There are some interesting political/business undercurrents in the Scandinavian/Baltic region, that are accelerating at the moment. 11 metropolii (inc. Warsaw and St P) are working together to finance continued full welfare-based approaches to society (there is some diversity, but v. small in comparison to, say, US or UK) by a concerted effort to attract FDI.

In order to be strong in the European and global scale, Baltic Metropolises have to be prepared to take an active role in the development of the innovation area which goes well beyond their national boundaries. Therefore, the Baltic Metropolises have started to build up a closely networked "Archipelago of Innovation". The BaltMet Inno project has pooled a diversity of competences by bringing together cities, regional development agencies, universities and science parks for closer innovation policy co-operation.

Baltic Metropolises - Pool of Potentials

• Baltic Metropolises*, together with the surrounding areas, are home to 21 million inhabitants ? every fourth citizen of the Baltic Sea Region
  
• The joint annual GDP of the 11 cities is approx. EUR 400 billion
  
• There are 92 universities, 145 polytechnics, university colleges and academies with a total number of students and academic staff of 1.3 million
  
• Every fourth inhabitant has attained higher education
  
• There are 86 science and research centres; over EUR 20 billion is invested in research and development annually (47% of the total R&D input of the Baltic Sea Region)
  
• The total budget spending of the metropolises was EUR 43 billion in 2006

*Baltic Metropolises: Berlin, Copenhagen, Helsinki, Malmö, Oslo, Riga, St. Petersburg, Stockholm, Tallinn, Vilnius, Warsaw

Of course the Nordic welfare system is expensive, and taxes are already high. Added to this Finnish nurses recently won a 10%+ wage increase, and striking Finnish pharmacists settled with 12% yesterday. There was much public support. Then we have to add in the Bulge of retirement peaking in 2010, and low birth rates.

The BaltMet Inno project is an attempt to finance all this with a better creative innovation and entrepreneurship infrastructure, rather than cut down on social services or put pressure on wages.

The key is state and corporate R&D investment. I am not sure about figures for the other countries (except for Sweden and Norway), but Finland invests 3.4% of GDP. In the past, a high proportion of Finnish R&D investment was state-sourced (ie via taxes and propitious use of EU funding), but now that a culture and infrastucture of innovation has been established, it is easier to draw in corporate investment.

The availabilty of a skilled and literate workforce is one of the pillars to this strategy. Brains are, perhaps, the most sustainable resource we have. But you don't get brains without education, and you don't keep brains without a good balance of reward and quality of life.

You can't be me, I'm taken