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.fiFinland, whose economy was traditionallybased on heavy industry and forestry, hasbecome a leader in the Networked Worldin recent years, ranking third overall int he Networked Readiness I ndex. Fin landsstrength in economic competitiveness (asreflected in its number one ranking in thisyears Global Competitiveness Index) isdeeply intertwined with the nationssuccess in deploying and using informa-t ion and communicat ion t echnologies.

Finlands strengths are evident in itsextremely well developed informationinf rast ructure, high-qualit y workforce,effective policy environment, and sophisti-cated use of ICTs. The Finnish ICT industryis so large and globally influential thatFinlands high-technology exports exceedimports, a unique phenomenon for anOECD count ry.

Although Finlands commercial ICT successis often connected to the rise of telecom-

munications equipment manufacturerNokia, it can also be traced to long-term,intense investment in national informationinfrastructure (Ranking in InformationInfrastructure micro-index: 1), and in ICT-oriented public education programs. As acountry that once was home to hundredsof telephone companies in the 1920s,Finland has a history of building out infor-mation infrastructure to connect itsgeographically dispersed population. Themodern telecommunications industry hasbeen progressively deregulated since 1985,and the resulting competition has

spawned some of the lowest network oper-ating costs in the world (Ranking in Effectof Telecommunications Competition: 1).There are robust broadband, mobile, anddigital backbone networks throughout thecountry (Ranking in Availability ofBroadband: 1).

In addition to a high penetration ofInternet access in households and work-places, Finland has a well developed infra-structure for public access t o t he I nternet(PIAP) via libraries and other public places

(Ranking in Public Access to the Internet:2). Between 1995 and 1999, the govern-ment provided almost US$250,000 per yearper village for rural areas to subsidize ICTequipment and personnel.1 When consid-ered together with regional programs suchas Tietotupa(information huts), whichprovide communal access to the Internetand other technologies, an expansivesystem of access is evident throughoutFinland.2 The government has stressed theimportance of its Information Strategy forEducation and Research 20002004,created to provide ICT access and literacytraining for those in need, with prioritygiven to the poor and minority groups. 3

All Finnish schools are connected to theInternet (Ranking in Internet Access inSchools: 1). These networked schools offeronline administrat ive funct ions such ascourse enrollment and grading as well asonline classes and t utorials at t he highschool and university levels. Computer

facilities for games and learning are evenprovided in public daycare and preschoolfacilities.

Finland is also a leader in e-commerce(Ranking in e-Commerce micro-index: 2).The financial services industry imple-mented advanced payment, security, andverification internal IT systems in theearly 1990s, enabling Finnish banks to beamong the first in the world to offeronline and mobile banking. ThoughFinnish consumers have been slower toadopt e-commerce for business and retail,

evidence of the nations ICT sophisticationcan be found in car washes and sodamachines paid via mobile phone. Onlineservices are now used widely, and bankingand information transfer remain thelargest segments of e-commerce for bothbusinesses and consumers.

The exceptionally welleducated workforce andnational dependence on IT,particularly communica-tions technologies, havecreated a virtuous cycle ofICT development in

Finland.Finnish softw are developer

Rare use of authentica-tion techniques hashurt e-commerce. Thetechniques exist, but arenot w idely used inFinland.Finnish communications manager

CountryProfiles

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FinlandPopulation 5,176,000

Rural population (% of total population) 1999 33.28 %

GDP per capita (PPP) US$24,864

Global Competitiveness Index Ranking, 20012002 1

UNDP Human Development Index Ranking, 2001 (adjusted to GITR sample) 10

Main telephone lines per 100 inhabitants 54.69

Telephone faults per 100 main telephone lines 8.40

Internet hosts per 10,000 inhabitants 1022.53

Personal computers per 100 inhabitant s 39.61

Piracy rate 29.00 %

Percent of PCs connected to Internet 25.82 %

Internet users per host 3.64

Internet users per 100 inhabitants 37.23

Cell phone subscribers per 100 inhabitants 72.64

Average month ly cost for 20 hours of Internet access US$7.26

Netw orked Economy

e-Commerce

e-Government

General Infrastructure

RANK

Network Access

Information Infrastructure

Hardware, Software, and Support

Network Policy

Business and Economic Environment

ICT Policy

Netw orked Society

Networked Learning

ICT Opportunit ies

Social Capital

3

3

1

2

1

3

2

2

1

1

1

2

1

3

2

2

6

Network Use component index

Enabling Factors component index

Networked Readiness Index

Key Facts