0:00:03 > 0:00:05Look at the North Sea.
0:00:05 > 0:00:09Does it divide us from our Nordic neighbours, or connect us to them?
0:00:12 > 0:00:15The Norsemen came to Scotland a thousand years ago.
0:00:15 > 0:00:19They settled here, drawing much of Scotland into their world,
0:00:19 > 0:00:22into a single maritime community of peoples
0:00:22 > 0:00:25gathered around the sea they shared.
0:00:26 > 0:00:29Does anything survive of that common heritage?
0:00:30 > 0:00:33Scotland has a choice to make next September.
0:00:34 > 0:00:37Should we look across the sea to our Nordic neighbours,
0:00:37 > 0:00:41to Norway and Sweden and beyond, for guidance or inspiration?
0:00:43 > 0:00:45For they have evolved a way of living
0:00:45 > 0:00:48and of governing that is the envy of much of Europe.
0:00:51 > 0:00:54That constellation of small, independent nation states
0:00:54 > 0:00:56is just across the North Sea here.
0:00:56 > 0:00:58They're often held up as an example
0:00:58 > 0:01:01of what an independent Scotland might become.
0:01:01 > 0:01:03Benign, non-belligerent, compassionate,
0:01:03 > 0:01:06socially harmonious and prosperous.
0:01:06 > 0:01:09But how much do we understand those countries?
0:01:09 > 0:01:12What can we really learn from our friends in the north?
0:01:21 > 0:01:25I was born, raised and educated in Scotland, but like many Scots,
0:01:25 > 0:01:28I left as a young man to make my career elsewhere.
0:01:28 > 0:01:32For the past 25 years, I've worked as a foreign correspondent.
0:01:32 > 0:01:35I've reported from something like 80 countries all over the world.
0:01:36 > 0:01:39Here, ethnic cleansing is almost complete.
0:01:39 > 0:01:41More than 10,000 of the 13,000 Muslims
0:01:41 > 0:01:43who used to live here have gone.
0:01:44 > 0:01:47It is a war we can see and hear only from a distance.
0:01:47 > 0:01:50The refugee camp is Rwanda, the volcano is in Zaire.
0:01:50 > 0:01:52Between them, a conflict is raging.
0:01:52 > 0:01:55The Zairian government troops are on the run
0:01:55 > 0:01:57in the face of an armed Tutsi uprising.
0:01:57 > 0:02:00Boris Yeltsin leaves the stage much as he entered it,
0:02:00 > 0:02:02with a dramatic gesture
0:02:02 > 0:02:05that leaves his political opponents in bewildered disarray.
0:02:05 > 0:02:09Tonight, he becomes the first leader of this ancient nation
0:02:09 > 0:02:13to walk voluntarily out of office and into retirement.
0:02:14 > 0:02:16This is one of the most sensitive parts of the city.
0:02:16 > 0:02:19The American embassy is just a little way down the road
0:02:19 > 0:02:21and there's a big American military base there,
0:02:21 > 0:02:23but the target on this occasion was a moving target,
0:02:23 > 0:02:27a convoy of Italian vehicles coming from the airport into the city.
0:02:27 > 0:02:30You can see from here that one vehicle in particular
0:02:30 > 0:02:32has taken the full force of the blast.
0:02:34 > 0:02:36I've watched nations torn apart,
0:02:36 > 0:02:39but I've also seen others born, or reborn,
0:02:39 > 0:02:42and take their place in a changing world.
0:02:42 > 0:02:45I've watched old certainties collapse,
0:02:45 > 0:02:48and once secure identities alter and shift.
0:02:51 > 0:02:55Many in the pro-independence camp point to the so-called Nordic model
0:02:55 > 0:02:58as an alternative vision for Scotland.
0:02:58 > 0:02:59I'm intrigued by that
0:02:59 > 0:03:02but, as a foreign correspondent, I'm bound to be sceptical too.
0:03:06 > 0:03:09We'll point to the initiatives taken
0:03:09 > 0:03:13by many of our neighbours and friends in Scandinavia
0:03:13 > 0:03:14who've managed to build
0:03:14 > 0:03:18both more prosperous and more equal societies.
0:03:18 > 0:03:21There are a range of issues with the Scandinavian countries
0:03:21 > 0:03:23that we can learn from
0:03:23 > 0:03:26and, indeed, a range of links that we have in cultural terms.
0:03:29 > 0:03:31What's happening here?
0:03:31 > 0:03:34What is it about the Nordic nations
0:03:34 > 0:03:37that has seized so many of our politicians?
0:03:37 > 0:03:39I think, in the Scottish dialogue,
0:03:39 > 0:03:41the Nordic model is not one that would be understood
0:03:41 > 0:03:43in any of the Scandinavian countries.
0:03:43 > 0:03:45I think it's an ideal.
0:03:45 > 0:03:47I think it's all about an understanding
0:03:47 > 0:03:49of where Scotland might be
0:03:49 > 0:03:52in terms of a very progressive left-of-centre polity
0:03:52 > 0:03:55in which they've dealt with all their social problems
0:03:55 > 0:03:58and, essentially, a very caring society.
0:03:58 > 0:04:01I think we're failing to understand that the Nordic model
0:04:01 > 0:04:03isn't really one model - it's a series of models.
0:04:03 > 0:04:05Each of the different countries is different
0:04:05 > 0:04:08and, actually, they still have some significant problems.
0:04:08 > 0:04:10They've got problems with regard to immigration,
0:04:10 > 0:04:13with regard to unemployment, with regard to the welfare state,
0:04:13 > 0:04:16they're operating in a global economy.
0:04:16 > 0:04:17All the difficulties and challenges
0:04:17 > 0:04:19that would face Scotland or anywhere else
0:04:19 > 0:04:23are being faced there, and difficult choices are having to be made.
0:04:25 > 0:04:26The Nordic model appeals, above all,
0:04:26 > 0:04:29to those on the pro-independence left,
0:04:29 > 0:04:32who admire the apparent social equality
0:04:32 > 0:04:34of the Scandinavian countries.
0:04:34 > 0:04:37The Nordic model is just a basic change in philosophy
0:04:37 > 0:04:39of how you organise society and the economy,
0:04:39 > 0:04:41and particularly the economy.
0:04:41 > 0:04:42It's always worked on the basis
0:04:42 > 0:04:45that you should be seeking to produce a high-wage economy
0:04:45 > 0:04:47based on highly productive enterprise,
0:04:47 > 0:04:50and that you use the resource from that,
0:04:50 > 0:04:51you use the money that that generates,
0:04:51 > 0:04:55largely through tax, to create extremely strong public services.
0:04:55 > 0:04:58And so you have this chain - good economy, good jobs,
0:04:58 > 0:05:02good wages, good taxes, good public services and high social cohesion.
0:05:02 > 0:05:04It's really quite a simple model,
0:05:04 > 0:05:06and the fact that we haven't learned more from it
0:05:06 > 0:05:08seems to me to have been a terrible mistake.
0:05:08 > 0:05:11Why haven't learned from it?
0:05:11 > 0:05:14Britain is a state which I would call disorientated.
0:05:14 > 0:05:16"Orientate" means to look to the east,
0:05:16 > 0:05:18but we never look east and we never look north
0:05:18 > 0:05:20for, partly, linguistic reasons
0:05:20 > 0:05:22but, largely, for political ideological reasons,
0:05:22 > 0:05:24we take all our lessons from our west.
0:05:24 > 0:05:28We look to Washington and the US for lessons on everything that we do
0:05:28 > 0:05:31and it's a very, very strange decision to have made
0:05:31 > 0:05:33to look in that direction,
0:05:33 > 0:05:34because if we take all the things
0:05:34 > 0:05:36that people say they want from their nation,
0:05:36 > 0:05:40which tends to be security, economic security, social security,
0:05:40 > 0:05:42good public services,
0:05:42 > 0:05:44the best examples of those don't come from our west.
0:05:47 > 0:05:52And that, they argue, is consistent with Scotland's own core values -
0:05:52 > 0:05:55a small, left-leaning country on the periphery of Europe,
0:05:55 > 0:05:59with a strong commitment to welfare provision and egalitarianism.
0:06:00 > 0:06:02But is it?
0:06:02 > 0:06:05Does Scotland really have more in common with Scandinavia
0:06:05 > 0:06:07than it does with the rest of Britain?
0:06:14 > 0:06:16Helsinki. Capital of Finland.
0:06:16 > 0:06:20It was once in a union with Sweden, and then with Imperial Russia.
0:06:20 > 0:06:24As an independent state, it's doing well now.
0:06:24 > 0:06:27But it's passed through many stormy waters
0:06:27 > 0:06:29on its voyage to the success it enjoys today.
0:06:32 > 0:06:35It's a small country, population five million,
0:06:35 > 0:06:36on the northern edge of Europe.
0:06:36 > 0:06:39Sound familiar? Well, this one flies its own flag.
0:06:39 > 0:06:41It used to be the smaller partner
0:06:41 > 0:06:44in a union with a much bigger neighbour.
