Ladies and gentlemen,
To put it simply, Health Village represents in many ways the ideal model that Finland wishes to follow in turning the current economic downturn into new growth. But before going through its characteristics, let me put this event and the Health Village in the bigger picture.
Finland is one of those countries facing a severe structural change. In our case, it is unfortunate that two important sectors of the economy, the ICT and the paper-forest industry, have lost a big share of their former strengths at the same time. This is obviously not good for economy of a small country such as Finland. One just cannot escape the consequences of changes of such magnitude. And to make the situation even harder, we are at the same time facing one of the most difficult and prolonged financial crises one can remember.
The government has reacted to the situation, but maybe a little too late and a little too little. At the same time companies have not managed to renew their businesses and to adapt their products to match the new demand. Public sector has been growing and expanding far too fast and unfortunately, relyig on welfare that was built on, what now seems, a temporary success.
I want to remind you about something that we Finns did to cope with the last recession and economical challenges back in the 90’s. The strategy we chose was to invest heavily in education, research, development and innovation, even if we had to save on almost everything else. That was a bold move, which enabled companies such as Nokia to explore new markets and develop innovative products. I believe that even today, the receipe for success is pretty much the same. The key is to encourage our businesses to innovate and renew themselves.
Even if we could have been more proactive, we have also managed to take some steps to the right direction. What has been in common to the actions is that they all aim at fostering new growth. We have, for instance, decreased taxation on company profits and increased public seed capital funding for small companies both at the early as well as at the later stage of growth.
However, what is of particular importance for today is that the government has also compiled a set of strategies on a number of critically important future growth areas of the economy. Cleantech and bioeconomy are areas where we have already been working on some time and are natural areas to expect increased growth. Health sector’s growth was worked on in the spring, but on that I talk a bit later.
Digitalisation is the next area where we need to get our act together. Finland is one of the strongest countries in the world when it comes to digital skills and knowledge. Our ICT skills were formerly quite monolithically placed in one area of the economy, namely in the ICT industry, but now that those are being diffused in many other parts of the economy and society, this provides us with a huge possibility to realize the future growth prospects of the internet economy. Like we have now started to understand, if there are areas of the economy not yet touched by internet, we can be sure that these will be revolutionized in the near future.
Digitalisation will also revolutionize health. This is already happening. We have started to observe how the focus of health care moves towards preventive care. It is now the consumer that is the central player of the game, not the big health care organizations, both public and private. This is all made possible by the new digital devices and appliances where consumers more and more take care of their own health – usually with the help of their smart phones. Usage of these devices and appliances generate data. And it is the data which is the raw material, or the new natural resource of the future. This holds for health care as well. I believe, that the players in the health care sector who aren’t already adapting to this big change, will be in trouble.
But where does this put Finland? Simply, in a very advantageous position! There are not many countries which have very high skills and knowledge both in the traditional health care and in ICT. The future possibilities lie at the crossroads of these two. And we are there.
We have already witnessed lots of interesting things happening at this crossroads. We noticed in the spring that life science has become the number one sector of the economy in high technology exports. This has been made possible by the steady rise of its exports – contrary to other parts of the high technology sectors of the economy. We have also seen that our startup companies gain interest from VC investors throughout the world. All in all, there are lots of signs that show we have especially good competencies at the crossroads where traditional health care meets digitalization.
Regarding the health sector competencies, Finland is in a fortunate situation since we have invested in health-related science, research and education for a very long time. Without a doubt, it is one of the top most heavily invested areas of our society. For a long time, most of this investment was performed with the objective that it should promote better health of the Finnish citizens. This is of course still the objective. What is, however, interesting is that recently we have started to link these investments also to growth. And we have started to understand that digitalization provides us with an enormous opportunity to new growth.
To realize these opportunities, the government prepared in the spring a strategy document on how to foster growth in the Finnish health sector – “the Health sector research and innovation growth strategy”. The primary focuses are on health technology and pharmaceutical research. The strategy document identifies the areas in the health sector’s ecosystem that must be developed in order to create an international competitive advantage for Finland as a health sector research and innovation partner and a target country for investment. My point is not to go through the strategy here but just to point out how important Health Village is for the strategy.
Health sector generates at the moment some 5 billion euros as economic output in Finland. Most of this goes to exports, which has been steadily rising. The new strategy makes the point that the health sector’s ecosystem is not working properly. By correcting these weaknesses, we believe that the growth in the sector can be speeded up. This requires, for instance, that both university hospitals and companies collaborate more closely and that university research results get commercialized much more than currently. It is also a must that the critical players – university hospitals – understand their role in the ecosystem and especially as an innovation platform for start-ups.
Health is similar to many other sectors of the economy in that to be an important player one really needs to play in the major league. Anything below that is not enough. Only by being among the best you can attract global attention – investments, skills and market share. There is no easy way to the top, it is all about hard work.
Ladies and gentlemen,
Health is one of the fastest growing global markets. Health care is also at a crucial turning point. People’s own role in promoting their health and caring for themselves is increasingly emphasised. This development is accelerated by the liberalisation of health services: regardless of how much money people have, they can more freely choose where they receive treatment. An increasing desire to take responsibility for one’s own health also involves challenging conventional operating models and creating a market for new technological solutions. Individuality also emphasises quality. Consumers of future health services will be increasingly aware of the solutions affecting them.
How should societies deal with this change? As a politician I advise us to take it positively since lots of benefits can be gained: healthy people who enjoy high well-being provide the most crucial support to all societies. Society should encourage people to actively try new solutions for monitoring and promoting their own health. Experiments and development work yield valuable feedback on usability and effectiveness, and the solutions produced genuinely serve citizens, professional users and society. Health Village has the promise to be a foundation for many new solutions that can serve people and their health even globally.
Change is not only about destruction, it is also about generating something new. Change and renewal is also essential to future success.
In health care, the change that I have emphasized and we have started to see around is about new markets. The most alert countries try to benefit from this by considering new, radical solutions in developing ways to promote health. Both the public and private sector are needed for this, just like the new health sector growth strategy underlines. What is sure, pro-research societies that create new knowledge and apply technology and innovations in the society are attractive from the point of view of global R&D investors. Finland contributes even hundreds of millions of public funds every year to health related research and has risen internationally to the very top in many science sectors. This gives a solid basis in meeting the health sector’s change and growth opportunities.
As I have pointed out, our health sector’s ecosystem is not working perfectly at the moment. We need to improve it in many areas for us to benefit from the upcoming opportunities. However, it is still important to understand that even now we have exceptional strengths to serve and be a good base for the global R&D intensive health industry. For instance, Finland is considered to be one of the leading countries in the research and innovation for personalised healthcare. We also have top research competences in many therapy areas and versatile competences in health technology, such as diagnostics and imaging. Finland also has solid ICT competences and a strong technology industry.
So I am positive about our ability to gear up health sector’s growth. I also trust that the GE Health Village will be one of the new and important platforms in helping our R&D investment, also the public one, being turned into commercially viable businesses.
I want to wish you the best possible luck in this. Hopefully today we are celebrating only the beginning of this and in the months and years to come we will celebrate new investments and great success of GE and its partners in Helsinki.