Economy of Finland

8/10/2019 Economy of Finland

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Finlandhas a highly industrialised,mixed economywith aper capitaoutput equal to that of other western

economies such asFrance,Germany,Swedenor theUnited Kingdom.The largest sector of the economy

isservicesat 65.7 percent, followed by manufacturing and refining at 31.4 percent. Primary productionis

2.9 percent.[13]

With respect toforeign trade,the key economic sector ismanufacturing.The largestindustries[14]areelectronics(21.6 percent), machinery, vehicles and other engineered metal products

(21.1 percent), forest industry (13.1 percent), and chemicals (10.9 percent). Finland hastimberand

several mineral and freshwater resources.Forestry,paper factories, and theagricultural sector(on which

taxpayers spend around 2 billion euro annually) are politically sensitive to rural residents. TheGreater

Helsinkiarea generates around a third ofGDP.[citation needed]

In a 2004 OECD comparison, high-technology manufacturing in Finland ranked second largest after

Ireland. Knowledge-intensive services have also ranked the smallest and slow-growth sectors

especially agriculture and low-technology manufacturingsecond largest after Ireland.[clarification

needed]Investment was below expected.[15]Overall short-term outlook was good and GDP growth has been

above many EU peers. Finland has the 4th largestknowledge economyin Europe, behind Sweden,

Denmark and the UK.[16]

Finland is highly integrated in the global economy, and international trade is a third of GDP. The

European Union makes 60 percent of the total trade.[17]The largest trade flows are with Germany,Russia,

Sweden, the United Kingdom, the United States,Netherlandsand China.[17]Trade policy is managed by

the European Union, where Finland has traditionally been among the free trade supporters, except for

agriculture. Finland is the only Nordic country to have joined theEurozone;DenmarkandSwedenhave

retained their traditional currencies, whereasIcelandandNorwayare not members of the EU at all.

Contents

[hide]

1 History

o 1.1 After World War II

o 1.2 Liberalization

o 1.3 European Union

2 Agriculture

o 2.1 Forestry

3 Industry

o 3.1 Electronics

o 3.2 Metals, engineering and manufacturing

o 3.3 Chemical industry

o 3.4 Pulp and paper industry

o 3.5 Energy industry

4 Companies
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_Finland#Liberalizationhttp://en.wikipedia.org/wiki/Economy_of_Finland#Liberalizationhttp://en.wikipedia.org/wiki/Economy_of_Finland#European_Unionhttp://en.wikipedia.org/wiki/Economy_of_Finland#European_Unionhttp://en.wikipedia.org/wiki/Economy_of_Finland#Agriculturehttp://en.wikipedia.org/wiki/Economy_of_Finland#Agriculturehttp://en.wikipedia.org/wiki/Economy_of_Finland#Forestryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Forestryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Electronicshttp://en.wikipedia.org/wiki/Economy_of_Finland#Electronicshttp://en.wikipedia.org/wiki/Economy_of_Finland#Metals.2C_engineering_and_manufacturinghttp://en.wikipedia.org/wiki/Economy_of_Finland#Metals.2C_engineering_and_manufacturinghttp://en.wikipedia.org/wiki/Economy_of_Finland#Chemical_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Chemical_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Energy_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Energy_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Companieshttp://en.wikipedia.org/wiki/Economy_of_Finland#Companieshttp://en.wikipedia.org/wiki/Economy_of_Finland#Companieshttp://en.wikipedia.org/wiki/Economy_of_Finland#Energy_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Chemical_industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Metals.2C_engineering_and_manufacturinghttp://en.wikipedia.org/wiki/Economy_of_Finland#Electronicshttp://en.wikipedia.org/wiki/Economy_of_Finland#Industryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Forestryhttp://en.wikipedia.org/wiki/Economy_of_Finland#Agriculturehttp://en.wikipedia.org/wiki/Economy_of_Finland#European_Unionhttp://en.wikipedia.org/wiki/Economy_of_Finland#Liberalizationhttp://en.wikipedia.org/wiki/Economy_of_Finland#After_World_War_IIhttp://en.wikipedia.org/wiki/Economy_of_Finland#Historyhttp://en.wikipedia.org/wiki/Economy_of_Finlandhttp://en.wikipedia.org/wiki/Norwayhttp://en.wikipedia.org/wiki/Icelandhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Denmarkhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-fin-17http://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-fin-17http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-16http://en.wikipedia.org/wiki/Knowledge_economyhttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-oecd2004-15http://en.wikipedia.org/wiki/Wikipedia:Please_clarifyhttp://en.wikipedia.org/wiki/Wikipedia:Please_clarifyhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Gross_domestic_producthttp://en.wikipedia.org/wiki/Greater_Helsinkihttp://en.wikipedia.org/wiki/Greater_Helsinkihttp://en.wikipedia.org/wiki/Agriculturehttp://en.wikipedia.org/wiki/Forestryhttp://en.wikipedia.org/wiki/Timberhttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-14http://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/International_tradehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-13http://en.wikipedia.org/wiki/Primary_sector_of_the_economyhttp://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdomhttp://en.wikipedia.org/wiki/Economy_of_Swedenhttp://en.wikipedia.org/wiki/Economy_of_Germanyhttp://en.wikipedia.org/wiki/Economy_of_Francehttp://en.wikipedia.org/wiki/Per_capitahttp://en.wikipedia.org/wiki/Mixed_economyhttp://en.wikipedia.org/wiki/Finland


