Finnish technology industry, February 2018

Technology Industry /
Finnish Economic Outlook
February 2019
12/5/2019 Technology Industries
of Finland

Overcoming the Gap in GDP Will Require 3.0%
Growth in Finland Annually in 2018-2023
2*) The IMF forecast for the euro area in April 2018: 2.4% in 2018, 2.0% in 2019, 1.7% in 2020, 1.5% in 2021, 1.5% in 2022,
1.4% in 2023
Source: Macrobond, IMF, Federation of Finnish Technology Industry
of Finland

The Finnish Technology Industry Is Comprised of
Five Sub-Sectors
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…

The Finnish Technology Industry Is Comprised of
Five Sub-Sectors
4
ELEKTRONICS AND ELECTROTECHNICAL
INDUSTRY
• Data communications equipment, electrical
machinery, medical technology
• Turnover (2018): 15.3 billion euros
• Personnel (2018): 38,600
METALS INDUSTRY
• Steel products, non-ferrous metals,
castings, metallic minerals
• Personnel (2018): 16,400
MECHANICAL ENGINEERING
• Machinery, metal products, vehicles
• Personnel (2018): 133,000
INFORMATION TECHNOLOGY
• IT services, applications and
programming
• Personnel (2018): 68,900
CONSULTING ENGINEERING
• Expertise for construction industry and
infrastructure
• Personnel (2018): 54,300
of Finland

The Technology Industry –
the Largest Export Sector in Finland 2018
5
• Over 50 % of total exports.
• 311,000 employed directly in the sector,
including indirect effects 660,000 people.
• Effect on value added totaling € 57 billion,
or 28% of GDP value added.
• Bring to Finland € 18 billion tax revenue
annually.
• Investments about EUR 5.0 billion
annually in Finland.
• 70 % of private-sector R&D investment.
of Finland

Value Added to the Economy Generated by the
Technology Industry Is EUR 55 Billion, or over 28%
of GDP * (2017)
65.2.2019 Teknologiateollisuus
28.8, 53%
15.6, 29%
10.1, 18%
A total of EUR 54.5 billion
Impact on technology industry
(direct influence)
Impact on other industries
(indirect influence)
Impact on private consumption
(income effect)
*) GDP value added was EUR 193.3 billion in 2017.
Source: Economic Impact of the Technology Industry in Finland 11/2018

Technology Industry Generates nearly 650,000
Jobs in Finland (over 25% of All Employees) (2017)
304,600, 47%
225,800, 35%
114,600, 18%
A total of 644 900 employees
(direct influence)
(income effect)
10 jobs in the technology industry bring
11 jobs to the rest of the economy

Every Job in the Technology Industry Generates
almost another Job in the Services (2017)
295,100, 87%
12,200, 3%
33,100, 10%
Impact on other industries and on
private consumption: 340,300 employees
Services*
Primary production
Processing*
*) Excl. the services industries in the technology industry.

Technology Industry Generates over 18 Billion
Euros in Tax Revenue Annually in Finland (2017)
9.2, 50%
4.3, 24%
4.7, 26%
A total of EUR 18.2 billion
(direct influence)
(income effect)

Turnover of the Technology Industry in Finland
10Source: Macrobond, Statistics Finland, Technology Industries of Finland2/5/2019 Technology Industries
of Finland

11*) In addition to goods exports the sector exported services worth some 13 billion euros.
Source: National Board of Customs, Statistics Finland
Export of Technology Industry Goods from Finland
by Area in 2017
Total goods exports 30.6 billion euros*
North America
2.79 billion €
9.1 %
Western Europe
16.44 billion €
53.7 %
South and
Middle America
0.84 billion €
2.8 %
Central and Eastern Europe
5.11 billion €
16.6 %
Africa
0.43 billion €
1.4 %
Middle and
Central East
0.51 billion €
1.7 %
Asia
4.51 billion €
14.7 %
of Finland

Technology, Forest and Chemical Industries
Provide 81 % of Finland's Goods and Services
Exports Revenue
Goods and service exports: billion euros and the share of Finnish exports in 2017
12*) Service exports industry-specific data for the year 2017 are preliminary information.
Source: Board of Customs, Statistics Finland (National Accounts, Foreign trade in services), Federation of Finnish Technology Industries
of Finland
Technology industry,
43.6, 51%
Forest industry;
12.9; 15%
Chemical industry;
13; 15%
Other branches;
16.1; 19%