0:06:44 > 0:06:46It's been independent for less than 100 years,
0:06:46 > 0:06:49and in that time, it's achieved levels of prosperity
0:06:49 > 0:06:52that puts it at or near the top of most international league tables.
0:06:52 > 0:06:54I've been here before,
0:06:54 > 0:06:56and I've always been intrigued as to how they do it.
0:06:59 > 0:07:02Finland got its independence in 1917.
0:07:02 > 0:07:05Its story illustrates both the strengths and weaknesses
0:07:05 > 0:07:08of small independent states.
0:07:08 > 0:07:11During the Cold War, its economy was heavily dependent
0:07:11 > 0:07:14on trade with the old Communist bloc.
0:07:14 > 0:07:16Dangerously overdependent, in fact,
0:07:16 > 0:07:19for when the Soviet Union collapsed in 1991,
0:07:19 > 0:07:21Finland's economy collapsed with it.
0:07:24 > 0:07:28We had a number of boom years in the late 1980s
0:07:28 > 0:07:33and the prices of houses were going up like never before
0:07:33 > 0:07:36and there was a feeling that we're more or less invincible.
0:07:36 > 0:07:40And we called it the "casino years".
0:07:40 > 0:07:46And then, at the same time, we faced the collapse of the Soviet Union
0:07:46 > 0:07:49and the world economy also in relative turmoil,
0:07:49 > 0:07:52and this resulted in a large banking crisis
0:07:52 > 0:07:54and a very sudden, more or less,
0:07:54 > 0:07:57collapse of the whole Finnish economy 20 years ago.
0:07:57 > 0:08:01How did Finland start getting its way out of this crisis?
0:08:01 > 0:08:05Well, of course, it was a very slow and painful road
0:08:05 > 0:08:08and it started in the...
0:08:08 > 0:08:12And one issue that did have a big significance,
0:08:12 > 0:08:16and which is interesting from today's perspective,
0:08:16 > 0:08:20is the fact that we had also anchored the Finnish currency,
0:08:20 > 0:08:26the Finnish markka, and to have sort of a fixed rate,
0:08:26 > 0:08:32and after fighting for quite some time to keep it at a fixed rate,
0:08:32 > 0:08:35we had to give it up and let it float,
0:08:35 > 0:08:36and it devalued considerably.
0:08:36 > 0:08:40And then, slowly, we made the necessary decisions on the banks,
0:08:40 > 0:08:43we let a couple of major ones go bust.
0:08:43 > 0:08:46The ones that were left standing merged.
0:08:46 > 0:08:49So, the whole banking sector was completely renovated.
0:08:52 > 0:08:55Many small nations have this weakness.
0:08:55 > 0:08:59They rely on relatively few key economic sectors.
0:08:59 > 0:09:04The failure of just one of these can have an enormous economic impact.
0:09:04 > 0:09:07So, Finland's government had to slash public spending.
0:09:07 > 0:09:09The Finns did not riot. They did not strike.
0:09:09 > 0:09:10They did not demand
0:09:10 > 0:09:13that their government spend money it didn't have.
0:09:13 > 0:09:16And things got much, much worse before they got better.
0:09:17 > 0:09:20And key to their recovery was an asset
0:09:20 > 0:09:23that an independent Scotland would not have -
0:09:23 > 0:09:26an independent currency that could be devalued
0:09:26 > 0:09:28to boost the country's competitiveness
0:09:28 > 0:09:30in the global economy.
0:09:39 > 0:09:43PIANO PLAYS
0:09:43 > 0:09:46CHILDREN SING
0:09:51 > 0:09:54This generation, though, inherits the more prosperous Finland
0:09:54 > 0:09:57that emerged from those lean and painful years two decades ago.
0:10:00 > 0:10:03Pasi Sahlberg is the brains behind Finland's status
0:10:03 > 0:10:05as an educational world-beater.
0:10:05 > 0:10:09His country sits at the top of the international league table.
0:10:09 > 0:10:12Finns are the best educated people in the world.
0:10:12 > 0:10:14How has it pulled that off?
0:10:19 > 0:10:22We increased, significantly, the autonomy of the school,
0:10:22 > 0:10:26schools decentralised the education management,
0:10:26 > 0:10:28so that most important decisions,
0:10:28 > 0:10:31for example regarding curriculum and student assessment
0:10:31 > 0:10:32and many other things,
0:10:32 > 0:10:36were done by teachers in the local schools.
0:10:36 > 0:10:39- So, schools are highly autonomous? - You can say that's so, yes.
0:10:39 > 0:10:41And what happens if a school starts to fail?
0:10:41 > 0:10:43What do you do with failing schools?
0:10:43 > 0:10:45That's something that the government cannot do very much,
0:10:45 > 0:10:48because government has only a light hand over the management.
0:10:48 > 0:10:50But it's kind of a responsibility
0:10:50 > 0:10:53of each and every municipality and educational leader there
0:10:53 > 0:10:55to deal with those things.
0:10:55 > 0:10:57Probably the first thing that they would do
0:10:57 > 0:11:00is to go and have a serious conversation
0:11:00 > 0:11:02with the school principal and see where the issue is.
0:11:02 > 0:11:04I think Finland is more likely
0:11:04 > 0:11:07to first try to provide help and assistance,
0:11:07 > 0:11:09try to identify the issue,
0:11:09 > 0:11:11than punish and close down the school,
0:11:11 > 0:11:14as it is in many other places nowadays.
0:11:16 > 0:11:19This is a junior school in the city of Espoo
0:11:19 > 0:11:21and it's radically different from our own schools.
0:11:24 > 0:11:29The children start school at the age of seven, not five.
0:11:29 > 0:11:33They don't sit exams, or competitive tests, until they're 16.
0:11:33 > 0:11:37- The teachers and children all eat together?- Yeah.- That's good.
0:11:37 > 0:11:40- It's an educational thing...- Right.
0:11:40 > 0:11:44..that we teach them to eat with good habits.
0:11:44 > 0:11:47They call their teachers by their first names
0:11:47 > 0:11:49and there's a relaxed, informal atmosphere.
0:11:50 > 0:11:52So, what do we have here?
0:11:52 > 0:11:56- Spinach...- Spinach. - ..and potatoes and salad.
0:11:57 > 0:12:01In this school, at least, social cohesion, harmony
0:12:01 > 0:12:03and equality of opportunity are the goals.
0:12:05 > 0:12:07Tell me about the philosophy in the classroom.
0:12:07 > 0:12:10What are the priorities in the classroom?
0:12:10 > 0:12:12The first priority
0:12:12 > 0:12:17is that you must grow up as a harmonised person
0:12:17 > 0:12:20who can use his or her talents,
0:12:20 > 0:12:22and the main concept is personality,
0:12:22 > 0:12:25and so you are yourself,
0:12:25 > 0:12:28but you must also take care of other people.
0:12:29 > 0:12:32And then the results of learning and mathematics,
0:12:32 > 0:12:35they are in the second... second grade.
0:12:35 > 0:12:39So, the most important priority is not academic at all, it's social.
0:12:39 > 0:12:42Yeah, and personal grow up, yeah.
0:12:42 > 0:12:45And you put a lot of stress on mixed ability classes,
0:12:45 > 0:12:49- not separating the brighter kids from the less bright ones.- Yeah.
0:12:49 > 0:12:51And why is that?
0:12:51 > 0:12:54Because we believe that we are a stronger nation
0:12:54 > 0:12:58if we are, together, talented and not so talented.
0:12:58 > 0:13:01So, this gives also, for talented children,
0:13:01 > 0:13:04a possibility to help others.
0:13:04 > 0:13:07And do the parents of the brighter kids never come to you and say,
0:13:07 > 0:13:08"I think these mixed ability groups
0:13:08 > 0:13:10"are holding my very talented child back"?
0:13:10 > 0:13:12No. No. They under...
0:13:12 > 0:13:17I think this is quite shared opinion in Finland
0:13:17 > 0:13:20that we don't separate children.
0:13:20 > 0:13:22SHE SPEAKS IN HER OWN LANGUAGE
0:13:25 > 0:13:29Yet this country, where kids spend less time in the classroom
0:13:29 > 0:13:31and less time doing homework,
0:13:31 > 0:13:34and where there's almost no private sector schooling,
0:13:34 > 0:13:38outperforms every other country in Europe in educational attainment.
0:13:38 > 0:13:40How?
0:13:40 > 0:13:43We take it easy. We don't have tests.
0:13:43 > 0:13:44We don't have that kind of pressure,
0:13:44 > 0:13:49which is usual...which is very common in other countries.
0:13:49 > 0:13:55How important is this clear spirit of egalitarianism in the classroom?
0:13:55 > 0:13:58Yeah, it's a philosophical solution
0:13:58 > 0:14:00that every child is valuable
0:14:00 > 0:14:02and no child is left behind.
0:14:03 > 0:14:06But the nature of children is that some will be very clever
0:14:06 > 0:14:08and some will be much less clever.
0:14:08 > 0:14:11- That's true, isn't it? - Yeah, that's true. But who cares?
0:14:14 > 0:14:17THEY SING IN THEIR OWN LANGUAGE
0:14:17 > 0:14:20The Finns are getting something right in their schools.
