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Finland's Way to the Information Society

Finland's Way to the Information Society

The National Strategy and its Implementation. Paper issued by the Finnish Ministry of Finance, 1996. Beginning in January 1995, there were significant developments towards the Information Society in Finland. A report commissioned and approved by the Ministry of Finance outlined a national strategy. On the basis of this document and on inputs from other ministries, the Cabinet Office drew up a position paper on measures for the development of the Information Society. The position paper was approved by the Government on 18 January. These strategy documents are being followed by concrete action in all the departments and agencies concerned.

Finland's national strategy is expected to have an impact on all aspects of administrative and private sectors reaching all the way to homes and individual citizens.

This publication presents a brief summary of the Information Society report and on developments related to its implementation during 1995. (ISBN 951-53-0695-7)

Contents

Information Society Strategy - Report by the Ministry of Finance

  • Towards the Networked Economy and the Information Society
  • Information Network Connections to Work Sites and Households
  • Others are drafting strategies as well
  • Finland to Assume an Active Role in the Development of a European Information Society
  • Finland's Strategy Aims to Assure a Competitive Edge
  • A Vision for the Future, and the Principal Elements of the Strategy
  • Outline of a National Strategy
  • Priority Recommendations
  • Proposals for Implementation of the Strategy

Implementation and main Developments

  • General Developments
  • Government Policy Statements
  • Implementation and Developments during 1995
  • Conclusion

Annex: Government Position on Measures for the Information Strategy

Information Society Strategy - Report by the Ministry of Finance

In Finland, the information society strategy concept dates back to the work of the Information Technology Advisory Board (1976 to 1991) and a country review of Finland's IT and telecommunications policies performed by the OECD in 1990 to 1992. The OECD country review, the first of its kind in the world, concluded that while Finland had reached an astonishingly high level of IT and telecommunications penetration and expertise, the country lacked a clear statement of strategy in these areas. Consequently, by a Government decision, the Ministry of Finance was given the task of preparing one. The report was researched and written during 1994.

The work benefited from the launching, in the United States, of the Information Highway concept, and from the publication of the Bangemann report and the subsequent decisions of the European Council on Europe's way to the Information Society. Parallel strategy work has been going on in related areas in Finland, most notably on industrial, telecommunications, educational and cultural, and health and welfare strategies, usually with a specific reference to IT and networking.

The report, Finland Towards the Information Society - a National Strategy, completed at the end of 1994, was drawn up to support Finland's renewal with an aim to cope successfully with three challenges of vital significance for Finland's future: the external challenge of integration into the open global economy, the internal one of societal renewal to overcome an economic depression of unprecedented proportions, with concomitant mass unemployment and an expansion of the public debt, and thirdly, pressures for change posed by the new technologies.

Overall economic goals that an accelerated development towards the information society can serve are, according to the report, successful adaptation to the open world economy, high employment, vibrant entrepreneurship, and a competitive public sector. Relevant societal goals are balanced social development, better opportunities for individual advancement, a citizen society, and a civilization based on knowledge.

Towards the Networked Economy and the Information Society

Within an open world economy, both firms and national economies must continuously look for ways to improve productivity and competitiveness. In order to secure the well-being of citizens, and the resources required to develop the society, there are no alternatives. Renewal requires readiness for change, as well as know-how and the use of information and technologies of the highest quality.

Productivity growth generates space for the development of new products and services especially by new businesses and entrepreneurs. This is the only recipe for success for eliminating or even reducing unemployment.

Information technology has become so widely used that it has been integrated in all procedures, products, and structures in businesses and in communities. It is an essential competitive factor for products and production. It is also increasingly gaining foothold at a personal level in work, studies, and leisure time activities.

The latest, most radical model of implementing information technology affecting overall business and societal structures are information networks in which information technology merges with the exchange of data and communications. Furthermore, it integrates with publication technologies as well as with audio-visual technologies within culture and entertainment. This merger is leading to information industry becoming the leading economic sector in the world.

Information networks accelerate the shift of production and service activities to specialized units such as subcontractors, cooperative clusters, various alliances, and distance workers. The general direction in this renewal is networking and the networked economy. A networked economy, with a developed information network as its basis, provides a real opportunity for Finland as it reduces the problems caused by distance and makes it possible to take advantage of our high level of education.

