Finnish Technology Industry, January 2016

Technology Industry /Finnish Economic Situation and Outlook

January 2016

2

• 50% of total Finnish exports.

• 75% of private-sector R&D investment.

• Over 280,000 employed directly in the sector, 700,000 employed in total, equalling about 30% of the entire Finnish labour force.

• The Federation of Finnish Technology Industries has over 1,600 member companies.

The Technology Industry – the Largest Export Sector in Finland

8.6.2015

3

Mechanical EngineeringAbloy, Cargotec, Finn-Power, Fiskars, Glaston, Kone, Konecranes, Metso, Meyer Turku, Normet, Oras, Patria, Pemamek, Ponsse, Stala, Valmet, Valtra, Wärtsilä…

Electronics and Electrotechnical IndustryABB, Ensto, Microsoft Mobile, Murata Electronics, Nokia, Planmeca, Polar Electro, Suunto, Vacon, Vaisala…

Information TechnologyAffecto, Basware, Bilot, CGI, Comptel, Digia, Efecte, Enfo, F-Secure, Fujitsu Finland, IBM, Innofactor, Knowit, Microsoft, Nixu, Tieto…

Metals IndustryBoliden, Componenta, Kuusakoski, Luvata, Outokumpu, Outotec, Ovako, Sacotec, SSAB …

Consulting EngineeringA-Insinöörit, Citec, Elomatic, Etteplan, FCG, Granlund, Neste Jacobs, Pöyry, Ramboll, Rejlers, SITO, SWECO, WSP...

The Finnish Technology Industry Is Comprised of Five Sub-Sectors

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The Finnish Technology Industry is Comprised of Five Sub-Sectors

Electronics and Electrotechnical Industry• Data communications equipment,electrical machinery, medical technology products• Turnover (2014): 15.3 billion euros• Personnel (2014): 42,100

Metals Industry• Steel products, non-ferrous metals, castings• Turnover (2014): 9.8 billion euros• Personnel (2014): 15,700

Mechanical Engineering• Machinery, metal products, vehicles• Turnover (2014): 26.8 billion euros• Personnel (2014): 122,300

Consulting Engineering• Expertise for construction industry and infrastructure• Turnover (2014): 5.3 billion euros• Personnel (2014): 46,200

Information Technology• IT services, applications and programming• Turnover (2014): 10.0 billion euros• Personnel (2014): 58,500

8.6.2015

8.6.20155

Turnover of the Technology Industry in Finland

Billion euros, at current prices

0

4

8

12

16

20

24

28

32

36

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Electronics and electrotechnical industryMechanical engineeringMetals industryConsulting engineeringInformation technology

Source: Macrobond, Statistics Finland

6 8.6.2015

Export of Technology Industry Goods from Finland by Area in 2014Total goods exports 26.2 billion euros*

North America2.6 billion €9.8%

Western Europe13.1 billion €50.1%

Middle and Central East0.5 billion € 2.1%

Asia4.1 billion €15.8%

Africa0.5 billion €1.8%

South and Middle America0.9 billion €3.3%

Central and Eastern Europe4.5 billion €17.1%

*) In addition to goods exports the sector exported services worth 10.9 billion euros.Source: National Board of Customs, Statistics Finland

7 8.6.2015

Turnover of the Industry and Technology Industry in Finland

Index 2005=100 Change: 1-10,2015 / 1-10,2014, %

90

95

100

105

110

115

120

125

130

135

140

Technology Industry0 %Industry-5 %

Latest information: October, 20152005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


8 8.6.2015

Turnover of the Technology Industry in Finland

Index 2005=100 Change: 1-10,2015 / 1-10,2014, %

50

75

100

125

150

175

200

225

250

Electronics andElectrotechnical Industry-12 %

Mechanical Engineering3 %Metals Industry4 %

Consulting Engineering7 %

Information Technology11 %

Latest information: October, 20152005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


8.6.20159

Value of New Orders in the Technology Industry* in Finland

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,000

Combined

Export

Domestic

Million euros, at current prices

Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-August 2015

*) Excluding metals industry and game industry companies.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Change: III,2015 / III,2014 III,2015 / II,2015Export: -18 % -15 %Domestic: -30 % -27 %Combined: -21 % -18 %

01.05.202310

Value of New Orders in the Technology Industry* in Finland Without Ship Orders

80859095

100105110115120125130135140145150

Combined

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Four quarters’ moving sum, index 2005=100

Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2015

*) Excluding ship yards, metals industry and game industry companies.

