09/27/15 - 10/4/15
INNOVATION DELEGATION TO
ESTONIA & FINLAND
BALTIC INNOVATION Finland has been a decade long world leader in education and technological advancement, and now 24 years after declaring independence from the Soviet Union, Estonia has transformed its economy to mirror its neighbor and is leapfrogging to become one of the most innovative governments in the world. COUNTRIES AT A GLANCE Finland
Estonia
Helsinki
Tallinn
Population
5.3 M
1.2 M
Declared Independence
1917
1991
GDP
$221 B
$26 B
GDP Per Capita
$40,500
$26,600
GDP Growth Rate 12-14
-0.97%
2.5%
National Budget Revenues
$146 B
$10 B
National Budget Expenses
$156 B
$10 B
Public Debt (% of GDP)
60%
10%
FDI Inflow
-$1 B
$949 M
Imports
$71.2 B
$20.4 B
Exports
$75.2 B
$17.3 B
Most Imported Category
Minerals
Machines
Most Exported Category
Machines
Machines
Kaolin Paper
Silk Yarn
Network Readiness Index Rank
2nd
22nd
Economic Freedom Index Rank
19th
8th
Key Data & Statistics Capitol
World Exporter Of
01 - California Innovation Delegation 2015
2
In just decades both Finland and Estonia have transformed their economies.
1995
2013
Estonia's Top Exports to the U.S.
Estonia's Top Exports to the U.S.
Light Woven Cotton
$23 M
Refined Petroleum
$814 M
Heavy Woven Cotton
$9 M
Telephones
$139 M
Unsaturated Acids
$8 M
Tantalum
$25 M
House Linens
$7 M
Fishing & Hunting Equipment
$20 M
Pig Iron
$6 M
Chemical Analysis Instruments
$14 M
Raw Aluminum
$4 M
Insulated Wire
$13 M
Wadding
$3 M
Rare-Earth Metal Compounds
$11 M
Baby Garments
$3 M
Acyclic Hydrocarbons
$9 M
In 1995, Finland's economy was substantially driven by the
After two decades, the mantra of knowledge has changed to
wood and paper industry, accounting for more than 35 per-
innovation. Now, knowledge is not enough to drive the econ-
cent of the total exports; as compared to Estonia, which had a
omy, although it is still recognized as a key ingredient. It is the
partially more diversified economy with textiles, petroleum and
execution of using knowledge to create new ideas that result in
wood, accounting for over 30 percent of exports. Now, both
game changing outcomes. State and local governments need
countries' largest exporting industry sector are machines. This
to be thinking about the long-run future of their constituencies,
shift of economic specialization is a remarkable change given a
and how small policy implementations can have major eco-
relatively short period of time.
nomic implications.
An innovation delegation to these Baltic States can provide an-
Economic policies are not California's forte, and government
swers to questions such as: How did both of these Baltic States
innovation sounds similar to an oxymoron. The idea that most
change their economies so rapidly? What economic policies
government services can be accessed and delivered through
were implemented to create such sectors? Did the government
the internet is not a new idea. Although, a few countries have a
provide any services to create these sectors? How can a state
cohesive plan and have implemented a fully working
government promote unique economic policies to encour-
e-government system, Estonia's Parliament has created the first
age depressed geographic areas of California? The goal of the
ever e-residency program, which allows for people anywhere in
delegation is to inspire and promote creativity with solutions to
the world to become an "e-citizen" of the country and conduct
growing problems in California's uneven economy.
business without physically being there. It also allows Estonians access to all of their government information, from taxes to
Nearly two decades ago, the Organization for Economic Coop-
building permits, and can be signed using their digital signa-
eration and Development (OECD) released a report titled, “The
tures. This type of online citizen infrastructure will be the future
Knowledge-Based Economy,� which detailed the growth of the
of governance. By visiting a more risk tolerant government,
future economy was not simply based on the manufacturing
such as Estonia, it will enlighten legislators to what is possible.
output, but that knowledge is now recognized as the driver of productivity and economic growth, leading to a new focus on
Finland and Estonia have shown considerable progress to
the role of information technology and learning in economic
establishing their economies for a greater economic prosperity
performance. Simply put, measuring tangible outputs is not
in the 21st Century. While one is focused on innovation within
enough to drive the economy forward, future economic growth
the economy, the other is focused on innovation from within
is determined by the knowledge of the workforce.
the government. Visiting both countries will give an interesting contrast as to how they approach the future and how they are planning for it.