In the competition among nations towards increased productivity and renewal, the widespread use of information and information technology have become central to the point that it has become common to talk about a move towards the information society.

Information Network Connections to Work Sites and Households

Two of the most important trends in the advancement of information technology are the increase of digital presentation of information for all types of information (data, text, sound, still pictures, and live pictures such as video) and the development of information networks, as well as their reaching to an ever growing number of work sites and households.

Due to technical development of information networks it is already now possible to use large enough transfer capacity to send, in addition to text, pictures, voice, and video images all the way to terminals and workstations within the network. An advanced telephone network, a cable TV network, a wireless TV network, and an optical fiber network provide in part complementary, in part alternative solutions to bringing all types of information to the users.

Security of the information network, tariffs, and the level of services are important factors having a significant impact on how fast work sites and households join the network. Work sites have already taken the first steps. The question within the next few years will be which technology, what constellation of services, and which level of demand will prove to be profitable enough to connect households to high capacity information networks.

Others are drafting strategies as well

The opportunities offered by information technology are significant to the point that nearly all OECD countries and many international communities have drafted or are preparing information society strategies. Simultaneously, the drafting and the implementation of such strategies have become part of the agenda for decision makers at the highest levels.

The sheer necessity to implement information technology emerges as the central theme in strategies drafted outside Finland, the primary means being to get started with the building of the Information Highway. Another aspect evident is that information technology is seen to penetrate all sectors of the society, public as well as private. Most strategies characterize this phase of development as the Information Society.

Finland to Assume an Active Role in the Development of a European Information Society

The summit meeting of European officials, the European Council, received in 1994 a report by the Bangemann Group. The development of information networks, their basic services, and other innovative applications form the basis of the recommendations of the Group. Based on these recommendations, the EC Commission has presented a work program called "Europe Towards the Information Society". The first steps have already been taken to implement it.

The EU information society strategy is significant for Finland. EU research projects provide an important source of new expertise, and can provide employment for Finnish experts. EU strongly contributes to solving problems inherent in information technology, such as data security and privacy protection, as well as copyright issues. Finland has a lot to offer, among other things, its experience gained in liberalizing the telecommunications market, as well as a high level of applications know-how in developing, for example, large national registers, citizens' information networks, and geographical information systems.

Finland's Strategy Aims to Assure a Competitive Edge

The objective of the information society help strategy is to gain and maintain a competitive edge within the world economy as well as to help solve domestic economic problems. This makes it necessary to equal, and in some areas, to exceed in sophistication the best practice of IT application in competing countries. This is a real challenge considering the far-reaching strategies currently being carried out elsewhere. On the other hand, Finland's technological abilities and numerous demonstrations in the production of top level IT products and applications give us reason to believe the ambition to be

realistic.

A Vision for the Future, and the Principal Elements of the Strategy

The following future vision was created starting from the given premises:

  • Finland is an advanced information society based on networking
  • Finland is a world class competitor in the implementation of information and communications

technology

  • Finland's information society strategy is based on three main elements. They are

1. renewal into an information society,

2. the development of information industry, and

3. the assurance of necessary conditions, i.e. research, know-how, and the development of an IT

infrastructure.

Outline of a National Strategy

In order to structure the visions, aims, and the total concept of the strategy, the following five national action lines are proposed:

Action Line 1

Information technology and information networks to serve as tools in private and public sector renewal

Action Line 2

Information industry to become an important sector of economic activity

Action Line 3

Professional expertise in information and communications technology to be maintained at a high overall level, with selected peaks

Action Line 4

Everyone to have the opportunity and basic skills for using the services of the information society

Action Line 5

Finland's information infrastructure to perform in all aspects as competitive and capable of providing high quality services. Each action line encompasses a number of recommendations, 46 in all.

Priority Recommendations

Among the recommendations, some may be considered of central importance. The priority actions in a nutshell are the following:

Provide a strong impetus to the development of public information networks and Finland's Information Highway.

Encourage the innovative application of information and communications technologies in all areas of private and public sectors.

Develop modern information network services to strengthen the competitive position of the SME's. The use of information network services is proposed to support a large scale entrepreneurship campaign.