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5 Household income and consumption

6 Unemployment

7 Public policy

o 7.1 Product market

o 7.2 Job market

8 Taxation

9 Occupational and income structure

10 See also

11 References

12 External links

History[edit source|editbeta]

Finland started out as a relatively poor country that was vulnerable to shocks to the economy such as the

great famine of the 1860s. Until the 1930s, the Finnish economy was predominantly agrarian, and, as late

as in the 1950s, more than half the population and 40 percent of output were still in the primary

sector.[citation needed]

After World War II[edit source|editbeta]

Property rights were strong. While nationalization committees were set up in France and the United

Kingdom, Finland avoided nationalizations. After failed experiments with protectionism [citation needed], Finland

eased restrictions and concluded a free trade agreement with theEuropean Communityin 1973, making

its markets more competitive. Local education markets expanded and an increasing number of Finns also

went abroad to study in the United States or Western Europe, bringing back advanced skills. [citation

needed]

There was a quite common, but pragmatic-minded, credit and investment cooperation by state andcorporations, though it was considered with suspicion. Support for capitalism was widespread.[18]Savings

rate hovered among the world's highest, at around 8% until the 80s. In the beginning of the 1970s,

Finland's GDP per capita reached the level of Japan and the UK. Finland's economic development shared

many aspects with export-led Asian countries.[18]

Liberalization[edit source|editbeta]

Like other Nordic countries, Finland has liberalized its system of economic regulation since late 1980s.

Financial and product market regulations were modified. Some state enterprises were privatized and

some tax rates were altered.[19]In 1991 the Finnish economy fell into a severerecession.This was

caused by a combination ofeconomic overheating(largely due to a change in the banking laws in 1986

which made credit much more accessible), depressed markets with key trading partners (particularly theSwedish and Soviet markets) as well as local markets, slow growth with other trading partners, and the

disappearance of the Sovietbilateral trade.Stock market and housing prices declined by 50%.[20]The

growth in the 1980s was based on debt, and when the defaults began rolling in, GDP declined by 13%

andunemploymentincreased from a virtual full employment to one fifth of the workforce. The crisis was

amplified by trade unions' initial opposition to any reforms. Politicians struggled to cut spending and the

public debt doubled to around 60% of GDP.[20]Much of the economic growth in the 1980s was based on

debt financing, and the debt defaults led to a savings and loan crisis.A total of over 10 billion euros were
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used to bail out failing banks, which led to banking sector consolidation.[21]After devaluations the

depression bottomed out in 1993.

European Union[edit source|editbeta]

Finland joined theEuropean Unionin 1995. The central bank was given an inflation-targeting mandate

until Finland joined the euro zone.[20]

The growth rate has since been one of the highestofOECDcountries and Finland has topped many indicators of national performance.

Finland was one of the 11 countries joining the third phase of the Economic and Monetary Union of the

European Union,adopting theeuroas the country's currency, on 1 January 1999. The national currency

markka (FIM) was withdrawn from circulation and replaced by the euro (EUR) at the beginning of 2002.

Agriculture[edit source|editbeta]

An oxeye daisy and a cow inKyyjrvi,Central Finland.

Finland's climate and soils make growing crops a particular challenge. The country lies between 60 and

70 north latitude - as far north as Alaska - and has severe winters and relatively short growing seasons

that are sometimes interrupted by frosts. However, because the Gulf Stream and the North Atlantic Drift

Current moderate the climate, and because of the relatively low elevation of the land area, Finlandcontains half of the world's arable land north of 60 north latitude. Annual precipitation is usually sufficient,

but it occurs almost exclusively during the winter months, making summer droughts a constant threat. In

response to the climate, farmers have relied on quick-ripening and frost-resistant varieties of crops, and

they have cultivated south-facing slopes as well as richer bottomlands to ensure production even in years

with summer frosts. Most farmland had originally been either forest or swamp, and the soil had usually

required treatment with lime and years of cultivation to neutralise excess acid and to develop fertility.

Irrigation was generally not necessary, but drainage systems were often needed to remove excess water.

Until the late nineteenth century, Finland's isolation required that most farmers concentrate on producing

grains to meet the country's basic food needs. In the fall, farmers planted rye; in the spring, southern and

central farmers started oats, while northern farmers seeded barley. Farms also grew small quantities of

potatoes, other root crops, and legumes. Nevertheless, the total area under cultivation was still small.

