve its mental healthcare. The government focused on drivers of suicide, like depression, poor access to mental healthcare, substance and alcohol abuse, and access to lethal means. Finland also

Alcohol and drug use disorders

R JP N HU N PO L SV K KO R US A CH L CZ E IS R NO SV R N LU CA X N LT U NZ L ES T CH E IT A LV A GB R DN K NL D AU S PR T AU T SW E BE L FR A DE U ES P IR L FI N

In 2015, every six minutes someone died from mental illness-related events or suicide in EU countries. In the same year, roughly nine young people between the ages of 15 and 24 died each day from suicide in EU countries. In fact, suicide is an area on which Finland has had remarkable success, thanks to a concerted policy effort over the past 30 years. Starting in the 1980s, Finland embarked on a series of national suicide strategies. The government established crisis phone lines, and gave the media guidance about how to report on suicide by recommending, for example, that information on the method of suicide not be included in news stories. Lastly, the government focused on improving treatment for mental illness. These efforts helped bring down Finland’s overall suicide rate by over 50%.

Depressive disorders

Anxiety disorders % 20

Mental illness affects absolutely everyone, rich and poor, male and female, young and old. However, some population groups are particularly vulnerable to mental ill-health. For instance, the two most common mental disorders–anxiety and depressive disorders affecting, respectively, 5.4% and 4.5% of the EU population–are more common among women. Conversely, drug and alcohol disorders, which are the third most common mental disorder and affect 11 million people in the EU, are twice as likely to affect men. Socioeconomic status also plays a part. In Finland, men in the lowest income group are nearly five times more likely than men in the highest income group to report chronic depression.

More than one in six people in EU countries have a mental health problem

20 05 20 06

or months, but can also affect their whole life.

Patana, Pauliina (2014), “Mental Health Analysis Profiles (MhAPs): Finland”, OECD Health Working Papers, No. 72, OECD Publishing, Paris, https://doi.org/10.1787/5jz1591p91vg-en

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FINLAND

Finland’s cautious path to OECD membership Peter Carroll, Tasmanian School of Business and Economics, University of Tasmania degrees of initial resistance among existing members, in Finland’s case it was the strong opposition to its membership from the Soviet Union, a non-OECD country, that led to a drawn-out process.

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Finland, which shares a 1,340 km border with its large neighbour, found itself in a challenging, constrained position as the Soviet government made it clear that it would see Finnish participation in the Marshall Plan and the OEEC as a hostile act. Hence, the Finnish decision not to apply for membership of the OEEC on its founding, though it was able to provide the organisation with detailed information on its economy from the outset.

Finland prepares to join: OECD Secretary-General Thorkil Kristensen (right) welcomes Tankmar Horn, Undersecretary of State, Finnish Ministry of Foreign Affairs.

Finland marks its 50th anniversary as an OECD member country on 28 January 2019. Though not a founding member when the OECD commenced in September 1961, Finland’s interest in joining was never in doubt. However, it adopted a cautious approach.

which were administered by the OECD’s predecessor, the Organisation for European Economic Co-operation (OEEC). However, it was not until some 20 years later, in 1967-1968, that Finland finally applied, successfully, for membership of the OECD.

As early as 1947-1948, and again in 1957-1958, the Finnish government had already shown interest in Marshall Plan funds for rebuilding post-war Europe,

Unlike Japan (which joined in 1964), Australia (1971) and New Zealand (1973), where accession was delayed for a mix of domestic reasons and varying

As the 1950s went by, successive Finnish governments also gradually and cautiously developed a closer relationship with the OEEC, supported by Sweden, Norway and Denmark, determined to ensure its economy was not disadvantaged by the growing economic integration of Western Europe. The work of the OEEC was driven, as is still the case at the OECD, by a range of expert policy committees that focused on current and developing issues, work attractive to Finnish governments. In 1956, Finland was invited to send an observer to the OEEC’s Pulp and Paper Committee, then its Maritime Transport Committee, followed by the Timber Committee in 1959. Finland also entered into a series of trade-related agreements with most OEEC members, particularly the Helsinki Club Protocol, signed in July 1957. In January 1958, President Urho Kekkonen instructed the Finnish ambassador in Paris to look formally into the conditions for joining the OEEC. A working party was established and, in addition, informal, largely fruitful discussions were held with key OEEC members to ensure their support for Finnish membership. The working party concluded that Finland

