It might be the depths of winter right now, but Finland’s economy is on fire. The government’s business-friendly attitude is hugely appealing to investors. Consequently, while other parts of Europe are in a slump, Finland is basking in its own self-generating glow.
Sure, red tape is minimal, running costs are low – all the things carpet-bagging investors like. But Finland’s government learned crucial lessons the hard way from previous downturns. Namely, being opposed to selling yourself short, the quickest and most secure route to success is through meaningful investment in your citizens.
As a consequence, the Finnish government operates a self-fulfilling policy of pooling resources between Finnish universities and the private sector. It’s a devilishly simple idea, and one that has brought Finland the largest turnover from innovation out of all the Nordic nations; the highest quota of utility patents in the EU; and the world’s third highest R&D spend per capita.
Seinäjoki is now Finland’s FDI poster town in terms of gross domestic product, employment rates and population growth.
Together with the strong synergy between companies and universities supplying a steady stream of highly educated talent, it should come as no surprise that Finland is still hugely prominent on investor’s radars. And right now nowhere is beeping louder than Seinäjoki.
Seinäjoki is now Finland’s FDI poster town in terms of gross domestic product, employment rates and population growth. Employment opportunities have grown at twice the national average, accelerated by Seinäjoki’s excellent transport links by air, road and rail.
A city of 200,000 it’s Finland’s sixth largest commercial centre and with around 8,500 businesses operating in the region. As one of Finland’s fastest-growing urban areas, the city has and continues to invest heavily in technology skills as well as food industry research and development.
Juha Alarinta, Research Director of the Seinäjoki University Consortium, explains how the regional economy has altered in this part of Finland. “Seinäjoki was able to rise from the backwoods to the forefront of the information society, thanks to a lot of enthusiastic people working together to make a difference.”
Seinäjoki’s regional development company Frami Ltd, are dedicated to strengthening the region, supporting new and existing technology companies. They are the first port of call for investors needing development services and facility services.
“The competitiveness of the Seinäjoki urban region has grown at a staggering rate,” says Seinäjoki-based investor Raimo Sarajärv. He sees no reason why the city’s growth won’t continue: “The current recession hasn’t caused any substantial increase in the amount of empty commercial premises. New companies and chains are coming into the area all the time.”
So where did it all go right? To answer this, says Mayor Jorma Rasinmäki, we need to turn the clock back two years to Seinäjoki’s Big Bang. Large scale public investment started in 2009 with a huge positive effect, Rasinmäki explains. The investment came just as recession in other parts of Europe was about to bite – the upshot being that Seinäjoki has seen major investment and development keep the city’s economy growing and providing jobs for the present and the future.
“The biggest activity is happening in construction, technology, logistics and trade and services industries. Industrial sites sales have tripled during the past 24 months compared to the 20 previous years.” The growth has continued apace throughout 2011, he says. “This has meant huge investments for the private construction industry. I see plenty of tower cranes on the horizon – and I’m pleased.”
He also points out that Seinäjoki current track record in private residential investment is leading the way for the whole of Finland. “These sectors have experienced significant growth and investments in these sectors have hugely increased during 2011. The trade and retail sectors are also growing fast.”
Compared to the withering retail sectors of Britain, consumer confidence in Finland is still deliriously high. Evidence of this can be seen in the large trading units, shopping centres and specialist shops, Rasinmäki says and it shows no signs of abating. Rasinmäki explains that Seinäjoki is gaining a nationwide reputation for car dealerships – attracting new customers from across the country.
“Companies are currently investing in tens of thousands of square metres of new shopping space in Seinäjoki and are continuing plans to do so in the near future as well.”
Other sectors experiencing high growth are food production, technology, manufacturing, sports technology and culture and even music production, Rasinmäki explains.
“Our strongest line of business is the food industry. The surrounding region of South Ostrobothnia is the main food production province in Finland. We produce food to satisfy the demand of the whole country. We are strongly representing the whole food production chain from initial production to refinery, machine construction, trade, and university level research.”
Prime investment potential can be found across the board in Seinäjoki, Rasinmäki says – from the food industry, to construction, and trade industries – sustainable growth and expansion means there are constant investment opportunities in this part of the world.
And the secret to Seinäjoki’s success? Rasinmäki puts it down to a very simple and very Nordic equation: social democracy and investment. “The knowledge transfer between business and universities has been one of the key factors in Finland’s track record of innovation and economic success,” Rasinmäki explains.
As one of Finland’s fastest-growing urban areas, the city has and continues to invest heavily in technology skills as well as food industry research and development.
“According to WEF’s Global Competitiveness Report 2010-2011, Finland has the best availability of scientists and engineers in the world and they are trained by one of the best educational systems in the world.”
Indeed, Finland’s education system consistently achieves outstanding results. The WEF’s Global Competitiveness Index ranks the quality of the system as the best in the world. In OECD’s Programme for Student Assessment (PISA) surveys Finnish students lead the rankings in combined learning results for science, mathematics and literacy. About a third of Finland’s working population has a degree or higher qualification.
It’s reassuring to see that education has not become a luxury in Finland. It’s also good to see decentralised economies thriving from state sponsored commitment. Some European leaders would do well to replicate Finland’s example…