Export Industry: Finland, Dependent on Exports, Must Act Diligently to Ensure the Attractiveness of the Domestic Business Environment
The Export Industry – consisting of Technology Industries, the Forest Industry, and the Chemical Industry – expects the government to take decisive actions in the upcoming budget negotiations to ensure the attractiveness of the business environment for industries operating in Finland.
The program of Prime Minister Petteri Orpo’s government aims to avoid raising the costs for industries operating in Finland through domestic decisions. This approach should also be followed in the budget negotiations.
The state aid competition among our competitor countries is intensifying alarmingly. For Finland, which relies on exports, it is essential to ensure the attractiveness of the domestic business environment to secure the competitiveness of export industries vulnerable to global competition. The challenges in the business environment make the decisions in the budget negotiations exceptionally crucial.
The business environment needs to be refined to become the best in the world. Only then can we guarantee that significant investment intentions for the green transition are realized. Finland must be capable of reforms because we cannot compete with money alone. The support for electrification, crucial for energy-intensive industries, should continue until 2030, just as in other countries. Labor market reforms, balancing public finances, dismantling disincentives, streamlining permitting processes, directing research and innovation funding towards industry-led partnerships, and ensuring a skilled workforce will help secure Finland’s long-term well-being.
– The economically challenging situation, in many ways, emphasizes the importance of the rapid implementation of the government program. All actions that strengthen the competitiveness of industries operating in Finland are now much needed, says Paula Lehtomäki, CEO of the Forest Industry Federation.
Industrial investments can also be promoted by eliminating bottlenecks in freight transport on existing railways and addressing deferred maintenance. The condition of transport infrastructure now requires a longer program than proposed.
Export Industry Thrives on New Innovations
Finland’s attractiveness as an investment destination must be improved through various means. The government’s commitment to implementing the Research and Development Financing Act can enable companies operating in Finland to remain at the forefront of technological development and increase Finland’s attractiveness as an investment destination for international companies. Of the additional funding stipulated by the financing law, two-thirds should be annually allocated to industry-led projects through Business Finland.
– The government program does not sufficiently specify the direction of the additional funding for research, development, and innovation (RDI), and it seems that there are many takers for the additional funding. The weakest link in public RDI funding in Finland is RDI funding for companies, which is significantly lower than in comparable countries. RDI support for companies leverages additional investments in research. Without investments from companies, it is impossible to achieve the four percent RDI target, says Jaakko Hirvola, CEO of Technology Industries of Finland.
Realizing investments requires streamlined permitting processes and risk-sharing by the state
The Export Industry welcomes the government’s plan to create a national model for attracting large investments to Finland. Smooth administrative and permitting processes, as well as expedited processing times, are the prescription for realizing investments.
– Fundamental reform of the permitting process is a demanding process but pays itself back many times over. Unprecedented investments related to the green transition are planned in Finland, and the government’s actions – if realized – will make it more likely to attract large investments to Finland. This would bring a lot of jobs, tax revenue, and well-being, says Mika Aalto, CEO of the Chemical Industry Federation of Finland.
In addition to current RRF funding, state investments are needed for the long-term as well to share risks and address new-generation green investments and commercial risks. Aalto calls for the creation of an investment program supporting industrial renewal.
– It should fund investment projects that renew industry, improve competitiveness, and promote low-carbon solutions. Industrial investments typically have a life cycle of decades, so the effects on employment, the economy, and well-being can extend for decades as well.
FOR MORE INFORMATION:
Paula Lehtomäki, CEO, Forest Industry Federation, +358 9132 6600
Jaakko Hirvola, CEO, Technology Industries of Finland, +358 400 633 751
Mika Aalto, CEO, Chemical Industry Federation of Finland, +358 50 438 9247
