The Patient -- Finland!

June 20, 2014
"Finland is sick" as a banker said. SMEs must gain importance in economies like Finland or generally Nordic countries.

According to Ernst & Young the Finnish economy is internationalizing with higher pace. The foreign investments are concentrating around the capital of Finland, Helsinki.

Generally USA continues to be the largest investor in Europe, however BRIC countries are on the heels of USA.

Unfortunately foreign companies are mainly investing into marketing and sales operations. This is not particularly good news for a region like Northern Europe with a limited industrial production base. Finland, like whole Northern Europe is very dependent on industrial production and export.

At the same time countries like Finland are focusing with their policies more on larger corporations. Consequently SME segment is suffering, because the government is not paying enough attention for the challenges SMEs have.

Some of these challenges are:

  • Getting financing for expansion and new machine investments
  • Finding ways to export

Focusing on the larger corporations does not increase the employment level. For instance in Finland the structure in terms of employment is totally different than in many other countries. In Finland 130 large corporations employ about the same amount of people as 300'000 SMEs! What a potential is missed here.

Finland has a structural problem and this has been only growing.

As one Finnish banker, Kari Stadigh said: “Finland is sick! A patient does not have a competitive edge and it must be healed first.” (Kauppalehti June 12, 2014).

The politicians, not only in Finland, must finally understand that SMEs are the backbone of the economy and design their budget, i.e. taxation and employment laws, accordingly.

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