Warm ties from Finland’s cold climes
Finland’s ambassador to Singapore, Ari Heikkinen, speaks to Vincent Wee about the good ties that exist between Finland and the Republic and on potential areas for further cooperation
Finland’s ambassador to Singapore, Ari Heikkinen
Among notable recent milestones have been the Singapore-EU Free Trade Agreement (FTA) which was signed in September. Meanwhile, in October, Finland’s Minister of Economic Affairs Jan Vapaavuori made a ministerial visit to Singapore where he had a bilateral meeting with his Singapore counterpart S Iswaran.
Among topics of discussion were tourism trends, energy issues and bilateral trade and investment relations between Finland and Singapore. Other areas where there is potential for bilateral cooperation include education, innovation, taxation, and investment relations.
“Education is a theme that has gained a lot of attention recently. Both Finland and Singapore rate high in international surveys on education, but the schooling systems behind the success differ in many ways. It is evident that no one system is clearly superior to the other, but closer analysis and benchmarking is fertile in developing both systems,” notes Mr. Heikkinen.
Trade, FDIs and FTA
In terms of trade, Singapore is Finland’s most important trade partner among Asean countries and the volume of trade is growing. Finnish companies have also invested heavily in Singapore, with around 100 Finnish companies currently operating in the Republic. The most prominent of these is Neste Oil’s biodiesel refinery in Tuas which is the largest of its kind in the world.
Finland and Singapore are both high in international rankings for being among the most competitive and least corrupt countries in the world, as well as one of 11 countries globally with the highest AAA credit rating. Plus factors include a skilled work force, reliable legislation, stable political environment and world-class education.
However, while Finland has tried to attract more foreign direct investment (FDI) and has been very successful with investments – such as Google’s 450 million euro (S$763.5 million) investment in a data centre in Hamina among the latest achievements there are currently very few Singapore companies operating in Finland.
“There have been recent discussions at ministerial level on bilateral trade and investment relations between Singapore and Finland, which will hopefully help to change the course. Finland provides extraordinary possibilities for foreign investments, both in terms of business environment and location,” points out Mr. Heikkinen.
“As Singapore is a gateway to Southeast Asia, Finland’s strategic location and excellent relations with both east and west makes it a notable gateway to European and Russian markets,” he adds.
Mr. Heikkinen expresses hope that the FTA will increase trade between EU and Singapore and give a boost to EU’s FTA negotiations with other ASEAN countries.
ICT and R&D
Finland and Singapore share a reputation for being among the most advanced countries in information communication technology (ICT) in the world. The ICT sector has accounted for over half of Finland’s gross productivity increase over the last 50 years. This has led to rapid development and ICT now reaches all parts of society, making Finland the number one country in ICT readiness, just ahead of Singapore.
In addition, Finland is also the leading country in the global innovative-based competitiveness, availability of Science and Technology Researchers, private investment in R&D (as a percentage of GDP) and government investment in R&D (as a percentage of GDP).
Investments in R&D are crucial to promote ICT-based innovations and both countries place significant emphasis on this, Mr. Heikkinen notes. Finland’s public expenditure on R&D of around one per cent last year was above the EU average of 0.7 per cent.
With increasing investments on R&D from the Singapore side, there has been mutual interest, which led to cooperation in this area. For example A*Star has cooperation agreements with Finland’s VTT (Technical Research Centre of Finland and the Agency for Science) and Tekes (the Finnish funding agency for technology and innovation) to promote R&D and investments and scientific collaboration between the two countries.
Mr. Heikkinen says that there has been active cooperation in developing technological improvements to health-care for example. One of these areas is remote healthcare services, designed especially for elderly people. Both countries face similar problems because of an aging population. This presents challenges for the health-care systems and increases costs. ICT innovations play a key role in tackling the challenges in the future, such that further and even more comprehensive cooperation is needed and likely to take place.
Start-ups and innovation
An emphasis on start-ups is also important, Mr. Heikkinen says. “Start- ups are a major source of innovation. The capital of Finland, Helsinki has developed into a start-up hub and it has been referred as one of the hottest start-up capitals in Europe,” he says.
Among the many successful start-ups arising from Finland in recent years have been Supercell and Rovio (the maker of the Angry Birds game), which have gone on to become big players internationally. Business accelerators and universities have made invaluable efforts to encourage and help start-ups to grow.
For example, recently Espoo-based Startup Sauna was named the top young university business incubator in the world by UBI Networks. Government also plays a big role in providing financial support for start-ups through programmes such as Tekes and Finnvera (a specialised financing company owned by the State of Finland).
