Looking back to its agrarian economy era back in the 30's, Finland has shown a remarkable growth and progress ever since. During the 50s decade, most of the population and more or less 40 per cent of output were still in the primary sector.
During the 70's, Finland was already considered a stable and mature economy compared to its neighbor countries.
Nowadays, according to Newsweek Finland was awarded an Honorable mention as best country in the world. Reasons: best high income, best education.
And according to the World Economic Forum, Finland is considered to be in the first 6th place of the top richest countries around the world, key factors that make it considered a rich country is the fact Finland is an Innovation driven country but also Efficiency driven and with a very poor or zero corruption rates among others.
Finland's economy launched in a formal serious way so to speak after the World War II, developing strategies that were focused mainly on accumulating capital but sustained by public saving rates. For example, in the 50's and 60's it was reported that public savings were as much as 30 percent of aggregate savings, this was considered a surplus and became a channel to help and support private investments through capital equipments across the country.
In this time Finland was also focusing on staring public companies in key sectors of its economy, metal and chemical-fertilizer industries same as energy were the basis for creating these companies, it was reported later on in the 80's that these companies added value to more than 18 percent to the industry sector.
The low interest rates and administrative rationing of credit also allowed to sustain in a way Finland's high investment rate and it is so that from 1960 to 1984 gross fixed capital formation was around 26,3 percent of GDP.
There is a genuine and pragmatic cooperation between the private and public sector has been another key factor in Finland, it is so the case that categories are split either by policies rather by fiscal policy, monetary policy or industrial policy, commitment and compromise have also been key allowing a realistic and genuine integration between capital owners and the working class.
As we all remember the famous "Social Contract", in Finland this was not only upheld by the industrial class which was a mistake made by other countries that did not allowed the introduction of social reforms at the same time (wages, welfare services, pensions, children care, women's presence, etc). This helped that its market economy was seen with good eyes by the macroeconomic spheres allowing political legitimacy inside the politically strong and powerful working class.
The world must learn from this wonderful country that has only 5 million of inhabitants a bit more than Croatia, the following:
- Education and Education investment is the core of any development of any kind, all these highly developed countries believe that a good educational system, modern and flexible in opportunities empower them to overcome crises in the fastest, most efficient with the less coordination costs with creativity and innovation just to name a few.
- Difference between poor and rich country is not in the resources or age, otherwise Egypt or India for example, would be in the top richest countries of the world all this compared to those shown in the World Economic Forum research. Japan's natural resources are not so convincing at all, not good for agricultural work, etc, because it is more than 80% mountain like, however is considered one of the world economy, Japan is considered a floating industry, importing raw materials from around the world and exporting manufactured products, for example.
- What makes a country rich is the individual level of consciousness of each individual living there. In Finland people believe in family values above all, they are humble, honest, sincere and forthcoming. They believe in punctuality, in commitments and hold on that no matter what.
- Ethics, as a basic principle of integrity, Responsibility, Respect to the law, Respect for the rights of other citizens and realization of one's obligations as well, The love of work, The effort by saving and investment, The desire to excel and grow.
- High levels of investment in physical and human capital and Increased economic freedom, including lower taxes but also obligation to pay.
- Protection of property rights and decentralization
- Decision-making in most sectors of economy.
- Strong incentives in order to save, invest and increase productivity (including property rights).
- Competitive markets.
- Low inflation.
- Political stability.
- Free trade.