0:14:20 > 0:14:24Pasi Sahlberg's expertise is in demand all over the world.
0:14:24 > 0:14:29Could Scotland adopt the Finnish model and achieve its success rates?
0:14:35 > 0:14:38I think that this model as it is, as you see it now, here,
0:14:38 > 0:14:39is not exportable.
0:14:39 > 0:14:41If you export the Finnish school model,
0:14:41 > 0:14:43you have to also export big part of the culture
0:14:43 > 0:14:45and the values and traditions
0:14:45 > 0:14:49and things that are happening around the school.
0:14:49 > 0:14:51Obviously, Finnish school can serve as inspiration.
0:14:51 > 0:14:54There are many aspects there in our school system
0:14:54 > 0:14:56that can help many others to, you know,
0:14:56 > 0:15:00rethink and ask good questions about, regarding their own education system.
0:15:08 > 0:15:13So, in education, Finland punches above its weight internationally.
0:15:13 > 0:15:16Its radical approach demonstrates the flexibility,
0:15:16 > 0:15:19the adaptability of small nations,
0:15:19 > 0:15:23an ability to tailor things to their own distinct needs and character,
0:15:23 > 0:15:26and Scotland already has autonomy in education.
0:15:28 > 0:15:30But the Finns, after years of pain,
0:15:30 > 0:15:33have achieved something similar with their economy.
0:15:36 > 0:15:39Finland is geographically one of the biggest countries in Europe,
0:15:39 > 0:15:42but by population, it's one of the smallest.
0:15:42 > 0:15:45Most of the country is a lot like this - covered in forest,
0:15:45 > 0:15:48all the way from here to the Arctic Circle and beyond.
0:15:48 > 0:15:51This, in fact, was the basis of their first real industry -
0:15:51 > 0:15:53wood pulp and paper manufacture.
0:15:53 > 0:15:56And that was one of the main planks of their economy
0:15:56 > 0:15:58until really quite recently.
0:15:58 > 0:16:01Finland has traditionally been dependent on
0:16:01 > 0:16:04a small and limited range of industries.
0:16:04 > 0:16:07But then, at the height of Finland's economic meltdown,
0:16:07 > 0:16:10one of those wood-pulp companies took a spectacularly
0:16:10 > 0:16:13successful leap of faith in the future.
0:16:15 > 0:16:19Nokia, for more than 100 years, had made wood pulp,
0:16:19 > 0:16:21rubber boots and electrical cable,
0:16:21 > 0:16:25hardly the stuff of the digital future and the knowledge economy.
0:16:27 > 0:16:31An early, and risky, investment in communications technology
0:16:31 > 0:16:34put it ahead of the global pack.
0:16:37 > 0:16:39At the height of its success,
0:16:39 > 0:16:42Nokia was supplying 40% of the global market.
0:16:44 > 0:16:46We got new leadership at Nokia,
0:16:46 > 0:16:50and also, we, in a way, evaluated what...
0:16:52 > 0:16:55..of all those businesses that we were involved,
0:16:55 > 0:16:58what would be the most lucrative?
0:16:58 > 0:17:02And we came to the conclusion that that would be mobile communications.
0:17:02 > 0:17:06And then, the decision was made to divest all the other businesses,
0:17:06 > 0:17:09and to concentrate on mobile communications,
0:17:09 > 0:17:11and then we... The rest is history.
0:17:11 > 0:17:16Did the government here build an entrepreneurial society?
0:17:16 > 0:17:18A more business friendly Finland?
0:17:19 > 0:17:24Well, Finland was in those days in a very, very severe crisis.
0:17:24 > 0:17:27Our GDP fell by 9%,
0:17:27 > 0:17:31and the government had to do
0:17:31 > 0:17:35quite drastic measures in order to improve the conditions.
0:17:35 > 0:17:38And one of the things was of course that there were
0:17:38 > 0:17:42severe cuts in the public expenditure but, at the same time,
0:17:42 > 0:17:44the government makes significant investments
0:17:44 > 0:17:47in research and innovation.
0:17:47 > 0:17:50At the time when the public expenditures were cut severely,
0:17:50 > 0:17:54the government decided to increase public expenditure for R & D
0:17:54 > 0:18:00by 25%, which is a huge increase, within three years.
0:18:01 > 0:18:04Understand the nature of that.
0:18:04 > 0:18:07As Finland's government was cutting public services,
0:18:07 > 0:18:10it was spending more money to help private businesses.
0:18:10 > 0:18:12But it worked.
0:18:12 > 0:18:14Nokia came to dominate Finland's economy,
0:18:14 > 0:18:18and around it grew a network of smaller companies,
0:18:18 > 0:18:20suppliers and software start-ups,
0:18:20 > 0:18:23feeding this giant of global telecommunications.
0:18:23 > 0:18:25But the phone sector is a tough one.
0:18:25 > 0:18:27The sale of Nokia to Microsoft this summer
0:18:27 > 0:18:30marked the end of the company's reign
0:18:30 > 0:18:32as the king of Finnish business.
0:18:32 > 0:18:34In the age of globalised markets,
0:18:34 > 0:18:37Finland's independence, its sovereignty,
0:18:37 > 0:18:41could not save the company that had once saved Finland itself.
0:18:41 > 0:18:46Lay-offs, globally, have been more than 10,000 people,
0:18:46 > 0:18:49and that has affected Finland in a significant way.
0:18:51 > 0:18:55But, at the same time, it's been extremely encouraging to see
0:18:55 > 0:19:00what has come as a result of those talents that have left Nokia.
0:19:00 > 0:19:03Now there are the game companies,
0:19:03 > 0:19:05there are digital service companies.
0:19:05 > 0:19:08Many other new initiatives have been launched
0:19:08 > 0:19:13as a result of Nokia's lay-offs and difficulties.
0:19:13 > 0:19:16This is one example of those new companies
0:19:16 > 0:19:18that came along in Nokia's wake.
0:19:18 > 0:19:20This is Rovio.
0:19:20 > 0:19:22What have we here, Saara?
0:19:22 > 0:19:25We have Angry Birds Space, which we launched last year,
0:19:25 > 0:19:28based on the idea that the birds and the piggies go to space.
0:19:28 > 0:19:30I'm a complete stranger to Angry Birds.
0:19:30 > 0:19:33I'm going to reveal myself now as Mr Analogue.
0:19:33 > 0:19:34Explain what I am trying to do here.
0:19:34 > 0:19:37Why am I attacking these poor pigs?
0:19:37 > 0:19:40The pigs have stolen the birds' eggs and, of course, as parents,
0:19:40 > 0:19:42- they want to get them back.- Right.
0:19:42 > 0:19:44- So I have to make this bird hit this one?- Exactly.
0:19:44 > 0:19:46- Shall I try.- Yeah.
0:19:48 > 0:19:50Bang. Got one.
0:19:50 > 0:19:52Uh-huh. That was quite easy.
0:19:52 > 0:19:55Tell me the story of Angry Birds. How did it start?
0:19:55 > 0:19:59So Angry Birds was first launched in 2009
0:19:59 > 0:20:04and back then, we were a very, very small mobile game studio
0:20:04 > 0:20:07and we spent a lot of time figuring out
0:20:07 > 0:20:10what our next game concept would be.
0:20:10 > 0:20:14And we saw the appeal of the Angry Birds' characters.
0:20:15 > 0:20:18- Shall we go up a level?- Yeah.
0:20:18 > 0:20:19- 15?- Yeah.
0:20:19 > 0:20:20What is this bird?
0:20:20 > 0:20:24He is the very, very angry, explosive Bomb Bird.
0:20:24 > 0:20:27I see. That's the Bomb Bird. So he taps...
0:20:27 > 0:20:28It's a bit violent, isn't it?
0:20:28 > 0:20:30Not really.
0:20:30 > 0:20:33And then, if you tap the screen again... There you go.
0:20:33 > 0:20:36- God, it is violent. Oh, I got two! - Very good.
0:20:36 > 0:20:39The whole idea is that the gameplay is very easy to pick up, for anybody,
0:20:39 > 0:20:42but then, of course, there's different levels to it.
0:20:42 > 0:20:44And how many had you tried before?
0:20:44 > 0:20:47- Angry Birds didn't come out of nothing, did it?- No.
0:20:47 > 0:20:49- It was the end of a long process. - Yeah.
0:20:49 > 0:20:52So Rovio was actually established in 2003
0:20:52 > 0:20:55and about 50 games later, Angry Birds was created.
0:20:55 > 0:20:59That's a fantastic result. And you even have one left.
0:20:59 > 0:21:03To date, there have been 1.7 billion downloads of Angry Birds.
0:21:03 > 0:21:06If you've ever downloaded the app,
0:21:06 > 0:21:10you've helped fund Finland's dynamic private sector success.
0:21:10 > 0:21:13Oh, I missed. Defeated by a cartoon pig.
0:21:15 > 0:21:18Are you proud of what Finland's achieved,
0:21:18 > 0:21:20or do you simply take it for granted?
0:21:20 > 0:21:25Finns are very humble and we are not very sort of...
