Economics and business
COUNTRYAAH, Finland has a mixed economy and a high standard of
living. In 1995, Finland joined the EU. In 2019, agriculture and forestry accounted for 3 percent
of GDP, industry and construction for 28 percent and the
services sector for 69 percent. The public sector is
relatively large and contributes 20 per cent to GDP and 25
per cent of employment.
Following a sharp economic downturn in the first half of
the 1990s, Finland's economy had a steady growth of about 4
percent per year until 2007, when the economy ceased in the
wake of the international financial crisis. Finnish GDP
growth fell from 0.9 per cent in 2008 to −8.2 per cent in
2009 (the largest decline since Finland became independent
from Russia in 1917). Exports fell 32 percent, and
unemployment rose. In 2010 and 2011, the economy recovered
temporarily but was again negative in 2013 and 2014.
In 2014, the country was adversely affected by EU
restrictions on the Russian Federation. Finland's exports to
the Russian Federation fell by 13 percent while imports fell
by 16 percent. The decline was particularly noticeable at
the border trade in eastern Finland. The tourism industry
also saw a decline in Russian visitors.
Business has traditionally been a more common source of
income on Åland and on the west coast of the country than in
the other parts of the country. 20 per cent of employed
persons in South Ostrobothnia are self-employed, while the
share elsewhere is 12-14 per cent, with the exception of the
metropolitan region where the proportion is lower. However,
there is a rapid structural change in the business sector,
and own business is becoming more common throughout the
country. In total, the number of companies in the country
has increased by 40 percent over the past 15 years; The
increase is mainly in companies with 1-4 employees.
Since the mid-1990s, the great dependence on the forest
industry has been broken and a broader business sector has
emerged where the electronics and IT sectors in particular
functioned as spearheads. One weakness of this development,
however, has been that growth, in particular the increase in
exports, has to a large extent been dependent on a single
company, the telecom giant Nokia. This became very clear in
2013 when Nokia sold its mobile phone manufacturing to
Microsoft and production in Finland ceased. Exports of
mobile phones were worth EUR 7 billion in 2008, while in
2014 it fell to EUR 78 million.
Despite this decline, the high-tech products' share of
exports has continued to increase, but their share of total
exports is around 7 percent, while the forest and chemical
industry's share of each is around 20 percent.
Companies with highest turnover
||Turnover 2015 (EUR million)
|Next Oil Oyj
|Stora Enso Oyj
|Wärtsilä Oyj Adp
Companies with the most employees
||Number of employees in 2015
|Stora Enso Oyj
|PKC Group OYj
|Wärtsilä Corporation Plc
About 8 percent of the country's area is usable land.
Agriculture, together with fishing and forestry, employs 3.4
percent of the workforce and accounts for about 3 percent of
Finland is located at the northern boundary of many
plants' distribution areas. The Gulf Stream means that the
country has better cultivation conditions than other equally
northern areas (Alaska and Greenland). However, the impact
of the Gulf Stream is less than in the other Nordic
countries, which means that the growing period is shorter
than in Sweden.
The largest agricultural areas are on the western and
southwestern coasts and in central Finland. Agriculture is
often conducted in parallel with forestry. In southern and
southwestern Finland the farmland area is on average larger
than the forest area, in eastern and northern Finland the
ratio is the opposite.
Until the Second World War, agriculture was the largest
industry in Finland, but then its share declined rapidly. In
the 1960s a great transformation took place in agriculture;
productivity rose rapidly, arable land increased and
overproduction became a problem. In 1969, laws were passed
that gave farmers the right to compensation for land that
was not cultivated. The goal was to achieve a certain
transition to pig breeding and milk production. However, in
the early 1970s, overproduction of pork and eggs arose.
Despite various mitigation measures, overproduction
continued in the 1980s.
Finland's entry into the EU contributed to a rapid
structural change. The size of the farms has increased and
the number of small farms has decreased, especially this is
evident in the southern part of the country. In the northern
and eastern parts, agriculture and other industries are
increasingly combined. Support from the EU's regional funds
can be obtained for the establishment of agricultural
activities. Some common examples are machine workshops,
sewing studios, farm tourism and specialty farming.
