The Nordic model has performed well so far. Now, a new chapter in the history of the model is being written according to current global challenges. Is it sustainable in the long term? Now would be a perfect opportunity to design and implement true reforms that move Finland as a whole towards becoming more of an agile nation.
Deloitte recently published a report on the future of the Nordic social welfare state for which I had the opportunity to perform some of the ground work through interviewing several eminent business leaders here in Finland. As the analysis for the work was done “pre-corona”, I wanted to spend some time reflecting how the insights arising from my own discussions, and our analysis more broadly, are impacted with the current situation. Following are my own opinions and they centre on Finland. Please challenge as you see fit!
First and foremost I believe we are living in as good a place as one can be at the moment. The many strengths of the Nordic model are now evident and we are reaping the benefits arising from universal, strong healthcare that can cope with the pressures of the pandemic; transparent governance that is informed by science; education system that builds people up to distinguish rational arguments; freedom of the press that keeps us as the citizens informed and the decision makers honest; all backed up by stability of the society built on egalitarian values and funded by wealth distributing taxation. Now all these have room for enhancement, but in the grand scheme of things, above are true assets for us and something we can be proud of.
The Nordic model is however facing challenges as reported in our report and there are actions that need to be taken. In the COVID situation, some actions are vital for us to bounce back to recovery and some could turn into real opportunities that would allow us to thrive even better in the future. I have highlighted two examples of these that I believe are crucial for Finland in particular.
Building societal agility
COVID’s initial impact to consumption and its eventual repercussions across the whole economy will stress test many of our companies to the very limit and push some over the edge. Situation will also brutally expose some of the well known structural issues in our society that also concerned the CEOs we interviewed as part of our Nordic study. A key constraint they voiced for our future prosperity was the rigidity of political, regulatory and labour environment that hindered Finland’s position in the global game of nations where we compete for business, investment and talent. COVID exacerbates this.
The ability to rapidly innovate new services, adjust operations and flex cost structure in response to changing demand are all key coping mechanisms that enterprises need to apply.
Government’s actions to create elasticity as a temporal remedy were a much needed and required decision, but as we consultants like to say, real sustainable impact requires transformative changes. Whilst tactical recovery is important, we must ensure our decision making horizon is long enough and also considers strategic actions that truly address the root cause issues of our society.
Now would be a perfect opportunity to design and implement true reforms that move Finland as a whole towards becoming more of an agile nation.
Examples include business specific agreements on labour terms founded on the principle of supply and demand; policies that activate and drive contribution from the whole population; streamlined process to hire global talent to Finland; and public sector transformations that enhance productivity in a citizen centric manner. All these have been much debated over the years, now would be a perfect time to take action.
Climate agenda as competitive advantage
Whilst the pandemic triggered our survival instincts in both literal and economic sense, we must ensure other priority agendas are not forgotten – climate change being a key example and a topic that our Nordic welfare state report highlights as a key focus area for all Nordic nations also in the “old normal”. At the time of corona, it is more important than ever that we approach this critical issue as a source of competitive advantage rather than as a barrier for recovery or growth.
We should double down on our efforts on innovations that result in products and services that differentiate on the basis of their sustainability and shape the regulatory environment to be such that it incentivises enterprises operating in this manner.
Companies also need to ensure they can clearly articulate and communicate this aspect of their offerings to their customers (and regulators) to ensure they appreciate this value proposition and in turn allows companies to reap the rewards of their investments. In Finland, our world leading heritage forestry and fossil fuel companies, come bioindustry, renewable material and circular economy enterprises, are great examples of corporations already on this path. It is crucial that our national decision making fosters an environment where these established companies and the new starts ups who truly seek to differentiate on climate can flourish and ultimately via that continue to make their vital contribution to funding our welfare state. A simple ask from business leaders is to ensure decisions (also) with respect to environment are based on facts over emotions.
So I conclude in the same vein as I started. The very fundamentals of our Nordic societies are strengths that serve us well also in the time of a pandemic. It is also clear that the Nordic welfare model does face challenges that must be addressed.
A positive end note is that it was striking to me that the non-Finns I spoke with saw a positive balancing force to the challenges we face in areas that us locals often take for granted.
As an example, the basic luxuries of space, clean nature, location, education, safety and political stability, if managed correctly, were deemed as considerable draws for both high value residents and tourism with climate change acting as a positive catalyst. As someone who has now spent nearly a decade back in Finland after more than a decade abroad, this is a good reminder that even at current time when the negatives can start to overwhelm the positives, we do live in a place of an opportunity. We just need to make sure we take it.
JP Suortti vastaa Deloitten konsultointiliiketoiminnasta Suomessa ja hän toimii myös teknologia-, media- ja telekommunikaatio (TMT) konsultoinnin toimialajohtajana Pohjoismaissa. Hänellä on lähes 20 vuoden konsultointikokemus ja hänen erikoisalaansa ovat yrityksen ylimmän johdon ja hallitusten neuvonanto liiketoiminnan transformaatioihin liittyen. JPn ydinosaamiseen kuuluvat digistrategiat, toimintamallien kehitys ja käyttöönotto, yritysarkkitehtuuri, monimutkaisten muutosohjelmien johtaminen ja teknologiatransformaatiot. Hänen asiakkaisiinsa kuuluvat muun muassa johtavat mediayritykset, kustantajat, studiot, tietopalveluiden tarjoajat, operaattorit sekä verkkolaitteistojen ja välineiden valmistajat Euroopassa, Yhdysvalloissa ja Aasiassa. Briefly in English: JP Suortti is a Partner leading Deloitte’s Consulting business in Finland and our Technology, Media and Telecommunications Consulting in the Nordics. He has over almost 20 years of consulting experience and he specialises in advising CXOs and boards on enterprise-level business and digital transformations. His core competencies include digital strategy, operating model development and implementation, enterprise architecture, leadership of complex change programmes and technology transformations.