Cattle grazed in the summer and consumed hay in the winter. Essentially self-sufficient, Finland engaged

in very limited agricultural trade.

This traditional, almost autarkic, production pattern shifted sharply during the late nineteenth century,

when inexpensive imported grain from Russia and the United States competed effectively with local grain.

At the same time, rising domestic and foreign demand for dairy products and the availability of low-cost

imported cattle feed made dairy and meat production much more profitable. These changes in market
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conditions induced Finland's farmers to switch from growing staple grains to producing meat and dairy

products, setting a pattern that persisted into the late 1980s.

In response to the agricultural depression of the 1930s, the government encouraged domestic production

by imposing tariffs on agricultural imports. This policy enjoyed some success: the total area under

cultivation increased, and farm incomes fell less sharply in Finland than in most other countries. Barriers

to grain imports stimulated a return to mixed farming, and by 1938 Finland's farmers were able to meet

roughly 90 percent of the domestic demand for grain.

The disruptions caused by the Winter War and the Continuation War caused further food shortages,

especially when Finland ceded territory, including about one-tenth of its farmland, to the Soviet Union.

The experiences of the depression and the war years persuaded the Finns to secure independent food

supplies to prevent shortages in future conflicts.

After the war, the first challenge was to resettle displaced farmers. Most refugee farmers were given

farms that included some buildings and land that had already been in production, but some had to make

do with "cold farms," that is, land not in production that usually had to be cleared or drained before crops

could be sown. The government sponsored large-scale clearing and draining operations that expandedthe area suitable for farming. As a result of the resettlement and land-clearing programs, the area under

cultivation expanded by about 450,000 hectares, reaching about 2.4 million hectares by the early 1960s.

Finland thus came to farm more land than ever before, an unusual development in a country that was

simultaneously experiencing rapid industrial growth.

During this period of expansion, farmers introduced modern production practices. The widespread use of

modern inputschemical fertilisers and insecticides, agricultural machinery, and improved seed

varietiessharply improved crop yields. Yet the modernisation process again made farm production

dependent on supplies from abroad, this time on imports of petroleum and fertilisers. By 1984 domestic

sources of energy covered only about 20 percent of farm needs, while in 1950 domestic sources had

supplied 70 percent of them. In the aftermath of the oil price increases of the early 1970s, farmers began

to return to local energy sources such as firewood. The existence of many farms that were too small to

allow efficient use of tractors also limited mechanisation. Another weak point was the existence of many

fields with open drainage ditches needing regular maintenance; in the mid-1980s, experts estimated that

half of the cropland needed improved drainage works. At that time, about 1 million hectares had

underground drainage, and agricultural authorities planned to help install such works on another million

hectares. Despite these shortcomings, Finland's agriculture was efficient and productiveat least when

compared with farming in other European countries.[22]

Forestry[edit source|editbeta]

Forests play a key role in the country's economy, making it one of the world's leading wood producers

and providing raw materials at competitive prices for the crucial wood-processing industries. As inagriculture, the government has long played a leading role in forestry, regulating tree cutting, sponsoring

technical improvements, and establishing long-term plans to ensure that the country's forests continue to

supply the wood-processing industries.

Finland's wet climate and rocky soils are ideal for forests. Tree stands do well throughout the country,

except in some areas north of the Arctic Circle. In 1980 the forested area totaled about 19.8 million

hectares, providing 4 hectares of forest per capitafar above the European average of about 0.5

hectares. The proportion of forest land varied considerably from region to region. In the central lake
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plateau and in the eastern and northern provinces, forests covered up to 80 percent of the land area, but

in areas with better conditions for agriculture, especially in the southwest, forests accounted for only 50 to

60 percent of the territory. The main commercial tree speciespine, spruce, and birchsupplied raw

material to the sawmill, pulp, and paper industries. The forests also produced sizable aspen and elder

crops.

The heavy winter snows and the network of waterways were used to move logs to the mills. Loggers were

able to drag cut trees over the winter snow to the roads or water bodies. In the southwest, the sledding

season lasted about 100 days per year; the season was even longer to the north and the east. The

country's network of lakes and rivers facilitated log floating, a cheap and rapid means of transport. Each

spring, crews floated the logs downstream to collection points; tugs towed log bundles down rivers and

across lakes to processing centers. The waterway system covered much of the country, and by the 1980s

Finland had extended roadways and railroads to areas not served by waterways, effectively opening up

all of the country's forest reserves to commercial use.

Forestry and farming were closely linked. During the twentieth century, government land redistribution

programmes had made forest ownership widespread, allotting forestland to most farms. In the 1980s,

private farmers controlled 35 percent of the country's forests; other persons held 27 percent; thegovernment, 24 percent; private corporations, 9 percent; and municipalities and other public bodies, 5

percent. The forestlands owned by farmers and by other peoplesome 350,000 plotswere the best,

producing 75 to 80 percent of the wood consumed by industry; the state owned much of the poorer land,

especially that in the north.

