The economy of Finland is a highly industrialized, mixed economy with a per capita output similar to that of western European economies such as France, Germany, and the United Kingdom. The largest sector of Finland’s economy is services at 72.7 percent, followed by manufacturing and refining at 31.4 percent. Primary production is 2.9 percent.
With respect to foreign trade, the key economic sector is manufacturing. The largest industries are electronics (21.6 percent), machinery, vehicles, and other engineered metal products (21.1 percent), forest industry (13.1 percent), and chemicals (10.9 percent).
Finland has timber and several mineral and freshwater resources. Forestry, paper factories, and the agricultural sector (on which taxpayers spend around 2 billion euro annually) are politically sensitive to rural residents. The Greater Helsinki area generates around a third of GDP.
Finland has the 4th largest knowledge economy in Europe, behind Sweden, Denmark, and the UK. The economy of Finland tops the ranking of the Global Information Technology 2014 report by the World Economic Forum for concerted output between the business sector, the scholarly production and the governmental assistance on information and communications technology.
Finland is highly integrated in the global economy, and international trade represents a third of the GDP. Trade with the European Union represents 60 percent of the country’s total trade.
The largest trade flows are with Germany, Russia, Sweden, the United Kingdom, the United States, the Netherlands, and China. Their trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture.
Finland is the only Nordic country to have joined the Eurozone; Denmark and Sweden have retained their traditional currencies, whereas Iceland and Norway are not members of the EU at all.
The country also benefits from a strong infrastructure of airports, railways, waterways, and ports that connects the country domestically and internationally. Rotterdam has the largest port in Europe, whilst Amsterdam’s International Airport is one of the largest in the world.
The country has had steady natural gas resources since 1959, upon the discovery of a wellspring – which accounts for more than 25% of all natural gas reserves in the European Union. The sale of natural gas generated a significant amount of revenue over the decades, but there are more sectors that contribute to the country’s resources.
The Netherlands also have their eyes on the future, embracing innovation, sustainability, and digitalization with the EU Innovation Scoreboard (2020) ranking the country as the fourth-best nation for innovators.
The Netherlands is a main gateway to European talent for companies expanding abroad and as a magnet for business ventures from the United States, Australia, China, and India.
SMEs are companies with fewer than 250 employees and a turnover of no more than EUR 50 million or a balance sheet total of no more than EUR 43 million. Companies larger than this are classed as large corporations.
SMEs play an important role in Finland’s ‘non-financial business economy’. They account for 59.6% of value added and 65.2% of employment, close to the respective EU averages of 56.4% and 66.6%.
The productivity of Finnish SMEs, defined as value added per person employed, is approximately €66,000, well above average EU productivity of €44,600. Finnish SMEs employ an average of 4.2 people, against an EU average of 3.9. As is the case throughout the EU, manufacturing and wholesale and retail trade are the two largest SME sectors in Finland, together contributing 35.1% of overall SME value added and 37.4% of employment.