In just over a decade it increased the amount it spent on R&D from 1.5 per cent of GNP to 3.2 per cent. The European average of 1.9 per cent, while the OECD rate, boosted by the contributions of the United States and Japan, is 2.4 per cent.
From 1988 to 1999 its exports of high tech products increased from 5 per cent to 22 per cent.
Professor Routti said one of the key mechanisms was tightly linking university research with industry. Half of Finnish companies now have links with universities, compared with a European average of 10 per cent.
The environment means companies are more willing to invest in R&D - and only 35 per cent of research is publicly funded, compared with 60 per cent in New Zealand.
"It's very important to create conditions where it is attractive for companies to invest.
“We want to have industrial partners pay their fair share so we have made it attractive to invest - it is much more important than research funding to make investment, in general, attractive.”
Professor Routti said rather than leave research in universities, Finland was putting a lot of effort into the commercialisation phase.
He said knowledge and technology transfer was a worldwide business, as small countries don't have the resources to do it themselves. "You must find the best partners everywhere in the world."
His university also tries to educate the decision-makers, offering a two week course in economic policy to all new MPs, media, trade union and industrial leaders.
Professor Routti said Finland has not ignored its traditional industries. Forestry, which 20 years ago provided 70 per cent of its exports, is now ten times bigger but employs fewer people, and the number of paper companies has dropped from 30 to two or three.
"Every industry must be high technology now.
"You can never compensate for the erosion of traditional industries employment, but it's important to have this high technology centre close by because that will transform every other industry in the most efficient way."
He said unemployment has dropped from 17 per cent to about 9 per cent.
"It's mostly structural - there's a huge shortage of software engineers and biotech engineers, but you can't just make an old dairy farmer or logger into a programmer."
It is important to create new jobs plus have safety networks for those who don't do it.
"The Finnish boom has challenged the traditional egalitarian nature of the society, but it has not led to the extremes of wealth now experience in New Zealand."
When we did global studies of possible worlds, we could see different models. A world with winners and losers was politically not attractive to have before, but we now realise we need that success.
"We now have the role models, so young people want to start up businesses."
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