0:21:25 > 0:21:28We don't like to brag with our achievements
0:21:28 > 0:21:32but I think everybody in Finland is very proud
0:21:32 > 0:21:35of what we've done with Nokia and with Rovio,
0:21:35 > 0:21:38with a lot of the different technology companies we have.
0:21:38 > 0:21:40Do you think of yourself
0:21:40 > 0:21:43as a small country that punches above its weight?
0:21:43 > 0:21:46I don't think all the Finnish people think about it that way.
0:21:46 > 0:21:51I think we really sort of are focused on what we do
0:21:51 > 0:21:54and we want to, you know, make the best out of it.
0:21:56 > 0:22:00Finland, partly because it was ready to make tough choices
0:22:00 > 0:22:04and endure real pain, recovered from economic disaster
0:22:04 > 0:22:07and came to dominate one of the key industries of our time.
0:22:07 > 0:22:09Despite levying high taxes
0:22:09 > 0:22:12and spending heavily on its public services,
0:22:12 > 0:22:16its economy was this year ranked number one in Europe
0:22:16 > 0:22:18in the Global Dynamism Index.
0:22:18 > 0:22:21But it's only one version of the Nordic model.
0:22:27 > 0:22:29I'm back in London, where I live and work.
0:22:29 > 0:22:32Why do the Nordic countries not enjoy
0:22:32 > 0:22:34more widespread recognition here?
0:22:37 > 0:22:41For it's not only the political left that likes the Nordic model.
0:22:41 > 0:22:44Some on the right also take inspiration from it.
0:22:47 > 0:22:51It's become strange that people on the right in Britain
0:22:51 > 0:22:53used to look to America for ideas,
0:22:53 > 0:22:55but now we look to Sweden.
0:22:55 > 0:22:58It's one of the few countries in the world
0:22:58 > 0:23:01that is cutting taxes and getting growth as a result,
0:23:01 > 0:23:05everything from pensions policy to the way you run public services.
0:23:05 > 0:23:07The Swedes are at the forefront of liberalisation,
0:23:07 > 0:23:10and the Americans haven't really come up with many good ideas
0:23:10 > 0:23:12on the right for quite some time.
0:23:12 > 0:23:15And it goes to show that there need not be any tension
0:23:15 > 0:23:19between the free-market ideas and progressive ends.
0:23:19 > 0:23:23They've managed to marry the two in a way which is really appealing
0:23:23 > 0:23:25to those of us in Britain
0:23:25 > 0:23:28who are arguing for the same kind of modernisation here.
0:23:28 > 0:23:32And in the context of Scotland's constitutional debate,
0:23:32 > 0:23:34do you think a more strongly devolved Scotland
0:23:34 > 0:23:36or even an independent Scotland
0:23:36 > 0:23:38could look to Sweden as some kind of model?
0:23:38 > 0:23:42Very much so. Every time I'm in Sweden, I look around thinking,
0:23:42 > 0:23:43"This is just like the Highlands."
0:23:43 > 0:23:45It's on the same latitude as Inverness.
0:23:45 > 0:23:48We've got the same landscapes, the same raw materials,
0:23:48 > 0:23:51so why can't things be as good in Scotland as they are in Sweden?
0:23:51 > 0:23:53There is no reason at all.
0:23:53 > 0:23:55The only problem is bad ideas in Scotland
0:23:55 > 0:23:57that can be supplanted by good ones,
0:23:57 > 0:24:00and we can be just as progressive, I think, as the Swedes are now.
0:24:07 > 0:24:10Sweden is the big beast of the Nordic countries.
0:24:10 > 0:24:12With more than nine million people,
0:24:12 > 0:24:15it's the size of Norway and Finland put together.
0:24:18 > 0:24:21By every measure, it is one of the most stable, prosperous,
0:24:21 > 0:24:25best-governed and socially egalitarian countries in the world.
0:24:25 > 0:24:27But it's changing,
0:24:27 > 0:24:31especially in how its famous public services are delivered.
0:24:34 > 0:24:37This is St Goran's Hospital, the nation's biggest.
0:24:37 > 0:24:40It's part of the public health service
0:24:40 > 0:24:44but since 2000, it's been owned and run by a private company.
0:24:46 > 0:24:48Britta Wallgren is a former anaesthesiologist,
0:24:48 > 0:24:51who's now chief executive of the hospital.
0:24:51 > 0:24:53We are publicly financed,
0:24:53 > 0:24:55and we have a contract with the county,
0:24:55 > 0:24:57so they order care.
0:24:57 > 0:25:00It's the same funding as for all the hospitals in Stockholm.
0:25:00 > 0:25:04We have a contract to how much care we have to deliver,
0:25:04 > 0:25:07we also have quality goals that we have to reach,
0:25:07 > 0:25:10otherwise we lose some of the reimbursement.
0:25:12 > 0:25:15We know that if we improve the quality,
0:25:15 > 0:25:18if we increase the value-adding time for the patients,
0:25:18 > 0:25:21so they can get paid for every diagnosis.
0:25:21 > 0:25:24So if you enter the hospital with a hip fracture,
0:25:24 > 0:25:28if we treat you very efficiently and with rehab and everything
0:25:28 > 0:25:31so you can leave the hospital two days earlier,
0:25:31 > 0:25:37we get the same reimbursement, but the cost is two days shorter.
0:25:37 > 0:25:4010% of Sweden's public health service
0:25:40 > 0:25:42is provided by private companies.
0:25:42 > 0:25:45Swedes also pay a fee to visit their GP.
0:25:45 > 0:25:49Would any political party dare propose this in Scotland?
0:25:49 > 0:25:53Wouldn't it be denounced as privatisation of the NHS?
0:25:53 > 0:25:56If profit is the issue,
0:25:56 > 0:25:59then you to tend to forget to discuss
0:25:59 > 0:26:01how the care is delivered,
0:26:01 > 0:26:04because just by being publicly owned,
0:26:04 > 0:26:09that's not something that will ensure that the quality is high.
0:26:09 > 0:26:13Do you expect the role of private companies in Swedish
0:26:13 > 0:26:16health care provision to increase in the years ahead?
0:26:16 > 0:26:19We have a big discussion in Sweden right now
0:26:19 > 0:26:23and we have elections next year, and it's not uncontroversial.
0:26:23 > 0:26:27I think that we should focus on what I said earlier -
0:26:27 > 0:26:32delivery of care on the operations, what the quality is -
0:26:32 > 0:26:39and less focus on if we are state owned or privately owned.
0:26:39 > 0:26:42But I think there's a market for different providers.
0:26:42 > 0:26:46I think that it's good, the challenge is good in the system.
0:26:46 > 0:26:48- It's good to have a mix?- Yeah.
0:26:49 > 0:26:51This is what Fraser Nelson meant
0:26:51 > 0:26:54when he said Holyrood and Westminster should take note of
0:26:54 > 0:26:57the way Sweden is changing,
0:26:57 > 0:27:00for bringing private enterprise into the public hospitals
0:27:00 > 0:27:03is not how we traditionally perceive the Nordic model.
0:27:03 > 0:27:05And neither's this.
0:27:07 > 0:27:10This is a job centre in central Stockholm.
0:27:10 > 0:27:14Sweden's unemployment rate is 8%, higher than ours.
0:27:14 > 0:27:17Workers buy insurance which covers them
0:27:17 > 0:27:20for a year's unemployment benefit.
0:27:20 > 0:27:24After that, they go on to much-reduced state benefits
0:27:24 > 0:27:27and have to undergo rigorous testing and training.
0:27:30 > 0:27:33It is a myth that Sweden's unemployment benefit is generous.
0:27:38 > 0:27:39So right now, here we are,
0:27:39 > 0:27:42this is the most glorious view of Stockholm you can imagine.
0:27:42 > 0:27:45It's literally 360 degrees.
0:27:45 > 0:27:48You see here some of the usual sights, of course.
0:27:48 > 0:27:52This is the palace down there, this is the amusement park here,
0:27:52 > 0:27:54but the most significant building,
0:27:54 > 0:27:58the tallest building that you can see here in Stockholm,
0:27:58 > 0:28:00you find over there.
0:28:00 > 0:28:04That is the building that houses the Swedish tax authority.
0:28:05 > 0:28:08That's the most prominent structure in Stockholm.
0:28:08 > 0:28:12That is the biggest, most prominent building in the whole city?
0:28:12 > 0:28:15- That's right. As it well should be. - That's appropriate for Sweden?
0:28:15 > 0:28:18Yeah. The castle, you can barely notice by comparison.
0:28:19 > 0:28:23Many Swedes pay close to two-thirds of their income to the taxman.
0:28:23 > 0:28:27The academic Lars Tragardh is an expert on Swedish society.
0:28:27 > 0:28:31Sweden is, in many ways, a very harsh society,
0:28:31 > 0:28:34precisely because we emphasise the individual
0:28:34 > 0:28:37and individual responsibility, right?
0:28:37 > 0:28:40There's not a lot of compassion, right, for loafers,
0:28:40 > 0:28:42for people who do not work, right?
0:28:42 > 0:28:45It's not a kind society in that sense, right?