During the 2000s, interest in riding increased
significantly, which is reflected in the number of horses
increased by 30 per cent and is now the largest since the
early 1970s when the horse was still used in forestry.
Economically, Finland's most important agricultural
products are milk and meat (pigs, cattle and chicken). The
most important crops are barley, oats, wheat, potatoes and
Bread production is almost entirely concentrated in
southern Finland, as is just over half of the feed grain.
Milk production is greatest in Ostrobothnia as well as in
eastern and northern Finland. Livestock management is
becoming increasingly concentrated; while the number of cows
has decreased, the average number of animals per herd has
increased. Since the 1960s, the total number of cattle has
dropped from just over 2 million to less than half. At the
same time, the number of cows per farm has risen sharply.
The breeding of fur animals became increasingly common in
Finland during the 1960s. Fur farm animals are highly
concentrated in Ostrobothnia. Finland has been the world's
largest fox fur manufacturer. Today, the most important fur
animals are mink and blue fox. Although silver fox and
raccoon dogs bred for fur production.
Interest in biodynamic cultivation has increased rapidly.
The proportion of land used for biodynamic cultivation
increased by 25 percent in 2003–13. In fruit and berry
cultivation it accounts for about 2 per cent, while the
proportion is slightly larger in meat, milk and egg
Reindeer husbandry is mainly conducted in Lapland.
About three quarters of Finland's land area is covered by
forest, mainly coniferous forest. The forest is Finland's
most important raw material. About 60 million m 3
timber is harvested annually. Growth is greater than
harvesting. Most of the raw material goes to industry, while
exports are insignificant.
In the past, forestry was important for employment,
especially since it offered work for farmers in winter.
However, the increasing need for mechanization has reduced
the need for manpower in the forest, while operations have
spread throughout the year. The forest areas are the largest
in central and eastern Finland. More than half of the forest
land is owned by private individuals, about a third of the
state, while the forest industry owns forest to a lesser
In Finland, fishing is practiced on a fairly small scale.
A large part of the professional fishermen work part-time
fishing, such as auxiliary to, for example, agriculture. In
2013, approximately 143,000 tonnes of fish were caught,
while approximately 14,000 tonnes were grown. In marine
areas are commercial fishing to almost 90 percent focused on
herring fishing (see herring), the lakes are vendace the
main catch. In the country's approximately 170 fish farms,
rainbow trout fish are mainly grown. Economically, fish
farming is more important than traditional fishing. Some of
the cultivated fish is exported.
In Finland, a large number of minerals are mined in some
40 mines. The majority of mining operations are in private
companies, and state ownership has gradually decreased. The
regulations for mineral exploitation are advantageous at the
same time as the mining companies are required to show
The raw materials that are produced in the largest
quantity are natural gravel and crushing gravel, which for
several years has amounted to approximately 85 million
tonnes annually. The mining of ores for metal extraction
(mainly sulfur-silica, chromium, zinc, copper, iron and
steel) amounted to 20 million tonnes in 2012, while the
mining of ores intended for industrial minerals (mainly
apatite, talc, sulfur-silica and quartz) amounted to about
15 million tonnes. Finland is one of the major producers of
chromium and wollastonite. Raw material exports were
dominated in 2012 by sulfur pebbles, nickel, zinc, limestone
and kaolin, while imports were dominated by crude oil, coal
and iron ore as well as iron and copper.
The mining of copper has long been the most important
mining industry. The copper mine shut down in Outokumpu in
Karelia in the 1990s was one of the largest in Europe. In
2008, the Talvivaara mine was opened in Sotkamo municipality
in Kainuu. The area contains nickel, zinc, copper, cobalt,
manganese and uranium. Talvivaara's operations contributed
strongly to increasing the country's ore exports. However,
the company went bankrupt in 2014 and its continued
operations are uncertain. In 2012, copper was mined in
Talvivaara, Pyhäsalmi, Hitura, Kylylahti and Kevitsa. Zinc
was mined in Talvivaara, Pyhäsalmi and Kylylahti, chrome in
Kemi and nickel in Hitura, Talvivaara, Kylylahti and Kevitsa.
Industrial minerals are mined in a number of locations.
