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Transforming threats into opportunities

Many small countries around the world have seen the massive changes taking place in the world economy as a threat, either actual or potential. Thinking outside the box, however, as Finland has done, reveals that these changes simply call for new responses.
Ministry of Employment and the Economy

Erkki Virtanen, Permanent Secretary at the Finnish Ministry of Trade and Industry.

Change still seems to be the order of the day in the global economy. New economies are beginning to flex their muscles – not the least of these being China, which has become a real driver of international economic growth – while traditional powers, particularly those in Western Europe, appear to be losing the positions that they, and the rest of us, had become accustomed to.

This pattern of change is seen by many as a threat, particularly by small countries. And this was how things were seen in Finland as well, initially. Gradually, however, we have begun to see that what seemed threats are, in fact, the potential for new opportunities.

Finland has built up a good track record in managing its economy in recent years. We have succeeded in eliminating our interest-bearing foreign debt completely, for example, and our public-sector economy is in perhaps the best shape of that of any country in Europe at the moment. Inflation and interest rates are both low, and even unemployment is well below the EU average. And thanks to a long-term emphasis on high technology, Finland now regularly comes out among the top performers in surveys on global competitiveness.

All in all then, Finland appears well-set to face both today’s and tomorrow’s challenges. We cannot afford to sit on our laurels, however, particularly as the pace of production and jobs shifting to low-cost countries is accelerating all the time.

Growing abroad – and at home

Finnish companies too have been among those that have set up production overseas. As recently as 10 years ago, Finnish companies had only around 100,000 employees outside Finland, while today that figure is in the order of 250,000.

Over that time, however, the number of jobs in industry in Finland itself has also risen, by some 40,000.

And a recent study revealed that nearly half of Finnish companies have said that they have increased the number of people they employ in Finland as a result of increasing their production abroad. A little over a third said that they have reduced their personnel numbers in Finland.

Given the overall success of developments so far, Finland intends continuing with its current approach. By investing even more in technology, education, and innovation, we believe that we will continue to be among the winners as developments continue their onward race.

> Erkki Virtanen
(Published in High Technology Finland )