The world is rapidly moving towards digitalisation and automation in all areas of society. Yet some of the most digitally advanced economies in the world are struggling to sustain digital growth and innovation – Finland being one of them. This years’ Digital Evolution Index places Finland in the Stall Out Zone; a category for digitally advanced countries that have reached so-called “digital plateaus” of slowing momentum in terms of digital growth.
“Moving past these ‘digital plateaus’ will require a conscious effort by these countries to reinvent themselves, to bet on a rising digital technology in which it has leadership, and to eliminate impediments to innovation,” the researchers behind the Digital Evolution Index suggest. The states in the Stall Out category – among them all Nordic nations – seem to suffer from issues on both the supply and demand sides of digital growth; past digitalisation is not translating into future innovation because of market saturation and a lacking start-up culture.
Yet, compared to its Nordic neighbours, Finland has fared quite well in adding fresh fuel to its digital innovation engine to keep it running. The past years have been a turbulent time for Finnish business, with a long economic recession following the decline of Nokia’s mobile phone production, yet Finland’s digital sector is now evolving faster than those in any other Nordic countries. In fact, Finland is not far away from being included in the Stand Out zone for digitally advanced countries with a fast-paced digital evolution.
Nevertheless, the road from the stall out category to the stand out zone is a slippery one, and as noted in the Harvard Business Review, all countries need to continuously generate new demand to avoid stalling out. Countries in the Break Out zone, with China in the forefront, are evolving rapidly and have the potential to become the leaders of digital business and technology in a matter of years. China has gone from almost no digital innovation at the turn of the century to having a population of 730 million Internet users today. This rapid development has made China the country with the largest number of Internet users in the entire world, and thus a lucrative market for e-commerce.
If Finland wants to remain at the vanguard of digitalisation, it should look to countries with a similar population size but with a faster digital evolution. Examples of such countries are Estonia, Singapore and New Zealand. Estonia is, of course, a particularly interesting example – not only because of its geographical proximity to Finland, but also because of its leading position in e-government.
As the data used to measure each country’s pace of digital evolution in this year’s Digital Evolution Index was gathered between 2008 and 2015, it is worth keeping in mind that Finland only declared its recessionary era to be over as recently as last year. Digital evolution in Finland is thus likely to pick up speed in the coming few years, if it has not already done so. A promising example for Finland’s digital future is Slush – a phenomenally successful start-up event that brings together the global tech scene in the winter darkness of Helsinki.