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News 31.08.2021

Growth of Finnish Manufacturing Industry is stagnating – new competitive edge from climate change mitigation

Business Finland’s Sustainable Manufacturing program aims to renew Finland’s manufacturing industry in terms of their environmental impact and competitiveness. Developing products and business operations to respond to the challenges set by industrial productivity and climate change is the key to the international competitiveness. .

Productivity in the Finnish manufacturing industry has seen its ups and downs in recent decades. The excellent trend at the beginning of the 2000s turned to a steady economic downfall following the 2008 financial crisis that did not come to an end until late 2014. The decline was followed by few years of growth, after which the pace has once again slowed down. Since 2017, industrial productivity has been standing still.

Falling behind rival countries will reduce the competitiveness of Finnish industry. At the same time, industry is facing a new challenge, as not even the highest quality and the lowest price are enough: customers, owners, buyers and sellers require not only cost efficiency from companies, but also better consideration of environmental, social and societal impact, also in industrial products.

An analysis was conducted as part of impact monitoring in the program, in which UpRight,a technology company studying the impact of businesses, analyzed the net impact of 75 companies participating in the program relative to the control group. Four dimensions were analyzed: society, knowledge, health, and the environment. According to the analysis, the participating companies employ a large number of highly educated people, whose input produces significant value-add for the national economy and, therefore, tax revenue as well. The companies are building a new societally significant data infrastructures, and producing and spreading volumes of information. However, they are unfortunately also increasing greenhouse gases indirectly.

Companies must reduce their emissions

The Sustainable Manufacturing program focuses precisely on this perspective: emissions must be reduced to stop climate change, while changes must be possible without damaging the finances of companies. Giving up fossil energy sources is not enough – operating methods and, in some cases, even entire business models must also be reconsidered. The industry must find ways to use raw materials more effectively, generate less waste and, above all, make the same products at a higher rate of energy efficiency. Considering the carbon footprint of business, the evaluation must also extend outside the unit under review to all the supply chains to which the company is connected. Here, circular economy, the emerging industrial platform economy, and decentralized manufacturing, for example, are significant areas of development.

“It is absolutely essential for Finnish companies to be at the forefront, developing solutions for climate change challenges, as this business will provide Finnish companies with a highly potential global growth market during the 2020s,” says Toni Mattila, program director of Sustainable Manufacturing Finland.

The Sustainable Manufacturing program accepts all companies that have the will and ability to grow and that seek rapid internationalization and solutions for climate change challenges.

Read more about the program and its services 

UpRight report: The Net Impact of Business Finland’s Sustainable Manufacturing Program (pdf)

More information

Toni Mattila
toni.mattila (at)
Tel. +358 40 500 9909