8.6.201511

Value of Order Books in the Technology Industry* in Finland

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,00022,00024,00026,000

Export

Domestic


Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information 30.9.2015

*) Excluding metals industry and game industry companies.

Combined

Change: 30.9.2015 / 30.9.2014 30.9.2015 / 30.6.2015Export: +14 % +7 %Domestic: +6 % -3 %Combined: +11 % +4 %

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

12Source: The Federation of Finnish Technology Industries’ order book survey, latest information October 2015.

“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.

-60

-50

-40

-30

-20

-10

0

10

20

30

40

Balance figure

8.6.2015

Tender Requests* Received by Technology Industry Companies in Finland

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

8.6.201513

Value of New Orders in the Electronics and Electrotechnical Industry in Finland

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Combined

Export

Domestic


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Change: III,2015 / III,2014 III,2015 / II,2015Export: -38 % -9 %Domestic: -9 % -17 %Combined: -35 % -11 %

Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, latest information July-September 2015

8.6.201514

Value of Order Books in the Electronics and Electrotechnical Industry in Finland

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Export

Domestic

Combined


Change: 30.9.2015 / 30.9.2014 30.9.2015 / 30.6.2015Export: -19 % -5 %Domestic: -2 % -12 %Combined: -17 % -6 %


2005 2006 2007 2008 2009 2010

2011 2012 2013 2014 2015

8.6.201515

Value on New Orders in the Mechanical Engineering in Finland

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,500

Combined

Export

Domestic


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Change: III,2015 / III,2014 III,2015 / II,2015Export: +6 % -17 %Domestic: -51 % -44 %Combined: -11 % -23 %


8.6.201516

Value of Order Books in the Mechanical Engineering in Finland

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,00013,00014,00015,000

Series3 Export

Combined


Change: 30.9.2015 / 30.9.2014 30.9.2015 / 30.6.2015Export: +31 % +12 %Domestic: +4 % -9 %Combined: +24 % +7 %


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

8.6.201517

Value of New Orders in the Consulting Engineering in Finland

0

40

80

120

160

200

240

280

320

Combined

Export

Domestic


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Change: III,2015 / III,2014 III,2015 / II,2015Export: -35 % -53 %Domestic: +18 % -26 %Combined: +10 % -30 %


8.6.201518

Value of Order Books in the Consulting Engineering in Finland

050

100150200250300350400450500550600650

Export

Domestic

Combined



Change: 30.9.2015 / 30.9.2014 30.9.2015 / 30.6.2015Export: -9 % -2 %Domestic: +26 % +3 %Combined: +19 % +2 %

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

8.6.201519

Value of New Orders in the Information Technology in Finland

0

100

200

300

400

500

600

700

800 Million euros, at current prices

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Change: III,2015 / III,2014 III,2015 / II,2015Combined: -1 % -4 %


*) Excl. game industry companies

8.6.201520

Value of Order Books in the Information Technology in Finland

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,7001,800


2007 2008 2009 2010 2011 2012 2013 2014 2015Change: 30.9.2015 / 30.9.2014 30.9.2015 / 30.6.2015Combined: +8 % +7 %


*) Excl. game industry companies

30.7.201521

Personnel in the Technology Industry

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (30.9)

150,000

170,000

190,000

210,000

230,000

250,000

270,000

290,000

310,000

330,000

350,000

Personnel in Finland Personnel in subsidiaries abroad

Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey

Some 12,000 of personnel affected by temporary or part-time lay-offs 30.9.2015

7.5.201522

Technology Industry Personnel in Finland by Branch

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (30.9)

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Electronics and Electrotechnical Industry Mechanical engineering industry Metals industryConsulting engineering Information technology

Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Electronics and Electrotechnical Industry Mechanical engineering industry Metals industryConsulting engineering Information technology

8.6.201523

Technology Industry Personnel in Subsidiaries Abroad by Branch

Source: The Federation of Finnish Technology Industries’ labour force survey

24

Retirement of Technology Industry Personnel

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

0100020003000400050006000700080009000

Number of individuals retired Number of individuals retiring (estimation)

Source: Wage inquiry of the Federation of Finnish Technology Industries, Finnish Centre for Pensions, Statistics Finland

Individuals per year

Salaried employees

Blue collar employees

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25

Retirement of Technology Industry Blue Collar Employees

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

0

500

1000

1500

2000

2500

3000

3500

Mechanical engineering Metals industry Electronics and electrotechnical industry

Source: Wage inquiry of the Federation of Finnish Technology Industries, Finnish Centre for Pensions, Statistics Finland

Individuals per year

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- Finland is in the grip of structural change. Development remains uneven between companies.

