What do Google, GE Healthcare, Mitsubishi and Muji have in common? They are among the group of 244 foreign companies that invested in Finland in 2019. Invest in Finland’s customers invested over 1.5 billion euros in Finland and created 921 direct jobs. Now Finland needs foreign investment more than ever to combat the economic impacts of the coronavirus.
Invest in Finland, the Finnish Investment Promotion Agency and part of Business Finland, exceeded its 2019 targets despite the declining global FDI trend. In 2019, Invest in Finland’s advisors contacted over 1,000 foreign companies, which led to nearly 100 company visits to Finland. As a result, 37 customer companies invested nearly EUR 1,557 million in Finland, which means a 228% increase from the previous year. The investment resulted in 921 direct jobs in Finland in 2019.
“Finland attracts investments from a wide range of industries from wind power to the bioeconomy. The common factor is our globally high-ranking technological expertise, which can be used from smartphone image processing to diagnostics for serious illnesses”, says Executive Director Antti Aumo from Invest in Finland.
There are several examples of foreign companies that have invested in disruptive industry sectors in Finland. Schaeffler, the German industrial giant that manufactures ball bearings, chose Finland as the location for their research and development centre for Industrial Internet solutions. Mitsubishi Logisnext from Japan is extending their product development in Finland for the automation and digitalisation of forklifts and inbound logistics.
“Further investment from foreign companies demonstrates trust in Finland as an operational environment. Google’s decision to invest EUR 1.2 billion in data centres in Finland was the largest further investment of last year”, Aumo continues.
In terms of quantity, the largest number of foreign investment projects came from Sweden (71), the United Kingdom (36) and the United States (27). Most of the investments landed in the Uusimaa, Southwest Finland and Pirkanmaa areas in Finland. The ICT sector and business services were the most popular target industries.
“According to EY, Finland was the most popular target for foreign direct investments in the Nordic countries. In 2018, Finland gathered more foreign investment projects than all the other Nordic countries together”, Aumo adds.
Only 1 per cent (approximately 4,400) of all companies in Finland are foreign-owned but their impact is much greater. These companies employ nearly 266,000 people, which is roughly 18% of the total employment. According to the 2018 data from Statistics Finland, the turnover of these companies was EUR 96 billion. Of all business sectors, industry was the largest when measured by number of employees and turnover.
Due to their global value chains, foreign companies are important boosters for Finnish industry, especially during an economic recession.
“Foreign direct investments increase production capacity and support the growth of the economy and creation of jobs. They also create indirect impact when foreign companies buy services and products from local companies, and therefore strengthen the employment of their customers. Copenhagen Economics from Denmark has calculated that a single direct job we provide creates three jobs in total, when you take the indirect impacts into consideration.”
According to EY, in 2018 Finland gathered more FDI (foreign direct investment) projects (194) than all the other Nordic countries combined. While the number of investments in the other Nordic countries decreased from the previous year, Finland managed to strengthen its position by increasing the number of investments. Compared to other European countries, Finland was selected as the 11th most attractive investment target country.
In Finland, investments focus on a wider range of sectors than in the other Nordic countries. The most attractive investment targets were the software industry (53 investment projects), social and health care services (22), and business and expertise services (17). Helsinki was the most popular city for investment among Nordic cities with almost 30% of projects landing in the area. The top ten of Nordic cities also included Espoo, Tampere, and Vantaa.
Executive Director, Ecosystems, Invest in Finland
antti.aumo (at) businessfinland.fi
+358 40 5050 477
Sources: Business Finland (2020) Invest in Finland, EY European Attractiveness Survey (2019), EY Nordic Attractiveness Survey (2019), Statistics Finland (2019). Due to the availability of data and the delay in results and statistics in this field, the figures are from different organisations and different years.