Report: Economic growth requires investing and bridging the skills gap
According to a situation report on economic and industrial policy published by of the Ministry of Economic Affairs and Employment on 24 February 2020, Finland’s economic growth is expected to stabilise at around one per cent in 2020–2021 provided nothing unexceptional happens in the global economy and in economic cycles. However, a number of sectors such as the bioeconomy, the circular economy and the mining industry provide growth opportunities.
The report also concludes that economic growth may continue to decline after 2020–2021 if we are unable to identify effective means for increasing productivity, and if world trade shows no signs of recovery.
Growth potential in many sectors despite uncertain near-term outlook
The general sentiment in business and industry reflects uncertainty, as the future is difficult to predict. This uncertainty translates into stagnant investment growth this year. The R&D expenditure growth spurt seen in 2017–2018 is also abating, but the outlook for 2020–2021 is cautiously optimistic. Shortage of skilled employees and competence in sectors such as ICT and the software industry is holding back growth.
“Finland has significant growth potential in many sectors and specialised niches, including the bioeconomy, circular economy, mining, the food sector, diagnostics and photonics. However, I am concerned about the low level of corporate investment and the shortage of skilled labour,” says Minister of Economic Affairs Mika Lintilä.
According to the report, growth will continue in mining and exploration. Joint development projects are under way involving several themes such as the battery cluster, the environmental impact of mines, development work on a test enrichment facility for the Geological Survey of Finland, and research into geoenergy and peat. In addition, Geological Survey of Finland, Aalto University and VTT Technical Research Centre of Finland have recently established a joint circular economy hub in Otaniemi.
Situation report presents the views of the Ministry of Economic Affairs and Employment’s administrative branch
The situation report is based on a survey targeting eight organisations operating under the guidance of the Ministry of Economic Affairs and Employment. The situation awareness report discusses current issues in fields such as R&D, the venture capital investment market, export financing, the geo industry and functioning of the markets. The report helps to specify the overall picture of the direction of the economy, and supports the Ministry’s policy preparation and ownership steering.
The situation report is published twice a year. Each report also discusses themes of current interest. This time, the report provides an overview of the economic outlook and of the current state of research and development in Finland.
Kai Husso, Chief Planning Officer, Ministry of Economic Affairs and Employment, tel. +358 29 506 3683
Johanna Alatalo, Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 504 8084