The ties between forestry and farming were mutually beneficial. Farmers supplemented their incomes

with earnings from selling their wood, caring for forests, or logging; forestry made many otherwise

marginal farms viable. At the same time, farming communities maintained roads and other infrastructure

in rural areas, and they provided workers for forest operations. Indeed, without the farming communities

in sparsely populated areas, it would have been much more difficult to continue intensive logging

operations and reforestation in many prime forest areas.

The Ministry of Agriculture and Forestry has carried out forest inventories and drawn up silvicultural plans.

According to surveys, between 1945 and the late 1970s foresters had cut trees faster than the forests

could regenerate them. Nevertheless, between the early 1950s and 1981, Finland was able to boost the

total area of its forests by some 2.7 million hectares and to increase forest stands under 40 years of age

by some 3.2 million hectares. Beginning in 1965, the country instituted plans that called for expanding

forest cultivation, draining peatland and waterlogged areas, and replacing slow-growing trees with faster-

growing varieties. By the mid-1980s, the Finns had drained 5.5 million hectares, fertilized 2.8 million

hectares, and cultivated 3.6 million hectares. Thinning increased the share of trees that would produce

suitable lumber, while improved tree varieties increased productivity by as much as 30 percent.

Comprehensive silvicultural programmes had made it possible for the Finns simultaneously to increaseforest output and to add to the amount and value of the growing stock. By the mid-1980s, Finland's

forests produced nearly 70 million cubic meters of new wood each year, considerably more than was

being cut. During the postwar period, the annual cut increased by about 120 percent to about 50 million

cubic meters. Wood burning fell to one-fifth the level of the immediate postwar years, freeing up wood

supplies for the wood-processing industries, which consumed between 40 million and 45 million cubic


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meters per year. Indeed, industry demand was so great that Finland needed to import 5 million to 6

million cubic meters of wood each year.

To maintain the country's comparative advantage in forest products, Finnish authorities moved to raise

lumber output toward the country's ecological limits. In 1984 the government published the Forest 2000

plan, drawn up by the Ministry of Agriculture and Forestry. The plan aimed at increasing forest harvests

by about 3 percent per year, while conserving forestland for recreation and other uses. It also called for

enlarging the average size of private forest holdings, increasing the area used for forests, and extending

forest cultivation and thinning. If successful, the plan would make it possible to raise wood deliveries by

roughly one-third by the end of the twentieth century. Finnish officials believed that such growth was

necessary if Finland was to maintain its share in world markets for wood and paper products.[22]

Industry[edit source|editbeta]

Since the 1990s, Finnish industry, which for centuries had relied on the country's vast forests, has

become increasingly dominated by electronics and services, as globalization lead to a decline of more

traditional industries.[23]Outsourcing resulted in more manufacturing being transferred abroad, with

Finnish-based industry focusing to a greater extent on R&D and hi-tech electronics.

Electronics[edit source|editbeta]

The Finnish electronics and electrotechnics industry relies on heavy investment in R&D, and has been

accelerated by the liberalisation of global markets. Electrical engineering started in the late 19th century

with generators and electric motors built by Gottfried Strmberg, now part of the ABB Group.Other

Finnish companiessuch as Instru, Vaisala and Neles (now part of Metso) - have succeeded in areas

such as industrial automation, medical and meteorological technology.Nokiawas once a world leader in

mobile telecommunications.

Metals, engineering and manufacturing[edit source|editbeta]

Finland has an abundance of minerals, but many large mines have closed down, and most raw materialsare now imported. For this reason, companies now tend to focus on high added-value processing of

metals.[citation needed]The exports include the production steel, copper, chromium, zinc and nickel, and

finished products such as steel roofing and cladding, welded steel pipes, copper pipe and coated

sheets.Outokumpuis known for developing the flash smelting process for copper production and

stainless steel.

With regard to vehicles, the Finnish motor industry consists mostly of manufacturers of tractors (Valtra,

formerlyValmet tractor), forest machines (f.ex.Ponsse), military vehicles (Sisu,Patria), trucks (Sisu

Auto), buses andValmet Automotive,a contract manufacturer, whose factory

inUusikaupunkiproduces Fiskerelectric cars.Shipbuildingis an important industry: the world's largest

cruise ships are built in Finland; also, the Finnish companyWrtsilproduces the world's largest dieselengines. In addition, Finland also produces trainrolling stock.

The manufacturing industry is a significant employer of about 400,000 people.[24]

Chemical industry[edit source|editbeta]

The chemical industry is one of the Finland's largest industrial sectors with its roots in tar making in the

17th century.[23]It produces an enormous range of products for the use of other industrial sectors,

especially for forestry and agriculture. In addition, its produces plastics, chemicals, paints, oil products,
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pharmaceuticals, environmental products, biotech products and petrochemicals.Biotechnologyis

regarded as one of the most promising high-tech sectors in Finland and it is growing rapidly .[25]

Pulp and paper industry[edit source|editbeta]

A freight train departing from a pulp mill innekoski.

