Learning from the Finnish article

This may take innovation from cold climate concerns to the depths of uncoolness, but it is a serious proposition for development into every teenage boy's plaything on his X Box or equivalent.

"It's more Deep Purple than Segovia," says one of those behind the start-up company, which has to be "born global" to survive.

Take also the timber industry, which dominates Finland's culture as well as its geography. Here is a telling difference with Scotland: one country lets foreign countries operate their know-how on its raw materials, while the other has its own innovative, outward-looking companies finding new ways to lead the world in wood products.

Finns are developing intelligent packaging, for instance, able to tell you when your sandwich has gone off, or how long that chicken has been frozen. Or one day microchips could be embedded in your copy of The Herald, capable of downloading data on to a format you can fold and put in your pocket.

Finland buzzes with talk of research, development and, increasingly, innovation. It trails only Israel and Sweden in its spend on research and development. That is 3.5% of gross domestic product, or a colossal e5.4bn (£3.7bn), 60% of it in electronics. That is because the government invests generously with grants through Takes, its R&D arm - doling out half-a-billion euros in grants to business and universities this year, rather than bamboozling finance directors with Chancellor of the Exchequer Gordon Brown's tax credits. The target is to reach 4% of GDP by 2010, requir- ing 7% annual growth in government support.

Nokia, the telecoms giant built rapidly out of a welly boot manufacturer when Finland fell upon very hard times 15 years ago, is a large part of the story. It is a colossus of the Finnish economy, drawing on roughly 25,000 supplier and feeder companies, and responsible for between 33 and 40% of that R&D spend.

For all those who say that Scotland needs a global company like Nokia, be careful what you wish for. On a trip to Helsinki earlier this month, it quickly became apparent that the Finnish economy is over-dependent on one company, and the manufacturing that accompanies it is fast moving to lower-cost locations.

In any case, while Scotland has been looking enviously to Nokia, at least one Edinburgh finance house has been going successfully global. And the Helsinki government is looking enviously at countries that have cracked the service sector that way.

Finland, for all its astonishing success in digging out of deep recession when its neighbouring Soviet trading partner collapsed, is facing some big challenges. Its economy and climate equal high energy needs, and it has opted to go nuclear to avoid over-dependence on Russia. It is exposed in its dependence on manufacturing, both in wood products and electronics, and unemployment is high. Having taken an impressive lead in telecoms, it finds it a bracing and fast-moving sector in which to stay ahead.

But instead of facing globalisation with despondency, the national character offers a level-headed response. There is a strong consensus around what has to be done, including investment in education and high levels of trust in the government and its agencies to make the right policy decisions.

Then there is a determined collective effort. At present, that is going into a shift from the emphasis on manufacturing-orientated R&D towards a stress on innova-tion across every sector, including business processes. Hence, it is not enough for Kone to make elevators: the next floor up requires servicing them in innovative ways. It has been suggested that public procurement should be linked to a company's proven commitment to innovate.

Finns achieve this collective effort through a strong alliance of government, business and unions, with business organisations apparently more focussed on spreading the innovation mantra to their membership than on their role in Britain of lobbying government and complaining.

The populace pick up the message. When the government tells them to become an information society, they oblige. "Almost everyone uses mobile phones," says a senior government official.

"It's one of our traditions in Finland."

Finns share with Scotland a demographic challenge, and are preparing themselves for the novelty and challenge of significant immigration. Meanwhile, they encourage their young people to leave, confident that Finland's Good Life will bring them back: "Other countries are concerned about a brain drain," says one business leader. "We're not. We want to emphasise mobility, as that will help networks and connections."

Their exceptional language gives them cohesion, but also barriers. It is harder to network academics internationally, and they recognise they have work to do there. So too with a lack of entrepreneurial flair, where people have traditionally depended on manufacturing wage packets.

So this is not a business nirvana, simply because it gave birth to Nokia, has superb R&D levels, and heads competitiveness league tables. It can envy Scotland's energy resource, university base and finance sector successes. But what Scots can learn from Finland is a capacity for strategic foresight and the follow through of collective action. That takes a political system that can handle unpalatable truths.

A recent report on globalisation from the prime minister's office in Helsinki makes extraordinary reading by British standards, for its lack of self-congratulation and frank addressing of difficult issues.

The goal, it says, is to achieve the efficiency necessary to survive the globalising forces while retaining the social equality prized highly by Scandanavians: "What is essential is the ability to accept unavoidable changes, a readiness to reconsider established practices, willingness to support the adjustment of those hit hardest by the changes, and open-minded exploitation of any new opportunities that arise".