The energy supply in Finland is based at approximately 45
per cent on fossil fuels (oil, gas, coal, peat). Of these,
the entire need is imported except peat, which is to some
extent produced domestically. Domestic water energy, which
is fully developed, and wind energy accounted for 4.5
percent of total energy supply in 2012, nuclear energy for
18 percent and renewable energy sources for 27 percent. In
Finland there are four nuclear reactors, two on the island
of Olkiluoto in southwestern Finland and two in Lovisain
southeastern Finland. A fifth reactor is being built in
Olkiluoto. It was originally commissioned in 2009 but has
been significantly delayed. Another one, planned for
Pyhäjoki, has been approved and plans are available for two
more. Small quantities of electricity are imported from
Sweden and the Russian Federation.
In 2012, industry consumed approximately 45 percent of
the energy produced; above all, the forest industry is
energy intensive. In addition, just over 26 percent is spent
on heating and 16 percent on transport.
See also Energy supply.
Industrialization, which began in the early 1900s, gained
momentum after the Second World War. Industry was then built
up so that the country with industrial products could pay
war damages to the Soviet Union.
The internationalization of Finnish industry started only
in the 1970s, after which development has been rapid. Today,
the subsidiaries of industrial companies employ more abroad
than the industry employs in Finland. The Finnish production
sector is characterized by a high level of wages, which
leads to lower price competitiveness vis-à-vis other
countries. Therefore, investments are made to increase value
added and create new products in high technology areas.
About one fifth of the industry's total investment is
invested in research and development.
The forest industry has traditionally been the
engine of Finnish business. The paper and cellulose industry
is usually located at locations located at the major
estuaries, such as Kotka, Pori and Oulu. In particular, the
paper industry is characterized by increased concentration
to larger units. Of the larger forest companies, UPM, Stora
Enso and Metsä Group can be mentioned. In 2012, the industry
accounted for 13 per cent of industrial workplaces and 15
per cent of industry value added. 70 per cent of the
production value added comes from the production of
cellulose, paper and board and 30 per cent from sawn and
planed products. The forest processing industry is strongly
export-oriented; 90 percent of paper and paperboard
production is exported.
The metal industry is the largest industrial
industry with 35 percent of industrial jobs and 34 percent
of the industry's value added. Important products are mainly
machines, such as paper machines and vehicles. This industry
branch is mainly located in the southern and southwestern
parts of the country. The metal industry, with the Kone,
Wärtsilä, Outokumpu and Rautaruukki groups, for example, is
strongly internationalized. Shipbuilding has been strong in
Finland; they have built icebreakers and other specialized
vessels and passenger ferries. In the 1980s, the
shipbuilding industry experienced a crisis that led to
sharply reduced operations. Nowadays the shipyard in Turku
is owned by the German Meyer Werft, the shipyard in Helsinki
by Russian USC and the shipyard in Raumo by a newly founded
Electricity and electronics industryand in
particular, its high-tech sector progressed during the
latter part of the 1980s, in parallel with the creation of
technology centers, in many parts of the country. The upturn
was strongly linked to Nokia, which in 2013, however, sold
its mobile phone manufacturing to Microsoft. In 2013, Nokia
and Nokia Siemens Networks had an estimated 10,000 employees
in Finland; six years earlier, the number was three times as
large. The electrical and electronics industry accounts for
about 13 percent of the industry's employment. Within it are
several highly specialized companies that manufacture
different types of high-tech measuring instruments. As a
link to this industry, you can also see the development of
digital products, where, among other things, the gaming
industry has grown strongly with companies such as Rovio
(Angry Birds) and Supercell, which were sold to a Japanese
company in 2013.
The food industry employs about 41,000 people
and accounts for 8 percent of the industry's value added.
This sector is characterized by an increasing concentration
of large corporate groups. The chemical industry (4
percent of employment and 8 percent of value added) is based
primarily on the processing of imported raw materials.
Larger facilities are located in Helsinki and Oulu.
Important employers in the chemical industry are the oil
company Fortum and Kemira. Textile and leather
industries(2 percent of employment and 2 percent of
value added) declined sharply during the 1980s and 1990s.
The reason for this was high production costs and reduced
exports to the former Soviet Union. The biotechnology
industry, including pharmaceuticals, diagnostics and
functional foods, is growing strongly. In the industry there
are around 100 companies.
