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Technology Industry /
Finnish Economic Outlook
September 2017
19/15/2017 Technology Industries
of Finland
The Finnish Technology Industry Is Comprised of
Five Sub-Sectors
29/15/2017 Technology Industries
of Finland
ELEKTRONICS A...
The Finnish Technology Industry Is Comprised of
Five Sub-Sectors
3
ELEKTRONICS AND ELECTROTECHNICAL
INDUSTRY
• Data commun...
The Technology Industry –
the Largest Export Sector in Finland
4
• 50 % of total Finnish exports.
• Companies invest about...
Turnover of the Technology Industry in Finland
5Source: Macrobond, Statistics Finland, Technology Industries of Finland9/1...
6*) In addition to goods exports the sector exported services worth some 12.3 billion euros (2015).
Source: National Board...
Technology, Forest and Chemical Industries
Provide 80 % of Finland's Goods and Services
Exports Revenue
Goods and service ...
Turnover of the Industry and Technology Industry
in Finland
8Source: Macrobond, Statistics Finland9/15/2017 Technology Ind...
Turnover of the Technology Industry in Finland
9Source: Macrobond, Statistics Finland9/15/2017 Technology Industries
of Fi...
Value of New Orders in the Technology Industry*
in Finland
10Source: The Federation of Finnish Technology Industries’ orde...
Value of Order Books in the Technology Industry*
in Finland
11Source: The Federation of Finnish Technology Industries’ ord...
Tender Requests* Received by Technology
Industry Companies in Finland
1215.9.2017 Teknologiateollisuus Source: The Federat...
Value of New Orders in the Electronics and
Electrotechnical Industry in Finland
13Source: The Federation of Finnish Techno...
Value of Order Books in the Electronics and
Electrotechnical Industry in Finland
14Source: The Federation of Finnish Techn...
Value of New Orders in the Mechanical
Engineering in Finland
15Source: The Federation of Finnish Technology Industries’ or...
Value of Order Books in the Mechanical
Engineering in Finland
16Source: The Federation of Finnish Technology Industries’ o...
Value of New Orders in the Consulting Engineering
in Finland
17Source: The Federation of Finnish Technology Industries’ or...
Value of Order Books in the Consulting
Engineering in Finland
18Source: The Federation of Finnish Technology Industries’ o...
Value of New Orders in the Information
Technology* in Finland
19Source: The Federation of Finnish Technology Industries’ o...
Value of Order Books in the Information
Technology* in Finland
20Source: The Federation of Finnish Technology Industries’ ...
Technology Industry Personnel
219/15/2017 Technology Industries of Finland Source: Statistics Finland, The Federation of F...
Technology Industry Personnel in Finland by
Branch
229/15/2017 Technology Industries of Finland Source: Statistics Finland...
Technology Industry Personnel in Subsidiaries
Abroad by Branch
239/15/2017 Technology Industries of Finland Source: The Fe...
Retirement of Technology Industry Personnel in
Finland
24
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2000 2002 2004 20...
Retirement of Technology Industry Blue Collar
Employees in Finland
25
0
500
1000
1500
2000
2500
3000
3500
2000 2002 2004 2...
Overview of the Situation in the Technology
Industry and Outlook for Autumn 2017
26
- Turnover in Finland totalled some EU...
World Economic Outlook
- Finland as a Part of Global
Economy
279/15/2017 Technology Industries of Finland
Gross Domestic Product Has Grown in the Euro
Area for a Long Time, and Now also in Finland
28Lähde: MacrobondTechnology In...
Recently, Finland's Economic Growth Has also
Been Supported by an Increase in Exports
29Source: Macrobond, Statistics Finl...
GDP Has Grown for a Long Time in the Euro Area,
Now Also in Finland
309/15/2017 Lähde: MacrobondTechnology Industries
of F...
319/15/2017 Lähde: Macrobond
In China and India Growth Continues, also Brazil
Is Returning to Growth
Share of global GDP i...
329/15/2017 Latest information August 2017
Source: Markit
GDP Growth in the Euro Area Has Picked up During
the last Months...