0:28:45 > 0:28:48So, unemployment is a tragedy, OK?
0:28:48 > 0:28:51It's something that is viewed as a negative
0:28:51 > 0:28:53in so many different ways, right?
0:28:53 > 0:28:56It's stigmatising for the unemployed.
0:28:56 > 0:28:59It places you outside of so many of the support systems,
0:28:59 > 0:29:02right, so that you do not, for example,
0:29:02 > 0:29:06qualify the same way for your future pensions, right?
0:29:06 > 0:29:10You have some money but much less, right?
0:29:10 > 0:29:13This is not a generous welfare state in that sense, right?
0:29:13 > 0:29:15We have very few welfare queens.
0:29:15 > 0:29:18It's an unhappy situation to be in.
0:29:18 > 0:29:21'This is not the Sweden that many on the political left imagine
0:29:21 > 0:29:23'and take inspiration from.'
0:29:23 > 0:29:26What's so curious about the Swedes today
0:29:26 > 0:29:29is that when we look at data, like the World Values Survey,
0:29:29 > 0:29:33we see that the Nordics, and particularly the Swedes,
0:29:33 > 0:29:38score in a very extreme way as individualists, in that sense,
0:29:38 > 0:29:41on the emphasis on the individual as the primary unit in society
0:29:41 > 0:29:43as opposed to, let's say,
0:29:43 > 0:29:47the family or the clan, you know, or the religious community, right,
0:29:47 > 0:29:51or any kind of communities that are between individual and the state.
0:29:51 > 0:29:54And the linkage between individual and state,
0:29:54 > 0:29:57what I refer to as "statist individualism",
0:29:57 > 0:30:02really is an outstanding feature of the Swedish social contract
0:30:02 > 0:30:03but it's rooted, right,
0:30:03 > 0:30:08in values that have a long, long pedigree, right, a long history.
0:30:09 > 0:30:12This "statist individualism" may seem paradoxical,
0:30:12 > 0:30:15but it's part of the character of Sweden, as a country of
0:30:15 > 0:30:19big government, and high levels of social equality - but also strongly
0:30:19 > 0:30:24entrenched individual liberties - including private property rights.
0:30:24 > 0:30:28Sweden's relative classlessness doesn't come out of nowhere.
0:30:28 > 0:30:30It wasn't created in a few decades
0:30:30 > 0:30:33by some social democratic acts of parliament.
0:30:33 > 0:30:36It's built on a centuries-old tradition of land ownership
0:30:36 > 0:30:39that's radically different to anything Scotland has ever known.
0:30:39 > 0:30:41In the 18th century,
0:30:41 > 0:30:44the peasants owned 50% of the land of the kingdom.
0:30:44 > 0:30:48They had title deed to the land they worked.
0:30:48 > 0:30:51It put them in a quite different power relationship with the state.
0:30:51 > 0:30:54People talk about Swedes as socialists.
0:30:54 > 0:30:56We never socialised our banks,
0:30:56 > 0:30:59we didn't nationalise our industries to any great extent.
0:30:59 > 0:31:02You know, the only times that Social Democrats tried classic
0:31:02 > 0:31:05socialist policies, they were defeated in the polls.
0:31:05 > 0:31:08These are countries of land-owning peasants.
0:31:08 > 0:31:14Swedes, Norwegians, Danes, Finns - they like to own stuff!
0:31:14 > 0:31:18They like their property, right? They are not communists, you know?
0:31:18 > 0:31:21- So...- They're not even collectivists, are they, really?
0:31:21 > 0:31:22No, no, no.
0:31:22 > 0:31:24And this is what the Social Democrats discovered -
0:31:24 > 0:31:29Swedes like to have their stuff and own their own things,
0:31:29 > 0:31:33but they do like also to be liberated from ties
0:31:33 > 0:31:36of dependency, right, in traditional social institutions.
0:31:41 > 0:31:43In Sweden, social welfare spending
0:31:43 > 0:31:45is designed to support people in work,
0:31:45 > 0:31:47not reward them for being out of it.
0:31:51 > 0:31:53Anna Nyborg is a senior executive at Ericsson,
0:31:53 > 0:31:56the Swedish telecommunications company.
0:31:56 > 0:31:59She also has two children below school age.
0:31:59 > 0:32:02You had a baby and you took time off for maternity.
0:32:02 > 0:32:04In Sweden, does that disrupt a career?
0:32:06 > 0:32:10Not... I would say you put your career, obviously, a little bit on hold -
0:32:10 > 0:32:13you can't expect a promotion while you're actually away -
0:32:13 > 0:32:16but I think a lot of women like myself take the opportunity
0:32:16 > 0:32:20while you're away to think a little bit about the next step,
0:32:20 > 0:32:23do some networking and maybe change your jobs when you come back.
0:32:23 > 0:32:25That's what I did.
0:32:25 > 0:32:26As a working mother,
0:32:26 > 0:32:29is it advantageous to be Swedish, to live in this country,
0:32:29 > 0:32:30as a young working mother?
0:32:30 > 0:32:32Yes. I definitely think so.
0:32:32 > 0:32:35The combination of subsidised health care
0:32:35 > 0:32:39and paid parental leave means that, as a woman, you don't need to
0:32:39 > 0:32:42choose between having children and a career.
0:32:42 > 0:32:44In many other countries that's a, you know,
0:32:44 > 0:32:48an option not available to women, only to men.
0:32:48 > 0:32:49So from that perspective,
0:32:49 > 0:32:52I'm very grateful that I am a mother in Sweden.
0:32:52 > 0:32:56You say you get paid parental leave. What do you get?
0:32:56 > 0:32:59The government pays up until a salary cap,
0:32:59 > 0:33:0380% of your salary for I think it's 13 months,
0:33:03 > 0:33:07and then you get another five months of around 200 Crowns a day.
0:33:07 > 0:33:12And these days are split between the parents, so two months
0:33:12 > 0:33:14you cannot give to the other parent, but other than that you can
0:33:14 > 0:33:18sort of distribute it any way you want between the two parents.
0:33:18 > 0:33:19So it's very flexible.
0:33:19 > 0:33:20Yeah, it is.
0:33:20 > 0:33:23And now that you're back at work, who looks after your children
0:33:23 > 0:33:26during the day? Do you get subsidised child support?
0:33:26 > 0:33:27Yeah.
0:33:27 > 0:33:32From the time when the child is 12 months,
0:33:32 > 0:33:37the council is obliged by law to supply childcare.
0:33:37 > 0:33:43And the fees are really, really low, so about 2,000 crowns pay for
0:33:43 > 0:33:47two children now in preschool, and the rest is funded by council tax.
0:33:47 > 0:33:492,000 crowns per month.
0:33:49 > 0:33:51So that's about £200 a month.
0:33:51 > 0:33:53- Yeah, yeah, yeah. - For two children.
0:33:53 > 0:33:56And that's including nappies and food and everything.
0:33:56 > 0:33:59How can the state afford to carry that burden?
0:33:59 > 0:34:01This is what our taxes pay for, I guess,
0:34:01 > 0:34:04I mean, Sweden has one of the highest tax rates in the world,
0:34:04 > 0:34:07that's known, and this is what we use it for.
0:34:10 > 0:34:12High tax is a way of life here.
0:34:12 > 0:34:15Swedes seem reconciled to it.
0:34:15 > 0:34:21But the welfare model it buys supports and sustains wealth-creating enterprise,
0:34:21 > 0:34:23rather than drains from it.
0:34:23 > 0:34:27Their childcare provision means many more Swedish women
0:34:27 > 0:34:29can stay in the workplace.
0:34:30 > 0:34:33With a larger supply of productive hours,
0:34:33 > 0:34:36I mean, twice as many people in the workforce, more or less,
0:34:36 > 0:34:40that should, that should, you know, contribute to higher GDP
0:34:40 > 0:34:43per capita, should make Sweden a wealthier country.
0:34:44 > 0:34:47Also, and this is, I mean, this is also speculation,
0:34:47 > 0:34:52I haven't seen the statistics, but if a family doesn't have to
0:34:52 > 0:34:56rely on one salary to survive, then I suppose that that will allow us to
0:34:56 > 0:35:01be a little bit more moderate when it comes to...salary increases,
0:35:01 > 0:35:05so it should make us more competitive in, you know,
0:35:05 > 0:35:07global markets as well.
0:35:10 > 0:35:13This is Lars Tragardh's statist individualism in action.
0:35:14 > 0:35:20It's part of what makes Sweden's version of the Nordic model successful.
0:35:20 > 0:35:23But many Swedes see a downside in it.
0:35:23 > 0:35:25I do this show about the Swedish mentality in which
0:35:25 > 0:35:28I explain that people in other parts of the world
0:35:28 > 0:35:30doesn't know the square metre that they live on,
0:35:30 > 0:35:32which every Swede does.
0:35:32 > 0:35:34Fredrick Lundstrom is a comedian
0:35:34 > 0:35:39and film-maker who specialises in satirising the Swedish character.
0:35:39 > 0:35:41We had an interesting discussion in Sweden
0:35:41 > 0:35:46when the tsunami catastrophe in Thailand in 2004, I think.