Improve the conditions for growth of the information industry (information technology, telecommunications and the content industry). Information industry is expected to grow into a major new export sector.

Participate actively in the implementation of the EU information society program (including privacy protection and copyright legislation) and in other projects concerning information and telecommunications technologies and the content industry.

Ensure that all have the opportunity and basic skills to use the services provided by the information society.

Make national information resources and public documents easily accessible to all citizens through public information networks by specifying a uniform delivery channel and by providing appropriate resources to implement it.

Ensure that IT research and education are appropriate to needs and encourage the formation of a small number of world class research units.

Promote the interoperability of Finland's information infrastructure and the export of information network services.

Proposals for Implementation of the Strategy

The following activities are proposed:

On the basis of this report, the Council of Ministers should make a decision in principle concerning the aims and action for the development of a Finnish Information Society. Additionally, a concrete implementation plan should be drafted for the years 1995-1997.

An Information Society Advisory Board should be established.

The execution of the strategy should be supported by wide scale publicity campaigns and educational programs.

The implementation of the national strategy, Finland Towards the Information Society, should primarily be seen as an investment for Finland's renewal. In addition to ordinary developmental and operational investments, this would require at least 0.2% of GNP, or approximately one billion FIM (about MECU 170) annually. The major portion of the additional investments would be realized in the marketplace, in response to rising demand.

The responsibility of the Government is to guarantee the necessary prerequisites essential for renewal. The impact of this on the annual budget will depend on the speed of implementation. The most significant publicly funded investment comes from supplying schools and libraries with adequate information technology and networking. For the rest, implementation can be funded in the main by redirecting funding for customary expenditures. Major development projects and publicity campaigns will require separate funding.

Implementation and Main Developments

General Developments

Global and national trends during 1995 confirm the assumptions underlying the information society strategy and its main lines.

Finland's economic situation continued to be serious, with persistently high unemployment at the 17 to 18 per cent level and a public debt that was still rising, despite increasingly severe austerity measures. This had meant, among other things, that the Government budget had little, if any leeway for publicly financed information society projects.

Market developments

The principal technology trends have been the continued digitization of the different forms of information representation, the expansion of networks, and the rapid increase in their capacity to transmit and provide information.

The concept of "Information Highway" has received wide publicity but lacks concreteness. There were a number of independent developments that could be seen as consistent with this concept.

The main phenomenon, no doubt, was the explosive world-wide growth of Internet usage. This is no less the case for Finland, which has relatively more registered users than any other country. Even though some extreme projections for future growth are no doubt exaggerated, the Internet concept has proved the potential of a global information network and the triumph of user friendly de facto standards. Commercially oriented networks are now adopting these standards, thus laying the foundation for worldwide information services and a global electronic marketplace.

While narrow band Internet is expected to provide a Global Information Highway to the consumer, the acceptance, at last, of ISDN and the rapid growth of ATM networks and applications in Finland is likely to define a backbone for a network infrastructure for business and government.

The integration of digital devices such as the microcomputer, digital television, telephone, cellular phone and fax is becoming a reality. An inexpensive, stripped down PC suitable for a network terminal is expected to create a mass market.

Finland has pioneered in the development of the mobile office. Mobile computing adds a new dimension to networking, but one whose coming significance is still difficult to see.

These developments, together with the total liberalization of telecommunications far in advance of other EU countries, have spawned a burgeoning service industry in Finland. It will be many years, however, before this new growth can have an appreciable effect on employment and the public debt.

Implications for the information society strategy

The need to meet global competition spurred a number of mergers in many areas of Finnish business, including the IT services area. Increasing concentration of the IT service industry implies the need for smaller firms to cooperate by networking and by forming alliances with large firms.

The proper allocation of public expenditure has become a matter of strategic importance.

The use of IT to raise productivity often creates unemployment in the short run unless the firm is successful enough in the global market to achieve a compensating growth in production. Attention began to be paid to opportunities to create new employment in IT related activities such as the content industry.

Government Policy Statements

Government Position Paper, January 1995

The government of Finland took an early stand in support of the Information Society Strategy. In January 1995, soon after the report by the Ministry of Finance was made public, it took a decision in principle on goals and on action to be undertaken. The decision confirmed the aim of maintaining Finland's position as one of the leading information societies and gave departments and agencies goals and tasks for implementation in their operational plans and in the 1996 budget.