A SHORT HISTORY

could meet the obligations of membership and the OEEC Council gave the green light for its accession. The Soviet government took a different view. A continuing fall in Finnish purchases of Soviet goods, combined with Soviet opposition to Finland’s new government under Social Democrat Karl-August Fagerholm, led to the Night Frost Crisis of 1958, so-called by Nikita

In Finland’s case it was the strong opposition to its membership from the Soviet Union, a non-OECD country, that led to a drawn-out process Kruschev to depict how cold their relations had become. Moscow froze diplomatic exchanges with Helsinki and pressurised the government to resign. The Fagerholm cabinet collapsed and so the push for OEEC membership stalled. The new OECD continued to attract Finnish interest; Finland became an observer at the Machinery Committee, then Industry Committee in 1962, followed by other committees, so much so that in November 1965 some delegates raised the question of the extent to which a non-member should be allowed to participate as an observer without the

obligations of full membership. So, when the Finnish government expressed a desire to participate in OECD’s Economic Committee work in 1966, the SecretaryGeneral suggested that it seek full or associate membership. Once again, discussions regarding membership commenced, in a generally favourable environment, given the earlier green light signalled by the OEEC and Finland’s close relationship with the European Free Trade Association (EFTA). Importantly, there was no initial opposition from the Soviet government then, but it adopted a more negative stance as negotiations developed, deriding the OECD as a closed group of Western countries with close ties to NATO. However, the emergence of the European Economic Community (EEC) and EFTA meant that the OECD no longer attracted the same degree of Soviet opposition as had the OEEC. Moreover, it is likely that at this time the Soviets did not want to run the risk of destabilising the rising tide of détente and the progress being made toward a multilateral, European security conference that reached fruition in the 1970s. On 7 June 1968 the Finnish government decided formally to seek accession and detailed discussions ensued. It had some reservations to sections of the OECD’s Codes of Liberalisation of Current

Invisible Operations and Liberalisation of Capital Movements, as was the case with most OECD members, and these were soon resolved. Finland ratified the OECD Convention and became a member country on 28 January 1969. A slow and cautious process had come to a successful conclusion. The article draws upon material kindly made available by the OECD Library and Archives; Balázs Gyimesi of the OECD Observer assisted. References Carroll, Peter (2017), “Shall we or shall we not? The Japanese, Australian and New Zealand decisions to apply for membership of the OECD, 1960-1973”, in Matthieu Leimgruber and Matthias Schmelzer (eds.), The OECD and the International Political Economy since 1948, Palgrave Macmillan. Carroll, Peter and William Hynes (2014), “Japan and the OECD: how the sun rose on a global era”, OECD Observer No 298, at https://oe.cd/wI Carroll, Peter and Aynsley Kellow, (2011), The OECD A Study of Organisational Adaptation, Edward Elgar Ltd, Cheltenham and Massachusetts Jensen-Eriksen, Henri (2004), “Market, Competitor or Battlefield? British Foreign Economic Policy, Finland and the Cold War, 1950-1970”, a doctoral thesis at the London School of Economics and Political Science Majander, Mikko (1994), “The limits of sovereignty”, Scandinavian Journal of History, 19:4, 309-326 Yamamoto, Takeshi (2007), “The Road to the Conference on Security and Co-operation in Europe, 1969-1973: Britain, France and West Germany”, a doctoral thesis at the London School of Economics and Political Science

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OECD Observer Finland 50th Anniversary Edition

