ASEM 6 : Economy

Economy

Paper, pulp and wood plus metal and engineering products have traditionally been the backbones of Finland’s economy. In the 1990s, these industries were overtaken in importance by electronics, with the Finnish mobile phone company Nokia in the lead.

Finland’s economy is dependent on foreign trade and the significance of exports has increased over the past ten years. In 2004, exports constituted 38% of Finland’s GDP (EUR 151.9 billion). Sweden, Germany and Russia are Finland’s most important trading partners.

Forest industry

There is a popular saying that Finland is a country of thousands of lakes which lives off its forests. Almost three quarters of the national territory is covered by trees. (Finnish Tourist Board/Tim Bird)

The strength of Finland’s forest industry lies in the country’s vast forest resources. Among the countries of Europe (excluding Russia), Finland is clearly the most forested. Almost three quarters of its total area is covered by trees. In addition to paper, the forest industry produces various other wood-based products, principally pulp and sawn goods.

Finland’s biggest forest product companies are Stora Enso, UPM, and M-real Group. They also have large production units abroad.

Metal and engineering and electronics

The 1940s saw the growth of the metal and engineering industry in Finland. The Finland of forest and farm became a fully fledged industrial economy. In the 1980s, metal and engineering replaced the forest industry as Finland’s most important export sector. A decade later, electronics had become the engine of growth in Finnish industry.

Today, Finland’s competitiveness is mainly based on technological expertise which is utilised to create new business and promote corporate growth.

Among the biggest metal and engineering and electronics manufacturers are Nokia, Outokumpu, Metso, Elcoteq, Rautaruukki, and KONE. These companies are major players in their sectors of manufacturing.

Finland can pride itself as a country characterised by the absence of corruption. In 2005, Transparency International ranked Finland second, preceded only by Iceland, on their list of the world’s least corrupt countries.

Finland’s competitiveness is also top class. According to the World Economic Forum’s Global Competitiveness Report 2005-2006, Finland was the world’s most competitive country. Finland’s efficiently organised public administration, well-functioning education system and broad-based technological expertise have brought merits to the country.