A free translation of the position paper is given in the Annex.

Information Society in the new Government

The parliamentary election held in March 1995 resulted in the appointment on 13 April of a new Government with a different political composition from its predecessor. While many policies changed, an emphasis on Information Society matters remained. The Government's program included a number of references to information society policies and goals. The Government has also said it will honor and continue implementing the January decision.

According to the program document, the Government will foster the balanced development of a well functioning Information Society and promote the utilization of information networks and the Information Highway. Basic information society skills are to be made available to all. It is envisaged that a broadband Information Highway will eventually reach homes, public services and SMEs.

The school system will be connected to information networks and their services will be made available to all schools. The library system is to form an integral part of the IS strategy. The Government promotes the use of electronic communications for education and for telework. The networking of firms is a cornerstone of regional development. Investment in information and communications technologies will be encouraged.

Free and equitable competition in printed and electronic communications will be promoted and telecommunications legislation further developed to increase competition at home and in all of Europe.

Implementation and Developments during 1995

In 1995, the administrations most active in promoting the information society strategy were the Ministry of Education and the Ministry of Transport and Communications. Both published their information society strategies and launched action for their implementation. The Ministry of Health and Welfare was readying its strategy for publication in early 1996. The Ministry of Finance was preparing the establishment of a broad national Information Society Forum, headed by the Minister for Administration. The national Forum, as well as a Government Committee for Information Society Issues, were then established in May, 1996.

The response elsewhere in society has also been positive. A number of municipalities, provinces and private associations have held information society seminars and training. Local and regional information society projects have been launched. There has been a notable increase in civic activities in the networks.

The following provides an account of main developments by action line of the Information Society Strategy.

Action Line 1: IT and information networks to serve private and public sector renewal

In the Finnish administration, there were about 0.8 personal workstations per employee in 1995. Nearly ten per cent of them were portable, some with the capability of acting as mobile GSM-based terminals for the itinerant civil servant. Practically all workstations were connected to local area networks and to electronic mail with external X.400 or Internet connections or both. Over a third had access to the Web.

A rapid computerization of schools and libraries was in progress. Online use of national information sources increased rapidly. In 1995, for the first time, there was more use of Finnish databases from abroad than of foreign databases from Finland.

Innovative uses of the Internet included the transmission of radio and TV programs and the first introduction of true electronic cash. Finland remained the country with the highest number of Internet users per population. Innovations in the mobile area included automatic news services directly to the screens of GSM mobile phones.

Large enterprises, particularly in banking and trade, continued to deepen their utilization of IT within and among organizations as well as with their customers. Progress in small and medium enterprises was slower. Experiments were begun on the automation of routine information exchange between Government and the business sector.

Action Line 2: IT industry to become an important economic sector

Multimedia attracted a great deal of interest. An important initiative in this respect was the National Multimedia Program launched with public support and a large number of firms participating. Such initiatives, as well as the burgeoning information service activities due to telecommunications liberalization and the growth of Internet and the national Telmo networks, were beginning to create a "content industry" to complement technology-oriented growth exemplified by Nokia.

Apart from mobile phones, IT industry exports were still weak. The most successful software product was the Team Ware system with foreign sales of 300 000 units.

Action Line 3: A high level of professional expertise in IT and communications

The Ministry of Education prepared during 1995 two Information Society strategy documents, one for education and research, one concerning culture. According to these, the Ministry planned to spend 240 million FIM in 1996 on implementation. The largest component, over 100 million, was reserved for higher education, scientific libraries and networks and for information services.

University enrollment in information technology is to increase considerably. The number of doctorates in IT is to grow rapidly, particularly in the more technically oriented areas. Of the 950 places in special graduate programs, 118 were for information technology and electronics. Of the twelve especially designated "top research units" three were active in information technology.

Action Line 4: Information Society opportunity and skills for all

Over half of the Ministry of Education's "Information Society budget" is aimed at improving the citizens' skills and opportunities to participate in the Information Society through programs carried out by schools and adult education. Funds were allocated to procurement of equipment and software, teacher training, the creation of educational materials, or for experimenting with new educational techniques such as the "virtual school".