- Turnover in Finland in January-October 2015 remained at the same level as 2014. In 2014 turnover totalled EUR 67 billion. In the pre-crisis year 2008 it was EUR 86 billion.

- The monetary value of new orders reported between July-September 2015 was 21% lower than in the corresponding period in 2014, and 18% lower than in the preceding quarter.

- At the end of September, the value of order books was 11% higher year-on-year, and 4% higher the value reported at the end of June.

- Growth of orders was driven particularly by ship orders, which are produced over a period of several years.

- The turnover of technology industry companies in late 2015 is expected to remain at the same level as in the corresponding period last year.

- Since 2008, personnel numbers in Finland have shrunk by 43,000 employees, totalling 282,000 at the end of September 2015.

Situational Overview and Outlook in the Technology Industry

8.6.2015

27

Developing Countries Pose a Risk to the Recovery in

Europe

8.6.2015

13.8.201528

GDP is Growing in Western Europe and USA , Except in Finland

Source: Macrobond

Index 2005=100

92,5

95,0

97,5

100,0

102,5

105,0

107,5

110,0

112,5

115,0

117,5

120,0

Latest information: 2015 Q32005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

SwedenEstoniaUSAGermanyUKFranceSpainFinland

01.05.202329

Growth is Lowering in ChinaRecession Continues in Russia and Brazil Share of global GDP in these countries is 23%, in China 16% (adjusted for PP)

Source: Macrobond

GDP change over previous year, %

-15

-10

-5

0

5

10

15

20


China (official)BrazilRussia

30

GDP Growth Has Continued in Eurozone in January 2016 Purchase Managers’ Index (PMI), 50 = no change from previous month

Latest information January 2016. Source: Markit

8.6.2015

31

Industrial Production Volume

Source: Macrobond 8.6.2015

Index 2008=100

65

70

75

80

85

90

95

100

105

110

Latest information: December, 20152008 2009 2010 2011 2012 2013 2014 2015

USAEU countriesJapanFinland

32

Industrial Production Volume in EU Countries

Source: Macrobond 8.6.2015

Index 2008=100

Inde

x

70

80

90

100

110

120

130

140

Latest information: November, 20152008 2009 2010 2011 2012 2013 2014 2015

PolandEstoniaBelgiumAustriaGermanySwedenItalyFinlandSpain

01.05.202333

Global Industrial Production Growth has Slowed Down

Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis

Index 2008=100

80

90

100

110

120

130

140

150

Latest information: November 20152008 2009 2010 2011 2012 2013 2014 2015

Emerging countriesWorldDeveloped countries

01.05.202334

Industrial Production in China is Dropping Purchase Managers’ Index (PMI) in manufacturing industry in China50 = no change from previous month

Latest information December 2016. Source: Markit

35

Industrial Production in Russia is DroppingPurchase Managers’ Index (PMI) in manufacturing industry in Russia50 = no change from previous month


8.6.2015

36

Industrial Production in Brazil is DroppingPurchase Managers’ Index (PMI) in manufacturing industry in Russia50 = no change from previous month


8.6.2015

37

Industrial Production in India is DroppingPurchase Managers’ Index (PMI) in manufacturing industry in Russia50 = no change from previous month


8.6.2015

01.05.202338

Industrial Production in USA is DroppingPurchase Managers’ Index (PMI) in manufacturing industry in Russia50 = no change from previous month

Lähde: Macrobond

323436384042444648505254565860

Latest information: December, 20152005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

01.05.202339

Growth of Residence Construction Has Finished in China Share of China in Asian GDP is 42% (adjusted for PP)

Source: Macrobond

Change over previous year, %

0

5

10

15

20

25

30

35

40

Latest information: November 20152005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

01.05.202340

Fixed Investments in Russia and Brazil are FallingShare of Russia in European GDP is 13% (adjusted for PP)Share of Brazil in Latin American GDP is 35% (adjusted for PP)