Turnover of the Industry and Technology Industry
in Finland
13Source: Macrobond, Statistics Finland2/5/2019 Technology Industries
of Finland

Turnover of the Technology Industry in Finland
14Source: Macrobond, Statistics Finland2/5/2019 Technology Industries
of Finland

Value of New Orders in the Technology Industry*
in Finland
15
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 2018
Million euros, at current prices
Change: IV,2018 / IV,2017 IV,2018 / III,2018
Export: -13 % +8 %
Domestic: -15 % +11 %
Combined: -13 % +9 %
*) Excl. metals
industry, game
industry and data
center companies
of Finland
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation October-December 2018

Value of Order Books in the Technology Industry*
in Finland
16
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
28,000
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Change: 31.12.2018 / 31.12.2017 31.12.2018 / 30.9.2018
Export: +11 % +4 %
Domestic: +7 % +1 %
Domestic: +10 % +3 %
*) Excl. metals
industry, game
industry and data
center companies
Combined
of Finland
companies, latest observation 31th December 2018.

Tender Requests* Received by Technology
Industry Companies in Finland
17Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, the last questionnaire in
January 2019
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Balance figure
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
*) ”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.”
of Finland

Tender Requests* Received by Technology Industry
Anticipate Weaker Order Development
18*) Four quarters moving sum.
Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies
50
60
70
80
90
100
110
120
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Balance figure*
(left scale)
New orders*,
index 2008=100
(right scale)
New orders
(without ships)*,
index 2008=100
(right scale)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
of Finland

Value of New Orders in the Electronics and
Electrotechnical Industry in Finland
19
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
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Export: +16 % +12 %
Domestic: -13 % 0 %
Combined: +9 % +10 %
of Finland

Value of Order Books in the Electronics and
Electrotechnical Industry in Finland
20
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
Change: 31.12.2018 / 31.12.2017 31.12.2018 / 30.9.2018
Export: +9 % +6 %
Domestic: -12 % 0 %
Combined: +5 % +5 %
Combined
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
of Finland

Value of New Orders in the Mechanical
Engineering in Finland
21
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
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Export: -27 % +5 %
Domestic: -32 % +14 %
Combined: -28 % +6 %
of Finland

Value of Order Books in the Mechanical
22
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Export
Domestic
Change: 31.12.2018 / 31.12.2017 31.12.2018 / 30.9.2018
Export: +12 % +3 %
Domestic: +12 % +2 %
Combined: +12 % +3 %
Combined
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
of Finland

Value of New Orders in the Consulting Engineering
in Finland
23
0
50
100
150
200
250
300
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Export: +90 % +7 %
Domestic: +31 % +32 %
Combined: +37 % +28 %
of Finland

Value of Order Books in the Consulting
24
0
100
200
300
400
500
600
700
800
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Change: 31.12.2018 / 31.12.2017 31.12.2018 / 30.9.2018
Export: -15 % -13 %
Domestic: +30 % -3 %
Combined: +21 % -5 %
Combined
of Finland

Value of New Orders in the Information
Technology* in Finland
25
0
100
200
300
400
500
600
700
800
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Combined: +20 % +25 %
*) Excl. game industry and data center
companies
of Finland

Value of Order Books in the Information
Technology* in Finland
26
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 2018
Change: 31.12.2018 / 31.12.2017 31.12.2018 / 30.9.2018
Combined: +6 % +3 %
*) Excl. game industry and data
center companies
of Finland

Technology Industry Personnel in Finland and
Abroad
27Source: Statistics Finland, Federation of Finnish Technology Industries’ labour force survey
150,000
170,000
190,000
210,000
230,000
250,000
270,000
290,000
310,000
330,000
350,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Personnel in Finland Pewrsonnel in foreign subsidiaries
of Finland

Technology Industry Personnel in Finland by
Branch
282/5/2019 Technology Industries of
Finland
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond

Technology Industry Personnel in Subsidiaries
Abroad by Branch
Finland
Source: The Federation of Finnish Technology Industries’ labour force survey, Macrobond

Retirement of Technology Industry Personnel in
Finland
30
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
2/5/2019

Retirement of Technology Industry Blue Collar
Employees in Finland
31
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
2/5/2019

