Research Nation: A Visit to Finland, Part2
Jerry Laiserin

Finland, perhaps more so than any other country on the planet, has taken to heart sociologist Manuel Castell's "world of flows" thesis regarding the information society (brilliantly expounded in his 1996-1998 trilogy The Information Age: Economy, Society,and Culture). If intellectual capital, social capital and financial capital can flow freely around the globe in search of maximal returns, how does a country of just five million souls create and sustain competitive advantage? Finland has chosen a course of carefully targeted and highly leveraged research, development and commercialization in select economic clusters—especially the "real estate cluster" (including design, construction, facility management, and asset/property management). The real estate cluster accounts for 70% of Finland's national (capital) assets and 20% of the country's employment. However, through projects such as Healthy Building, REMbrand, ProBuild and Vera, Finland is setting its sights on design and construction opportunities far beyond its own borders.

In Issue Ten we looked at TEKES, the Finnish National Technology Agency and some of its important funding initiatives. This look included the Vera Project, with VTT, the Technical Research Centre of Finland handling the principal investigative duties. Vera may have the most global implications among all Finnish AEC R&D efforts, because the prime target of the Vera project is helping every member of the building team migrate towards electronic exchange of digital information and away from physical exchange of paper-based information. Even as the research and pilot programs of the Vera project wind down, major players throughout the Finnish real estate cluster are starting to standardize on the underlying modeling, simulation and interoperability protocols that make true digital information exchange possible. Recognizing the competitive disadvantage inherent in the small size of their geographic/domestic market, the Finns have assiduously linked their efforts to comparable work in Japan, Singapore, the USA and elsewhere in the hope of achieving that critical mass that triggers "first-mover advantage" and "network effects" (in a world of flows, ever more resources will be attracted to the first solution that attracts significant resources—a self-sustaining virtuous circle).

Vera is not the only Finnish real estate cluster initiative with global implications. ProBuild, a 1997-2001 Tekes/VTT program for progressive building, focused on process issues rather than the more commercially accessible product issues. Much of the international effort in AEC software has emphasized buildings and their components as products to be analyzed and modeled in design software tools such as CAD, structural analysis or energy simulation. While these efforts are essential, they overlook the considerable leverage to be gained through improvements to the processes by which buildings as products are created. Specifically, ProBuild's R&D efforts focused on process issues surrounding:

> needs and requirements definition and decision-making on behalf of building owners
> procurement methods for project management, design and construction (e.g., sourcing, estimating, bidding or tendering, and contracting for services)
> implementation concerns—from procurement to partnering
> and quality requirements, criteria and feedback systems.

In effect, ProBuild looked at the end-to-end design and construction cycle as an opportunity for process improvement through process (re-)definition, rather than as a typical CAD-centric approach involving a succession of product phases.

The Healthy Building program of 1998-2002, under the auspices of Tekes and the Finnish Real Estate Federation, addresses four key areas of indoor climate and quality:

> services and business operations intended to make healthy indoor air quality (IAQ) a competitive advantage
> classification of ventilation and building technologies on the basis of cleanliness
> finding solutions for moisture and mold problems
> and identification and promotion of low-emissions building materials.

Real estate management services are the subject of the 1999-2003 RemBrand technology program, funded by Tekes and led by the Finnish Association of Building Owners and Construction Clients. RemBrand aims to "promote the Finnish real estate and construction sector by focusing on the services it provides." While this may not sound like a significant technological development, RemBrand promotes a customer-oriented service concept of construction and real estate rather than the more globally typical product perspective. Where traditional construction and real estate services are seen as part of the product (the building), RemBrand attempts to create value through customer-oriented concepts that make the product (or building) part of the service. In what B. Joseph Pine II and James H. Gilmore have called the "experience economy" (in their book of the same name), people no longer buy things but instead buy experiences. Thus, music lovers do not consume a concert hall building as a product that contains the concert service; they consume the experience of the concert, in which the concert hall/building product is part of the experiential service. Because the same principles would apply to every other building/product and the corresponding experience/service anywhere in the world, RemBrand's explicit technological objectives are to:

> "raise the standards...offered by the Finnish real estate sector to the same level as in the leading countries of the world"
> "increase and diversify market services in the real estate sector"
> and "create the ability to export [Finnish] real estate know-how" (emphasis added).

This last point, the ability to export Finnish know-how is the key to Finland's strivings towards long-term competitive advantage. While the rest of the world remains focused on a product-oriented "know-what" view of information, Finnish R&D efforts are accelerating into a service/process-oriented know-how view of information. In future issues we will look at commercialization of Finnish know-how for potential export in software by Granlund and Enterprixe.

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