Industrial Production Volume
339/15/2017 Source: MacrobondTechnology Industries
of Finland
Industrial Production Volume in the EU Countries
349/15/2017 Source: MacrobondTechnology Industries
of Finland
Industrial Production is Growing in Particular in
Emerging Countries
359/15/2017 Source: Macrobond, The CPB Netherlands Bu...
369/15/2017 Latest information August 2017
Source: Markit
Industrial Production in China is Declining Slightly
Purchase Ma...
379/15/2017 Latest information August 2017
Source: Markit
Industrial Production in Russia is Growing
Purchase Managers’ In...
389/15/2017 Latest information August 2017
Source: Markit
Industrial Production in Brazil Is Increasing
Purchase Managers’...
39Source: Macrobond
Industrial Production in USA is Growing
Purchase Managers’ Index (PMI) in manufacturing industry
50 = ...
40Source: Macrobond
Growth of Residence Construction Has Lowered in
China
Share of China in Asian GDP is 42% (adjusted for...
41Souce: Macrobond
Fixed Investment in Brazil Continue to Decrease
Share of Russia in European GDP is 13 % (adjusted for P...
42Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis
World Trade Has Picked up Again
Import volume...
Imports to China Have Increased from Several
Countries, but Are Slowing Down
43Source: MacrobondTechnology Industries
of F...
Exports from EU Countries to Russia Have Fallen,
but Stabilized
44Source: MacrobondTechnology Industries
of Finland
9/15/2...
Russia’s Share* of Technology Industry Exports
from Finland Has Lowered to Some Five Per Cent
45*) Soviet Union up to 1991...
46Source: IMF (April 2017)
Global Economy is Expected to Grow by 3,5 % in
2017
GDP growth in 2017, %
-4
-3
-2
-1
0
1
2
3
4...
47Source: IMF (April 2017), Board of Customs
Demand in the Finnish Technology Industry Export
Market is Expected to Grow b...
Finland’s Economic Growth
Relies on Exports and
Investments
48Technology Industries
of Finland
9/15/2017
49Source: Macrobond, Eurostat
Finland's Exports Are still Low and Insufficient to
Finance the Public Sector
Technology Ind...
Finnish Exports Lagging Behind Competitors
50Source: Macrobond, EurostatTechnology Industries
of Finland
9/15/2017
Economic Growth is Constrained by the 20% Drop
in Production Capacity and a High Rate of Utilization
Investments are vital...
52Source: Macrobond, Eurostat
Growth of Public Expenditures, Debt and Tax Ratio
in Finland
Increased cost burden requires ...
Corporate Investments in Finland Are in Real
Terms Almost 6 Billion Euros Lower than in 2008
Production and R&D investment...
Companies in Finland Have Invested Significantly
Less than in Competing Countries
54Source: OECD, Economic Outlook (June 2...
55Source: Statistics Finland, (National Accounts), The Confederation of Finnish Industries* investment survey (June 2017)
...
Investments and productivity* are Decisive for
Finland’s Success
Productivity of export sector is 10 % lower than in 2007-...
Rapid Growth in Labour Costs Has Weakened the
Ability of Companies to Invest in Finland
57*) Both wages and R & D investme...
58
Finland's Price and Cost Competitiveness Vis-à-vis
the Euro Area Has Improved Recently
Unit labour costs in the whole e...
What Should Be Done in Finland?
59
• Support the renewal of the industry.
• Taxes should support growth and investment in ...
Long-Term Outlook and Challenges
60
• Global Structural Change Set to Continue Apace
o Industrial production and services ...
Technology Industries of
Finland
61Teknologiateollisuus9/15/2017
The Federation’s Member Companies 2016
62
250–499 employees
69,035
39%
29,787
17%
28,016
16%
50,683
28%
1,421
92 %
84
5 %
...
The Federation’s SME Member Companies 2016
63
481
34%
479
33 %
258
18%
203
14%
Number of enterprises / 1 421 Number of per...