Source: Macrobond


-20-16-12

-8-4048

121620242832

Latest information: 2015 Q32008 2009 2010 2011 2012 2013 2014 2015

RussiaBrazil

01.05.202341

Import to Emerging Countries Has LoweredImport volume development

Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis

Index 2008=100

80

90

100

110

120

130

140

150

Latest information: November 20152008 2009 2010 2011 2012 2013 2014 2015

Emerging AsiaEmerging countriesWorldDeveloped countries

01.05.202342

Import to China Has Reduced from Other Countries

Source: Macrobond

US dollars, at current prices, 3 month moving sum, change over previous year, %

-60

-40

-20

0

20

40

60

80

100

120

Latest information: December 20152008 2009 2010 2011 2012 2013 2014 2015

North AmericaIndonesiaTaiwanSouth KoreaJapanEU countriesIndia

43

Exports from EU Countries to Russia is Falling

Source: Macrobond8.6.2015

Export value in each countries's own currency, 12 months sliding sum, index 2005 = 100

0

50

100

150

200

250

300

350

400

450

Latest information: November 20152005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

EstoniaUKBelgiumAustriaFranceGermanyItalyNetherlandsSwedenNorwayDenmarkFinland

44

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

e

0

4

8

12

16

20

24

28

32

36

40

Russia’s Share of Technology Industry Exports Will Decline Again to the Level of Approximately Five Per Cent

%

*) Soviet Union up to 1991. Source: Finnish Customs

8.6.2015

01.05.202345

Raw Material Prices are FallingSpot prices of hot-rolled coils

01/2005 01/2006 01/2007 01/2008 01/2009 01/2010 01/2011 01/2012 01/2013 01/2014 01/2015100200300400500600700800900

1,0001,1001,2001,3001,400

USA Germany Russia China Brazil

US dollars / ton

Latest information December 2015Source: CRU

01.05.202346

Exchange Rates in Emerging Countries are Varying Euro exchange rate compared to other currencies

Source: Macrobond


-30

-20

-10

0

10

20

30

40

50

60

70

80

Latest information: 22 January 2016

Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov2014 2015

Russia roubleBrazil realTurky liraMalesia ringgitMexico pesoSouth Africa randIndonesia rupiaThailand bahtChina juanUS dollar

05/01/202347

Global Economy is Expected to Grow by 3.4 % in 2016GDP growth in 2016, %

Source: IMF (January 2016)

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100-4-3-2-10123456789

North AmericaWestern Europe

Japan

China

India

Rest of Asia

Res

t of E

aste

rn

Euro

pe

Rus

sia

Bra

zil

Mex

ico

Res

t of L

atin

A

mer

ica

Mid

dle

East

and

Afr

ica

The width of the bar indicates the share of global GDP in 2014 (adjusted for purchasing power parity), %

Average growth: +3,4 %

05/01/202348 Source IMF (January 2016), Board of Customs

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100-4-3-2-10123456789

North America Western Europe Japan

China

India

Rest ofAsia

Res

t of E

aste

rn

Euro

pe

Rus

sia

Bra

zil

Mex

ico R

est o

f Lat

in A

mer

ica

Mid

dle

East

and

Afr

ica

The width of the bar indicates the export share of technology industry from Finland in 2014, %

Average growth: +2,3 %

Export Demand for Technology Industry in Finland Will Grow by 2.3% in 2016 GDP growth in 2016, %

49

Breakdown of World Industrial Production

0

5

10

15

20

25

30

35

40

45

50

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Asia

North America

Europe

Purchasing power parity adjusted shares. Source: Maddison (Historical Statistics), IMF and ETLA

%

8.6.2015

50

Industrial Production Development by Year

Source: Macrobond8.6.2015

Index 2005=100

75

100

125

150

175

200

225

250

275

300

325

350

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

ChinaIndiaSouth-KoreaRussiaBrazilUSAJapanEuro zoneFinland

51

The Big Challenge for Finland after 2008

8.6.2015

52

Finnish Exports up to EUR 30 Billion Short of Annual Target Level

Source: Macronond, Statistics Finland / National Accounts8.6.2015

Export of goods and services by quarter, billion euros at current prices

Exports neededto avoid extrarunning intodebt in thepublic sector

10

12

14

16

18

20

22

24

26

28

30


Exportsrealized

53

Finnish Exports Lagging Behind Competitors

Source: Macrobond, Eurostat 8.6.2015

Export of goods and services by quarter, billion euros, at current prices, index 2005=100

75

100

125

150

175

200

225

250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PolandEstoniaChech RepublicGermanySpainBelgiumSwedenFinland

