in demand. at the same time, estimates indicate that the return on investment in education has remained high, implying that the demand for educated labour has kept pace with the rapid increase in supply. investment in research and development a very important feature of the finnish “ miracle ” of the 1990 ’ s and thereafter has been the spectacular rise of the ict industry, especially mobile telephony. the large share of the ict sector in finnish exports and the economy as a whole explains an important part of the country ’ s rapid productivity growth since the 1990s. the rise of the finnish ict sector has attracted a lot of attention from many countries and governments which would like to enjoy a similar positive transformation. an important milestone in the rise of the ict cluster was the early liberalisation of the telecommunication sector in finland, which heightened competition, drove prices down, and led to the growth of mass markets for wireless communication, providing a test laboratory for the equipment industry. standardisation among the nordic countries, in particular the common nordic nmt standard of mobile telephony, gave an early start for the internationalisation of the mobile telecommunication industry. the later gsm standard was a result of a european research and standardisation effort, and opening of the telecom market in europe gave access to new entrants in telecom services. as a consequence, integrated and technologically advanced mass market for wireless communication was created in the whole of europe. as early starters, the nordic telecom equipment manufacturers were well positioned to respond to the growing demand. a necessary condition for success is that there has been in finland, at least since the 1980s, a consistent commitment by decision makers, private and public, to foster an innovation - driven economy. successive governments have invested in a lot research and development. as a result, the total research and development expenditure in finland is 3. 5 % of gdp, highest in europe after sweden, and higher than in the united states. the government has contributed a third of the total while private sector has answered for two thirds of the finnish r & d outlays. an important part of the research has focused on the ict. public agencies, foundations and universities have promoted open r & d cooperation with private companies. finland and the finnish companies have also been active participants in eu research programs. the ict sector is not the only one to improve its productivity in a big way, however. banking is another industry worth of attention. it is actually a lesson on the connection of competition with productivity. finland had a major banking crisis in

" the condition of the monetary system of a nation is a symptom of all its conditions. " ] – what schumpeter said about a nation, goes today as well for europe as a whole, for our economic and monetary union. what happens to our money, is a reflection of the state of our union and its economy. so we have to take a broad view. monetary policy has its own mandate in economic life, but it cannot solve all the world ’ s problems. however, monetary policy and economic success are interdependent : price stability is a necessary condition, although not a guarantee, for sound economic development. simultaneously, the real economy together with political developments determines the preconditions for successful monetary policy. as schumpeter understood, if the economic and political fundamentals are weak, that will be felt in the monetary developments as well. the interaction of real and monetary factors brings me to the following point : central bankers are often labelled as either hawks or doves. i don ’ t see this as a very useful classification. it is almost a caricature of one - eyed dogmatism, not fitting to any serious central banker that i know of. instead, a more relevant distinction was made by the philosopher isaiah berlin, who divided policymakers to foxes and hedgehogs : “ the fox knows many things and the hedgehog knows one 1 / 5 bis central bankers'speeches big thing ”. in monetary policy, pursuing the price stability objective with long - term consistency and resolve calls for the central banker to develop a personality of the hedgehog. but monetary policy is not a mechanical exercise that can be done in a social vacuum. a strategic sense of the interplay between the economy and politics, the markets and the media is also essential – knowing when to play offensive, when to hold on to defence, and how to combine the two. by being aware of the big picture, and capable to navigate in uncertain seas, central bankers should be foxes, as well. so, monetary policy must always take into account the analysis of the prevailing situation in the real economy, in enterprises and the society at large, recognizing its challenges and how they relate to the commitment and responsibility that central banks have for monetary stability. ladies and gentlemen, our present starting point has both positive and negative features. on the positive side, the recovery of the euro area after the financial crisis has lasted for almost six years now. we should appreciate the achievements : the number of