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Finnish technology industry, September 2017

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Economic outlook: Finnish technology industry and economy, monthly statistics

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Finnish technology industry, September 2017

  1. 1. Technology Industry / Finnish Economic Outlook September 2017 19/15/2017 Technology Industries of Finland
  2. 2. The Finnish Technology Industry Is Comprised of Five Sub-Sectors 29/15/2017 Technology Industries of Finland ELEKTRONICS AND ELECTROTECHNICAL INDUSTRY ABB, Ensto, Microsoft Mobile, Murata Electronics, Nokia, Planmeca, Polar Electro, Suunto, Vacon, Vaisala… METALS INDUSTRY Boliden, Componenta, Kuusakoski, Luvata, Outokumpu, Outotec, Ovako, Sacotec, SSAB … MECHANICAL ENGINEERING Abloy, Cargotec, Finn-Power, Fiskars, Glaston, Kone, Konecranes, Metso, Meyer Turku, Normet, Oras, Patria, Pemamek, Ponsse, Stala, Valmet, Valtra, Wärtsilä… INFORMATION TECHNOLOGY Affecto, Basware, Bilot, CGI, Comptel, Digia, Efecte, Enfo, F-Secure, Fujitsu Finland, IBM, Innofactor, Knowit, Microsoft, Nixu, Tieto… CONSULTING ENGINEERING A-Insinöörit, Citec, Elomatic, Etteplan, FCG, Granlund, Neste Jacobs, Pöyry, Ramboll, Rejlers, SITO, SWECO, WSP…
  3. 3. The Finnish Technology Industry Is Comprised of Five Sub-Sectors 3 ELEKTRONICS AND ELECTROTECHNICAL INDUSTRY • Data communications equipment, electrical machinery, medical technology • Turnover (2016): 13.3 billion euros • Personnel (2016): 38,000 METALS INDUSTRY • Steel products, non-ferrous metals, castings, metallic minerals • Turnover (2016): 9.0 billion euros • Personnel (2016): 15,400 MECHANICAL ENGINEERING • Machinery, metal products, vehicles • Turnover (2016): 27.7 billion euros • Personnel (2016): 122,400 INFORMATION TECHNOLOGY • IT services, applications and programming • Turnover (2016): 11.5 billion euros • Personnel (2016): 60,400 CONSULTING ENGINEERING • Expertise for construction industry and infrastructure • Turnover (2016): 5.8 billion euros • Personnel (2016): 49,800 9/15/2017 Technology Industries of Finland
  4. 4. The Technology Industry – the Largest Export Sector in Finland 4 • 50 % of total Finnish exports. • Companies invest about EUR 5.0 billion annually in Finland. • 70 % of private-sector R&D investment. • Almost 295,000 employed directly in the sector, 700,000 employed in total, equalling about 30% of the entire Finnish labour force. • Technology Industries of Finland has over 1,600 member companies. 9/15/2017 Technology Industries of Finland
  5. 5. Turnover of the Technology Industry in Finland 5Source: Macrobond, Statistics Finland, Technology Industries of Finland9/15/2017 Technology Industries of Finland
  6. 6. 6*) In addition to goods exports the sector exported services worth some 12.3 billion euros (2015). Source: National Board of Customs, Statistics Finland Export of Technology Industry Goods from Finland by Area in 2016 Total goods exports 25.2 billion euros* North America 2.5 billion € 9.8 % Western Europe 13.7 billion € 53.9 % South and Middle America 0.8 billion € 3.2 % Central and Eastern Europe 3.8 billion € 15.0 % Africa 0.4 billion € 1.7 % Middle and Central East 0.5 billion € 1.8 % Asia 3.7 billion € 14.6 % 9/15/2017 Technology Industries of Finland
  7. 7. Technology, Forest and Chemical Industries Provide 80 % of Finland's Goods and Services Exports Revenue Goods and service exports: billion euros and the share of Finnish exports in 2016* 7*) Service exports industry-specific data for the year 2015. Source: Board of Customs, Statistics Finland (National Accounts, Foreign trade in services) Technology industry 50% Forest industry 15% Chemical industry 15% Other sectors 20% 9/15/2017 Technology Industries of Finland
  8. 8. Turnover of the Industry and Technology Industry in Finland 8Source: Macrobond, Statistics Finland9/15/2017 Technology Industries of Finland
  9. 9. Turnover of the Technology Industry in Finland 9Source: Macrobond, Statistics Finland9/15/2017 Technology Industries of Finland
  10. 10. Value of New Orders in the Technology Industry* in Finland 10Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation April-June 2017 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: II,2017 / II,2016 II,2017 / I,2017 Export: +60 % +31 % Domestic: +15 % +8 % Combined: +47 % +25 % *) Excl. metals industry and game industry companies Technology Industries of Finland 9/15/2017
