Many are taking advantage of Southeast Asia’s booming consumer market and the Finns, too, are catching on this trend. Riku Mäkelä, Counsellor (Trade & Innovation Affairs) from the Embassy of Finland in Singapore, shares the next steps for Finland’s business and trade development in the region.
Mr Riku Mäkelä, Counsellor (Trade and Innovation Affairs), Embassy of Finland in Singapore.
PFA: Finland’s forestry practice is over 400 years old and 70 per cent of the country is forested. It is also well-known for its resource efficiency, sustainable forestry practices and using wood for a wide variety of purposes. What promise does Asia hold in the development of trade in this area?
RM: Indeed, in Finland we have a track record of managing our resources very well, as well as creating value-added products from the forest. It makes business sense and is more sustainable in the long run.
Our experts train forest-related agencies and experts in emerging countries. In Southeast Asia, I am aware that this is happening in Indonesia and Vietnam, where some of our people are extending their knowledge to local authorities to help them understand sustainable practices in forestry and construction.
Vietnam has been one of the main beneficiaries of Finnish foreign aid for the last 45 years. This aid will end next year as the country is now considered a middle-income country. We are going to focus on cultivating business relations after next year.
One of our collaborations with the Vietnam government is a forest resource management information system jointly funded by both countries. We are developing a database for managing all forest resources in Vietnam. This is a crucial part of sustainable practices because you first need to know what resources are available, where and who owns them. Only then can you start optimising them. This system is coming up soon. It is in its pilot phase now and should be fully operational next year.
PFA: Finland is also known for its sustainable approach and long-term vision in building urban landscapes that last for decades. What are some possible products you can offer to the region?
RM: We have several IT companies that sell their software services and tools for the building and construction industry. They are leading evangelists on using digital tools such as BIM technology to plan, manage and implement projects. BIM is great for managing information throughout the life-cycle of the building—from the first planning to final demolition. In Finland, our houses are built to last for 100 years; 30 years later, you can still find everything you need in the programme.
This software can also be used to submit, process and issue building and construction permits. Singapore is going to build a similar service and may buy this from a Finnish company.
PFA: On that note, how and why did Southeast Asia become an important focal point for trade expansion?
RM: If we consider the late 1990s to early 2000s, China was the big thing for Finland as it was for other countries. In a few years, hundreds of companies went over to open offices. Then in the mid-2000s, India became the next big thing. Before 2005, there were 30 Finnish companies registered there. In two years, the number tripled to 110.
Similar things are happening in Southeast Asia right now. The region is recognised as the growth engine of the world, with a huge young population and access to a middle-class market. Amid the global economic slowdown, Southeast Asia still looks promising in terms of GDP growth. It is the only region that can still register 4 – 7 per cent GDP growth annually.
PFA: What are your plans to develop this market?
RM: Singapore is the answer. As a regional hub for many sectors, it makes sense for us to begin with this country, build business connections here and move on to other countries. Some of the main reasons for this is that it is corruption-free, easy to do business, has a well-functioning government and favourable incentives for foreign businesses. There is a sizeable domestic market here too. It has the same population as Finland too—five million; it is a size many Finns understand.
At the moment, many Finnish companies are interested in Singapore. Some months ago, my ambassador and I visited Finland and met 59 companies, all of which were interested in expanding operations in Southeast Asia.
Many of the bigger companies already have an established office here and Singapore is the regional hub for their activities. There are also about 140 SMEs and start-ups here. Some of them have been here for 50 years. The increase over the years has been steady but in the past two years, the figures have just accelerated.
To develop joint innovation and business opportunities, we focused on smart nation-related topics. This includes technologies for construction and buildings.
This year is Finland’s 100th year of independence. To celebrate, we have put in a lot of effort in building more collaboration opportunities globally. This year has been a really good one for business relations between Singapore and Finland.
We have seen fast growth in interests from Finnish companies towards Singapore’s know-how and as an investment destination, and vice versa. We will continue to foster these opportunities to build bridges between both countries, and through this, between EU and ASEAN.
Kamppi Chapel in Helsinki is a stunning example of Finnish wood design and construction. This knowledge is one of the many Finland is keen to offer to Singapore and the region. Photo credit: Marko Huttunen/ Tuomas Uusheimo
PFA: Singapore and Finland have established relations since 1973. How will this relationship evolve in future?
RM: Both of us have decided to be more active in connecting our people. Singapore is keen to explore solutions and build sustainable models for the country’s long-term growth. It has studied best practices from other countries and Finland is one of them.
In the past we were only selling but now we are also keen to buy Singapore-made solutions. You are looking at equal partnerships for creating products and services for the rest of the world.
There are a lot of investments in product innovation and business creation in all sectors imaginable: oil and gas, software, building and construction, healthcare and medical technology. In healthcare for instance, there are strong public-private partnerships in Finland using genomics and other data from the population for research purposes. These organisations are looking to Singapore to develop further partnerships. We have a lot to expect from these developments.
PFA: How else can both parties value-add this relationship?
RM: Ideally, we would love to sign Memorandums of Understanding. But government-level partnerships can only realistically work out if private companies and research groups are keen and committed to follow through on their vision. The MOUs would then help them secure partnerships with the relevant government agencies and support these private sector developments.
Firstly, we can lead by demonstrating where the opportunities lie, by engaging companies and getting a sense of what their needs and interests are. For example, two years ago, we discovered opportunities in shipping here. (Two of the world’s leading crane manufacturers for ports are from Finland.) Discussions came about but we didn’t find strong enough interest at that point in time.
Now, the shipping sector is interested to explore strategic partnerships for autonomous ships and automatic shipping logistics in the next few decades. There are big budgets to support such research.
If there is enough interest, we are more than happy to sign MOUs to move things along. It is a bottom-up and top-down approach at the same time so everyone meets in the middle.
This article was first published in Panels & Furniture Asia (Nov/Dec 2017)