0:35:46 > 0:35:50There were lots of Swedes there, it's very popular to go to Thailand
0:35:50 > 0:35:52and this is a new Majorca for Swedes.
0:35:52 > 0:35:56Of course, it was very tragic and people died and stuff.
0:35:56 > 0:35:58The interesting discussion afterwards,
0:35:58 > 0:36:01it was obvious that many people had some kind of idea that
0:36:01 > 0:36:04the Swedish nation or state or government
0:36:04 > 0:36:10should protect their inhabitants wherever you were in the world.
0:36:10 > 0:36:14You should go abroad with the sun and stuff like that.
0:36:14 > 0:36:18It's a cold, grey winter in Sweden, but if something happens, you want to run.
0:36:18 > 0:36:23It's like a teenager's relation to your parents - you want to be
0:36:23 > 0:36:27a grown-up when it's good for you, but then you, you know,
0:36:27 > 0:36:32something happens or...shit happens and then you want to run back
0:36:32 > 0:36:34to your parents and say, "I'm still a kid, help me."
0:36:36 > 0:36:41It is, in his view, the quintessential nanny state.
0:36:41 > 0:36:45Finland, Sweden and Norway all have centre-right governments now.
0:36:45 > 0:36:50But they've all accepted the key values of the Nordic model.
0:36:50 > 0:36:53The only reason that the centre-right was able to
0:36:53 > 0:36:58actually win an election and then win again was not, right,
0:36:58 > 0:37:03by proposing a radical alternative to what social democracy has built
0:37:03 > 0:37:07in the Nordic or in Sweden over the last, you know, 30, 40, 50 years,
0:37:07 > 0:37:12but it was by finally giving up on opposition altogether, right?
0:37:12 > 0:37:18So they said, "We also believe in the civil religion of Sweden, which is the welfare state.
0:37:18 > 0:37:24"We do not intend to dismantle the welfare state. We like Sweden.
0:37:24 > 0:37:27"We're just going to do it a little bit better."
0:37:27 > 0:37:28Right? Then they won, right?
0:37:28 > 0:37:31"We're not just going to reduce taxes,
0:37:31 > 0:37:34"we are actually going to make the welfare state better."
0:37:34 > 0:37:36That's how they reinvented themselves.
0:37:36 > 0:37:39And, of course, it created a huge consensus at the centre,
0:37:39 > 0:37:40you know, of Swedish politics.
0:37:40 > 0:37:44In fact, the centre is roughly, what, 95%.
0:37:49 > 0:37:53Once, Imperial Sweden dominated its neighbours.
0:37:53 > 0:37:56Norway and Finland have both, in their histories,
0:37:56 > 0:37:58been the junior partner in a union with Sweden.
0:38:01 > 0:38:06This is the Swedish warship Vasa, in its day one of the largest
0:38:06 > 0:38:09and most heavily armed military vessels in the world.
0:38:09 > 0:38:12It sank on its maiden voyage in 1628,
0:38:12 > 0:38:17sunk by the grandiose unsustainability of its ambition.
0:38:17 > 0:38:22It was salvaged in the 1960s by a Sweden that had utterly
0:38:22 > 0:38:26reinvented itself in the three intervening centuries.
0:38:26 > 0:38:29When you stand here today, you get an almost thrilling sense
0:38:29 > 0:38:33of what a huge imperial and military power Sweden once was.
0:38:33 > 0:38:35This is a great projection of that power,
0:38:35 > 0:38:40and of Sweden's ability to draw its two much smaller Nordic neighbours
0:38:40 > 0:38:44under its wing, and into an incorporating union.
0:38:44 > 0:38:48Almost nothing in contemporary Sweden even hints at this mighty past.
0:38:48 > 0:38:51Sweden spends less on its armed forces today
0:38:51 > 0:38:54than it does on providing free childcare for working parents.
0:38:55 > 0:38:58Finland and Sweden are both in the European Union.
0:38:58 > 0:39:02Finland has also adopted the euro, in effect surrendering
0:39:02 > 0:39:06the currency independence that helped get it out of the economic mess of the 1990s.
0:39:07 > 0:39:10Do these countries, as small independent states,
0:39:10 > 0:39:14think of themselves - to use a phrase from Scotland's own debate -
0:39:14 > 0:39:16as "going it alone"?
0:39:16 > 0:39:19I don't think that phrase has any meaning here.
0:39:19 > 0:39:21They all have independent statehood.
0:39:21 > 0:39:24But they are all also utterly interdependent,
0:39:24 > 0:39:29pooling and sharing sovereignty with each other and with much of Europe.
0:39:37 > 0:39:41Even Norway - which has joined neither the EU nor the Euro -
0:39:41 > 0:39:45knows that its real independence is highly restricted.
0:39:45 > 0:39:47Of these three nations, Norway is perhaps
0:39:47 > 0:39:51the closest in character, geography and circumstance to Scotland.
0:39:53 > 0:39:57Oslo sits at the head of Oslo fjord - or firth in Scots -
0:39:57 > 0:39:59the words are surely from the same root -
0:39:59 > 0:40:01the legacy of a shared linguistic past.
0:40:03 > 0:40:07Our populations are almost exactly the same size.
0:40:07 > 0:40:13Both nations have had a long and intimate relationship with their bigger, closest neighbour.
0:40:13 > 0:40:15And of course, 50 years ago,
0:40:15 > 0:40:19something changed both Norway and Scotland for ever.
0:40:22 > 0:40:25A comparison is often made between the way Britain has
0:40:25 > 0:40:28handled its oil finds and the way the Norwegians have done it.
0:40:28 > 0:40:33They've also struck it rich, but they've been much more demanding with the oil companies.
0:40:33 > 0:40:38Norway found oil off its coast in 1969, and through the 1970s and '80s,
0:40:38 > 0:40:41its industry grew alongside Britain's.
0:40:41 > 0:40:43What are we looking at here?
0:40:43 > 0:40:45We are looking here at... Here is Norway,
0:40:45 > 0:40:48and here is Scotland and England.
0:40:48 > 0:40:51This is basically unexplored.
0:40:51 > 0:40:54Bjorn Lereon has covered the Norwegian oil story
0:40:54 > 0:40:57both as a journalist, and as an analyst for the industry.
0:40:57 > 0:41:00He's seen the effects it has had on Norway.
0:41:00 > 0:41:02Oil saved our nation.
0:41:02 > 0:41:08You should bear in mind we are now at the beginning of the '70s,
0:41:08 > 0:41:15the first oil crisis, where oil prices went through the skies.
0:41:15 > 0:41:18We had a crisis in the shipbuilding industry,
0:41:18 > 0:41:25Norway was a strong nation in building ships, oil vessels.
0:41:25 > 0:41:31And that market collapsed in a period of months in 1974.
0:41:31 > 0:41:34The market disappeared.
0:41:34 > 0:41:38And that situation to a small nation -
0:41:38 > 0:41:44very dependent on the fabricating industry - we could switch
0:41:44 > 0:41:47all the shipyards -
0:41:47 > 0:41:51most of the shipyards could switch to offshore production facilities.
0:41:51 > 0:41:56And of course, together with the oil, a lot of money came,
0:41:56 > 0:42:02and I totally agree this could ruin a small, relatively small economy.
0:42:05 > 0:42:08But oil did not ruin Norway.
0:42:08 > 0:42:10Norwegians are the richest people in the world -
0:42:10 > 0:42:14despite, rather than because of, their oil windfall.
0:42:14 > 0:42:16It's thanks to a radical
0:42:16 > 0:42:19and forward-thinking decision made by the nation's politicians.
0:42:21 > 0:42:23In the early years of oil,
0:42:23 > 0:42:26Norway's leaders understood that a sudden,
0:42:26 > 0:42:31massive windfall like that can be a curse as well as a blessing,
0:42:31 > 0:42:33that it can have the effect of so over-inflating
0:42:33 > 0:42:37the value of your national currency as to make every other sector
0:42:37 > 0:42:40of the productive economy uncompetitive,
0:42:40 > 0:42:44to put everybody except the oil people out of business.
0:42:44 > 0:42:47So to avoid that, Norway's political parties
0:42:47 > 0:42:50entered into a kind of self-denying pact with each other.
0:42:50 > 0:42:52They agreed that none of the oil revenues should be
0:42:52 > 0:42:55spent in Norway itself.
0:42:55 > 0:42:59Instead, they'd be put into a fund to be invested overseas.
0:42:59 > 0:43:04Further, 96% of the interest on that fund would be re-invested overseas.
0:43:04 > 0:43:08All the Norwegian government allows itself is 4%,
0:43:08 > 0:43:12not of the capital, but of the interest on that capital.
0:43:12 > 0:43:16And even that tiny proportion is enough to give them
0:43:16 > 0:43:18some of the best schools and hospitals
0:43:18 > 0:43:20and public services in the world.
0:43:22 > 0:43:25It's called the Norwegian Sovereign Wealth Fund, or,
0:43:25 > 0:43:28more colloquially, the State Pension Fund.
0:43:28 > 0:43:36It's currently worth £400 billion, and it owns nearly 2% of the entire world's stocks and shares.
