Finland is absolutely modern in every respect and practically the most highly developed power in the European Union. And this despite the fact that this country has the lowest population density in the EU, a very harsh cold climate, long distances between settlements and a significant limitation of natural and raw materials. Largely because of this, the Finnish economy is extremely dependent on the right regional policy, which is constantly checked by the challenges of our time associated with a fairly rapid, one might even say swift, aging population and globalization.
Basic vectors
The country of Suomi has chosen a difficult path for itself, aimed at achieving national goals, strengthening appropriate competitiveness in the international arena and fully improving the well-being of all citizens of the country. For this, the Finnish economy today is focused on increasing the efficiency of regional development, which is done so that each region of the state can fully reveal its hidden potential. In this regard, the country pays attention to maintaining not only the poorest regions, but also other regions in order to improve their economic behavior and resistance to changes in the world arena. This is the key position of the strategy of the current Finnish government.
History reference
The history of the Finnish economy is very dynamic and positive. What is the stage of 1960-1970, when the number of people born in the post-war period reached its maximum peak. It was at this time that the most significant migration of the able-bodied population from agrarian regions to administrative and industrial regions took place. Over the next twenty years, the Finnish economy has developed relatively stably and evenly. The state did its utmost to create an optimal balance, helping to develop university cities, provinces and communes in various ways. In practice, this resulted in the creation of the so-called technological villages, which were analogues of the nowadays American Silicon Valley - a place where the best experts from all over the world united their aspirations. And this approach of the Finnish leadership has led many companies to purposefully turn to these villages in order to get the results of the research and development required for them. One of the largest technological villages is Oulu, which was able to give a powerful impetus to the development of the region.
Problems
The Finnish economy experienced a certain crisis in the 1990s, which was subsequently followed by a recovery phase. The difficulties in the state were caused by the fact that there was a slowdown in the growth of people’s employment in the original industrial areas, which led to a serious blurring of the borders of the so-called industrial Finland. This situation ensured a rapid outflow of labor from the southeast agglomeration of the country. At the same time, Helsinki and its suburbs developed rapidly, while regional imbalances only slowly increased.
In more detail, in the provinces of Uusimaa, Varsinais-Suomi, Pirkanmaa and Pohoys-Pohyanmaa for the period 1994-2000, the economic growth amounted to 6.5% with the national indicator of 5%. At the same time, regional differences only intensified, while unemployment grew. It is worth noting that in 1990 its figure was 3.2% for the country, and in 1995 - already 15%.
2000 period
In the early years of the 21st century, Finland's socially-oriented economy began to experience less contrasts, but the leaders and regions that were lagging behind in terms of development remained the same. The modest pace of economic growth led to the fact that the indicators of economic development somewhat leveled off and balanced. At the same time, there was a slight slowdown in the migration of people to large settlements and industrial centers, since many Finns faced what is called overpopulation: the social services sector began to experience a significant overload, housing prices also increased significantly and turned out to be prohibitive for many.
All this quite logically led to the fact that the tendency of people to move to the suburbs and sparsely populated communes increased. In addition, 2012 was a turning point in some respects, as the process of reducing the working-age population aged 15-64 years began. According to experts, by 2025 the number of people over 64 years old will increase by 80% in the region of the capital compared to current indicators, and Eastern Finland will experience a shortage of labor, which, in turn, will significantly limit the production sector in further progressive development. Improving the situation in terms of the number of able-bodied people will be observed only in trade, tourism, business, and health care.
Positive points
The positive qualities of the northern country include the following:
- The openness of the Finnish economy.
- Political stability.
- Highly developed infrastructure.
- Reliability of telecommunication systems.
- Perfect interaction between various existing enterprises, research, technical centers and universities.
- The speed of mastering the latest developments and technologies.
- Adequate educational level of the local population.
- The optimal climate for doing business.
Government sector
State enterprises provided a significant contribution to the development of the country. In the 1990s, enterprises controlled by the state were liquidated: the institute of public administration, the cartographic center, the publishing house, and many others. However, the following companies were partially privatized:
- Neste (oil refining and chemistry).
- “Fortum” (energy sector).
- Outokumpu (manufacturing).
- Valmet (mechanical engineering).
- “Sampo” and “Sponda” (financial services, real estate).
- "Stura Enso" (forestry, woodworking and pulp and paper industry).
For the period 1990-2000 privatization brought 11 billion US dollars to the state treasury.
Industry Features
Finland (the country's economy is currently experiencing a slow growth compared to the rest of the European Union) has the forestry, information, telecommunications, metallurgy, energy, engineering, food, construction sectors, as well as healthcare and business services as its main sectors. It is worth noting that the agricultural industry in the period 1940-1950 brought the country more than 25% of the gross national product, and today - 3%. The service sector, which generates about 60% of GNP, has broken into first positions. Until 1980, the share of industry influence was steadily growing, but today its share is fixed at 28%.
Wood processing
Forests are the main wealth of the Finnish state. Among the main timber processing companies are: UPM-Kymmene, Stora Enso and Metsä Group. By the way, the world-famous company Nokia also began its business activity with the opening of a pulp mill and only at the beginning of 1990 decided to move into the telecommunications sector.
At the time of 2007, Finland accounted for 10% of all world exports of both timber and pulp and paper products. And the value of export of printing paper made up one fifth of all exports.
Metallurgy and mechanical engineering
The Finnish economy in this segment is represented by such enterprises as:
- Sisu Auto - the production of trucks and special equipment for the most part for the needs of the defense complex.
- Wärtsilä - produces engines for ships of various capacities, screw-type mechanisms, gaskets, control systems and more.
- Wekman is a manufacturer of metal roof tiles.
- Kone - manufactures elevators, travelators, escalators and passenger lifts.