TIEKE (Center for IT Development) has innovated a computer user's "driver's license" that has attracted interest internationally. 10 000 licenses, based on a comprehensive examination, were granted in 1995.

The Ministry of Transport and Communications began to implement its Information Highway strategy with a development program directed both at the infrastructure and basic services of data neworks to encourage, for example, electronic trade.

TELMO, a joint organization for cooperation in the information network area, began a program to improve the quality of and access to information services.

Action Line 5: An effective, competitive and accessible information infrastructure

By "infrastructure" is meant, besides physical equipment and software, also laws, norms and commonly accepted procedures that are important for the Information Society, as well as information sources and resources.

The most important actors in the construction of physical information infrastructures are telecommunications operators and information service providers acting in a competitive market. Government action is mainly limited to enabling legislation and a limited number of strategic initiatives.

Even though Finland already had the highest level of de facto competition in the telecommunications area, new legislation for further liberalization was presented and passed in 1995.

An extensive program of digitization of information of scientific or cultural significance was begun. A new study of the pricing policies of governmental information was made. The Statistical Office started a project on statistical indicators of the Information Society, in cooperation with the OECD.

1995 saw work starting on a reform of the 1987 privacy legislation, on updating legislation on intellectual property, and on organizational measures for national information security.

Conclusion

Trends in 1995, both as regards market developments and public and private measures, can be regarded, for the most part, as very positive in terms of the aims and recommendations of the Information Society Strategy report. An important strategy area where development has been less satisfactory is the adoption of policies and measures by small and medium enterprises to become more active users of IT and of networks and to orient their productive activities towards modern information products. Strategic public initiatives are undoubtedly called for in this area.

Annex: Government Position on Measures for the Informaion Society

The position paper, was approved at a Cabinet meeting on 18 January, 1995. It stipulates that each administrative branch prepare detailed action plans to implement the information society strategy principles.

While no new budget allocations are provided for information society development for 1995, the ministries are instructed to redirect, as necessary, their resource allocations to give effect to the Government decision.

The detailed planning phase is coordinated by the Ministry of Finance and overseen by the meeting of permanent undersecretaries. Other coordinating measures are expected to evolve as the departmental action plans are fully elaborated.

The following is not a direct translation of the Government position paper of 18 January, 1995, but an abstract intended to convey its essence to foreign readers.

Aims of Information Society policies

Finland aims to secure its position as a leading information society in the year 2000. This entails that:

  • Finland's information, communications and content industries contribute an important share of production and exports
  • Finland has a vibrant entrepreneurship in these areas
  • All citizens have access to electronic information and communication services and possess the skills to use them; the services are easy to use
  • Business and administrative functions, structures, products and services are being renewed with the aid of information and communication technologies and networking
  • IT professional skills are competitive at the world level
  • Finnish information infrastructures are competitive and functional in all respects; this implies broadband capabilities in a large part of network services.
  • Legislation and other norms should facilitate the information society and promote the use of networks and competition in all parts of the infrastructure.
  • Every citizen has the right to information.
  • The availability of public sector information in networks and libraries must be improved.
  • The needs of people in all walks of life should be met equitably; IT&C should not curtail anyone's chances to participate in society or in working life.
  • Finnish cultural and linguistic identity must be preserved.
  • Finland aims to accelerate the trend to telecommunications competition in Europe and take part in drafting
  • European legislation to promote it. Advantage should be taken of our advanced state of telecommunications services and associated know-how.

Way forward

The information society will be built by a myriad of actions by firms, private and public organizations, and citizens. Financing will mainly come from firms and households. The role of government is to provide a favorable framework.