Forest products has been the major export industry in the past, but diversification and growth of the

economy has reduced its share. In the 1970s, thepulp and paper industryaccounted for half of Finnish

exports. Although this share has shrank, pulp and paper is still a major industry with 52 sites across the

country. Furthermore, several of large international corporations in this business are based in

Finland.Stora EnsoandUPMwere placed #1 and #3 by output in the world, both producing more than

ten million tons.M-realandMyllykoskialso appear on the top 100 list.[26]

Energy industry[edit source|editbeta

]Finland's energy supply is divided as follows: nuclear power - 26%, net imports - 20%, hydroelectric

power - 16%, combined production district heat - 18%, combined production industry - 13%, condensing

power - 6%.[27]One half of all the energy consumed in Finland goes to industry, one fifth to heating

buildings and one fifth to transport.[28]Lacking indigenous fossil fuel resources, Finland has been an

energy importer. This might change in the future since Finland is currently building its fifth and approved

the building permits for its sixth and seventh reactors.[29]There are some uranium resources in Finland,

but to date no commercially viable deposits have been identified for exclusive mining of

uranium.[30]However, permits have been granted toTalvivaarato produce uranium from thetailingsof

theirnickel-cobaltmine.

Companies[edit source|editbeta]
http://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Biotechnologyhttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-25http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-25http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-25http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=11http://en.wikipedia.org/wiki/%C3%84%C3%A4nekoskihttp://en.wikipedia.org/wiki/%C3%84%C3%A4nekoskihttp://en.wikipedia.org/wiki/%C3%84%C3%A4nekoskihttp://en.wikipedia.org/wiki/Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/M-realhttp://en.wikipedia.org/wiki/M-realhttp://en.wikipedia.org/wiki/M-realhttp://en.wikipedia.org/wiki/Myllykoski_Corporationhttp://en.wikipedia.org/wiki/Myllykoski_Corporationhttp://en.wikipedia.org/wiki/Myllykoski_Corporationhttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-26http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-26http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-26http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=12http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-27http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-27http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-27http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-28http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-28http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-28http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-29http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-29http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-29http://en.wikipedia.org/wiki/Uranium_minehttp://en.wikipedia.org/wiki/Uranium_minehttp://en.wikipedia.org/wiki/Uranium_minehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-30http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-30http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-30http://en.wikipedia.org/wiki/Talvivaarahttp://en.wikipedia.org/wiki/Talvivaarahttp://en.wikipedia.org/wiki/Talvivaarahttp://en.wikipedia.org/wiki/Tailingshttp://en.wikipedia.org/wiki/Tailingshttp://en.wikipedia.org/wiki/Tailingshttp://en.wikipedia.org/wiki/Nickelhttp://en.wikipedia.org/wiki/Nickelhttp://en.wikipedia.org/wiki/Cobalthttp://en.wikipedia.org/wiki/Cobalthttp://en.wikipedia.org/wiki/Cobalthttp://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=13http://en.wikipedia.org/wiki/File:Aanekoski_rautatie_sellutehdas_maisema.jpghttp://en.wikipedia.org/wiki/File:Aanekoski_rautatie_sellutehdas_maisema.jpghttp://en.wikipedia.org/wiki/File:Aanekoski_rautatie_sellutehdas_maisema.jpghttp://en.wikipedia.org/wiki/File:Aanekoski_rautatie_sellutehdas_maisema.jpghttp://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=13http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=13http://en.wikipedia.org/wiki/Cobalthttp://en.wikipedia.org/wiki/Nickelhttp://en.wikipedia.org/wiki/Tailingshttp://en.wikipedia.org/wiki/Talvivaarahttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-30http://en.wikipedia.org/wiki/Uranium_minehttp://en.wikipedia.org/wiki/Uranium_minehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-29http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-28http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-27http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=12http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=12http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-26http://en.wikipedia.org/wiki/Myllykoski_Corporationhttp://en.wikipedia.org/wiki/M-realhttp://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Pulp_and_paper_industryhttp://en.wikipedia.org/wiki/%C3%84%C3%A4nekoskihttp://en.wikipedia.org/w/index.php?title=Economy_of_Finland&veaction=edit&section=11http://en.wikipedia.org/w/index.php?title=Economy_of_Finland&action=edit&section=11http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-25http://en.wikipedia.org/wiki/Biotechnology


8/16

Aleksanterinkatu,a commercial street in Helsinki.