  11. 11. Value of Order Books in the Technology Industry* in Finland 11Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation 30.6.2017 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: 30.6.2017 / 30.6.2016 30.6.2017 / 31.3.2017 Export: +25 % +14 % Domestic: -1 % +2 % Combined: +18 % +10 % *) Excl. metals industry and game industry companies Combined Technology Industries of Finland 9/15/2017
  12. 12. Tender Requests* Received by Technology Industry Companies in Finland 1215.9.2017 Teknologiateollisuus Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, the last questionnaire is April 2017 -60 -50 -40 -30 -20 -10 0 10 20 30 40 Balance figure 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 *) Have you experienced a notable increase or decrease in the number of requests for tenders in recent weeks in comparison to the situation three months ago?”. Balance figure = the number of companies receiving more requests - the number of companies receiving less requests.
  13. 13. Value of New Orders in the Electronics and Electrotechnical Industry in Finland 13Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation April-June 2017 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: II,2017 / II,2016 II,2017 / I,2017 Export: +11 % +4 % Domestic: +45 % +30 % Combined: +18 % +9 % Technology Industries of Finland 9/15/2017
  14. 14. Value of Order Books in the Electronics and Electrotechnical Industry in Finland 14Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation 30.6.2017 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 Export Domestic Million euros, at current prices Change: 30.6.2017 / 30.6.2016 30.6.2017 / 31.3.2017 Export: +8 % +4 % Domestic: +26 % +27 % Combined: +11 % +8 % Combined 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Technology Industries of Finland 9/15/2017
  15. 15. Value of New Orders in the Mechanical Engineering in Finland 15Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation April-June 2017 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: II,2017 / II,2016 II,2017 / I,2017 Export: +113 % +53 % Domestic: +3 % +7 % Combined: +86 % +45 % Technology Industries of Finland 9/15/2017
  16. 16. Value of Order Books in the Mechanical Engineering in Finland 16Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation 30.6.2017 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 Export Domestic Million euros, at current prices Change: 30.6.2017 / 30.6.2016 30.6.2017 / 31.3.2017 Export: +31 % +17 % Domestic: -10 % -2 % Combinedä: +23 % +14 % Combined 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Technology Industries of Finland 9/15/2017
  17. 17. Value of New Orders in the Consulting Engineering in Finland 17Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation April-June 2017 0 50 100 150 200 250 300 350 Combined Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: II,2017 / II,2016 II,2017 / I,2017 Export: -28 % -46 % Domestic: +11 % +1 % Combined: +5 % -8 % Technology Industries of Finland 9/15/2017
  18. 18. Value of Order Books in the Consulting Engineering in Finland 18Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation 30.6.2017 0 100 200 300 400 500 600 700 800 Export Domestic 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: 30.6.2017 / 30.6.2016 30.6.2017 / 31.3.2017 Export: +78 % +2 % Domestic: +4 % +2 % Combined: +15 % +2 % Combined Technology Industries of Finland 9/15/2017
  19. 19. Value of New Orders in the Information Technology* in Finland 19Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation April-June 2017 0 50 100 150 200 250 300 350 400 450 500 550 600 650 700 750 800 850 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: II,2017 / II,2016 II,2017 / I,2017 Combined: -1 % -12 % *) Excl. game industry companies Technology Industries of Finland 9/15/2017
  20. 20. Value of Order Books in the Information Technology* in Finland 20Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest observation 30.6.2017 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Million euros, at current prices Change: 30.6.2017 / 30.6.2017 30.6.2017 / 31.3.2017 Combined: -2 % -5 % *) Excl. game industry companies Technology Industries of Finland 9/15/2017
