Economy of Finland: sectoral structure

Finland - absolutely modern in all respects 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 severe cold climate, long distances between settlements and a significant limitation of natural and raw materials resources. In many respects, because of this, the Finnish economy is extremely dependent on a correct regional policy, which is constantly checked by the challenges of the present, connected with the rather rapid, even rapid growth of the population and globalization.

Basic vectors

The country of Suomi has chosen for itself a difficult path aimed at achieving national goals, strengthening the proper competitiveness in the international arena and fully improving the well-being of all citizens of the country. To this end, Finland's economy today is focused on increasing the efficiency of regional development, which is done to ensure that each region of the state is able to fully reveal its hidden potential. In this regard, the country pays attention not only to maintaining 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.

Historical reference

The history of the development of the Finnish economy is very dynamic and positive. What is the only stage of the 1960-1970 period, when the number of people born in the post-war period reached its peak. It was at this time that the most significant resettlement of the able-bodied population from the agrarian regions to administrative and industrial areas occurred. For the next twenty years the Finnish economy has been relatively stable and evenly developed. The state in every possible way strived to create an optimal balance, in various ways helping to develop university cities, provinces and communes. In practice, this resulted in the creation of so-called technology villages, which were analogues of the now existing American Silicon Valley, a place where the best specialists from all over the world joined their aspirations. And this approach of the Finnish leadership led to the fact that many companies targeted to these villages purposefully to obtain the results of 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, followed by a recovery phase. Difficulties in the state were caused by the fact that there was a slowdown in the growth of people's employment in the primordial industrial regions, which led to a serious blurring of the boundaries of the so-called industrial Finland. This situation ensured a rapid outflow of labor from the southeastern agglomeration of the country. At the same time, Helsinki and its environs developed at a rapid pace, and regional disproportions only gradually increased.

To put it in more detail, in the provinces of Uusimaa, Varsinais-Suomi, Pirkanmaa and Pohjos-Pohjanmaa, during the period 1994-2000, the economic growth amounted to 6.5% with a 5% nationwide rate. However, the regional differences only worsened, and unemployment grew. It is worth noting that in 1990 its rate was 3.2% in the country, and in 1995 - already 15%.

Period of 2000

The co-ordinated economy of Finland in the first years of the 21st century began to experience fewer contrasts, but the leaders and the regions that were lagging behind in development remained the same. The modest pace of economic growth has led to the fact that the indicators of economic development have somewhat leveled off and balanced. In parallel, there was a slight slowdown in the migration of people to large settlements and industrial centers, as many Finns faced what is called overpopulation: the social services sector began to experience significant overload, house prices also increased significantly and turned out to be prohibitive for many.

All this quite logically led to the fact that the trend of people moving to suburbs and sparsely populated communes has increased. In addition, 2012 was a turning point in some ways, as the process of reducing the able-bodied population aged 15-64 began. According to experts' estimates, by the year 2025 in the capital area, the number of people over 64 will increase by 80% compared to the current indicators, and Eastern Finland will experience a shortage of labor, which in turn will severely restrict the production sphere in the further development. Improvement of the situation in terms of the number of able-bodied people will be observed only in trade, tourism, business, health.

Positive moments

Of the positive qualities of the northern country, the following can be noted:

• Openness of the Finnish economy.
• Political stability.
• Highly developed infrastructure.
• Reliability of telecommunication systems.
• Ideal interaction between various existing enterprises, research, technical centers and universities.
• The speed of mastering the latest developments and technologies.
• Sufficient educational level of the local population.
• Optimal climate for doing business.

Government sector

State enterprises provided a significant contribution to the development of the country. During the 1990's, such enterprises controlled by the state were liquidated, such as: public administration institution, cartographic center, publishing house and many others. At the same time, companies underwent partial privatization:

• "Neste" (oil refining and chemistry).
• "Fortum" (energy sphere).
• "Outokumpu" (manufacturing industry).
• "Valmet" (machine building).
• "Sampo" and "Sponda" (financial services, real estate).
• "Stora Enso" (forestry, woodworking and pulp and paper industry).

For the period 1990-2000. The privatization brought to the treasury of the state 11 billion US dollars.

Industry Features

Finland (the economy of the country is currently experiencing a slow increase compared to the rest of the European Union) as the main sectors is the forest, information, telecommunications, metallurgy, energy, engineering, food, construction, health and business services. It is worth noting that the agricultural sector in the period 1940-1950 brought the country more than 25% of the gross national product, and nowadays - 3%. The sphere of services, which generates about 60% of GNP, broke out into the first positions. Until the 1980s, the share of industrial influence also grew steadily, but today its share is fixed at around 28%.

Processing of forest

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 started its business activities with the opening of a pulp mill and only in early 1990 decided to go into the telecommunications field.

At the time of 2007, Finland accounted for 10% of the total world exports of both timber and pulp and paper products. And the size of the export of printing paper was one fifth of all exports.

Metallurgy and machine building

The economy of Finland in this segment is represented by such enterprises as:

• Sisu Auto - production of trucks and special equipment for the most part for the needs of the defense complex.
• Wärtsilä - produces engines for vessels of different capacities, screw-type mechanisms, seals, control systems and the like.
• Wekman is a manufacturer of metal tiles.
• Kone - produces elevators, travolators, escalators and passenger lifts.
• Abloy is a world-famous manufacturer of locking systems, locks, construction hardware, locks, including electromechanical ones.
• Rautaruukki is a manufacturer of steel structures for construction and special steel grades.
• Outokumpu - produces stainless steel.