FINLAND

Finland in the OECD Observer: A selection from the archives Finland, the new member of the OECD Among the nations which are already members, Finland occupies a unique position: although she has not reached the same level of industrialisation as many of them (the primary sector employs 27% of the labour force and accounts for 16% of domestic production), the country enjoys a relatively high level of income. Gross national product per capita (at market prices), which is expected to reach the equivalent of about US$1700 for 1968, lies between that of Austria and that of the Netherlands, and Finland has assets which should make further development easier than it would be for many other countries at a similar level of industrialisation: universal literacy, one of the highest university and technical school enrolments in Europe, a well developed infrastructure of medical and other social services and at the same time an adequate supply of manpower. Finland has another important advantage. Instead of having to proceed from a primary base that is solely agricultural, the country has forests–more than two-thirds of the land is covered by them–and wood processing involves sophisticated techniques, both mechanical and chemical, hence a highly skilled work force. It is largely around its forests that Finnish industry has grown. “Finland, OECD’s new member country”, in OECD Observer No 39, April 1969

Spotlight on Finland: Its economy The Finnish economy has performed remarkably well for a decade. GDP growth has consistently been somewhat better than the OECD average. Unemployment has remained relatively stable at around 5%, well below the OECD and European averages. Inflation has been roughly in line with the rest of Europe, serious external imbalances have been avoided and the public debt has remained low.

“Spotlight on Finland: Its economy”, in OECD Observer No 152, June/July 1988

Economic crisis and regional development: Why co-operation counts In addition to improving the preconditions for regional development in the long term, the recovery package in Finland also includes rapid and flexible response measures to provide assistance to regions and municipalities that face sudden problems, such as those caused by factory closures, Mari Kiviniemi (picture below), Minister of Public Administration & Local Government, wrote in her contribution to the OECD Observer Roundtable on regional policy in 2009.

“Roundtable on regional policy”, in OECD Observer No 272, April 2009

Finland–Reforming the pension system The Finnish public pension system recently underwent a far-reaching reform, prompted by concerns about the aging of the population, the low effective retirement age of workers and the erosion of the tax base after the slump in the early 1990s. The reform, which is based on a consensus between government, employers and unions, strikes a balance between preserving income security for the elderly and strengthening the link between individuals’ lifetime earnings and pensions. By so doing, the reform is deemed to enhance labour-force participation and career development. There is nonetheless scope for improvement.

“Finland–Reforming the Pension System”, by Paul van den Noord, in OECD Observer No 208, October/November 1997

JUNE 1969

Science rocks Finland took the number one spot in the OECD’s PISA 2006 survey, a comprehensive and much-quoted international yardstick of secondary school student performance. Finland was followed by Hong Kong-China, Canada, Chinese Taipei, Estonia, Japan and New Zealand. After focusing on reading skills in 2000 and on mathematics in 2003–Finland was among the brightest on these occasions, too–PISA 2006 updates these tests, and turns its attention to science. Take this question: The temperature in the Grand Canyon ranges from below 0o C to over 40o C. Although it is a desert area, cracks in the rocks sometimes contain water. How do these temperature changes and the water in rock cracks help to speed up the breakdown of rocks? A. Freezing water dissolves warm rocks. B. Water cements rocks together. C. Ice smoothes the surface of rocks. D. Freezing water expands in the rock cracks.While 67.6% of students got the correct answer (which is D), the future of science is nonetheless a matter of some concern in many countries.

“Science rocks”, in OECD Observer No 264/265, December 2007-January 2008

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OECD Observer Finland 50th Anniversary Edition

Finnish architecture and design: A natural fit Ruairí O’Brien, Architect

simple and undecorated. Humanity’s work and that of nature are one. Alvar Aalto, a Finnish architect from the last century and a younger member of the old school of early moderns, such as Le Corbusier or Bauhaus founder Walter Gropius, is a stimulating figure that I use in my teaching to explain the importance of holistic thinking to a generation that has been overwhelmed by the false promises of specialisation and virtual visualisations.