0:43:37 > 0:43:39It's owned by the people, managed by the state,
0:43:39 > 0:43:41and invested for the future.
0:43:41 > 0:43:46It's the envy of pro-independence campaigners in Scotland.
0:43:46 > 0:43:50I think that the Norwegian politicians also in this respect
0:43:50 > 0:43:53had acted very wise, and if you look today
0:43:53 > 0:43:57what is saved in the pension fund,
0:43:57 > 0:44:03and we are talking about 4,700 billion Norwegian krones,
0:44:03 > 0:44:06I think they have been clever in doing it.
0:44:06 > 0:44:08But in the first years, you can say that they spent
0:44:08 > 0:44:13all the money as soon as they could take the oil off ground
0:44:13 > 0:44:18and sell it, the money was spent, and we got inflation and we spent
0:44:18 > 0:44:23a lot of money on conserving industry that had no ability to live.
0:44:23 > 0:44:27So in that sense, we spoiled a lot of money,
0:44:27 > 0:44:30but gradually, we fixed this and we...
0:44:30 > 0:44:33I think that Norwegian politicians,
0:44:33 > 0:44:37they have showed a very, very, very strong discipline.
0:44:39 > 0:44:42Very early, Norway stopped using oil revenues to bail out
0:44:42 > 0:44:44old industries -
0:44:44 > 0:44:47despite pressure from the trade unions and the public.
0:44:47 > 0:44:49Back in the UK,
0:44:49 > 0:44:52oil revenues were a much smaller portion of the national economy,
0:44:52 > 0:44:56but no attempt was made to save and invest the windfall resource.
0:44:58 > 0:45:02Successive Labour and Conservative governments of the 1970s and '80s
0:45:02 > 0:45:06used the money to help prop up dying industries
0:45:06 > 0:45:10and then to pay the social costs of letting them die.
0:45:23 > 0:45:25Norway let its old industries die too.
0:45:27 > 0:45:29There used to be a steel plant here.
0:45:30 > 0:45:32Now it's the BI Business School,
0:45:32 > 0:45:35a prestigious private university near central Oslo.
0:45:36 > 0:45:40And this is a recruitment fair for graduating students.
0:45:42 > 0:45:43This is the new workers.
0:45:43 > 0:45:46They are not industrial workers, they are office workers.
0:45:46 > 0:45:49This is in a way to me the metaphor of the Norwegian economy.
0:45:49 > 0:45:51This is where the old steel industry was,
0:45:51 > 0:45:53we had manufacturing here some years ago.
0:45:53 > 0:45:55All that is closed now.
0:45:55 > 0:46:00Now it's education, it's research, it's IT, it's culture,
0:46:00 > 0:46:01this is the new part of Norway,
0:46:01 > 0:46:05that's where the entrepreneurship takes place, it's along the river.
0:46:05 > 0:46:09And the river gives us this idea that we can do new things here.
0:46:09 > 0:46:12This is quite important to understand, isn't it?
0:46:12 > 0:46:15Norwegians aren't rich because they're spending all this oil money.
0:46:15 > 0:46:18They're rich because they are not spending it.
0:46:18 > 0:46:21Exactly, we transformed the petroleum wealth,
0:46:21 > 0:46:25we transformed that to knowledge wealth, and that's how we could
0:46:25 > 0:46:28be competitive, even after the North Sea is empty,
0:46:28 > 0:46:31because in a way Norway is now in many respects like Houston.
0:46:31 > 0:46:33Where is our technology now?
0:46:33 > 0:46:38Take drilling, technology, subsea technology, it's Houston or Norway.
0:46:38 > 0:46:41And we didn't know those industries at all at first,
0:46:41 > 0:46:42but we learned very quickly.
0:46:42 > 0:46:45We learned from Americans, from the British and so on.
0:46:45 > 0:46:47And then we went on our own,
0:46:47 > 0:46:50and now, when Brazil is developing offshore oil,
0:46:50 > 0:46:52they use Norwegian technology,
0:46:52 > 0:46:55Norwegian vessel, Norwegian subsea, Norwegian...
0:46:55 > 0:46:57even Norwegian oil companies are there.
0:46:57 > 0:46:5933 of them.
0:46:59 > 0:47:01The school is producing the next generation
0:47:01 > 0:47:04of Norway's business leaders.
0:47:04 > 0:47:07Central Bank. They are the people with the fund.
0:47:07 > 0:47:09Like here...
0:47:09 > 0:47:11NBIM, that is the Petroleum Fund.
0:47:11 > 0:47:15Right. This fund owns a proportion of most companies in the world?
0:47:15 > 0:47:18Almost every company on the stock exchange, stock-listed.
0:47:18 > 0:47:21So this is the Sovereign Wealth Fund, that Norway's so famous for.
0:47:21 > 0:47:24And they're recruiting young people to come and manage it for them?
0:47:24 > 0:47:26Yes, and it is managed by the Central Bank,
0:47:26 > 0:47:29but then it is split out into a separate institution,
0:47:29 > 0:47:32called Norwegian Bank Investment Management, NBIM,
0:47:32 > 0:47:35and that's the largest sovereignty fund in the world right now.
0:47:35 > 0:47:39And just to be clear, none of that money is invested in Norway itself?
0:47:39 > 0:47:41They can't do that.
0:47:41 > 0:47:46The constitution says none of that money can be invested in Norway.
0:47:48 > 0:47:50The Scottish government says an independent Scotland
0:47:50 > 0:47:52could start an oil fund of its own.
0:47:52 > 0:47:55But much of the oil has already gone.
0:47:56 > 0:47:59And Norway has a 40-year head start,
0:47:59 > 0:48:02using its wealth to prepare for a post-oil future,
0:48:02 > 0:48:04by building a different kind of economy
0:48:04 > 0:48:07based on the skills of its young people.
0:48:12 > 0:48:16Jonas Store has served as both Foreign and Health Ministers
0:48:16 > 0:48:18in Norway's former Labour governments.
0:48:18 > 0:48:22What would the Norwegian economy look like now, if 40 years ago,
0:48:22 > 0:48:24governments had decided
0:48:24 > 0:48:28to use oil revenue to fund recurrent expenditure?
0:48:28 > 0:48:31Well, I think, you know, it would have been overheated.
0:48:31 > 0:48:34It would have closed down industry.
0:48:34 > 0:48:38It would have been, you know, a service-based economy,
0:48:38 > 0:48:40disproportionately big.
0:48:40 > 0:48:44We've had quite strong pressure groups, you know, from industry -
0:48:44 > 0:48:49a warning against this because they know, you know, if that goes on,
0:48:49 > 0:48:54the currency will go up, costs will go up, and competition will be out.
0:48:54 > 0:48:59So if you follow Norwegian politics and economic debate
0:48:59 > 0:49:01from week to week,
0:49:01 > 0:49:04we have weekly debates about whether this currency is now
0:49:04 > 0:49:08getting too strong and that is directly impeding on
0:49:08 > 0:49:10government's public spending.
0:49:10 > 0:49:15So it's not only about, you know, some kind of moral context here.
0:49:15 > 0:49:17It's also about some very hard realities.
0:49:22 > 0:49:24In most European countries,
0:49:24 > 0:49:27governments have been spending money they don't have.
0:49:27 > 0:49:29Norway is the mirror image of that -
0:49:29 > 0:49:33choosing not to spend money it clearly does have.
0:49:33 > 0:49:36But using it in a much more disciplined and imaginative way.
0:49:36 > 0:49:38It is a remarkable achievement,
0:49:38 > 0:49:42and a quiet Nordic rebuke to the rest of us.
0:49:42 > 0:49:45But Norway's experience also challenges us
0:49:45 > 0:49:48to rethink what we mean by independent statehood.
0:49:48 > 0:49:51For Norway - even outside the EU -
0:49:51 > 0:49:54has found that global economic realities mean
0:49:54 > 0:49:56that in effect, its real sovereignty,
0:49:56 > 0:49:59its real freedom of manoeuvre, is -
0:49:59 > 0:50:02like everyone else's - highly restricted.
0:50:02 > 0:50:06How important was it that Norway didn't join the European Union?
0:50:07 > 0:50:11Well, I was part of the delegation that negotiated membership
0:50:11 > 0:50:13back in '93 and I voted in favour
0:50:13 > 0:50:17because I believe Norway belongs in that European family.
0:50:17 > 0:50:20But I can also explain, you know, if you have half an hour,
0:50:20 > 0:50:22why we didn't, because it really...
0:50:22 > 0:50:25we are not a standard European country from nature.
0:50:25 > 0:50:28Norway's an ocean country and we have the fish sector,
0:50:28 > 0:50:31we have energy, we're a sparsely populated country.
0:50:31 > 0:50:34And we fought with Brussels to have acceptance that, you know,
0:50:34 > 0:50:36arctic settlement is different from middle of Europe.
0:50:36 > 0:50:39But I think what is key here is that there is broad consensus
0:50:39 > 0:50:42in Norway that, OK, we can take that decision.