Finland is a small and open market, which is heavily
dependent on foreign trade. In 1961, the country signed a
special agreement with EFTA and later became a full member.
A cooperation agreement was signed in 1973 with SEV and a
free trade agreement, the Kevsos agreement, with some
smaller, socialist countries. Finland joined the EU in 1995.
57.3 percent of exports now go to EU countries and a
total of 71.7 percent to European countries. Asia accounts
for 13.9 percent and the United States for 8.1 percent.
Finland's most important trading partners, in 2014, were
Germany, Sweden and the Russian Federation, both in exports
Finland's most important trading areas were for a long
period Western Europe and the Soviet Union. At the beginning
of the 1980s, the USSR accounted for a quarter of Finland's
exports and imports. Trade took place as a clearing trade on
the basis of 5-year trade agreements, where the goods were
specified. The Soviet Union's share of Finland's trade fell
sharply during the latter part of the 1980s and the
beginning of the 1990s due to the weakening economic
situation in Eastern Europe. Trade with the Russian
Federation accounted for 15 percent of imports in 2014 and
about 8 percent of exports.
The metal industry (including the machine industry) and
electricity and electronics account for 45 per cent of
exports and the chemical industry for 23 per cent, while the
forest and paper industry exports account for 20 per cent.
Imports comprise half of raw materials and production
supplies and 10 per cent of energy products. Consumer goods
account for about 25 percent of exports and 11 percent of
Finland had a positive trade balance since the beginning
of the 1990s until 2010, after which it has been negative.
However, there has been some improvement since the bottom
Tourism and gastronomy
Finland has a well-developed tourism industry. The
country has 5 million foreign visitors annually. In addition
to city tourism in Helsinki and Turku, with considerable
elements of business travelers, many tourists visit the
country for its beautiful nature. Large parts of the
country, mainly in the north and in the middle parts,
consist of untouched nature. Among other things, Finland has
Europe's largest continuous lake system.
Most foreign tourists come from the rest of the Nordic
countries, the Russian Federation, Germany, the Baltic
States and the United States. For Swedish tourists, it is
mainly the capital Helsinki and the Swedish-speaking Åland
that attract, not least due to frequent and cheap ferry
connections from Stockholm. Tourism also receives
significant revenue from the large tourist trip to the
Northern Calotte. However, winter tourism with extended
winter sports resorts in the high-lying parts of Lapland is
mostly aimed at domestic tourists.
Finland's food culture is to some extent characterized by
the former men's powers. Sandwich tables, meatballs and
pancakes are as common as in Sweden; bristles, pies and
blinis are reminiscent of the Russian Federation. But the
strongest influence on Finnish food production undoubtedly
comes from the domestic soil, few countries are so marked by
their nature and their assets. The climate, of course, comes
into play, as do relatively simple living conditions that
have characterized the nation for many centuries.
The fish plays a prominent role. Soups, stews, pies,
pies; everything can be cooked with fish as a base.
Kalakukko, "the world's oldest canned food", joins the
fish with the meat (the word means "fish tip"): fish
(usually musk, ie, onion) is wrapped in a dough, mixed with
pork and baked for several hours. Even forshmak,
stewed on salt herring and mutton or lamb, combine both
foods. Lake, soup on the same and licorice to the blinis
often occur, neon eyes as well. The mushrooms are often
salted so that the supply should never be. Sienisalaatti,
creamy mushroom, is a must on the sandwich table. Beef and
veal, pork and sheep, everything is equally common, and in
the right carjalan paisti they are united in a pot.
Sausages on pureed meat (poromakkara), smoked
reindeer chickens and dried reindeer meat are everyday
foods, especially in the northern parts of the country.
Tavastland's somewhat more cultivation-friendly climate can
be traced in, among other things. the rich flora of
vegetable boxes, which are gladly served for liver or herd.
The ubiquitous sour rye bread or crispbread is also
characteristic, as are the dairy products; milk or sour milk
for the food or porridge, yoghurt and langfil as dessert or
snack. Memma, finally, is a standing ingredient on the
Easter table. Rye flour and malt are mixed with pomeranian
peel and baked into a pudding often served in a fist coat.