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Finland’s transformation from an agriculture-based economy to an innovation powerhouse is an example of resilience. Emerging from a devastating civil war, and later defending ourselves against the Soviet Union, we rebuilt our nation. Some of the key elements in Finland’s development have been opening our economy and fostering trade, and recognising its critical importance.
We began with initial steps and modest means. An education policy – basic education for all – was established just four years after gaining independence, followed later by a science policy and the expansion of universities, which created the base for innovation policy underpinned by research innovation and investments.
Other founding elements needed to create a conducive business environment were good governance, trust in political and social institutions, a predictable legal system, inclusion of women, respect for human rights and openness to new ideas.
Central to our success has been a firm belief in free trade. Trade liberalisation has played a pivotal role in shaping Finland into the modern welfare state it is today. It has driven economic growth, generated tax revenues, benefited consumers, created employment opportunities, attracted investments, fostered innovation, and enhanced competitiveness.
Finland’s economy has traditionally been driven by exports. The ability to trade freely has facilitated the import of capital goods and technology, which has been essential for Finland’s industrialisation. Free trade agreements concluded between the European Union (EU) and other countries have allowed Finnish companies to access larger markets, ultimately contributing to the nation’s prosperity.
Key characteristics of today’s Finnish innovation system are intense public-private partnerships, a consensus mentality among different and often competing parts of society, good public governance, and networking among companies, universities, and research organisations. Public-private partnerships and free trade are mutually reinforcing.
Looking ahead, Finland is committed to doubling trade with Africa by 2030, with Kenya emerging as a pivotal partner in achieving this goal. Especially since the beginning of Russia’s illegal invasion of Ukraine, Finnish companies have been increasingly looking for new markets.
Making African markets more accessible benefits both the Kenyans and Finns. Kenya is seen as an increasingly attractive destination for Finnish companies and investment facilities.
The potential of regional trade in East Africa is still largely underutilised. Finland seeks to unlock the regional growth potential and create opportunities for Finnish companies through its support to regional organisations, such as TradeMark Africa.
Finland has been committed to TradeMark’s work for more than 10 years already. As part of my visit here in Kenya, we will be announcing our renewed support for TradeMark Africa: 12 million euros of core funding over the next four years. Finland is proud to be part of this success story of economic integration.
Earlier this year, Kenya signed an Economic Partnership Agreement (EPA) with the EU as the first country in East Africa. This guarantees Kenyan goods quota-free and duty-free access to the European market.
The agreement is open for other countries in the region to join, which we warmly welcome.
Through the EU´s Global Gateway investment strategy, we channel public and private investments to support Kenya in its ambition to boost digitalisation and develop a green, sustainable economy.
Simply creating business opportunities is not sufficient. An enabling regulatory framework plays a crucial role in fostering a conducive business environment by ensuring transparency, fairness, and stability.
A more predictable business environment will spur private sector growth, attract more foreign direct investment, and enhance the potential for trade with companies. Moreover, it is imperative that environmental aspects are considered, ensuring sustainable development and responsible business practices.
For Finland, the ‘leave no one behind’ policy has yielded returns in many ways. A well-functioning society necessitates a healthy and dynamic economy free from corruption. We commend Kenya’s efforts to progressively enhance trade, investment, and regulatory regimes for the EU to invest and engage in more business.
It took more than 50 years for Finland to change from an agriculture-based, marginal Northern European economy into one of the most innovative, technologically driven and knowledge-intensive economies.
Many steps were taken and tested without absolute certainty of where they would lead or how good the results would be. With hindsight, the above outlined lessons can be learnt from our journey.
As we continue to navigate the complexities of the modern world, Finland stands ready to share its experiences and collaborate with partners like Kenya in shaping a prosperous future for all.
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Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.
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