International Review: Republic of Finland
The new material of International Review series will tell about the happiest country in the world - the Republic of Finland. Suomi refers to the number of small highly industrialized countries. The economy is developing according to the cluster model of upgrowth and is considered to be one of the most effective.
Finland (officially the Republic of Finland) is a state in Northern Europe with a population of about 5.6 million people. The capital and largest city is Helsinki. The state languages are Finnish and Swedish. The form of government of Finland is a republic. The highest executive power in the country belongs to the president, who is elected for a six-year term by direct national referendum. Since December 6, 1917 it is an independent state. The Member of the Northern Passport Union since 1952, the UN - since 1955, the Nordic Council - since 1956, the EU - since 1995, the Schengen Agreement - since 1996. According to the Human Development Index, the republic ranks 23rd in the world, to the Entrepreneurship Development Index - 11th, to the Doing Business rating - 17th.
Finland is one of the small, highly industrialized countries. The country's GDP in 2017 amounted to $ 253 billion (42nd place in the world), an increase of 5.5% compared with 2016, but not reaching the 2014 mark ($ 273 billion). The unemployment rate is 8%, the inflation rate is 0.8%, the average wage is 4,000 euros.
The largest sector of the economy is the services sector. It employs 70% of the working population. The export of goods and services amounts to $ 97 billion, 70% of which are goods. In 2017, the country just returned to the indicators of 2010.
Key export positions: mechanical engineering (32.3%), cellulose and paper products (12%), chemical products (10%). Key partners in the commodity turnover of the country: Germany (15%), Sweden (11%), Russia (10%), China (7%), Holland (6%), USA (5%).
According to the Finpro Association, international direct investment into Finnish companies continues to grow. In 2017, Finland recorded a peak number of new investments and acquisitions of companies. Most of all new businesses came from Sweden, UK, USA, Denmark, Norway. In 2017, 12 companies came from China. Foreign direct investment in Finland is mainly directed to the services sector, especially financial and insurance companies.
Interesting fact. Finland is the happiest country in the world according to a 2018 UN report.
Finland has a well-developed industry, among its branches it is particularly worth highlighting the electrical and electronic industry, wood processing, metalworking and mechanical engineering.
The list of the largest Finnish companies in the technology industry:
- Nokia (network infrastructure, revenue in 2017 - € 23 billion);
- Kone Corporation (elevators, conveyors, € 9 billion);
- Outokumpu (stainless steel products, € 6 billion);
- Wärtsilä Corporation (engines, power plants, € 5 billion);
- Kargotek (lifting and handling equipment, € 3 billion);
- Valmet (woodworking machinery, € 3 billion);
- Metso (road equipment, pumping equipment, € 3 billion).
There are also international concerns ABB (revenues - € 33 billion, top 200 companies in the world, production of power equipment), Ensto Finland (production of electrical systems and components, € 0.3 billion) in Finland.
Interesting fact. Three largest Finnish forest industry concerns (UPM-Kymmene, Stora Enso, Metsä Group) are among the top 5 companies in Europe.
One of the leading directions of the countire's development are communication technology, mobile equipment. The main representative of this sphere is the world giant Nokia. The corporation makes electronic equipment, performs scientific and research development.
In Finland, nickel and copper are mined, stainless steel, special equipment and trucks, elevators and escalators, and electromechanical products are produced. The most famous companies in these industries are Sisu Auto, Rautaruukki. The country's food industry is represented by large dairy enterprises, the chocolate giant Fazer, and manufacturers of alcoholic beverages, including beer. Recently, the industry has undergone a series of shocks due to the sanctions of the Russian Federation.
The forestry cluster of Finland consists of woodworking, logging, cellulose and paper industry. The country produces lumber, wood-based panels and plywood, paper, cardboard, cellulose. The industry forms more than 5% of gross domestic product, one fifth of all industrial production and export.
Interesting fact. Finland accounts for 10% of world cellulose and wood products.
The country operates 17 paper production plants, 14 cardboard plants, 19 cellulose and weight plants, 35 sawmills and 10 slab enterprises. The growth of the forest industry has had a positive effect on the production of forest machines, the share of which in general engineering is over 15%. There are three major forest machine manufacturers in Finland: John Deere, Ponsse and Komats.
One of the distinguishing features of the Finnish economy is introduction of information technologies in industry. For example, e-commerce in timber is developed in the country. Stora Enso develops the Internet service MySupply, which allows real-time viewing of product availability, its price and delivery terms. In addition, Tieto, the largest company in Northern Europe, has developed the Forest Hub platform for computerization of the timber and cellulose delivery processes.
COOPERATION: FINLAND AND BELARUS
In 2017, the trade between Belarus and Finland amounted to $ 122 million (120.8% by 2016), export - $ 20 million (118.2%), import - $ 102 million.
Export of Belarusian products:
- insulated wires and cables;
- plastic pipes, hoses and fittings;
- gears and vehicle equipment;
- metal products;
- women's outerwear textile;
- trailers and semi-trailers, agricultural machines, special purpose machines.
Import to the Belarusian market:
- paper and cardboard coated;
- equipment for agriculture, horticulture, forestry;
Successful examples of cooperation:
- the acquisition by Olvi of a major stockholding in Lidskoe Pivo;
- construction in the Belarusian capital and a number of regional centers of trading houses for the sale of goods for home and summer cottages “OMA” by the Finnish concern “KESKO”;
- modernization of the Gomel ice-cream factory by the Finnish company Ingman Ice Cream;
the creation of an innovation center at the Minsk College of Bakery with the participation of Leipurin.
The most promising areas of bilateral cooperation are the following areas:
- energy saving and biotechnology;
- forest use, wood processing and biofuel production;
- innovation and scientific and technical cooperation.
The Belarusian companies will be interested in the experience of developing electronic trading platforms in Finland, especially in the field of woodworking (MySupply, Forest Hub), in order to develop a new sales channel.
Taking into account the cluster development of the Finnish economy, as well as a large number of deliveries of Finnish products to the countries of Western Europe and Russia, Belarusian companies can actively offer contract manufacturing services. Finnish State Agency for Innovative Finance, Trade Development, Tourism and Investment Business Finland can provide support in the search for potential partners.
Finnish investors are more interested in investments in industrial production (52.7%) in Eastern European countries. In this vein, Belarusian companies should consider the possibility of cooperation in the sale of a part of shares, a share in the authorized capital, or the organization of joint ventures in the forest, chemical, engineering, electrical engineering industries.
In November 2018, a delegation led by the Extraordinary and Plenipotentiary Ambassador of the Republic of Finland in the Republic of Lithuania and the Republic of Belarus Christer Michelsson visited the administration and residents of the FEZ Grodnoinvest. This will give new impetus to the development of business relations between the companies of the Grodno region and Finland.
In the case of interest of Belarusian companies in cooperation with the business community of Finland, the administration of the FEZ is ready to assist in establishing contacts and organizing negotiations on the implementation of joint projects. All you need to do is email firstname.lastname@example.org or call +375 152 41-23-17.