  21. 21. Technology Industry Personnel 219/15/2017 Technology Industries of Finland Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond (30.6)
  22. 22. Technology Industry Personnel in Finland by Branch 229/15/2017 Technology Industries of Finland Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond (30.6)
  23. 23. Technology Industry Personnel in Subsidiaries Abroad by Branch 239/15/2017 Technology Industries of Finland Source: The Federation of Finnish Technology Industries’ labour force survey, Macrobond
  24. 24. Retirement of Technology Industry Personnel in Finland 24 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Number of individuals retired Number of individuals retiring (estimation) Salaried employees Blue collar employees Individuals per year Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics FinlandTechnology Industries of Finland 9/15/2017
  25. 25. Retirement of Technology Industry Blue Collar Employees in Finland 25 0 500 1000 1500 2000 2500 3000 3500 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Mechanical engineering Metals industry Electronics and electrotechnical industry Individuals per year Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics FinlandTechnology Industries of Finland 9/15/2017
  26. 26. Overview of the Situation in the Technology Industry and Outlook for Autumn 2017 26 - Turnover in Finland totalled some EUR 67.3 billion in 2016. This is about half per cent higher than in 2015. In January-June 2017 turnover was 11 % higher than last year at the same time. In 2008, prior to the financial crises, the corresponding figure was EUR 86 billion. - The monetary value of new orders reported between April-June 2017 was 25 % higher than in January-March, and 47 % higher than in the corresponding period in 2016. - At the end of June, the value of order books was 10 % higher than at the end of March, and 18 % higher than in June 2016. - The turnover of technology industry companies in autumn 2017 is expected to be higher than in the corresponding period last year. - The number of personnel in Finland increased somewhat in January-June 2017. Personnel increased by two per cent, or by 6,000 employees from the average number in 2016. On average, the industry employed 296,000 people in June. In 2008, the industry employed a total of 326,000 people in Finland. - The recruitment activities have picked up markedly in 2017. The companies recruited a total of 22,600 new employees between January and June. 9/15/2017 Technology Industries of Finland
  27. 27. World Economic Outlook - Finland as a Part of Global Economy 279/15/2017 Technology Industries of Finland
  28. 28. Gross Domestic Product Has Grown in the Euro Area for a Long Time, and Now also in Finland 28Lähde: MacrobondTechnology Industries of Finland 9/15/2017
  29. 29. Recently, Finland's Economic Growth Has also Been Supported by an Increase in Exports 29Source: Macrobond, Statistics FinlandTechnology Industries of Finland 9/15/2017
  30. 30. GDP Has Grown for a Long Time in the Euro Area, Now Also in Finland 309/15/2017 Lähde: MacrobondTechnology Industries of Finland
  31. 31. 319/15/2017 Lähde: Macrobond In China and India Growth Continues, also Brazil Is Returning to Growth Share of global GDP in China, India, Brazil and Russia is 31 % (adjusted for PP) Technology Industries of Finland
  32. 32. 329/15/2017 Latest information August 2017 Source: Markit GDP Growth in the Euro Area Has Picked up During the last Months Purchase Managers’ Index (PMI), 50 = no change from previous month Technology Industries of Finland
  33. 33. Industrial Production Volume 339/15/2017 Source: MacrobondTechnology Industries of Finland
  34. 34. Industrial Production Volume in the EU Countries 349/15/2017 Source: MacrobondTechnology Industries of Finland
  35. 35. Industrial Production is Growing in Particular in Emerging Countries 359/15/2017 Source: Macrobond, The CPB Netherlands Bureau for Economic Policy AnalysisTechnology Industries of Finland
  36. 36. 369/15/2017 Latest information August 2017 Source: Markit Industrial Production in China is Declining Slightly Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  37. 37. 379/15/2017 Latest information August 2017 Source: Markit Industrial Production in Russia is Growing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  38. 38. 389/15/2017 Latest information August 2017 Source: Markit Industrial Production in Brazil Is Increasing Purchase Managers’ Index (PMI) in manufacturing industry in China Technology Industries of Finland