0:50:42 > 0:50:45There's no way we can escape the European economic reality
0:50:45 > 0:50:47which makes us, you know,
0:50:47 > 0:50:50fully part of the European internal market
0:50:50 > 0:50:51with rights and obligations.
0:50:51 > 0:50:55All the key out of Brussels is adopted into Norwegian legislation.
0:50:55 > 0:50:58- So you have to obey all the rules? - Yes, we do.
0:50:58 > 0:51:01And, you know, and you may then say without voting them,
0:51:01 > 0:51:05well, that's right. And I think, had Norway - my private opinion -
0:51:05 > 0:51:09been a larger country, that bargain would've been very hard to accept.
0:51:17 > 0:51:20Norway is anything but insular.
0:51:20 > 0:51:22It's a trading nation with a long history of looking abroad
0:51:22 > 0:51:24to increase its wealth.
0:51:25 > 0:51:28Once, of course, the Norse did it by force.
0:51:30 > 0:51:33More than 1,000 years ago, they set sail in these longboats
0:51:33 > 0:51:35to pillage and conquer.
0:51:36 > 0:51:39This museum pays tribute to that violent past.
0:51:41 > 0:51:45But it also tells us something else about the modern nation.
0:51:45 > 0:51:49These boats were excavated and put on display here 100 years ago,
0:51:49 > 0:51:52around the time of Norway's independence from Sweden.
0:51:54 > 0:51:58Young, newly independent nations need a tale to tell themselves,
0:51:58 > 0:52:01of roots to take pride in,
0:52:01 > 0:52:03of the histories that shaped their characters.
0:52:05 > 0:52:09What is the national identity that this history shaped in Norway?
0:52:10 > 0:52:14We used to have an inferiority complex,
0:52:14 > 0:52:17especially against Swedes,
0:52:17 > 0:52:22who were always considered big brother of the Nordic countries.
0:52:22 > 0:52:25And of course they had ruled over Norway until 1905.
0:52:25 > 0:52:29So, we're a relatively young nation,
0:52:29 > 0:52:34but of course the oil has given us a much, much stronger position.
0:52:34 > 0:52:37Tell me about this inferiority complex that Norway has
0:52:37 > 0:52:40traditionally vis-a-vis the Swedes. How are they viewed?
0:52:40 > 0:52:43Er...with scepticism,
0:52:43 > 0:52:46but now the Swedes are of course coming here,
0:52:46 > 0:52:49especially the young Swedes come here,
0:52:49 > 0:52:52to work in the service industry and so forth.
0:52:52 > 0:52:56And so now we can get a little bit back at them,
0:52:56 > 0:52:58and they are serving us, so to speak.
0:52:58 > 0:53:03But I think it's still, especially my generation and the older people,
0:53:03 > 0:53:07still have that little bit of inferiority complex.
0:53:07 > 0:53:10And I think it has to do a little with
0:53:10 > 0:53:12the Swedes have always been, sort of,
0:53:12 > 0:53:17the rich people in Sweden have been the aristocracy,
0:53:17 > 0:53:21which we don't have, and so they seem more posh,
0:53:21 > 0:53:28more wealthier, more...sophisticated so to speak,
0:53:28 > 0:53:31while we are still farmers and fishers and so forth.
0:53:31 > 0:53:35You're describing the relationship between England and Scotland here.
0:53:35 > 0:53:39Yes, exactly, I know, because I've been a correspondent in the UK
0:53:39 > 0:53:44and I recognise all these same traits in the Scottish people
0:53:44 > 0:53:46as I do in the Norwegians.
0:53:46 > 0:53:50And...I think a close connection, of course, the history is there,
0:53:50 > 0:53:55but I think the whole way we think of ourselves is very similar.
0:53:55 > 0:53:58What was it about the Scottish people that reminded you
0:53:58 > 0:54:00of the Norwegians when you went there?
0:54:00 > 0:54:03I think the Scottish people have the same thing that Norwegians have
0:54:03 > 0:54:05that they are very outgoing and so forth,
0:54:05 > 0:54:08but if you push their buttons, they're a bit touchy,
0:54:08 > 0:54:11where their country and their nationality comes through.
0:54:11 > 0:54:13Especially if it's the Swedes, in your case,
0:54:13 > 0:54:17or the English, in Scotland's case, who are pushing those buttons.
0:54:17 > 0:54:20Exactly, exactly, so, there you have, I see that,
0:54:20 > 0:54:24where soccer is concerned, where you have the big games
0:54:24 > 0:54:25between England and Scotland,
0:54:25 > 0:54:29that's the same thing with the Norwegians and Swedish team.
0:54:29 > 0:54:33The most important thing is to beat the Swedes.
0:54:36 > 0:54:40Much of the debate back home is framed by the asymmetric nature
0:54:40 > 0:54:42of the United Kingdom - by Scotland's relationship
0:54:42 > 0:54:46with its much bigger partner in the Union.
0:54:46 > 0:54:50I think what we've got to try and work out is how we relate to others.
0:54:50 > 0:54:53I would prefer to see this constitutional debate
0:54:53 > 0:54:56completely reframed as a debate about relationships.
0:54:56 > 0:55:00It's about how we relate to the rest of the UK and beyond.
0:55:00 > 0:55:03And the truth of that, that can't be resolved in a referendum.
0:55:03 > 0:55:05This referendum is not going to resolve anything,
0:55:05 > 0:55:07whether we vote Yes or No.
0:55:07 > 0:55:09There will constantly be a need to look again,
0:55:09 > 0:55:13re-adjust the relationships, and they are plural relationships,
0:55:13 > 0:55:16that will affect Scotland and its position in the world.
0:55:24 > 0:55:28Norway does not sit at the top table of global diplomacy.
0:55:28 > 0:55:32It will never be a permanent member of the UN Security Council.
0:55:32 > 0:55:35It does not punch above its weight in the world in that sense.
0:55:38 > 0:55:41This is Oslo's Nobel Peace Centre.
0:55:41 > 0:55:43It speaks volumes about the values
0:55:43 > 0:55:46Norway tries to project internationally.
0:55:46 > 0:55:49Norway is, by example, and in its own way,
0:55:49 > 0:55:51influential beyond its size.
0:55:53 > 0:55:58The Nordic countries are all sovereign independent states.
0:55:58 > 0:56:01But they are also immersed in a broader European identity,
0:56:01 > 0:56:05in which sovereign states have spent much of the last half century
0:56:05 > 0:56:09gradually surrendering aspects of national sovereignty
0:56:09 > 0:56:13to act together, to better advance their national interests.
0:56:13 > 0:56:16I think we've seen over the last years that these countries
0:56:16 > 0:56:20come out on top when it comes to innovation, creating new businesses,
0:56:20 > 0:56:24flexibility, the flexicurity notion has emerged.
0:56:25 > 0:56:2820 years ago, we were told that these countries were doomed
0:56:28 > 0:56:31in the global economy because the state was too big,
0:56:31 > 0:56:34the unions were too strong, public sector too powerful.
0:56:34 > 0:56:38And then now we see that the figures tell different stories, you know?
0:56:38 > 0:56:42We have higher employment, sounder public finances, more re-adaptation
0:56:42 > 0:56:46in our businesses, some businesses close and others occur
0:56:46 > 0:56:49because we have safe and solid public welfare,
0:56:49 > 0:56:53because we have unions that take collective responsibility
0:56:53 > 0:56:55and strike responsible deals.
0:56:55 > 0:56:58So, for me, this is another sign of what I have really
0:56:58 > 0:57:01been following with great interest - that these countries
0:57:01 > 0:57:04also have a high level of social capital, in addition to, you know,
0:57:04 > 0:57:08financial capital, human capital, and everything you can calculate.
0:57:13 > 0:57:16A couple of decades ago, the received wisdom in Europe
0:57:16 > 0:57:18was that the Nordic Model had had its day.
0:57:18 > 0:57:21Taxes were too high, the state was too big,
0:57:21 > 0:57:25it was all an impossible burden on a truly productive economy.
0:57:33 > 0:57:37Well, since then, the Nordic Model has proven itself more robust,
0:57:37 > 0:57:41more flexible, more dynamic than anyone else's in Europe.
0:57:41 > 0:57:45It's certainly weathered the storm of the last five years better than most.
0:57:49 > 0:57:52But could you take the Nordic Model off the peg, so to speak,
0:57:52 > 0:57:56and make it fit a non-Nordic society?
0:57:56 > 0:57:58Could it fit an independent Scotland?
0:57:58 > 0:58:00And if it could, why couldn't it fit
0:58:00 > 0:58:03a devolved Scotland inside the United Kingdom?
0:58:03 > 0:58:07For what does national sovereignty really mean in the Nordic context?
0:58:07 > 0:58:10In what sense is any of these three countries -
0:58:10 > 0:58:12to use the language of our own independence debate -
0:58:12 > 0:58:14really going it alone?
0:58:14 > 0:58:17I don't know the answer to these questions.
0:58:17 > 0:58:20But shouldn't they be at the heart of the debate we have
0:58:20 > 0:58:22between now and next September?
0:58:22 > 0:58:25And shouldn't we try to see the choice we face
0:58:25 > 0:58:27in its broader, European, context?