Looking to the 2020s: VATT conducts research of high international quality
Anni Huhtala has served as Director General at VATT since 2015. During this period research indicators, which put particular emphasis on publication quality, have developed positively. "The Director General's task is to create an enabling framework for doing research," Huhtala describes her role at VATT.
Internationality and high quality
While still employed as a professor at MTT Agrifood Research Finland (today the Natural Resources Institute Finland), Anni Huhtala participated in a scientific evaluation of VATT’s research as a member of an international panel in 2007. The evaluation found that, whereas there was major scope for improvement, both VATT and the Ministry of Finance understood the importance of high-quality scientific research.
- At that time, the evaluation panel had a discussion on scientific research with the client, the Ministry of Finance. We reached a mutual understanding of this process being about quality assurance. The scientific approach is a guarantee of VATT’s independence: rather than having its own political agenda, the institute meets the criteria for scientific economic research, and decision-makers can rely on our studies having been conducted appropriately, says Huhtala.
Anni Huhtala joined VATT as Research Director in 2011, and since 2015, she has served as the institute’s Director General. She took on her new role in the midst of uncertainty: after years of preparation, a reform of sectoral research and funding was carried out, and VATT was also hit by budget cuts.
- The starting point of our new strategy was being successful in the competition for externalfunding by conducting independent research that is important for society. The whole idea behind the Finnish sectoral research reform was focusing on problems faced by today's society. This was also the justification for the central government maintaining research institutes in general, she explains.
- When VATT is a credible actor and we conduct credible research, VATT is also an attractive workplace for prominent researchers. We have enthusiastic researchers who are highly skilled and expert at their jobs. When researchers have a strong interest in societal issues and decision-making, the director's role of motivating them and pointing the direction for the research institute is actually quite easy, Huhtala describes the backdrop to VATT 's success.
Huhtala's management style is highly organic. The Director General must make it clear that VATT appreciates research of a high scientific standard which is essential for decision-making.
- VATT attracts economists interested in public economics and economic policy. It is important to encourage our people to move with the times and keep up with developments in their field, and to study critical issues of the world around them. The Director General's task is to create an enabling framework for doing research, she describes her role at the helm of VATT.
Huhtala completed her postgraduate studies in economics at the UC Berkeley. At this famous university, the young researcher learned to take a high scientific standard and internationality of research for granted, and this attitude still prevails at VATT today.
- The competition for resources and good researchers in economics is tough in Finland and around the world. This is why it is great that VATT has managed to recruit talented researchers, also from abroad. Best of all, thanks to our researchers we are affiliated with leading scientists who study policy relevant questions using Finnish data, she describes the high significance of VATT's internationalisation.
The coronavirus pandemic has affected international cooperation.
- International interaction is highly important for VATT. Usually we have had at least one of our researchers visiting a foreign university every year. At worst, the pandemic limits interaction, and this is particularly difficult for young researchers. In the early stages of your career, it is a good idea to get to know people personally and join networks, Huhtala stresses.
VATT’s findings make a statement
Huhtala believes it is vital for Finland to have a publicly funded research institute such as VATT, which is not guided by the viewpoints of different interest groups. She is concerned over the trend in which communications consultants are expected to productise research findings
- Research is expected to have societal impact. But there is no way we can show causality between VATT 's research findings and Parliament's decisions, for example. Decision-making is ultimately influenced by so many factors. Our responsibility ends with ensuring that decision-makers are aware of our findings, she says.
Huhtala considers Twitter an important channel for VATT's communications, albeit she would personally prefer a calmer environment for presenting analyses and conducting longer-running discussions.
- The social media has revolutionised the world of communications. As politicians are on Twitter, so are political journalists. Twitter is an incredibly democratic forum in principle, and experts have a chance of getting visibility on it, she says.
She is sceptical about Twitter as a platform for discussing research, however. There is a great deal of uncertainty about many things, and as the one who shouts the loudest is likely to win on Twitter, this tends to be forgotten.
- It is wonderful, however, that VATT researchers are taking part in Twitter discussions by describing our research and showing that we actually have knowledge of many issues. If only someone had the patience to read about it, she says.
A penchant for environmental economics
While she was studying economics, Huhtala was particularly interested in issues related to developing countries, the environment, equality and the position of women. The fact that she selected pollution and taxes as the topic of her pre-thesis seminar proved a fatal choice, which later largely determined her research interests.
- I already became interested in looking at environmental issues from the perspective of economics during my basic studies. This interest probably determines the way in which I have viewed and reflected on the world in relation to economic policy and the economy, muses Huhtala.
Huhtala is fascinated by the abstract way in which economics structures the world.
- Economics starts from the very simple idea of budget constraints, which force people to make choices. We all have a limited amount of time and other resources. Ultimately, the Earth also has a limited amount of natural resources, she explains.
Economists are often accused of sacrificing everything at the altar of efficiency.
- Economics tends to be misunderstood slightly. Efficiency is at the heart of economics precisely because resources are scarce. As economists, we think about how things could best be organised in society to maximise welfare while addressing the constraints, she explains.
But economics, too, is evolving. Today’s behavioural economics draws on psychology, while large population register data sets make it possible to observe behaviour in the face of authentic economic choices.
- At the core of economics is elasticity, or abstractions of responses to changes: how do employees or companies react if wages go up or taxation increases? These reactions can be quantified based on register data. Economics is useful when planning social reforms and considering how incentives should work, says Huhtala.
It was this abstract way of thinking that fascinated Huhtala in economics.
- The longer I work in this field, the more appreciation I have for how aptly the simple theoretical basis of economics structures the world. Economics combines social issues and their analytical mathematical description – what could be a better combination? she describes her interest in economics.
From the point of view of economics research, the world is only becoming more interesting.
- A year ago, I took part in an introductory course in the philosophy of artificial intelligence. It is obvious that AI will change economics. It will be exciting to see how soon and in what ways, Huhtala enthuses.
Director General interviews
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VATT 30 years