©Nick Harrison/Alamy Stock Photo

Aalto and his wife Aino (also an architect whom he met in 1924) worked as a team on several projects together, and in 1935 founded the furniture and lighting firm Artek (www.artek.fi). They believed in holistic thinking, art and technology, small and big, and that the house should be designed “from the doorstep to the living room.”

Finland has a reputation among designers, architects and artists for being a land, a nation, a culture that produces high-quality design and architecture. It tops happiness polls and educational surveys, can produce determined sports champions, and world-class high-tech products and games software, but it also has a relatively high incidence of mental illness and has been battling down its suicide rate. A land of extremes with a wide breadth of emotions, talents and expectations? What is the secret of this small nation’s success? People, their customs and their local habits are often expressions of an existential struggle with the natural settings they are born in. In Finland the extreme cold and darkness of winter, the long days of light in summer, the deep cool lakes, the secretive beauty of the forests, are dramatic character and soul forming elements. Can the Finnish success in the design world be linked to the workings of such poetic forces? Or is it linked to the instinctive strength of character (what Finns call sisu) born out of Finland’s vast lonely expanses and living at a healthy distance from busy European metropoles? In my visits to Finland, Helsinki, Turku, Tampere and Vaasa, I experienced the quiet, humble confidence of these admirable people. Coffee drinking, one of my favorite educational passtimes, provided me with many venues for my research and moments of reflection as I got to know this special land. As a designer I am accustomed to recognising in a space when, in the simplest of ways, harmony and balance can be expressed in the interaction of single elements, producing a sense of whole. Spaces that achieve this level of coherency have no superfluous elements. What I see is a simple, understandable code being used, with nothing redundant in the composition: the trees have leaves in summer, the water is ice in winter, the wood is preferred in natural tones, the light temperature used is warm, the cups

Aalto and Aino believed in the social importance of their profession, developing simple and inspirational works of architecture that the layperson could appreciate and enjoy. They also worked across all the scales, from furniture design to large public buildings. Furniture was not just a marketing vehicle to them, it was an area of design where the human scale and needs could be expressed in unison with natural materials. Aalto experimented with bending wood to form a natural structural entity to seat the human form with minimal waste of materials. In this micro-architectural exercise we witness how humans can tame nature to express being at one with our environment. Aalto’s architecture is an extension, if not a re-interpretation, of the nature around us. The search for the symbiosis between humans, nature and technology is evident in the works he produced. Aalto, who was rational and practical in his thinking process and construction of space, did not shy from using the symbolic and mythological powers of his national spirit. In his famous design for the Finnish Pavilion, for the New York World’s Fair in 1939, Aalto constructed a surging leaning wall of wood, which evoked images of a Finnish forest housing images of Finland in an undulating flowing line that counters the orthogonal line of the supporting service buildings. This is Aalto’s code, simple and complex, soft and hard. Perhaps this is Finland’s code. Another much-loved work of Aalto is his glass vase from 1936. The vase gives us the undulating line he used later in his Finnish pavilion, and which implies capturing dynamic change as the wind moves the face of a forest in the sun or causes ripples in the water of the lakes. Such lines can also be seen in the structure of split rocks or in the grains of cut trees. In small objects and in big architecture, Aalto proves that the complexity of life is hidden in simplicity, for all who look. In the coffee shops, I understood this as I sat on Aalto stools, designer stools that formed part of a bigger Finnish code. Ruairí O’Brien, an architect based in Germany, has worked in Finland. He currently teaches in Cairo. See also “Japan’s radiant architecture”, in OECD Observer No 298, Q1 2014, at https://oe.cd/obs/2Ay

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Snapshots on Finland 100k

Source: Aggregate National Accounts

80k

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44k

20k

72.1

Source: Labour market statistics

30 50

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Source: OECD Social and Welfare Statistics: Income distribution

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Source: OECD Health Statistics