  39. 39. 39Source: Macrobond Industrial Production in USA is Growing Purchase Managers’ Index (PMI) in manufacturing industry 50 = no change from previous month Technology Industries of Finland 9/15/2017
  40. 40. 40Source: Macrobond Growth of Residence Construction Has Lowered in China Share of China in Asian GDP is 42% (adjusted for PP) Technology Industries of Finland 9/15/2017
  41. 41. 41Souce: Macrobond Fixed Investment in Brazil Continue to Decrease Share of Russia in European GDP is 13 % (adjusted for PP) Share of Brazil in Latin American GDP is 35 % (adjusted for PP) Technology Industries of Finland 9/15/2017
  42. 42. 42Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis World Trade Has Picked up Again Import volume development Technology Industries of Finland 9/15/2017
  43. 43. Imports to China Have Increased from Several Countries, but Are Slowing Down 43Source: MacrobondTechnology Industries of Finland 9/15/2017
  44. 44. Exports from EU Countries to Russia Have Fallen, but Stabilized 44Source: MacrobondTechnology Industries of Finland 9/15/2017
  45. 45. Russia’s Share* of Technology Industry Exports from Finland Has Lowered to Some Five Per Cent 45*) Soviet Union up to 1991 Source: Finnish Customs 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(1-6) Technology Industries of Finland 9/15/2017 %
  46. 46. 46Source: IMF (April 2017) Global Economy is Expected to Grow by 3,5 % in 2017 GDP growth in 2017, % -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 0 10 20 30 40 50 60 70 80 90 100 North America Western Europe Japan China India Restof EasternEurope Russia Brazil Mexico RestofLatin A,merica MiddleEast andAfrica Average growth: +3,5 % The width of the bar indicates the share of global GDP in 2015 (adjusted for purchasing power parity), % Rest of Asia 9/15/2017 Technology Industries of Finland
  47. 47. 47Source: IMF (April 2017), Board of Customs Demand in the Finnish Technology Industry Export Market is Expected to Grow by 2.2 % in 2017 GDP growth 2017 / 2016, % -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 0 10 20 30 40 50 60 70 80 90 100 North America Western Europe Japan China India Rest of Asia Restof EasternEurope Russia Brazil RestofLatinAmerica MiddleEastandAfrica Average growth: +2.2 % Mexico The width of the bar indicates the export share of technology industry from Finland in 2015, % 9/15/2017 Technology Industries of Finland
  48. 48. Finland’s Economic Growth Relies on Exports and Investments 48Technology Industries of Finland 9/15/2017
  49. 49. 49Source: Macrobond, Eurostat Finland's Exports Are still Low and Insufficient to Finance the Public Sector Technology Industries of Finland 9/15/2017
  50. 50. Finnish Exports Lagging Behind Competitors 50Source: Macrobond, EurostatTechnology Industries of Finland 9/15/2017
  51. 51. Economic Growth is Constrained by the 20% Drop in Production Capacity and a High Rate of Utilization Investments are vital for the production and export recovery 51 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% 70 75 80 85 90 95 100 105 110 115 120 125 Industrial production ability (production with capacity in full use), left. Scale Industrial production (2008=100), left scale Capacity utilization rate, %, right scale -19 % 2008 200 9 2010 2011 2012 2013 2014 2015 2016 2017 -21 % Source: Statistics Finland / National Accounts, Industrial volume indexTechnology Industries of Finland 9/15/2017
  52. 52. 52Source: Macrobond, Eurostat Growth of Public Expenditures, Debt and Tax Ratio in Finland Increased cost burden requires cuts to public sector Technology Industries of Finland 9/15/2017
  53. 53. Corporate Investments in Finland Are in Real Terms Almost 6 Billion Euros Lower than in 2008 Production and R&D investments in Finland 53Source: Statistics Finland, National Accounts 20 21 22 23 24 25 26 27 28 29 30 31 32 2008 2009 2010 2011 2012 2013 2014 2015 2016 Billion euros, in the 2016 price level Technology Industries of Finland 9/15/2017
  54. 54. Companies in Finland Have Invested Significantly Less than in Competing Countries 54Source: OECD, Economic Outlook (June 2017) 70 75 80 85 90 95 100 105 110 115 120 125 130 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e USA Switzerland Sweden Netherlands Germany Finland Corporate investments, index 2008 = 100 Technology Industries of Finland 9/15/2017
