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ID number:911764
Published: 21.11.2005.
Language: English
Level: College/University
Literature: 10 units
References: Used

Finland description
In the article “Finland on Top of the Competitiveness Game” it is very well shown that Finland has evolved very fast and very efficiently, that Finland economy competitiveness is ranked as one of the best in the world, yet there are doubts about methods of evaluation, what leads to uncertainty and the will to recalculate the rankings. Without additional study of indices and figures it is hard to understand the meaning of the GCI, WCI and CCI, yet an overall view of the situation is easy to develop. I agree that if the sources of data change over time, then the indices are rather not comparable, what makes the indices less important and more meaningful to the data sources than all citizens. That is why GDP is viewed somewhat a standard, because it takes into account all valuables produced, but as good as it is, the GDP can not be viewed as more ideal than other indices.
I totally agree, that Finland’s climbing in the rankings was the fastest. Due to communication industry development and well established channels of distribution not only in Finland alone, but in many other countries, the economy has skyrocketed as one industry helped all others just by subcontracting. The role of government should nevertheless be mentioned as not least important, because of economy friendly legislation, investments in R&D even in times of depression and economic stagnation. Even though the government R&D spending is significantly lower than private sector R&D spend, the position of the government is clear and long term goals are set through investing. Governments position also helped foreign investors to join the market and boost the economy, what afterwards was converted to the intellectual and innovation capital, which might be even more valuable than investment. Finland might not be as it is if there was no foreign capital. I also learned that not only education itself did the job, but innovation in technology made the path of success.
The idea that high spending on public sector is a weakness appeals to me, yet I disagree that it is a certain weakness, for innovation does not come only from educated, researches, workers. Some of the greatest inventions were made by ordinary people, who did not study in a particular field of sciences, some greatest leaders were poor and through public sector financing the ideas of these people might come to universities, schools, streets, enterprises. Nevertheless the spending should be monitored and revised to cut unnecessary costs so as to lift the burden of taxpayers. In Latvia the public sector financing is much lower and mostly insufficient and in some cases ineffective and even wrongfully spent. Latvian Finance ministry should more look up to the example of Finland ay it to Latvia’s environment.
I also learned that the situation is quite sensitive. For example if some country develops a products that will be better, cheaper and just as much recognizable as Nokia is, the economy would eventually (if there are no new products of Nokia) will start losing ground to this competitor and maybe even be forced to diversify, what does not mean greater prosperity. This as well as other issues, such as unemployment, is the main issues for Finland’s government and private sector. For Latvia the situation was similar. Latvian ports have transported large amount of Russia’s oil up to the point when Russia built its own port and consequently used new infrastructure and channels of distribution. This made some of big Latvian enterprises suffer losses and start new businesses, such as tourism and recreation centers, Latvian government became more and more liberal to foreign investment to boost the ability of state to continuously attract high value-added activities of private enterprises from abroad, what actually happened. Not so long ago new airline companies started providing their services in Riga airport, new hotels opened and so forth.
It was interesting to know that competitiveness in Finland is based on equality and social coherence, what is not the case in Latvia, it is more a ”grab and run” situation, but it is developing to become more close to Finland’s example as shops unite and industries come closer. Another interesting thing is that the rank actually might be meaningless, what I agree to because one can not take all factors there are and calculate (it is more or less impossible because of insufficient information, the sources of data –surveys or the figures).
What is true, that people become complacent when no higher standards are at the horizon. It is then the economy starts to slide down towards the worse off state. In Latvia there are too many problems for people to feel complacent. Article states, that enjoying the high position Finns might try less. Without further study it is hard for me to bluntly state the agreement or disagreement, but I feel more for the agreeing side. To my point of view the statement “The Finnish paradox: if Finland has such an attractive business environment, why are the Finns so reluctant to become entrepreneurs?” is saturated.

The article „What is Behind Finnish ‘ICT Miracle’?” is trying to explain the reasons for such a fast development. I agree to the point that development should be examined within the context of a cross-sector cluster concept. In Finland as well as in Latvia and any other country not only one enterprise is influenced by the economics, but the economics, both as a whole and as a single cluster, is also influenced by an enterprise. It happens because of many factors and of course, because of logistics chains.

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