Overview of the Situation in the Technology
Industry and Outlook for the Early 2019
32
- Turnover in Finland totalled some EUR 77 billion in 2018. The turnover was up 6 % year-on-year. In
2008, prior to the financial crises, the corresponding figure was EUR 86 billion.
- The monetary value of new orders reported between October-December 2018 was 9 % higher than
in the preceding quarter, but 13 lower than in the corresponding period in 2017. The drop is due to
the ship orders in the reference period.
- At the end of December, the value of order books was 3 % higher than at the end of September, and
10 % higher than in December 2017.
- The turnover of technology industry companies in early 2019 is expected to be higher than in the
corresponding period last year. Some of the turnover growth is attributable to rising producer prices.
- The number of personnel employed by technology industry companies in Finland grew by almost 4
per cent in 2018 from the 2017 average. The industry employed some 311,000 people, up 11,000
from 2017. In 2008, the industry employed a total of 326,000 people in Finland.
- The recruitment activities decreased towards the end of the year. Companies recruited a total of
50,000 new employees in 2018. In 2017, total recruitments came to 42,500.
2/5/2019 Technology Industries of Finland

World Economic Outlook
- Finland as a Part of Global
Economy
332/5/2019 Technology Industries of Finland

GDP Growth Forecasts for 2019 Have Been
Weakened in Recent Months
34Source: Consensus Economics
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
2.8
3
3.2
GDP consensus forecasts for 2019, %
Eastern Europe
Sweden
Euro zone
France
Germany
Russia
Italy
of Finland

GDP also Grows in Finland, but the Backlog for the
Other Euro Area Countries Is up to 8%
35Lähde: MacrobondTechnology Industries
of Finland
2/5/2019

Finnish Exports Growth Has Come to an End
during 2018, Backlog for the Other Euro Area
Countries is 40%
36Source: Macrobond, Eurostat2/5/2019 Technology Industries
of Finland

Growth in Finland’s Exports and Private
Consumption Has Declined during 2018
37Source: Macrobond, Statistics FinlandTechnology Industries
of Finland
2/5/2019

Gross Domestic Product Has Grown Long in
Europe and the USA, Finland is Lagging Behind
38Souce: MacrobondTechnology Industries
of Finland
2/5/2019

392/5/2019 Lähde: Macrobond
In China and India Growth Continues, also Brazil
Is Now Growing
Share of global GDP in China, India, Brazil and Russia is 31 % (adjusted for PP)
Technology Industries
of Finland

402/5/2019 Latest information January 2019
Source: Markit
Economic Growth in the Euro Area Has Slowed
Down Rapidly
Purchase Managers’ Index (PMI), 50 = no change from previous month
of Finland

New Orders in the Manufacturing Industry in the
Euro Area Declined Towards the End of 2018,
Services Come after
Teollisuuden ja palvelujen ostopäällikköindeksi, 50 = ei muutosta edelliskuukaudesta
41Latest information January 2019
Source: Markit
of Finland

Industrial Production Has also Grown in Finland,
but the Backlog to EU Average Is 15%
422/5/2019 Source: MacrobondTechnology Industries
of Finland

Industrial Production Volume in the EU Countries
432/5/2019 Source: MacrobondTechnology Industries
of Finland

Finland’s Industrial Production Has Lagged Behind
the Competition Countries
44Source: Macrobond, The CPB Netherlands Bureau for Economic Policy AnalysisTechnology Industries
of Finland
2/5/2019

Source: Markit
Industrial Production in China is Declining
Purchase Managers’ Index (PMI) in manufacturing industry in China
of Finland

Source: Markit
Industrial Production in Russia Is Growing
Purchase Managers’ Index (PMI) in manufacturing industry in Russia
of Finland

Source: Markit
Industrial Production in Brazil Is Growing
Purchase Managers’ Index (PMI) in manufacturing industry in Brazil
of Finland

48Source: Macrobond
Industrial Production in the USA is Growing
Purchase Managers’ Index (PMI) in manufacturing industry
50 = no change from previous month
of Finland
2/5/2019

Changes in Foreign Exchange Rates Reflect
Uncertainty about Customs and Economic Sanctions
49Source: Macrobond2/5/2019 Technology Industries
of Finland

50Souce: Macrobond
Fixed Investments Have also Grown in Brazil
of Finland
2/5/2019

51Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis
Strongest Growth in World Trade Is already
Behind
Export volume
of Finland

Imports to China Have Increased from Several
Countries
52Source: MacrobondTechnology Industries
of Finland
2/5/2019

EU Exports to Russia Have Recovered only Slightly
53Source: MacrobondTechnology Industries
of Finland
2/5/2019