  55. 55. 55Source: Statistics Finland, (National Accounts), The Confederation of Finnish Industries* investment survey (June 2017) Investments in the Manufacturing and Technology Industry in Finland Do Not Promise Long-Term Strong Growth 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e Manufacturing industry (incl. technology industry) Technology industry (incl. information technology and consulting engineering) Production and R&D investments in Finland, million euros, at current prices Technology Industries of Finland 9/15/2017
  56. 56. Investments and productivity* are Decisive for Finland’s Success Productivity of export sector is 10 % lower than in 2007-2008, productivity of entire national economy is 3 % lower 56 *) Productivity is measured as real value added per hours worked. When productivity grows (the curve rises) value added grows more than hours worked. Value added = turnover – purchasing of materials and services Value added = labour costs + rents + depreciations + profits Source: Statistics Finland / National Accounts Technology Industries of Finland 9/15/2017
  57. 57. Rapid Growth in Labour Costs Has Weakened the Ability of Companies to Invest in Finland 57*) Both wages and R & D investments include R&D staff wage costs Source: Statistics Finland (National Accounts) 50 55 60 65 70 75 80 85 90 95 100 105 110 115 2008 2009 2010 2011 2012 2013 2014 2015 2016 Corporate wages and social security costs* Corporate production and R&D investments* Corporate profits after taxes At current prices, index 2008=100 Technology Industries of Finland 9/15/2017
  58. 58. 58 Finland's Price and Cost Competitiveness Vis-à-vis the Euro Area Has Improved Recently Unit labour costs in the whole economy = labour costs / productivity, including the influence of effective exchange rates 94 96 98 100 102 104 106 108 110 112 114 2000=100 2005=100 2008=100 Finland’s price and cost competitiveness declines Finland’s price and cost competitiveness improves 01 02 03 05 06 07 08 09 10 11 12 13 14 15 16 17 9/15/2017 Technology Industries of Finland *) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 38 main trade partners, as well as the development of unit labour costs for the total economy. Latest information January-March 2017. Source: European Central Bank
  59. 59. What Should Be Done in Finland? 59 • Support the renewal of the industry. • Taxes should support growth and investment in Finland. • Support decision making in companies related to compensation and working time • No new European nor national burdens on companies, which are deteriorating the competitiveness. Technology Industries of Finland 9/15/2017
  60. 60. Long-Term Outlook and Challenges 60 • Global Structural Change Set to Continue Apace o Industrial production and services will relocate to rapidly developing economic areas o Strong growth, large markets, cheap labour and increasing expertise will increase the attractiveness of these regions. • Competition over Skills and Raw Materials Set to Increase o Due to an increase in retirement, the sector’s annual recruitment need in Finland will rise considerably in the coming years. o The availability of reasonably-priced energy also threatens to become an investment bottleneck in Finland • Combating Climate Change o A challenge as costs are set to grow faster than in competitor countries o An opportunity for new environmental and energy technologies Technology Industries of Finland 9/15/2017
  61. 61. Technology Industries of Finland 61Teknologiateollisuus9/15/2017
  62. 62. The Federation’s Member Companies 2016 62 250–499 employees 69,035 39% 29,787 17% 28,016 16% 50,683 28% 1,421 92 % 84 5 % 40 2 % 22 1 % Number of enterprises / 1 567 Number of personnel / 177 521 1–249 employees 500–999 employees 1000– employees Technology Industries of Finland 9/15/2017
  63. 63. The Federation’s SME Member Companies 2016 63 481 34% 479 33 % 258 18% 203 14% Number of enterprises / 1 421 Number of personnel / 69 035 5,109 7% 15,290 22% 17,924 26% 30,712 45% 1–19 employees 20–49 employees 50–99 employees 100–249 employees 9/15/2017 Technology Industries of Finland

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