Estonia and Finland - 02
HELSINKI Finland ranks 1st for the most well-functioning and highly transparent public institutions, 2nd in the Networked Readiness Index and 3rd for most competitive country in the world by the World Economic Forum. Finland has a rich history of developing its society to be geared
capacity to adopt the latest technologies (ranked 18th)
toward a knowledge-based economy. Similar to other
could lead to important synergies that could, in turn,
countries in the region, they boast well-functioning
further reinforce the country’s competitive position going
and highly transparent public institutions (1st), topping several
forward. Finland’s macroeconomic environment has
indicators included in this category. Its private institutions,
weakened slightly due impart to rising inflation (above 3
ranked 3rd overall, are also seen to be among the best run
percent); however, it fares comparatively well when contrasted
and most ethical in the world. Finland also occupies the top
with other euro-zone economies.
position both in the health and primary education sectors, as well as higher education and training sector, which is the result
Finland’s education system is a fully subsidized program from
of a strong focus on education over recent decades. This has
kindergarten to post-secondary universities, with no tuition
provided the workforce with the skills needed to adapt rapidly
fees for full-time students. Their educational system is de-
to a changing environment and has laid the groundwork
signed for students to be able to compete on a global level,
for high levels of innovation, allowing Finland to become
and student performance is ranked the highest on all educa-
a highly innovative economy. Improving the country’s
tion standards.
03 - California Innovation Delegation 2015
FINLAND Finland started in the early 80’s with the
cent of Finland’s budget toward research
establishment of the Finnish Funding
and development.
Agency for Technology and Innovation (Tekes). The purpose of Tekes is to drive the advancement of technology within Finland and fund research-stage ideas into viable businesses. In 2014, Tekes reported it had received €550 million for 3,670 funding applications, and 2,750 were approved for funding. Of these, 660 were startup companies. This resulted in
DECADES OF A STRONG POLICY FOCUS TO EDUCATION HAS PLACED THEM IN THE TOP FOR HEALTH AND PRIMARY EDUCATION IN THE WORLD.
DESIRED TAKEAWAYS The rationale to visiting Finland is to give policymakers a new perspective on government programs that could be established to promote innovation in California. Finland is an exemplary country of how government has been a supporter of innovation by giving them funding and support during critical phases of a company's life cycle.
1,500 products, 1,300 patents and 1,090 academic theses.
With a population roughly the size of San Diego and Los Angeles combined,
CALIFORNIA IMPROVEMENT
Rovio Entertainment received over €2
their economy is remarkably diverse
million from Tekes over several years.
and innovative. The Finnish have estab-
By opening a dialog with Finnish policy-
Ultimately, this funding supported their
lished themselves as a global economic
makers and representatives, California
success of developing Angry Birds,
innovator and will continue to lead the
can be more creative with their policies
which is arguably the most popular
world with a clean and sustainable tech-
to promote the economy and innovation,
gaming app brand in the world. Finland
nology. California policymakers should
along with having the experience to see
ranks the highest on the Global Innova-
take note of funding schemes that have
and learn why Finland is ranked for the
tion Index and allocated roughly 3.6 per-
proven successful.
most well-functioning government.
Estonia & Finland - 04
TALLINN Estonia ranks among the most wired and technologically advanced countries in the world with a high internet penetration rate, widespread e-commerce and e-government services embedded into the daily lives of individuals. Estonia remains the best performer within Eastern Europe. The
world. Since 2001, Estonia has created a six year strategic plan
country has an excellent educational system and highly ef-
through their Estonian R&D Council to determine the direction
ficient and well-developed goods and financial markets, as well
of R&D and innovation in the country. In their latest strategic
as a strong commitment to advancing technological readiness.
plan, Estonia has set out specific benchmarks that they hope
In addition, Estonia’s 22nd rank in macroeconomic stability re-
to reach at the end of the six years. They include, increasing
flects its relatively well managed public finances. The country’s
productivity per employed person to 80 percent of the Euro-
leading margin ahead of the rest of the region also reflects its
pean Union average, raising the level of investment in R&D to
more flexible and efficient labor markets (12th), which continue
3 percent of GDP and increasing the share of Estonian exports
to be rigid in other countries throughout much of Europe.
in world trade to 0.11 percent. All of these are objectives for which Estonia is striving to accomplish by 2020.
Estonia has taken the most public action of any country in Europe to improve their future economic standing for their citi-
Not only are they driving their economy to be more established
zens. From 2001 to 2011, Estonia has increased its R&D funding
for the 21st Century, they are also innovating within govern-
by 239 percent, the largest increase out of any country in the
ment as well. Estonia has established the first e-residency pro-
05 - California Innovation Delegation 2015
ESTONIA gram for anyone in the world to become
that allows them to vote in elections, file
an “e-citizen” of Estonia. The purpose of
income tax returns, sign legally-binding
e-estonia.com is to create a fully func-
contracts, access medical files and even
tioning portal for their citizens
register businesses.
