Wednesday 11 September 2013

Why it’s still worth learning from Finland

By Richard Hartung, Published TODAY, 10 Sep 2013

From its education to its social support system, Finland has been lauded as a model worthy of emulation by many in Singapore.

Finnish students score among the best in the world in the PISA tests and nearly 70 per cent go on to tertiary education. Its economy continued to grow even as other parts of the euro zone fell into crisis.

But while its education system remains excellent, Finland’s situation is nowhere near as rosy as a year ago. The country fell into a technical recession earlier this year, it faces challenges with integrating immigrants and, as Prime Minister Lee Hsien Loong noted in his National Day Rally speech recently, 20 per cent of Finnish youth are unemployed despite comprehensive protection for workers.

With such tremendous changes under way, policymakers who once looked to the Finnish model might well be considering whether to look elsewhere for ideas instead.


Just when the euro zone started to emerge from its slump this year and industrial production registered modest growth, Finland went into a technical recession after GDP shrank 0.1 per cent in the first quarter and industrial output dipped 5.7 per cent.

The shift to the technology sector has slowed, and Federation of Finnish Technology Industries CEO Jorma Turunen said the drop in technology exports appears permanent because Finland is not competitive enough — a trend underscored by the headline-making sale of Nokia’s mobile phone business to Microsoft in a US$5.4-billion (S$6.9 billion) deal last week.

Nordea Bank said the period of weak economic growth has still not ended. And despite relatively low unemployment at 6.6 per cent in July, down from 7.8 per cent in June, the data masked a worsening labour market as more people dropped out of the workforce, according to Bloomberg.

Far worse, unemployment among immigrants is estimated to be three times higher than for Finns born in the country; and the latest EU Labour Force Survey also showed that youth unemployment is nearly 20 per cent.

Immigration is a hot-button issue, with concerns that immigrants will compete for scarce jobs and Minister for Education and Science Krista Kiuru noting, on her recent visit to Singapore, that resources of schools in the suburbs are being stretched by having so many immigrants.

Even though Finland will need more workers to cope with an ageing population, the University of Helsinki’s Arno Tanner wrote that “many regard Finland as a remote, cold, taciturn country displaying passive reluctance toward immigrants”.

The issue is so important the Cabinet in June released a White Paper outlining plans for controlled immigration that take into account the sustainability and security of Finnish society.


Yet amid the enveloping gloom, the quality of education through secondary schools in Finland remains high and life remains comfortable for most Finns, for now.

In contrast with the rising income inequality in Singapore and a Gini coefficient here that rose to 47.9 recently, Finland’s Gini coefficient of 25.8 indicates that it has far greater income equality. The Washington DC-based Fund for Peace ranked Finland as the best performer in its assessment of nations around the world for having the most even economic development out of 178 countries; its rule of law was ranked the third best in the world and social services sixth.

Finns were also rated as the second-happiest people in the world by the United Nations World Happiness Report in 2012, right after Denmark.

UN researchers concluded that political freedom, strong social networks and an absence of corruption were more important than income in countries topping the happiness rankings. In contrast, Singapore was ranked 33rd.

And despite the weak economic outlook, the latest World Economic Forum Global Competitiveness report released this month ranked Finland as the third most competitive economy in the world, just behind Singapore.


Dig a little deeper and the reasons for the challenges Finland faces may turn out to be similar to Singapore’s, even as the reasons for Finns’ greater happiness reflect some of what Singapore is striving for. It may be beneficial to learn from more than just its education successes.

Like Singapore, Finland’s economy is shifting to services as manufacturing faces cost pressures and moves overseas. Universities with more traditional education models that also churn out plenty of engineers have, as in Singapore, been slow in shifting to teach the skills students actually need for the new workplace reality.

What perhaps cushions Finland and keeps happiness high is a sense of equality and a strong social support network that takes care of the population during the transition, somewhat similar in essence to the kampung spirit Singapore enjoyed in decades past.

As the Centre for International Mobility and Cooperation’s Director-General Pasi Sahlberg told educators in a talk at Harvard University, fairly equal wealth distribution within Finland impacts the education system and enables Finland to continue to do well in many areas beyond education, such as women’s empowerment, technological advances, children’s well-being and prosperity.

The focus on collaboration and personalisation in education, he said, results in a system where a student’s only competitor is himself or herself. As Finnish Teachers’ Union President Olli Luukkainen told the Smithsonian: “Equality is the most important word in Finnish education.”

While detractors argue that this undermines the competitive drive, or that extensive social welfare benefits reduce the incentive for young people to look for work, such support fuels a sense of community and helps those in transition.

Singapore, meanwhile, has acknowledged the untenability of the wide income disparity and is seeking to close that gap, although it is unlikely to go as far as Finland in equalising incomes or in providing outright social welfare safety nets.

The mantra is that Singapore must find its own way, to suit its own unique situation. Even so, the National Day Rally speech signifies a momentous shift, with the State taking on a greater load in caring for the individual — and, just as importantly, calling on the community to do the same.

As Singapore looks at how to reclaim its kampung spirit, where neighbours took care of each other and there was greater communal sense of nationhood, it is worth considering how the Finns developed the societal values of equality and support for those in need.

And with both countries needing to shift their tertiary education systems to better prepare the young for new workplace needs, there may be opportunities for collaboration in higher education.

There is still plenty to learn from Finland — and to share as well.

Richard Hartung is a consultant who has lived in Singapore since 1992.

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