20-24 year-olds, % in same age group, 2016

Source: Education at a Glance: Transition from School to Work

OECD Observer Finland 50th Anniversary Edition

DATABANK

Empowering women beyond Finland

Beyond changes in the structure of the economy, weakening productivity growth within particular sectors has also contributed to sluggish overall productivity, with disappointing performances even among the best Finnish firms. Productivity has declined

60% 40%

DAC Total, 2016

Government and civil society

20% 0%

Population and reproductive health

Source: OECD Creditor Reporting System Aid Activity. Database at http://oe.cd/oda-gender

Health

Other social infrastructure

Multisector

peace and security. To ensure that civilian and military experts deployed in crisis management operations respect gender, Finland has developed a gender checklist used by the Finnish Defence Forces International Centre.

of 36.5%. Over 80% of Finland’s ODA investments in education, water and sanitation focus on gender equality. Finland actively supports countries in developing their own national plans for implementing United Nations Security Council Resolution 1325 on women,

Share article at https://oe.cd/obs/2zG

Productivity above average but could do better Productivity as measured by GDP per hour worked, total, US$, 2018 or latest data available

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100 90 80 70 60 50 40 30 20 10 0

Relatively weak overall productivity growth partly reflects a decline in manufacturing, in particular of dynamic gazelle firms in information technology and communications equipment, for instance. Moreover, productivity in the expanding service sector is generally weaker than in manufacturing.

Education

80%

2016

Productivity test Finland may be top of the class for education, but it shines less brightly when it comes to productivity, even if output per hour worked is 15% above the OECD average. In fact, productivity growth has slipped back since the financial crisis a decade ago.

100%

Water and sanitation

TU R

In 2002, Finland was among the OECD Development Assistance Committee (DAC) countries–together these countries account for some 90% of total bilateral official development assistance–to spearhead reporting on gender equality as part of its development work. Finland’s share of gender-focused bilateral aid reached 53.2% in 2016, well above the DAC average

Economic infrastructure

Finland’s global reputation as a genderequality pioneer is well earned. It introduced equal inheritance rights in 1878, gave women the right to study at university in 1901 and the right to vote in 1906. It should be no surprise, therefore, that the rights and status of women and girls should be a priority in Finland’s development co-operation policies as well. This is reflected in the country’s strong support of multilateral organisations with a mandate to work on women’s empowerment and sexual and reproductive health and rights.

Finland’s gender lead in development Finland compared with OECD Development Assistance Committee (DAC), share of bilateral allocable official development assistance (ODA) in support of gender equality by sector, commitments, 2016

Source: OECD

in public administration, education, social and health services, although this should be interpreted with caution given measurement issues. Also, recent increases in the employment rate, while beneficial, were concentrated among less skilled hires. Finland now has lower productivity than in the other Nordics. Recent and planned reforms could improve competition and lift productivity, the 2018 OECD Economic Survey of Finland notes.

Digitalisation offers further opportunities, too, though there is some concern that this productivity growth will become more concentrated in a small number of (possibly smaller) high performing firms. Still, maintaining strong R&D investment could also foster innovation, which if diffused, can lift productivity growth more widely. Share article at https://oe.cd/obs/2zH

How do you measure

a Better Life? For nearly a decade, the OECD has been working to identify societal progress – ways that move us beyond GDP to examine the issues that impact people’s lives. The OECD’s Better Life Index is an interactive tool that invites the public to share their thoughts on what factors contribute to a better life and to compare well-being across different countries on a range of topics such as clean air, education, income and health. Over five million visitors from around the world have used the Better Life Index and more than 90 000 people have created and shared their personal Better Life Index with the OECD. This feedback has allowed us to identify life satisfaction, education and health as top well-being priorities. What is most important to you?

Create and share your Better Life Index with us at: www.oecdbetterlifeindex.org

ÂŠIlkka Karkkainen/Unsplash

Special thanks to the Permanent Delegation of Finland to the OECD for their support in producing this special anniversary offprint on Finland. Requests for extra copies: Observer@oecd.org.