The most important governmental activities in the coming years will be:

Network Infrastructures

  • Set of projects on "Finnish Information Highway" including pilot ATM and ISDN environments for multi-media development, definition of appropriate network standards
  • Promotion of generic and support services, of network compatibility, and of information security

Application in Business and Industry

  • Systematic studies of IT and network application potential with particular attention to emerging high-tech clusters
  • Measures to improve conditions for SME and to encourage new entrepreneurship through IT use and easier access to networks
  • Program to promote telework by networking

The Public Sector

  • Projects to reform public service functions through process re-engineering incorporating advanced use of IT and networks
  • Measures to promote and unify electronic information exchange among administrations at the state, regional and local levels and to create integrated customer-oriented public service systems
  • Projects for direct customer access to public sector information, services and feedback mechanisms
  • User-friendly pricing of services provided via public networks

Information and Communication Industries

  • Better access to risk financing
  • A high quality supply of public broadcasting programs and participation in international program exchange
  • Start of digital radio and television broadcasts

Training

  • Ensuring that appropriate IT, information management and communication skills are imparted at all levels of education
  • Special attention to teacher training
  • IT&C professional education to be increased in volume and kept up to date qualitatively, IT&C training in other professional areas appropriate to changing requirements
  • Measures to provide adult population with basic IT&C training by special course offerings and through libraries
  • Urgent provision of access to information network services for the entire school system
  • Promote remote and multimedia studying at all levels

Culture

  • Ensuring a supply of Finnish cultural products on the Finnish, and international, information highway
  • Encouragement to birth of multimedia enterprises, promotion of production, distribution and use of digital products

Research and development

  • Promotion of spearhead projects, particularly by SME
  • Active participation in international research work
  • Provision of sufficient national and international scientific networking and computing capacity to research
  • Research on economic, social and cultural aspects of the information society
  • Projects on IT and working life, results to be made available to employers

Transport

  • Program on transport telematics to lower logistics costs at home and in trade with neighboring areas and to improve traffic safety

Social Welfare and Health

  • Elaboration of an information strategy for the welfare and health (WH) fields
  • Promoting the emergence of the formation of an economic WH cluster
  • Improving real time information exchange among institutions in the WH field

National Information Resources

  • Improving access to and utilization of national registers and statistical databases
  • Clear division of responsibilities in the provision of national information services, definition of cost allocation and pricing principles, including services to be provided for free
  • Support to public libraries as node points of an open information network

Legislation and other Framework Conditions

  • Draft legislation allowing the use of electronic media for transactions by citizens and firms with government agencies
  • Develop private law to take account of the implications of electronic networking for business, for example, in payments, with due regard for international harmonization
  • Promote international or internationally compatible solutions to problems related to protected material, particularly copyright
  • Develop and unify legislation on confidentiality and business secrets
  • Renew privacy legislation
  • Increase input to national and international standardization efforts to ensure compatible, open IT&C markets
  • Draw up a plan for a statistical system to measure information society development

International Cooperation

  • Active participation in EU and other international IT&C and telematics projects
  • Promote telecommunications competition in Europe
  • Make Finland better known through information networks

Implementation

  • Each ministry is responsible for the attainment of the objectives in its area of competence. It shall revise its operational plans and budgets accordingly.
  • Each ministry shall prepare a detailed action plan for the development of the Finnish information society in its area of competence and submit it to the permanent undersecretaries' meeting by the beginning of March, 1995.

Finland(s Way to the Information Society: Time for renewal

The open global economy, the rapid development of technology, and a pressing need to get out of an economic depression pose enormous challenges to the Finnish economy and society for adaptation. The report by the Ministry of Finance suggests that a national strategy for Information Society can help in meeting these challenges. What is needed is no less than a full-scale renewal. By a combination of willpower, information and information technology, it will be possible to reform the way organizations, public and private, operate. In this, networking is a key concept.

Finland is not alone with its challenges. Most of the countries of the European Union face, to some extent, similar problems.

Both the Union and its member countries have drafted Information Society strategies and are implementing them.

In addition to summarizing the gist of the Finnish report, this booklet presents some of the main findings of a review of progress made during 1995 in the implementation of the report and of a Government decision based on the report.

Publisher: Ministry of Finance 1996.

Graphic Design: Inclus Communications Oy, Printing: Oy Edita Ab, Helsinki 1996.

 

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Directeur de la publication : Joël-François Dumont
Comité de rédaction : Jacques de Lestapis, Hugues Dumont, François de Vries (Bruxelles), Hans-Ulrich Helfer (Suisse), Michael Hellerforth (Allemagne).
Comité militaire : VAE Guy Labouérie (†), GAA François Mermet (2S), CF Patrice Théry (Asie).

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