Finland invests too little in people and too much in walls – expert lists five lessons from Finland’s stagnant economy

Product branding is in its infancy in Finland, according to the expert.

Finland’s exports are not performing and economic growth is sluggish. Concerns are growing about government debt and the sustainability of the economy.

The value of Finland’s goods exports fell by 5.5% and the trade balance was EUR 2.1 billion in deficit last year, according to preliminary data from Customs.

Overall, Finland’s exports of goods and services as a share of GDP have lagged behind other Nordic countries since the financial crisis in the 2010s, and there has been no change for the better.

Something should be done, but what?

1. More services for export

Finland takes more goods than services, but service management is a global phenomenon.

– Future opportunities are greater in service exports. It would be a good idea to get service exports closer to the size of the goods exports.

Services include, for example, software that requires design work, tourism and brands.

However, the direction is gradually changing according to Statistics Finland.

Last year, the value of goods exports fell to just under EUR 80 billion, with the value of service exports to just under 40 billion.

In spite of the increase in service exports, it was therefore still about half of the goods exports.

The United States, in the combined value of exports of goods and services, was the most important trading partner in Finland for the second year in a row last year. Next came Sweden and Germany.

The services accounted for about 40 percent of Finland’s exports to the United States and nearly 60 percent of imports.

The exports of Finnish services were increased in particular by telecommunications, information technology and information services, as well as charges charged by the use of spiritual property, ie royalties and license fees.

– We are bad to build brands for consumer products, just in infancy compared to Sweden or Denmark. It requires intangible business services, new design and leadership culture, says Kangasharju.

In his view, it is important to take care of the education level of Finns, as skilled people are needed to design service products.

– In Finland, too little is placed in people and too much on the walls. The walls are a bad investment.

Finland is more invested in construction in relation to GDP than in the US and EU countries on average.

Machines and intangible investments in Finland are less money in relation to GDP than in the US and EU countries on average.

3. Big ambitions for international markets

The aim should be the extensive international markets already at the product development phase. Otherwise, there will be no growth.

According to Kangasharju, Finland focuses too much on making products that are suitable for small domestic markets.

– We have curled in inwards, says Kangasharju.

The products must be very specialized in order to be competitive.

Finland cannot compete with high production volumes and cheap prices such as China.

– We are such a small economy that if we want economic growth, we should bring well -wide world market products with a lot of added value.

The value chain of production must be obtained as comprehensively as possible in Finland.

Finland’s largest export products include pulp and oil products.

The processing of pulp products generates a comprehensive VAT chain. The forest is grown and poured. Wood is made of pulp and ready -made products such as handkerchiefs. When all this happens in Finland, each phase of work employs Finns and produces taxes in Finland.

For oil products, the VAT chain is not as comprehensive as the raw material is imported from abroad.

– The problem in both areas is that the Value supplement has not increased. They employ us, but they do not have the growth that they would be sufficient to cover the growing costs of society, such as the care of the elderly, says Kangasharju.

4. The green transition is “a thousand bucks’ place”

According to Kangasharju, Finland has good opportunities to take advantage of the green transition in a long value chain.

– We have a thousand bucks in this industry and in the export sector. We have a long -term competitive advantage in the construction of wind farms. We get them cheaper than Central Europe.

Wind or solar power and electrolysis can produce green hydrogen.

For example, green hydrogen can be used to make fuel for traffic, raw materials for the chemical industry and steel.

Kangasharju hopes that the forest and chemical industries will also use green hydrogen to produce advanced bioproducts.

– Here we have such a potential that if this is started, a new wave of industrialization, a lot of goods and jobs will come to Finland.

At its best, green hydrogen also attracts factory investments from abroad if Finland is able to provide them with energy at a competitive price.

– We should think about the industrial policy of Finland as a whole so that we do our best to achieve the green transition.