Notable companies in Finland includeNokia,the former market leader in mobile telephony;Stora Enso,

the largest paper manufacturer in the world;Neste Oil,an oil refining and marketing company;UPM-Kymmene,the third largest paper manufacturer in the world;Aker Finnyards,the manufacturer of the

world's largest cruise ships (such asRoyal Caribbean'sFreedom of the Seas);Rovio Mobile,video game

developer most notable for creatingAngry Birds;KONE,a manufacturer of elevators and

escalators;Wrtsil,a producer of power plants and ship engines; andFinnair,the largestHelsinki-

Vantaabased internationalairline.[31]Additionally, many Nordic design firms are headquartered in

Finland.[32]These include theFiskarsownedIittala Group,Arteka furniture design firm co-created by Alvar

Aalto, andMarimekkomade famous byJacqueline Kennedy.[33][34]Finland has sophisticated financial

markets comparable to UK in efficiency.[35]Though foreign investment is as not high as some other

European countries, the largest foreign-headquartered companies included names such

asABB,Tellabs,Carlsberg,andSiemens.[36]

Around 70-80% of the equity quoted on theHelsinki Stock Exchangeare owned by foreign-registered

entities.[37]The larger companies get most of their revenue from abroad, and the majority of their

employees work outside the country. Cross-shareholding has been abolished and there is a trend

towards an Anglo-Saxon style ofcorporate governance.However, only around 15% of residents have

invested in stock market, compared to 20% in France, and 50% in the US.[36]

Between 2000-2003, early stage venture capital investments relative to GDP were 8.5 percent against 4

percent in the EU and 11.5 in the US. Later stage investments fell to the EU median .[38]Invest in Finland

and other programs attempt to attract investment.[39]In 2000FDIfrom Finland to overseas was 20 billion

euro and from overseas to Finland 7 billion euro. Acquisitions and mergers have internationalized

business in Finland.Although some privatization has been gradually done, there are still severalstate-owned companiesof

importance. The government keeps them as strategic assets or because they arenatural monopoly.

These include e.g.Neste Oil,VR Group(rail),Finnair,VTT(research) andItella(mail). Depending on the

strategic importance, the government may hold either 100%, 51% or less than 50% stock. Most of these

have been transformed into regular limited companies, but some are quasi-governmental ( liikelaitos), with