Russia’s Share* of Technology Industry Exports
from Finland Has Lowered to Some 5 Per Cent
54*) 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
2018(1-11)
of Finland
2/5/2019
%

55Source: IMF (October 2018)
The World Economy Is Projected to Grow by 3.7%
in 2018
GDP growth in 2018 / 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
RestofEastern
Europe
Russia
Brazil
Mexico
RestofLatin
America
MiddleEast
andAfrica
Average growth:
+3,7 %
The width of the bar indicates the share of global GDP in 2017 (adjusted for purchasing power parity), %
Rest
of Asia
of Finland
2/5/2019

56Source: IMF (October 2018), Finnish Customs
Demand in the Finnish Technology Industry Export
Market is Expected to Grow by 2.7 % in 2018
GDP growth in 2018 / 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
Rest
of Asia
Restof
Eastern
Europe
Russia
Brazil
RestofLatinAmerica
MiddleEastandAfrica
Average growth:
+2,7 %
Mexico
The width of the bar indicates the export share of technology industry from Finland in 2016, %
of Finland
2/5/2019

Finland’s Economic Growth
Relies on Exports and
Investments
57Technology Industries
of Finland
2/5/2019

Finnish Exports Have Lagged Behind the
Competition Countries
58Source: Macrobond, EurostatTechnology Industries
of Finland
2/5/2019

Growth Paradox: the Downsized Industry Has
Limited Opportunities to Increase Finnish Exports
59Source: Statistics Finland / industrial production volume index
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
70
75
80
85
90
95
100
105
110
115
120
125
Industrial
production, with
capacity in full use
(theoretical level),
left axis
Industrial
production, at fixed
prices (2008 = 100),
left axis
Industrial capacity
utilization,%, right
axis-17 %
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-18 %
of Finland
2/5/2019

60Source: Macrobond, Eurostat
The Decline in Exports and Recession: the Public
Debt and Total Tax Rate Increased Significantly
Increased cost burden requires cuts to public sector
of Finland
2/5/2019

Unlike the Competition Countries, in Finland
Business Investment Is Still Below the Level in 2008
61Source: OECD, Economic Outlook (June 2018)
70
75
80
85
90
95
100
105
110
115
120
125
130
135
140
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e 2019e
Corporate investments, at fixed prices, index 2008=100
USA
Sweden
Switzerland
Netherlands
Germany
Finland
of Finland

62Source: Statistics Finland, (National Accounts), The Confederation of Finnish Industries* investment survey (June 2018)
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
13,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Manufacturing industry (incl. technology industry)
Technology industry (incl. information technology and consulting engineering)
Production and R&D investments in Finland, million euros, at fixed 2017 prices
of Finland
2/5/2019

Industrial Productive and R&D Investment in Finland
Have Not Yet Reached the 2007-2008 Levels
63*) Including software investments.
Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2018
0
1
2
3
4
5
6
7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Productive investment
R&D investment*
R&D investment (excl.
electronics industry)*
Billion euros, at fixed 2010 prices
of Finland

Total Industry Investment in Finland Are Below
the Consumption of Fixed Capital
64*) Including software investments.
Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2018
0
1
2
3
4
5
6
7
8
9
10
11
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Productive and R&D
investment*
Consumption of Fixed
Capital
of Finland

Industrial Productive Investment in Finland Have
Reached the Level of Consumption of Productive
Capital
65Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2018
0
1
2
3
4
5
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Productive investment
Consumption of
productive capital
of Finland

Industrial Production Capital in Finland Has
Disappeared Significantly, Especially after 2008
66Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2018
0
5
10
15
20
25
30
35
40
45
50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Cumulative consumption
of productive capital
Cumulative productive
investment
of Finland

Industrial Fixed (Tangible) Investment Growth in
Finland Has Lagged behind that of Competitors
67Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2019
60
70
80
90
100
110
120
130
140
150
160
170
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e2019e
Hungary
Poland
Netherlands
Austria
Germany
Czech
Republic
Sweden
Belgium
Finland
Billion euros, at fixed 2010 prices, index 2005=100
of Finland

Investment Rate in Industrial Fixed Investments
Is at a Low Level in Finland
68Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2019
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Hungary
Poland
Netherlands
Austria
Germany
Czech
Republic
Sweden
Belgium
Finland
Tangible investments / value added, %
of Finland

