How New Zealand can catch up with Finland’s economy

Finland’s Prime Minister Sanna Marin has offered advice on how New Zealand can emulate her country’s high-tech, high-income economy.

She was in the country earlier this week as part of a business delegation that included representatives from the likes of Nokia and Kone Corporation.

Finland has lower income inequality than New Zealand as measured by the GINI coefficient and performs better on GDP per capita and the Human Development Index.

And in contrast to Finland’s export profile of electronics and finished goods, New Zealand’s exports are dominated by basic industries.

In an exclusive interview, PM Sanna Marin told Q+A with Jack Tame that the secret of their success is their commitment to education, research and development and that the issue has been taken out of the politics of the day.

“In fact, together with the opposition parties, we are now pursuing the goal of increasing our R&D investments to 4% by 2030. So that’s a very lofty, ambitious goal,” said Marin.

She said this includes the private sector and “the government will only provide a third of the investment funds and two-thirds will come from the private sector”.

However, Marin warned countries to be careful about who they trade with, particularly China – New Zealand’s largest trading partner.

“We will see in the future that technology and the digital environment will only be more in our societies than it is now and we need to make sure that we don’t have these kinds of dependencies that become vulnerabilities and risks that will materialize.

“So we have to make sure that we have different trade routes, that we have democratic partners to trade with, that we have the capabilities to make semiconductor chips, for example — all the critical infrastructure that we need in our digital societies,” he said marine

She said the Russian invasion of Ukraine highlighted the risks of association with authoritarian regimes.

“As Europeans, we are too dependent on Russian energy, and we cannot be so dependent on new technologies and digital infrastructure when it comes to authoritarian countries. We can’t be that vulnerable.”