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July 29, 2008 5:55 PM

Notes on Finland

Posted by Bruce Ramsey

A member of the recent Greater Seattle Chamber of Commerce study mission to Helsinki sent a copy of notes. Without saying who it was, I’ll pass on some comments.

“The people we met were impressive. Very focused on the need for this small, homogenous country to be competitive… but there seems to be as much luck involved as planning, mainly round Nokia.”

The same might be said of us and Microsoft—but then, economic success is rarely the creation of planners. To go on:

“Nokia was a venerable company based on wood products and a variety of metal and rubber industrial products. Owners sold off all the old-line parts of the company to roll the dice on mobile devices… Today… Nokia dominates world mobile devices. The Nokia folks are smart and realize mobile device dominance could soon go the way of Ericsson or Motorola. To strategically deal with this, they are creating a second, separate company… in ‘mobile services.’ …(But it’s) hard to imagine how they could be the world leader in mobile services given the competition they’re going to be faced with worldwide.”

Like Washington, Finland is big in wood products and paper. Unlike Washington, my informant says, “About half of Finland’s electricity comes from nuclear power plants now, and…it looks like about 70% of their power in ten years or so will be nuclear.”

Finland’s economic disadvantages, this observer says, are significant, starting with a language difficult for foreigners to learn. It has a generous welfare state, which is helpful in some ways. There is “none of the aggressive behavior of vagrants” as sometimes seen in Seattle. But the level of social benefits also deadens the need to work and take risks.

“Finland has the lowest retirement age in the European Union and the longest vacation time…” At one large company, “employees must retire by 60 and will receive 60 percent of their working compensation.” Medical care is provided for, and higher education is paid by the state.

The Finns suffer from (or enjoy) “salary compression”—a more egalitarian distribution of pay. In other words, bosses make less. Personal taxes are also much higher than in the United States, so that top people pay more than half their salaries to the government. Fewer Finns than Americans start companies. The Chamber’s report showed a chart purporting to measure the “Willingness to become an entrepreneur,” in various European countries and the United States. Most entrepreneurial were the Portuguese, the Americans and the Irish (who have one of the lowest corporate tax rates in Europe.) Least entrepreneurial were the high-tax Swedes, Belgians, Dutch and, at the bottom, the Finns.

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Posted by Apollo

9:13 PM, Jul 30, 2008

But the level of social benefits also deadens the need to work and take risks.

Washington State is headed in this direction, too.

Innovation is bred with the possibility of making it big, not with the possibility of working all night, all week, for years on end only to be mediocre like your neighbor who sat on his butt.

That is the genius of America. The possibility and hope that is America. Take risks, get rewarded.

Having lived in France where the welfare state robbed nearly everyone I knew for the years that I lived there of any desire to work harder, to innovate, to get better, we must not permit ourselves to fall backwards into socialism.

I just might check out Ireland...or learn Portuguese. If Obama wins, we will lurch closer to Finland.

Posted by Flarri

6:59 AM, Jul 31, 2008

Clearly, Apollo has had a bit too much American Kool-Aid and has never been to Finland, Sweden or other similar countries. There's a reason why professionals from these countries are sought after in corporations all over the world, including the U.S. They are better educated and aren't afraid of hard work. The high taxes ensure their kids are healthier, their schools better, and the infrastructure that supports business (roads, rail, utilities, etc.) are in great shape. You think America has things figured out? I live in Seattle, and I can tell you that in Finland the power doesn't go out when the wind blows.

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