Finland's increasing integration into western Europe is set to boost the country's economy.
Bordered by Norway, Sweden and Russia, Finland has developed remarkably from a predominantly agricultural economy to its present position as a leader of high technology. Despite a high rate of unemployment, the country's economy is stable and stands on three legs - telecom, IT and its forests.
Finland is a highly industrialised country with a free-market economy; with per capita output roughly that of the UK, France, Germany, and Italy. Rapidly increasing integration with Western Europe - Finland was one of the 12 countries joining the European Economic and Monetary Union (EMU) - will dominate the economic picture over the next several years.
Electronics sector
Not many people know that Nokia is a Finnish company. The company began expanding towards the electronics field in the 1960s because of its cable manufacturing operations.
In the '70s the company took over the industrial operations of the national telecommunications administration and in the '80s began to specialise its repertoire by buying up several electronics firms in Sweden, Germany and elsewhere.
Falling on hard times, Nokia gave up its forest operations, rubber and cable manufacturing and the production of TV sets and computers. The company revived in the '90s because of proliferation of cellular phones that gave it a new lease of life.
Today, Nokia is the most recognisable brand name in the world apart from being a $28-billion (about Dh102.82 billion), 60,000-employee, company. Nokia is responsible for 15 per cent of Finnish exports and up to half of gross domestic product growth in 2005, and it goes without saying that the company plays a very important role in Finnish economy and politics.
According to recent figures, the company makes 400 million cellphones a year and has cornered 35 per cent of the world's cellphone market. "Nokia has pioneered many new developments in the industry with products such as the Nokia 9000 which was a combined cellular pone and palm-top computer with Internet access," says Osmo A. Wiio, professor of communication at Helsinki University, in Facts About Finland.
Cellular phones play an important role in Finland. A Finnish phone company estimates that there is one cellular phone for every three Finns.
Apart from mobile phones, Finland also has a high rate of Internet usage. According to Statistics Finland, three out of four 15 to 74-year-olds used the Internet in 2005, a rise of 20 per cent from 2001.
Steel and electro-technology
Finland's economy also boasts of a number of smaller, more specialised electronics firms. "The more conventional electro-technical industry is represented by the world's largest lift manufacturer Kone and its off-shoot KCI- Konecranes and by ABB Stromberg," says Jyrki Vesikansa, a Finnish journalist and author, in Facts About Finland.
" Kone is the world's third biggest manufacturer of lifts and escalators. The company is now marketing its innovation lift without an engine room, which is likely to lead to new applications for elevator technology."
Today, Finland's leading export industry in terms of both volume of production and jobs is the metal products sector, which includes both electrical equipment and electronics.
Finnish products have little chance of competing with mass-produced products, such as domestic appliances. But, Finland can and has been successful in making sophisticated specialised technology, such as state-of-the-art electronics and large-scale industrial systems.
Finland is also a leading manufacturer of machinery for the timber and wood processing industry.
Surviving on forests
Finland's first major industry was based on the country's most important natural resource, its forests. It was imperative for the sector to be on par with other countries that also produce paper and pulp.
Finland is among the top players in building paper machines and designing related industrial processes. But environmentalists needn't be alarmed, for Finnish authorities ensure that reforestation begins immediately after a stand of trees is felled and large-scale clear cutting is prohibited.
"Finland has traditionally 'lived on her forests'. The paper industry is a vital source of exports and the country is a major global player in the sawmill and board sector and other mechanical wood-processing industries. Its vast forests are primarily (about 54 per cent) under private ownership. Since the '60s, the volume of forest growth has exceeded the volume of trees felled," says Vesikansa.
Specialised metal products
The metal products sector, which includes both electrical equipment and electronics, is Finland's leading export industry today in terms of both volume of production and jobs.
"It is a byword in the business that the Finns are good at making anything 'bigger than a horse.' Finnish products have little chance of competing with standardised products, such as domestic appliances that require large production volumes," says Vesikansa. "On the other hand, Finland can be successful in making sophisticated specialised technology, such as state-of-the-art electronics and large-scale industrial systems."
Shipbuilding
According to Matti Ruuskanen, Commercial Counsellor, UAE and Saudi Arabian Trade Centres at Finpro Dubai, a consulting organisation focused on accelerating the internationalisation of Finnish companies, about 30 per cent of the world's cruise ships have been built in Finland and a large number of luxury cruise ships in the world have been built in Finland.
"Finland has very long traditions in shipbuilding, which began in Turku in 1737 and in Helsinki in 1865," says Wiio. " Kvaerner Masa-Yards has built many of the great cruise liners in Helsinki. The other Finnish shipyards have continued to produce special-purpose ships, such as research vessels, tankers, offshore platforms, and vessels for oil and gas production."
Trade ties
The UAE is a vital economic partner for Finland, and both countries have enjoyed a healthy commercial relationship for several years.
"Finnish exports to the UAE totalled 1.1 billion euros (about Dh5.08 billion) in 2005. The main exports comprise telecom and IT products, which form about 75 per cent of the total, while the rest comprises paper and machinery," says Ruuskanen.