debt backed by the state, as in the case of VTT.
http://en.wikipedia.org/wiki/Aleksanterinkatuhttp://en.wikipedia.org/wiki/Aleksanterinkatuhttp://en.wikipedia.org/wiki/Nokiahttp://en.wikipedia.org/wiki/Nokiahttp://en.wikipedia.org/wiki/Nokiahttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/Aker_Finnyardshttp://en.wikipedia.org/wiki/Aker_Finnyardshttp://en.wikipedia.org/wiki/Aker_Finnyardshttp://en.wikipedia.org/wiki/Royal_Caribbean_Internationalhttp://en.wikipedia.org/wiki/Royal_Caribbean_Internationalhttp://en.wikipedia.org/wiki/MS_Freedom_of_the_Seashttp://en.wikipedia.org/wiki/MS_Freedom_of_the_Seashttp://en.wikipedia.org/wiki/MS_Freedom_of_the_Seashttp://en.wikipedia.org/wiki/Rovio_Mobilehttp://en.wikipedia.org/wiki/Rovio_Mobilehttp://en.wikipedia.org/wiki/Rovio_Mobilehttp://en.wikipedia.org/wiki/Angry_Birdshttp://en.wikipedia.org/wiki/Angry_Birdshttp://en.wikipedia.org/wiki/KONEhttp://en.wikipedia.org/wiki/KONEhttp://en.wikipedia.org/wiki/KONEhttp://en.wikipedia.org/wiki/W%C3%A4rtsil%C3%A4http://en.wikipedia.org/wiki/W%C3%A4rtsil%C3%A4http://en.wikipedia.org/wiki/W%C3%A4rtsil%C3%A4http://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/Helsinki-Vantaahttp://en.wikipedia.org/wiki/Helsinki-Vantaahttp://en.wikipedia.org/wiki/Helsinki-Vantaahttp://en.wikipedia.org/wiki/Helsinki-Vantaahttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-31http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-31http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-31http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-32http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-32http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-32http://en.wikipedia.org/wiki/Fiskarshttp://en.wikipedia.org/wiki/Fiskarshttp://en.wikipedia.org/wiki/Fiskarshttp://en.wikipedia.org/wiki/Iittala_Grouphttp://en.wikipedia.org/wiki/Iittala_Grouphttp://en.wikipedia.org/wiki/Artek_(company)http://en.wikipedia.org/wiki/Artek_(company)http://en.wikipedia.org/wiki/Artek_(company)http://en.wikipedia.org/wiki/Marimekkohttp://en.wikipedia.org/wiki/Marimekkohttp://en.wikipedia.org/wiki/Marimekkohttp://en.wikipedia.org/wiki/Jacqueline_Kennedyhttp://en.wikipedia.org/wiki/Jacqueline_Kennedyhttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-33http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-33http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-33http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-economicfreedom-35http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-economicfreedom-35http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-economicfreedom-35http://en.wikipedia.org/wiki/ABB_Grouphttp://en.wikipedia.org/wiki/ABB_Grouphttp://en.wikipedia.org/wiki/ABB_Grouphttp://en.wikipedia.org/wiki/Tellabshttp://en.wikipedia.org/wiki/Tellabshttp://en.wikipedia.org/wiki/Tellabshttp://en.wikipedia.org/wiki/Carlsberg_Grouphttp://en.wikipedia.org/wiki/Carlsberg_Grouphttp://en.wikipedia.org/wiki/Carlsberg_Grouphttp://en.wikipedia.org/wiki/Siemenshttp://en.wikipedia.org/wiki/Siemenshttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Helsinki_Stock_Exchangehttp://en.wikipedia.org/wiki/Helsinki_Stock_Exchangehttp://en.wikipedia.org/wiki/Helsinki_Stock_Exchangehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-37http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-37http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-37http://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-38http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-38http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-38http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-39http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-39http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-39http://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Natural_monopolyhttp://en.wikipedia.org/wiki/Natural_monopolyhttp://en.wikipedia.org/wiki/Natural_monopolyhttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/VR_Grouphttp://en.wikipedia.org/wiki/VR_Grouphttp://en.wikipedia.org/wiki/VR_Grouphttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/VTThttp://en.wikipedia.org/wiki/VTThttp://en.wikipedia.org/wiki/VTThttp://en.wikipedia.org/wiki/Itellahttp://en.wikipedia.org/wiki/Itellahttp://en.wikipedia.org/wiki/Itellahttp://en.wikipedia.org/wiki/File:Aleksanterinkatu_Helsinki_summer.jpghttp://en.wikipedia.org/wiki/File:Aleksanterinkatu_Helsinki_summer.jpghttp://en.wikipedia.org/wiki/File:Aleksanterinkatu_Helsinki_summer.jpghttp://en.wikipedia.org/wiki/File:Aleksanterinkatu_Helsinki_summer.jpghttp://en.wikipedia.org/wiki/Itellahttp://en.wikipedia.org/wiki/VTThttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/VR_Grouphttp://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/Natural_monopolyhttp://en.wikipedia.org/wiki/Government-owned_corporationhttp://en.wikipedia.org/wiki/Foreign_direct_investmenthttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-39http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-38http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Corporate_governancehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-37http://en.wikipedia.org/wiki/Helsinki_Stock_Exchangehttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-ownership-36http://en.wikipedia.org/wiki/Siemenshttp://en.wikipedia.org/wiki/Carlsberg_Grouphttp://en.wikipedia.org/wiki/Tellabshttp://en.wikipedia.org/wiki/ABB_Grouphttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-economicfreedom-35http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-33http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-33http://en.wikipedia.org/wiki/Jacqueline_Kennedyhttp://en.wikipedia.org/wiki/Marimekkohttp://en.wikipedia.org/wiki/Artek_(company)http://en.wikipedia.org/wiki/Iittala_Grouphttp://en.wikipedia.org/wiki/Fiskarshttp://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-32http://en.wikipedia.org/wiki/Economy_of_Finland#cite_note-31http://en.wikipedia.org/wiki/Airlinehttp://en.wikipedia.org/wiki/Helsinki-Vantaahttp://en.wikipedia.org/wiki/Helsinki-Vantaahttp://en.wikipedia.org/wiki/Finnairhttp://en.wikipedia.org/wiki/W%C3%A4rtsil%C3%A4http://en.wikipedia.org/wiki/KONEhttp://en.wikipedia.org/wiki/Angry_Birdshttp://en.wikipedia.org/wiki/Rovio_Mobilehttp://en.wikipedia.org/wiki/MS_Freedom_of_the_Seashttp://en.wikipedia.org/wiki/Royal_Caribbean_Internationalhttp://en.wikipedia.org/wiki/Aker_Finnyardshttp://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/UPM_(company)http://en.wikipedia.org/wiki/Neste_Oilhttp://en.wikipedia.org/wiki/Stora_Ensohttp://en.wikipedia.org/wiki/Nokiahttp://en.wikipedia.org/wiki/Aleksanterinkatu


9/16

Household income and consumption[edit source|editbeta]

Srninen, Helsinki

Finland's income is generated by the approximately 1.8 million private sector workers, who make an

average 25.1 euro per hour (before the median 60%tax wedge)in 2007.[40]According to a 2003 report,

residents worked on average around 10 years for the same employer[41]and around 5 different jobs over

a lifetime. 62 percent worked for small and medium-sized enterprises.[42]

Female employment rate washigh and gender segregation on career choices was higher than in the US.[43]In 1999 part-time work rate

was one of the smallest in OECD.[43]