“Singapore is fast becoming a start-up hub as well and its efforts haven’t gone unnoticed in Europe. Business friendly environment, low taxation, educated people and efforts to boost innovation make it an ideal location for start-ups, especially to those aiming for fast growth in Asian markets,” notes Mr. Heikkinen. Finnish start-up companies, especially those in the gaming industry have looked towards Singapore, he adds.
Other areas of cooperation
There are many other potential areas for future cooperation between Finland and Singapore, some of which are already ongoing. These include in energy and the environment, construction technology, shipyard and port terminal development and the brave new world of Arctic sea trade routes.
Both countries share concerns about the climate and environment, says Mr. Heikkinen. While Singapore needs more energy security, Finland has a strong history and deep know-how in renewable energy, he notes.
The need to focus on renewable resources and energy efficiency is a top priority in Singapore which Finland, as the leading country in the EU in energy solutions, can help with. It has a national plan to generate 38 per cent of all energy from renewable resources by 2020, MrHeikkinen says.
With Finland’s expertise in energy efficiency and Singapore’s desire in its Sustainable Development Blue-print to set a target of achieving a 35 per cent reduction in energy intensity by 2030 compared to its 2005 level, there is certainly a convergence in goals. “These similar agendas have already led to joint public projects between Finnish and Singaporean institutions and universities, but there is still room for deeper cooperation,” said Mr. Heikkinen.
For example, in the area of cleantech, where products, services and processes are geared to promote sustainable use of natural resources and reduce harmful effects to environment.
“Both Finland and Singapore acknowledge the opportunities in cleantech. Finland is the leading country in Europe in eco-innovations and cleantech related R&D. Singapore has provided substantial funding to support and attract more medical and clean technology start-ups. Start-ups are in an increasingly important role in cleantech, although the significance of big companies is not to be underestimated,” he adds.
Mr. Heikkinen notes that there is huge potential for cleantech start-ups. Cooperation between Singaporean and Finnish start-ups and investors creates synergy and increases the odds of succeeding internationally, he said.
Another area where Singapore can use Finnish expertise is in construction technology. Although the city-state is widely known for its skyscrapers, in the future challenges will arise as these proliferate. An essential part of making high buildings functional is enabling people to move comfortably, safely and fast between and within different parts of the buildings.
Mr. Heikkinen highlights the fact that Finnish companies such as Kone are helping in this area. A world leading elevator and escalator manufacturer, Kone’s latest innovation – the UltraRope elevator hoisting technology, which enables future elevators to travel heights of 1,000 metres in a single run, has already been installed in Marina Bay Sands. Kone has invested heavily in Asia in recent years and is a market leader in new elevators and escalators in China and India also.
Mr. Heikkinen notes that as Singapore searches for solutions to house its growing population, a vision has arisen of a network of underground tunnels, malls, public spaces and even science cities.
“Building underground creates new opportunities, but doesn’t come without challenges. It requires a lot of research and is costly. Although Singapore’s visions of building underground are exceptional in scope, making use of international expertise is essential,” he says.
Mr. Heikkinen points out how Finland’s VTT is carrying out a unique research project (SmartSpace) with Lawrence Berkeley National Laboratory and University of California which focuses on measuring technology for the maintenance of urban underground infrastructure. “Consequently, with expertise like this, Finland and Finnish companies have a lot to offer to Singapore when innovative solutions are needed. Whether it means going up or underground,” he added.
Yet another opportunity for cooperation is in the area of shipyard, port and terminal solutions. Here, Finland has great speciality in producing innovative solutions to improve operations and companies such as Cargotec and Konecranes have a long history of engineering works and providing the latest IT solutions.
They have also invested in Singapore and are reaching out to the fast growing Asian region from there. Cargotecfor example, established a global competence center for container terminals in Singapore in 2011 to better serve its customers in the whole Asia-Pacific region. Meanwhile, Konecranes, which specialises in lifting equipment and services, recently had a multimillion dollar order from Indonesian government and maintains a strong presence in Southeast Asia.
Finally, while it may seem ironic for Singapore to cooperate with Finland on the groundbreaking Northern Sea Route, changes in global trade flows and the movement of information and technology make it possible. “As the Northern Sea Route’s significance is going to grow in the future, so is the demand for arctic expertise,” said Mr. Heikkinen.
With more direct trade between Asia and Europe, this will definitely be a trend to look out for. He noted that as a permanent observer in the Arctic Council, Singapore has expressed its interest in the developments in the Arctic and the Northern Sea Route. A bilateral Arctic cooperation could ensure a competitive edge to Singapore and Finland, especially when the importance of the Northern Sea Route grows.