The Finnish economy has gone from strength to strength over the last couple of decades, since recovering from its last recession in the early 1990s. After joining the European Union in 1995 the country has experienced consistent year on year growth to both their GPD (Gross Domestic Product) and GDP per Capita. In 2020, the International Monetary Fund ranked Finland 44th in its worldwide list of countries organized by GDP: not bad for a nation with a population of only 5.5 million people.
Finland’s economic profile, like many other European countries, is that of a mixed economy. Its largest sector is services, which comprises more than 70% of the total GDP. Unsurprisingly, the capital of Helsinki is the single biggest contributing region, responsible for roughly one third of the country’s GDP. A significant amount of these services are IT-based, with Helsinki being home to offices belonging to huge global companies like Nokia, Microsoft, and Unity Technologies. The second largest industry is manufacturing and processing, and Helsinki also boasts the headquarters of Stora Enso and UPM-Kymmene.
Such a diverse economic structure means that if one sector posts a loss, the others should keep the economy afloat. This isn’t the case in single economies, for example those which rely solely on farming and consumables. Then, a bad harvest for example, can have far reaching fiscal effects which will see citizens struggle. However, should the manufacturing industry in Helsinki experience issues, the profits from the other sectors should be enough to cover any shortfall.
2020 would prove to be the year which put mixed economies to the test, with all economic sectors experiencing downturns. While the rest of the world went into a total lockdown, with stay-at-home orders and the closing of businesses and schools, Finland took a slightly different approach. Its focus was on restricting movement to contain the virus, meaning the total closure of the country’s borders and a mandatory 2-week quarantine period for anyone entering the country. A separate border around Helsinki and the Uusimaa district was also enforced, meaning people could not travel in or out of the region.
However, shops remained open, public transport continued to run, and there wasn’t a curfew in sight. Now, a year on, Finland’s economy has recovered much faster and much better than many of its European counterparts, with a shrinkage of 2.9% instead of the 6.8% seen across much of the rest of the continent. In fact, in Q3 and Q4 of 2020, the Finnish economy actually registered a growth, and this trend has continued into 2021.
Part of the reason why the economy took less of a hit than in other countries is because of the nature of services Finland, and particularly Helsinki, trades in. The country is highly digitized; not only do many of the businesses offer IT products and solutions, but workplaces and individuals are well set up to function remotely. Once offices shut and people had to work from home, not only were staff digitally savvy enough to transition smoothly, but homes were as well-equipped as offices.
Finland’s technology and communications exports also faired particularly well during 2020. With the demand for better technology to facilitate home working, sales of laptops and smartphones hit record highs. With the headquarters of Nokia based in Espoo in the Greater-Helsinki region, a healthy percentage of the communications profits came home to Finland.
Another area of Finland’s IT services which thrived during 2020 was the gaming industry. With millions of people all over the world suddenly finding themselves out of work and unable to leave the house, the demand for home entertainment grew. People who would not normally class themselves as gamers, were left with few options and turned to their tablets and smartphones for ways to relax. This is where the Finnish gaming industry came into its own.
With many big-name releases originating from Helsinki and Espoo, such as Rovio Entertainment’s Angry Birds and Supercell’s Clash of Clans, the Finnish gaming industry has been making a name for itself as one of the leading countries for mobile and free-to-play games. Free-to-play games are games which don’t cost anything to purchase outright, unlike traditional video game releases for consoles and PCs. Instead, they make their money in one of two ways: selling in-game advertising space and/or offering in-game purchases for boosts and upgrades, which are not necessary to play the game, but can increase customization options or allow players to progress faster. Free-to-play games tapped into a market of casual gamers, who would download and try multiple apps before settling on those which they liked. These gamers were unlikely to pay upfront for a game in case they didn’t like it, so free-to-play games offered them the perfect solution.
One Finnish industry not doing as well is the gambling industry. Casinos and arcades were amongst the first businesses to be shut during the lockdown of March – May 2020. While buildings like Casino Helsinki opened again over the summer, it has now shut again. And slot machines and gaming arcades owned by the same group – Veikkaus – have been deactivated in retail outlets and entertainment venues since November. But even when the casinos were open, the industry struggled as knock-on effects from the lack of tourism meant that the number of visitors coming to play was greatly reduced.
The gambling industry in Finland is still on shaky ground. Unemployment rates in the capital have risen by unprecedent amounts and people who would usually have had the money to spend on entertainment, like gambling and dining out, are finding their budgets squeezed. Casino gambling might well become an unaffordable luxury, especially as there are so many online alternatives. In a country as technologically equipped as Finland, access to fast broadband speeds and good quality laptops and smartphones is fairly universal. Live streaming of games lets people feel like they’re at a real table, and high-quality animations and sophisticated RNG engines ensure a top-class gambling experience. A particular favorite online game is roulette, and you can find the best sites to play at roulettesites.org/finland/. So, when casinos locked their doors, anyone who wanted was able to venture online and get their fix of games and entertainment. They might not come with the food, drinks, and entertaining shows, but online casinos have come a long way since their launch in the mid-1990s.
The main reason why Finland’s economy was one of the least affected last year, is that they were prepared for any disaster from the start. The country has gambled on being affected by several unexpected situations and has protocols and measures in place for almost every eventuality. While their doom-laden forecasts might never have come to fruition, in this situation it clearly paid to be prepared. And it wasn’t just the stockpiled equipment that helped; being prepared for anything has been a part of life for Finns and when the Government issued orders, they obeyed quickly and without question. Had the country not been so well prepared, the economy, particularly that in Helsinki, might not have fared so well.