Situation and Outlook of the Finnish Technology Industry 1/2014
The Finnish technology industry's turnover in 2013 declined from 2012. An increase in the number of requests for tenders is a weak signal of a potential turn for the better. Technology industry companies share a guarded optimism that the worst is behind them.
Optimism with regard to an upturn in the growth of the global economy has increased somewhat during the last few months. Industrial production in the United States has been growing for four and a half years now. The growth of the global economy will nevertheless again remain modest this year. This is primarily due to two reasons. Firstly, the economic growth of developing countries will not attain the rates of recent years. In addition to this, Europe has become caught in a spiral of chronically poor economic growth.
Technology industry turnover declined again
The turnover of companies in the Finnish technology industries totalled EUR 64 billion in 2013. This represents a decline of six per cent from the previous year.
The companies that took part in the Federation of Finnish Technology Industries' survey of order books reported that the monetary value of new orders in the industry between October and December was 12 per cent lower than in the corresponding period in 2012, but 15 per cent higher than in the preceding quarter.
The value of order books at the end of December was 11 per cent less than at the end of 2012 and two per cent below the value reported at the end of September.
“Based on the development of orders in recent months, the turnover of technology industry companies in early 2014 will be approximately equal to what it was in early 2013,” says CEO Jorma Turunen of the Federation of Finnish Technology Industries.
Finnish technology industry companies employed approximately 296,000 people in 2013. This represents a decrease of 7,300 employees, or 2.5 per cent, from 2012. In 2008, prior to the financial crisis, the industry employed 327,000 people in Finland.
Upturn must be supported by all means necessary
The positive trend in the economy must not be jeopardised. It must be supported.
“The upturn in the number of requests for tenders is good news. There is a budding positive buzz in the market. Now, the important thing is to turn the invitations into actual orders. This will be yet another test of Finland's competitiveness,” Turunen says with conviction.
A technologically superior product, service or combination thereof will not necessarily bring the orders home. The sufficient availability of corporate financing as well as export financing and guarantees is crucial for the opening of the market and the creation of growth.
“The technology industry and Finland have linked destinies: when the industry prospers, so does the country,” Turunen states.
Turunen reminds the government of its promise not to introduce any further costs for the industry.
“Adjustment measures must focus on savings and structural changes in the future. An increase in productivity is required particularly from the public sector. Taxation cannot be tightened any further without compromising the employment situation,” says Turunen.
EU could boost competitiveness
Director Mika Nykänen presented the Federation of Finnish Technology Industries' themes for the Elections to the European Parliament.
“Dismantling regulations will improve legislation and create cost savings,” he says.
It would be vital to lighten the administrative burden, since small enterprises in particular are drowning in regulations. As a bad example, Nykänen mentions current environmental legislation, which does not support the achievement of environmental targets.
“The new single-target model for climate and environmental issues for 2030 is a well-functioning one. The crucial issues are to stop carbon leakage and to identify and promote environmentally friendly production. This would benefit the environment as a whole. Global problems require global solutions,” Nykänen continues.
The Arctic dimension offered by the Arctic Ocean provides great opportunities for Finland and Europe. The EU needs an Arctic expertise programme, in which Finland could play a leading role.
The Arctic railway must be made into an EU project, since it is in Europe's common interest to increase the available routes to the north.
“Together with the Baltic cable and our burgeoning data centre industry and high standard of privacy protection, the North-East Passage telecommunications cable presents an opportunity to turn Finland into a global telecommunications hub,” Nykänen believes.
Securing connections and building for the future are in the interest of Europe as a whole.
Further information:
Jorma Turunen, CEO, tel. +358 500 445 444
Mika Nykänen, Director, tel. +358 40 825 7329
Jukka Palokangas, Chief Economist, tel. +358 40 750 5469
Economic situation and outlook 1/2014 Report (pdf)
The Federation of Finnish Technology Industries is an industrial and labour market lobbying organisation for promoting the competitiveness and operating conditions of Finland's most important export industry. The main sectors of the Finnish technology industry are the electronics and electrotechnical industry, the mechanical engineering industry, the metals industry, the consulting engineering industry and the IT industry. The technology industry accounts for 55% of Finnish exports and 80% of R&D investments. The industry employs approximately 300,000 people directly and creates employment indirectly for another 700,000 Finnish people. A constantly evolving, state-of-the-art technology industry lays the foundation for Finnish welfare.
