If there is one thing people should never forget about Finland - apart from its being the land of Santa Claus; it is the nation's spirit of innovation.

That is something that Timo Rajakangas, Finland's Consul General in Hong Kong, wants to introduce to the city, which is shifting itself to a "knowledge-based economy", just as Finland did in the 1990s.

"Definitely, it is the area where I see that Finland and Hong Kong could be and should be doing more together," said Mr Rajakangas before the country's 92th birthday, "because basically, our future will not be derived from manufacturing but from creativity and innovation, from a knowledge-based economy."

"We have a tough beginning," said the Consul General, "but today, whether it is about economy growth or environmental sustainability, Finland does very well in all kinds of competitions, and I'm so proud of it."

In the Legatum Prosperity Index 2009, which measures wealth and well-being, Finland topped the gauge. Thanks to its new strategy, the country with an endless sea of forest and seven-month-long winters has become one of the world's leading countries in innovation and technology.

Mr Timo Rajakangas, The Consul-General of Finland.

But fast-rewind to the mid-90s, when the country was suffering its worst recession after the Soviet Union collapsed; the world could hardly have imagined that Finland could have revived as magical as Santa's gunny bag: since

the mid-1990s, Finland's economy grew faster than that of most European countries, while its unemployment rate fell from 17 percent in 1994 to 9 percent in 2001.

Finland's rapid productive recovery of 1990s was caused by a swift economic structural change. Assisted by a depreciated currency that helped to get export back on track and a set of technology-oriented government policies, Finland made a giant leap from being a resources-based economy to a knowledge-based economy. The country's spirit of innovation, most notably the communication and technology sectors, played a big role, as Nokia, Kone, and others became global industry leaders.

"To succeed in today's world, you have to be creative." Mr Rajakangas said, insisting that innovation should not be confined to laboratories, but should be used in every process of production, including design, manufacturing, marketing, and service.

Finland is by no means the only economy that succeeded through structural economic changes. Hong Kong had excelled as first a manufacturing centre then a financial centre, and now the city is expanding its knowledge-based industries to focus on innovation.

This is why Mr Rajakangas believes Finland and Hong Kong will benefit from a growing partnership - in building environmentally sustainable and knowledge-based economies, and the two sides could and should be doing more together.

There is already a healthy trading relationship between Finland and Hong Kong. One fifth of Finland's trade was with China in 2008, and HK$10.8 billion (US$1.4 billion) worth of goods, or 18.0% of the total, was through HK. "Hong Kong is an important trading partner to Finland." said Mr Rajakangas, who expects further cooperation between the two economies in innovation and creative industries.

In addition to trade, the Finland Consulate General in Hong Kong has also brought Finland's spirit of innovation to the city through cultural activities, such as the recent programme called Finland Appetizers as the first step in this area. Finland Appetizers will feature Finnish music and art performances, as well as exhibitions.

"We need to keep exchanging ideas to learn from each other and have more exchange activities, such as students," said Mr Rajakangas, who 'as a veteran hiker' knows the city well. "Hong Kong definitely has the conditions to be successful in building its knowledge-based economy. With capital, innovation, productive capacity, I can say Hong Kong's future will be prosperous," he predicted.

(HK Edition 12/04/2009 page3)