Future liabilities are dominated by the pension deficit. Unlike in Sweden, where pension savers can

manage their investments, in Finland employer chooses a pension fund for the employee. The pension

funding rate is higher than in most Western European countries, but still only a portion of it is funded and

pensions exclude health insurances and other unaccounted promises.[44]Directly heldpublic debthas

been reduced to around 32 percent in 2007.[45]In 2007, the average household savings rate was -3.8

andhousehold debt101 percent of annual disposable income, a typical level in Europe.[46]

In 2008, the OECD reported that "the gap between rich and poor has widened more in Finland than in any

other wealthy industrialised country over the past decade" and that "Finland is also one of the fewcountries where inequality of incomes has grown between the rich and the middle-class, and not only

between rich and poor."[47]

In 2006, there were 2,381,500 households of average size 2.1 people. Forty percent of households

consisted of single person, 32 percent two and 28 percent three or more. There were 1.2 million

residential buildings in Finland and the average residential space was 38 square metres per person. The

average residential property (without land) cost 1,187 euro per square metre (without land) and

residential land on 8.6 euro per square metre. Consumer energy prices were 8-12 euro cent per kilowatt

hour.[48]74 percent of households had a car. There were 2.5 million cars and 0.4 other

vehicles.[49]Around 92 percent has mobile phone and 58 percentInternet connection at home.The

average total household consumption was 20,000 euro, out of which housing at around 5500 euro,transport at around 3000 euro, food and beverages excluding alcoholic at around 2500 euro, recreation

and culture at around 2000 euro. Upper-level white-collar households (409,653) consumed an average

27,456 euro, lower-level white-collar households (394,313) 20,935 euro, and blue-collar households

(471,370) 19,415 euro.[50]

Unemployment[edit source|editbeta]
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10/16

The unemployment rate was 8.7% in January 2013.[51]The employment rate is (persons aged 1564)

68,6%,[52]Unemployment security benefits for those seeking employment are at an average OECD level.

The labor administration funds labour market training for unemployed job seekers, the training for

unemployed job seeker can last up to 6 months, which is often vocational. The aim of the training is to

improve the channels of finding employment.

Public policy[edit source|editbeta]

See also:Nordic model

Finnish politicians have often emulated other Nordics and theNordic model.[53]Nordics have been free-

trading and relatively welcoming to skilled migrants for over a century, though in Finland immigration is a

relatively new phenomenon. This is due largely to Finland's less hospitable climate and the fact that the

Finnish language shares roots with none of the major world languages, making it more challenging than

average for most to learn. The level of protection in commodity trade has been low, except for agricultural

products.[53]

As an economic environment, Finland's judiciary is efficient and effective. Finland is highly open to

investment and free trade. Finland has top levels of economic freedom in many areas, although there is a

heavy tax burden and inflexible job market. Finland is ranked 16th (ninth in Europe) in the 2008 Index of

Economic Freedom.[35]Recently, Finland has topped the patents per capita statistics, and overall

productivity growth has been strong in areas such as electronics. While the manufacturing sector is

thriving, OECD points out that the service sector would benefit substantially from policy

improvements.[54]TheIMDWorld Competitiveness Yearbook 2007 ranked Finland 17th mostcompetitive,

next to Germany, and lowest of the Nordics.[55]while theWorld Economic Forumreport has ranked

Finland the most competitive country.[56]Finland is one of the mostfiscally responsibleEU countries.

Product market[edit source|editbeta]

Economists attribute much growth to reforms in the product markets. According to OECD, only fourEU-15countries have less regulatedproduct markets(UK, Ireland, Denmark and Sweden) and only one has

less regulatedfinancial markets(Denmark). Nordic countries were pioneers in liberalising energy, postal,

and other markets in Europe.[53]The legal system is clear and business bureaucracy less than most

countries.[57]For instance, starting a business takes an average of 14 days, compared to the world

average of 43 days and Denmark's average of 6 days. Property rights are well protected and contractual

agreements are strictly honored.[35]Finland is rated one of the least corrupted countries in Corruption

Perceptions Index.Finland is rated 13th in theEase of Doing Business Index.It indicates exceptional

ease to trade across borders (5th), enforce contracts (7th), and close a business (5th), and exceptional

hardship to employ workers (127th) and pay taxes (83rd).[58]

Job market[edit source|editbeta]

According to the OECD, Finland'sjob marketis the least flexible of the Nordic countries.[53]Finland

increased job market regulation in the 1970s to provide stability to manufacturers. In contrast, during the

1990s, Denmark liberalised its job market, Sweden moved to more decentralised contracts, whereas

Finnish trade unions blocked many reforms. Many professions have legally recognized industry-wide

contracts that lay down common terms of employment including seniority levels, holiday entitlements, and

salary levels, usually as part of aComprehensive Income Policy Agreement.[53]Those who favor less

centralized labor market policies consider these agreements bureaucratic, inflexible, and along with tax
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Economy of Finland