- Abloy is a world-famous manufacturer of locking systems, locks, hardware, locks, including electromechanical ones.
- Rautaruukki is a manufacturer of steel structures for construction and special steel grades.
- Outokumpu - produces stainless steels.
First Quantum Minerals also has substantial revenue, which has official permission and is developing the largest Finnish nickel mine in Lapland. Production volumes are in the range of 10 million tons per year.
According to the end of 2015, 121 thousand people were involved in mechanical engineering. As for exports, 2015 was a successful year for the industry. Revenues from product sales amounted to 12.6 billion euros.
The metallurgical industry specializes in the production of steel. According to the results of 2015, Finland was on the 31st place in the world in terms of the total smelting of this metal (3.9 million tons). Steel mills fully cover the metal needs of the entire domestic market of the state.
Chemical industry
Ranks third in the formation of Finland's GDP. The production of chemical products has been at approximately the same level in the country for many years, which is explained by the presence of very stable demand not only in the external market, but also in the domestic one.
About 60% of all chemical products are sold to the countries of the European Union and Eastern Europe. The Finnish economy today owes much to its development to such titans of the chemical industry as:
- Kemira is a concern specializing in the production of chemicals, fertilizers, varnishes, paints, resins, adhesives. This giant is the only manufacturer on the planet with a full set of chemicals for the complete bleaching of paper pulp. He is also a world leader in the production of formic acid.
- “Kemira Gro Hau” - the concern chose the production of fertilizers and animal feed as the main vector of activity.
- Tikkurila is the largest producer of industrial and building and household paints in the Old World. In addition to enterprises located directly in Finland, the concern has its plants in Latvia, Poland, Estonia, Holland, Italy, England and Russia.
By the way, almost 40% of all industry workers are involved in plastics processing. The largest producers of polymers are: Borealis, Polymers Oy, Dinea Chemicals.
Food industry
The Finnish economy, which is briefly discussed in this article, also largely depends on the food industry, which, incidentally, has suffered rather sensitively from retaliatory sanctions imposed by the Russian Federation in August 2014. In particular, Valio, a company specializing in the production of dairy products, has already suspended its production lines, which are focused on sales on the Russian market.
One of the leading food processing companies in Finland is Fazer, a renowned chocolate producer. A large volume of coffee is produced by the Paulig Group.
The absolute leaders in the field of alcohol production are Sinebrychoff (operating in the market since 1819) and Hartwall.
Electronic and electrical industry
This sector of the country includes the production of electrical, telecommunications, medical equipment and is considered the most high-tech sector of the Finnish economy. The largest producers of the sphere are: ABB, Nokia, Ensto Finland and Vaisala.
In 2015, the industry brought 6.6 billion euros to the Finnish budget, which is 3% less than the 2014 figure. At the same time, 40.5 thousand people are employed at all enterprises in this sphere. As for the volume of production of electronic and electrical products, in Finland it is declining. This is due to the fact that the country has a very high level of production costs, and therefore most Finnish concerns have already taken part of their production lines outside the state in order to stabilize the profitability and competitiveness of production.
Shipbuilding
The manufacture of ships and marine equipment is practically the basis of such a field as the Finnish economy. In short, this industry is considered the country's most high-tech industry. Experts estimate the country's Finnish market at 1% of the total world production of ships, liners, ferries, icebreakers. The industry gave 20 thousand jobs. Today, seven shipyards are built in Finland, the largest of which is located in the city of Turku and specializes in the construction of passenger cruise ships.
Supervisory system
In matters of control, the Finnish state relies on state regulation of the economy. Finland, as a full member of the European Union, very meticulously implements all existing laws and directives of the European Commission, which, however, do not always successfully influence Finnish business. For example, the Directive on the reduction of carbon dioxide in emissions has led to significant reductions in the country's industry due to the increase in costs of existing enterprises to meet its requirements.
The economy in Finland (taxes, by the way, are quite high and can reach up to forty percent for private individuals) is accompanied by the clear work of the law on consumer protection, which has changed in 2013. In addition, the antimonopoly legislation is effectively working, which, in turn, is regulated by a number of well-considered legal acts.
Logistic leader
Posti Finland Economy is the largest Finnish company specializing in handling and shipping a wide variety of goods and goods. This company works together with the carrier Yanwen. Starting March 25, 2015, Posti Finland Economics has been included in the list of recommended delivery methods at one of the most popular Aliexpress trading floors. The site recommends this delivery method for sending goods less than $ 7. With the help of Posti Finland Economy, the tracking of purchased goods is fast and clear. The operator has a wide network of its own points where customers will be served almost instantly and at the same time with high quality. In addition, “FAST Finland economy” offers its customers (both private and corporate) a fairly large number of online services, which can be found in more detail on the company's official website.
Banking and insurance
As of January 1, 2015, Finland has registered 291 financial institutions. 279 are banks, 11 are investment funds, two of them are electronic (since 2014, due to changes in legislation, they have been singled out as a separate narrow group).
The largest bank in Finland is the OP-Pohjola Group, which has 450 branches and employs 12.3 thousand people. In second position is a bank called Nordea Pankki Finland Plc with a staff of 7.4 thousand people.
The main link of the entire financial system of the state are specialized and commercial banks. By the way, Finland is the unequivocal leader of the whole of Northern Europe in terms of the number of inhabitants per one financial institution. This indicator is equal to 15 thousand people per banking unit.
It is worth noting that quite negative trends in the economic sector led to a decrease in the assets of the entire banking segment. The total volume of financial institutions in Finland on January 1, 2016 amounted to slightly more than 684 billion euros, which is almost 3% less than the same indicator in 2015. This decrease occurred because lending by many European borrowers decreased.