ESTONIA HAS BECOME A MODEL FOR FREE INTERNET ACCESS AS A DEVELOPMENT ENGINE FOR SOCIETY. PARLIAMENTARY MEETINGS TOOK ON AVERAGE 4.5 HOURS, NOW THEY HAVE REDUCED THEIR MEETINGS TO JUST 30 MINUTES DUE TO THEIR E-CONSULTATION SYSTEM.
In 2000, Estonia’s Parliament created E-Cabinet, which originally removed paper documents and placed stationary computers. They now access all of their documents through their personal computers or phones. They have also created
DESIRED TAKEAWAYS Estonia’s ability to embrace e-governance and implement it across all of its agencies is a practice for which California policymakers should strive to replicate among various levels of government. This would also give an opportunity for policymakers to make direct connections with their counterparts that have been able to implement such a program.
government departments to consulate
CALIFORNIA IMPROVEMENT
directly with parliament representatives.
Several ways in which California can
Before the E-Cabinet and E-Consultation,
improve from its visit to Estonia is to start
normal parliamentary meetings took on
thinking about creating digital identi-
average 4.5 hours, now they are reduced
ties for all Californians. This will allow
to just 30 minutes.
for greater efficiencies when interacting
E-Consultation System, which enables all
with government across all departments. Estonia is emerging from a post-Soviet
Having a one-stop-shop for all govern-
to interact with the government at every
occupation to become a leading tech-
ment agencies would improve costly
level. Every resident of Estonia now has
nologically advanced society and will
delays for citizens and departments.
an online identity and special passcode
continue to excel for decades to come. Estonia & Finland - 06
Innovation Delegation Itinerary SEPTEMBER 27TH 2015 - OCTOBER 4TH 2015 Time
Event
Location
9/27 10:30 AM – 12:30
Shuttle To San Francisco Airport
Sacramento -San Francisco
2:30 PM – 1:15
Depart SFO, Arrive in Copenhagen
San Francisco - Copenhagen
9/28 5:15PM - 6:30
Depart Copenhagen to Helsinki
Copenhagen - Helsinki
7:00 PM – 7:45
Check in at Hotel Scandic Paasi
Paasivourenkatu 5 B, Helsinki 00530
8:00PM - 9:30
Dinner Debrief Ravintola Graniittilnna
Saastopankinranta 6, Helsinki 00530
9/29 9:00 AM - 11:00
U.S. Embassy Innovation Center Debrief
Helsinki
11:30 AM – 12:30
Finland Tekes (Innovation Funding Agency)
Helsinki
12:30PM - 2:00
Lunch
Helsinki
2:00 PM - 4:00
Innovative Finnish Company TBD
Helsinki
4:30
Return to Hotel
Helsinki
9/30 9:00 AM - 11:30
Innovative Finnish Company TBD
Helsinki
12:00 PM – 1:35
Lunch
Helsinki
1:45 PM - 2:30
SITRA (finnish futre-oriented org)
Helsinki
3:00
Return to Hotel Free Time
Helsinki
07 - California Innovation Delegation 2015
10/1 6:00 AM - 6:30
Shuttle to Airport to Tallinn, Estonia
Helsinki - Airport
7:30 AM – 8:00
Depart Helsinki to Tallinn
Helsinki - Tallinn
8:30 AM - 9:15
Drop Luggage off Hotell Palace
Vabaduse Valjak 3, Tallinn 10141, Est.
9:30 AM - 10:30
Breakfast
11:00 AM - 2:30
U.S. Embassy Hosted Lunch
2:45 PM - 4:15
E-Estonia Showroom Demo Center
4:30 PM - 7:15
Return to Hotell Palace
Lõõtsa 2a, 11415 Tallinn, Estonia
7:45 PM
Hosted Dinner TBD
Tallinnn
Tallinn Tallinn
10/2 9:00 AM - 11:30
Innovative Estonian Company TBD
Tallinn
12:00 PM – 1:35
Lunch
Tallinn
1:45 PM - 2:30
Innovative Estonian Company TBD
Tallinn
3:00
Return
Tallinn
10/3 All Day
Free Day
Tallinn
10/4 6:00 AM - 6:40
Innovative Estonian Company TBD
Tallinn - Helsinki
10:40 AM – 11:20
Lunch
Helsinki - Copenhagen
11:20 AM - 2:45
Innovative Estonian Company TBD
Copenhagen - San Francisco
3:30 PM - 5:30
Return
San Francisco - Sacramento Estonia & Finland - 08
Innovation State 1201 K Street, Suite 750 Sacramento, CA 95814 Innovationstate.org