Tuesday 27 March 2012

Recap: a pattern of behaviour for a small nation in a rapidly changing world


We all live in a rapidly changing world, which requires from us not only new skills, but also a new way of thinking on different levels – from individual to state.  The age of change has come, so we should learn how to adapt to it and make the most of it for the benefit of our community or nation. I’ve been inspired recently by the ideas of three strategic thinkers of nowadays – Eamonn Kelly and Peter Schwartz from the Global Business Network and Mikko Kosonen, President of the Finnish Innovation Fund SITRA. Here I’d like to share my recap of their presentations delivered almost two years ago, but which are still up to date.


Eamonn Kelly

If previously the world had been driven by Western values, innovations and most of “the rules of the game” were set by Western countries, today it is no longer an exaggeration to say that this era is ending, and we face an era of post-Western globalisation. Indian companies are reinventing the way we work by cresting a totally different value creation chain. Two of the biggest nano technology centres are located in China. Brazil is a champion of having sensible and efficient biofuel policy and infrastructure. The new world order will be not a top-down model with one pole of attraction and power, it will have a horizontal structure with multiple poles of attraction and the rules will be set by everybody. Innovations will sprung up all over the world.

Decline of an organisation as a single entity is inevitable. Values chains no longer revolve around single entities, they’re far more complex. Today, business is not creating, but rather co-creating along with their customers. Networks of relationships have become a fundamental source of innovation.

If XX century was about natural resources, then XXI century is about human energy and talent. This is the sole resource on the planet which will be growing, so does the share of educated people. But if the middle class in Western world remains of the same size, then the middle class in developing world will double in the nearest future. Therefore a special attention should be given to a system of education.

In most of European countries, the education system was designed in the 19th century for the needs of the industrial society, but that no longer the way how the world operates. We live in a post-industrial world, hence the new education model is needed for a nation to succeed. 


Source: arengufond.ee via Irina on Pinterest


Values are changing around the world. People want to see a meaning in their lives and in what they are doing at work. The pattern of consumption is changing as even more consumers start demanding sustainability and value the quality of life. Demography and urbanisation is another challenge. Europe, U.S., Russia are ageing, African and Asian nations are growing. And the next fight will be over the talented youth and the brain drain problem will get only worse.

The new type of connective technology is transforming the planet, but the future will be defined by BANG.

B – bits (digital technology)
A – atoms (nano-technology)
N – neurons (cognitive and neuroscience)
G – gens (biology, which will move from being a mere of science to technology)


Networks of innovation will become global, and a small nation can use its smallness to be agile. The government should act as a facilitator and set the priorities for the future. FDI should no longer be seen only  in terms of money injection into a state’s economy, helping to create new jobs. Human talent is a new kind of FDI, therefore a selective immigration policy is unavoidable. This is the world where closed system fails and open succeeds


Mikko Kosonen


To succeed in the future, we should not only apply creative forward thinking, but also understand an importance of strategic thinking, strategic agility – ability to influence your own future. In today’s global world, smallness is an advantage, because in a small country it is much more easier to take collective commitments and make experiments. Finland aspires to be Europe’s most strategic agile country like Singapore and South Korea.

We need new terminology to address a new world. We should not use old industrial era terminology like competitiveness (cost efficiency, cost cutting), welfare, which easily leads us to old mental models and frameworks. Vitality is a new buzzword of today. In Finland, there is an acute need to understand in what way we can get people vitalised and energised, because at present most of them are very sceptical, cynical, and passive. They are adaptors, but we need more actors, responsibility and initiative takers. Therefore Finland concentrate now more not on the creation of a vision, but on how to unleash people’s energy. 




Source: arengufond.ee via Irina on Pinterest

Finnish innovation policy has been designed for an industrial era, but the model of creating value, developing business is changing. Science-based innovation is no longer valid alone, to succeed you need an open platform for innovation and interaction. The reality is that work is moving outside Finland to Asia, we’re not taking risk, we’re not applying out-of-box thinking, instead we’re pushing harder the old horses. There’s more need in radical experiments and better policy coordination. The paradigm should change.


If previously politicians and companies decided which policies to adopt or which product to release, then today more and more people want to be a part of the process. The value creation logic has changed, the way how we create it is different. It is not a top down process and a product designed in labs, it is a product or service partially created by a community, customers.

Industrial era logic treats a human as a resource or object, thus creating dissatisfaction among people. The new logic tears down the hierarchy, puts an individual at the forefront, makes it a subject, actor, co-creator, developer of services and products.


In Finland, in our attempt to improve living conditions, well-being, we have taken away accountability and responsibility away from people. They have become passive adapters of services. But nothing brings more happiness and well-being than being a participant of something meaningful.

We should also get rid of words “management” and “leadership” all together, because they represent an industrial era logic, and replace them with the word “communityship”. There are three keys for a small state to succeed: 1) high level of education; 2) public-private cooperation; 3) trust between people. All of these factors give a chance to become a leader in providing technologies for the well-being of people.

Finland aspires to be a global pioneer of systemic changes creating well-being, which in its turn requires big structural changes and takes time. We need citizens to take more responsibility (for example, of their health care or community). We need to liberate imagination of vision! 


Peter Schwartz


A small nation has no other choice to succeed than to be open to the outside world, to understand and participate in the wider community of nations. You’ll have to sail with the wind. Estonians are too small to create its own wind. Europe, China creates the wind, but you’ll have to be open to use that. There are three important components of a successful economy:

1.     To be open economy;

2.     Education, education, education;

(You’re not going to build a successful economy based on natural resources only. The countries that have prospered, heavily invested in their people.)

3.     Creation of conditions to attract talents
(two factors are important here: quality of life and sense of governance – open & transparent)

Future based economy is all about the talent – educating your own talent and attracting from abroad.

My reflections

Bearing all this in mind, in the long term perspective I tend to question the viability of authoritarian regimes. If open, transparent governance style and proactive responsible citizens are key to success in this age of change, then authoritarian and paternalistic style of governance with top-down instructions will bring nothing more than a total failure and misery. Authoritarian regimes will still be importers of innovations and provide nothing more than natural resources and cheap labour. Ultimately, those nations who will embrace a new style of participatory democracy with horizontal structures will be the champions of a modern age. Hm.. 

2 comments:

Miguel Oliveira said...

it would be interesting to apply this concept (and consequent policies) to Latvia, being a small country. Although there would have to be differences between latvia´s model and Estonia

Unknown said...

Well, that will be another story to tell this weekend - strategic external communication: Latvian and Estonian case. Still undecided which language to choose - English or Latvian.

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