Industrial Intangible Investments * in Finland
Have almost Halved since 2005
69*) Intangible investments include research and development and software investments etc.
Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2019
40
60
80
100
120
140
160
180
200
220
240
260
280
Hungary
Poland
Netherlands
Austria
Germany
Czech Republic
Sweden
Belgium
Finland, excl.
electronics industry
Finland
Billion euros, at fixed 2010 prices,
index 2005=100
of Finland

Investment Rate of Industrial Intangible
Investments* Has Dropped Significantly in Finland
70*) Intangible investments include research and development and software investments.
Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2019
0
2
4
6
8
10
12
14
16
18
20
22
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e
Hungary
Poland
Netherlands
Austria
Germany
Czech Republic
Sweden
Belgium
Finland, excl.
electronics industry
Finland
Intangible investments / value added, %
of Finland

Investments and productivity* are Decisive for
Finland’s Success
Finland
*) Productivity is measured as real value added per hours worked. When productivity grows
(the curve rises) value added grows more than hours worked.
Source: Statistics Finland

72Latest information July-September 2018.
Source: Eurostat: Quarterly National Accounts
In Industrial Productivity Development, Finland
Has a Gap of 20% Compared to EU Average and
15% Compared to Sweden and Germany
Value added in manufacturing industry at fixed prices / hours worked
80
85
90
95
100
105
110
115
120
125
130
EU countries
Sweden
Germany
Finland
2008=100
of Finland

73Latest information July-September 2018.
Source: Eurostat: Quarterly National Accounts
In GDP Productivity Development, Finland Has a
Gap of 7% Compared to EU Average and 5% to
Sweden and Germany
GDP at fixed prices / hours worked
94
96
98
100
102
104
106
108
110
112
EU countries
Sweden
Germany
Finland
2008=100
of Finland

Investment Rate of Companies in Finland Is Lower
in Finland than in Other Small European Countries
74Source: Eurostat
18
20
22
24
26
28
30
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Corporate fixed investment compared to value added, % (excl. financial sector)
Sweden
Belgium
Austria
Switzerland
EU countries
Denmark
Finland
Means 8 bill.€, as
now in Finland 25
bill.€
of Finland

75
Finland’s Price and Cost Competitiveness vis-à-vis
the Euro Countries Is still to be Improved
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
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18
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 July-September 2018. Source: European Central Bank

What Should Be Done in Finland?
76
• 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.
of Finland
2/5/2019

Long-Term Outlook and Challenges
77
• 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
of Finland
2/5/2019

Technology Industries of
Finland
of Finland

The Federation’s Member Companies 2017
79
250–499 employees
68,763
39%
30,910
18%
26,576
15%
49,725
28%
1,439
92 %
86
5 %
38
2 % 24
1 %
Number of enterprises / 1 587 Number of personnel / 175 974
1–249 employees 500–999 employees
1000– employees
of Finland
2/5/2019

The Federation’s SME Member Companies 2017
80
485
34%
483
33 %
277
19%
194
13%
Number of enterprises / 1 439 Number of personnel / 68 763
5,150
8%
15,456
22%
19,075
28%
29,082
42%
1–19 employees
20–49 employees
50–99 employees
100–249 employees
of Finland

Operating Profit in the Member Companies of
Technology Industries of Finland in 2017
Operating profit-% = operating result / turnover * 100 (before taxes and financial income
and expenses)
81Source: Statistics Finland
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
(Median: 4,8 %)
Good (26 %)
Satisfactory (23 %)
Weak (29 %)
Unprofitable
(22 %)
of Finland
Companies in random order

Net Profit in the Member Companies of Technology
Industries of Finland in 2017
Net profit -% = net profit / turnover * 100 (after tax and financial income and expenses)
82
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
(Median: 3,9 %)
Unprofitable (23 %)
Good (21 %)
Satisfactory (23 %)
Weak (33 %)
Source: Statistics Finland2/5/2019 Technology Industries
of Finland

Return on Assets in the Member Companies of
Return on assets -% = (net income + financial expenses + taxes) / (capital invested in the
financial year) * 100
83
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
(Median: 12,3 %)
Good (43 %)
Satisfactory (13 %)
Mediocre (25 %)
Weak (19 %)
of Finland

Equity Ratio in the Member Companies of
Equity ratio -% = (total equity + total appropriations accrued) / adjusted balance sheet * 100
84
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
90
95
100
(Median: 41.0 %)
Good (52 %)
Satisfactory (24 %)
Weak (24 %)
of Finland

Finnish technology industry, February 2018

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