Also, significant activity is brought by the activities of First Quantum Minerals, which has an official permit and is developing the largest nickel mine in Finland, located in Lapland. Production volumes are within 10 million tons per year.

As of the end of 2015, 121,000 people were involved in machine building. As for exports, the year 2015 was quite successful for the industry. Proceeds from the sale of products amounted to 12.6 billion euros.

The steel industry specializes in the production of steel. At the end of 2015, Finland was on the 31st place in the world in terms of the total amount of smelting of this metal (3.9 million tons). Steel mills completely cover the demand for metal in the entire domestic market of the state.

Chemical industry

It occupies the third place in the formation of the GDP of Finland. The production of chemical products is at about the same level in the country for many years, which is explained by the presence of a very stable demand, not only in the external market, but also in the domestic market.

About 60% of all chemical products are sold to the countries of the European Union and Eastern Europe. The economy of Finland 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. It is this giant that is the only manufacturer on the planet of a complete set of chemicals for the complete bleaching of pulp. He is also a world leader in the production of formic acid.
• "Kemira Grou How" - as the main activity vector, the concern chose the production of fertilizers and animal feed.
• "Tikkurila" - the largest in the Old World, the manufacturer of industrial and construction-household paints. In addition to the enterprises located directly in Finland, the concern has its own factories in Latvia, Poland, Estonia, Holland, Italy, England and Russia.

By the way, almost 40% of all workers in the industry are involved in the processing of plastics. The largest producers of polymers are: Borealis, Polimers Oy, Dinea Chemicals.

Food industry

The economy of Finland, which is briefly considered in this article, largely depends on the food industry, which, incidentally, suffered rather sensitively from the Russian Federation's retaliatory sanctions imposed in August 2014. In particular, the company Valio, 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 companies in Finland is Fazer, a famous chocolate producer. A large amount of coffee is produced by Paulig Group.

In the production of alcoholic beverages, Sinebrychoff (operating on the market since 1819) and Hartwall are the undisputed leaders.

Electronic and electrotechnical industry

This branch 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 Finlandand Vaisala.

In 2015, the industry brought 6.6 billion euros to the Finnish budget, which is 3% less than in 2014. At the same time, 40.5 thousand people are employed at all enterprises of this sphere. As for the volume of production of electronic and electrical goods, in Finland it is declining. This is explained by the fact that the country has a very high level of production costs, and therefore most Finnish concerns have already withdrawn part of their technological lines outside the state in order to stabilize profitability and competitiveness of production.

Shipbuilding

The production of ships and marine equipment is practically the basis of such a sphere as the economy of Finland. To put it briefly, this branch is considered the most high-tech sphere of the country's industry. Experts estimate the Finnish market of the country in 1% of the world production of ships, ships, ferries, icebreakers. The industry has given 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 fulfills all the existing laws and directives of the European Commission, which, however, do not always have a positive impact on Finnish business. For example, the Directive on the reduction of carbon dioxide in emissions has led to significant reductions in the industry of the country due to an increase in the costs of existing enterprises to fulfill its requirements.

The economy in Finland (taxes, by the way, are quite high and can amount to forty percent for private individuals) is accompanied by a clear work of the law on consumer protection, which was changed in 2013. In addition, antimonopoly legislation is effective , which, in turn, is regulated by a number of well-considered regulatory and legal acts.

Logistic leader

Posti Finland Economy (Posti Finland Economy) is the largest Finnish company specializing in the processing and shipment of a wide variety of goods and goods. This company works together with the carrier Yanwen. Starting March 25, 2015, "Posti Finland Economy" is included in the list of recommended delivery methods on one of the most popular trading platforms Aliexpress. The site recommends this method of delivery for shipping goods less than $ 7. With the help of the "Posti Finland Economy", the tracking of the purchased goods passes quickly and clearly. The operator has a well-developed network of its own points, where customers will be serviced almost instantly and at the same time qualitatively. In addition, POST Finland Economy offers its clients (both private and corporate) a fairly large number of online services, which you can learn more about on the company's official website.

Banking and insurance sector

As of January 1, 2015, 291 financial and credit institutions were registered in Finland. 279 are banks, 11 are investment funds, two of them are electronic (since 2014, due to legislative changes, they are allocated to a separate narrow group).

The largest bank in Finland is the OP-Pohjola Group, which has 450 branches and employs 12,300 people. On the second position there 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 an unequivocal leader of the whole of Northern Europe in terms of the number of residents per credit and financial institution. This figure is 15 thousand people per banking unit.

It should be noted 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 as of January 1, 2016 was slightly more than 684 billion euros, which is almost 3% less than in the same period of 2015. This decline was due to a decrease in lending volumes from many European borrowers.

Conclusion

To date, Finland, Russia (their economy is currently experiencing not the best period) - the countries that are trying to effectively and quickly reset their relationship against the background of continuing sanctions. The leadership of both powers is well aware that life does not stand still and should quickly adapt to the challenges of our already harsh reality.