54

The Share of Industry in GDP in Finland 1900-2014

1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 20100%

5%

10%

15%

20%

25%

30%

35%

Industry* Industry + service sectors in the technology industry

*) During 1900-1974 industry covers also mines, energy, water and refuse collection sectors. Source: Statistics Finland / National Accounts

8.6.2015

55 12.6.2015

70

75

80

85

90

95

100

105

110

115

120

125

55

60

65

70

75

80

85

90

95

100

Industrial pro-duction ability (production with capacity in full use), left. Scale

Industrial pro-duction (2008=100), left scale

Capacity utiliza-tion rate, %, right scale-20%

2008 2009 2010 2011 2012 2013 2014 2015

-21%

Source: Statistics Finland / National Accounts, Industrial volume index

Finland’s Industrial Production Will not Regain the Level of 2008 with the Present Production CapacityFinland’s production capasity has decreased by 20%

56

Growth of Public Debt and Tax Rate Out of ControlIncreased cost burden requires cuts to public sector

Source: Macrobond, Statistics Finland 8.6.2015

Central and local government debt and public expenditures, billion euros, at nominal prices

0

10

20

30

40

50

60

70

80

90

100

110

120

39,5

40,0

40,5

41,0

41,5

42,0

42,5

43,0

43,5

44,0

44,5

45,0

45,5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total tax ratio, % of GDPCentral government debtPublic expendituresLocal government debt

Latest information: 2015 Q3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e2016e2017e859095

100105110115120125130135140145150155Corporate sector fixed investments, index 2005=100

SwedenThe NetherlandsUSAGermanySwitzerlandFinland

01.05.202357

Upswing of Investments Required in Finland

Source: OECD, Economic Outlook 2015

58

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Manufacturing industry Technology industry

Industrial Companies’ Investment Plans Indicate an Increase in Investments Both in 2015 and 2016Industrial fixed and R&D investments in Finland

Source: Statistics Finland, Confederation of Finnish Industries’ Investment Survey (January 2016)


8.6.2015

59

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 201495

100105110115120125130135140145150155160

Manufacturing industry

Technology industry

National economy

Turning Point of Productivity* Development in FinlandAfter 2008 Finland has lost considerable volume production in electronics, forest and machinery industries**

Source: Statistics Finland / National Accounts

*) 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 servicesValue added = labour costs + rents + depreciations + profits

**) The structure of current industry does not enable the similar productivity development as during the years 2000-2008

8.6.2015

Index, 2000=100

60

90

95

100

105

110

115

120

Compared to Belgium Compared to Germany Compared to SpainCompared to Italy Compared to the Netherlands Compared to AustriaCompared to Finland

*) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 20 to 30 main trade partners, as well as the development of unit labour costs for the total economy.Latest information III/2015. Source: European Central Bank

Finland’s price and costcompetitivenessdeclines

2005,I =100

Finland’s price and costcompetitivenessimproves

Unit Labour Costs at the National Economy LevelUnit labour costs = labour costs / productivity, including the influence of effective exchange rates

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

8.6.2015

61

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

What should be done?

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62

Global Structural Change Set to Continue Apace– Industrial production and services will relocate to rapidly developing economic areas– 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– Due to an increase in retirement, the sector’s annual recruitment need in Finland will rise

considerably in the coming years.– The availability of reasonably-priced energy also threatens to become an investment

bottleneck in Finland

Combating Climate Change– A challenge as costs are set to grow faster than in competitor countries – An opportunity for new environmental and energy technologies

Long-Term Outlook and Challenges

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63

The Federation of Finnish Technology Industries

8.6.2015

64

The Federation’s Member Companies 2014

7106938%

2808914%

2599717%

5861731%

143991%

80 5%

46 3%

23 1%

Number of enteprises / 1 583 Number of personnel / 183 772

1–249 employees

250–499 employees

500–999 employees

1000– employees

Source: The Federation of Finnish Technology industries8.6.2015

65

The Federation’s SME Member Companies 2014

506 35%

475 33%

258 18%

206 14%

Number of enterprises / 1 439 Number of personnel / 71 069

1–19 employees

20–49 employees

50–99 employees

100–249 employees

52617%

1504721%

1826327%

3249845%

Source: The Federation of Finnish Technology industries8.6.2015

Finnish Technology Industry, January 2016

Economy & Finance

Transcript of Finnish Technology Industry, January 2016