A place to discover
traditional sectors and introducing new technology
country of 187 000 lakes has succeeded in recent years in steering its economy
in a new direction by focusing, among other things, on the potential offered by
new technologies and the information society. The country's new Objectives 1 and
2 programmes for the 2000-06 period share this aim.
Twenty years ago,
hit by the recession of the late 1980s and the break-up of the USSR, one of its
principal debtors, Finland was struck by an unprecedented economic crisis. The
public purse could not simultaneously support the sudden increase in unemployment
and a generous system of social security. The Finnish mark was devalued by 25%
at the start of the 1990s. After its accession to the European Union in 1995 the
country rediscovered economic growth rates that are among the highest in the Union.
But an unemployment rate of close to 12% puts Finland among the European also-rans
in this regard. The situation is particularly alarming in the case of young people
and the long-term unemployed. The number of women excluded from the labour market
has also increased considerably. One immediate consequence has been a flight from
rural areas with attendant population growth in urban centres. The local economies
are often too dependent on the traditional sectors of timber, chemicals and metal-working,
monopolies of large companies. In addition, Finland has relatively few small and
medium-sized enterprises and employment vacancies in isolated regions are concentrated
almost exclusively in the public, agricultural and forestry sectors.
Sampo 2000 : Sweeping away economic
aim is to overcome the prevailing sense of depression. A distant goal in the region
of Parikkala-Saari, in south-eastern Finland. Devastated by the 1991 recession,
industrial employment fell by 50% in 5 years in the Parrikkala sub-region. Since
1996, however, small, sector-specific development projects have emerged. In response,
the Regional Council of Southern Karelia and the municipalities of Parikkala and
Saari decided to put together a major action plan focussing on innovation and
the cooperation of all parties concerned. Baptised "Sampo 2000", the
project aimed to develop existing companies and, most especially, to encourage
new companies to set up in the region. "Sampo 2000" has received ERDF
aid amounting to EUR 42.847 million.|
To help the companies
already established in the region, "Sampo 2000" offered genuine consultancy
services by analysing their needs and market opportunities, by establishing financing
plans or by drawing up suitable development scenarios. More than 50 companies
profited from this assistance. Thirty jobs were saved as a result and 50 created.
When these companies operate at full capacity, they should generate another 50
new jobs. The project's other priority was to attract new companies. Pariwood
Oy was the first to set up in the region. This Austrian owned company produces
planks using local raw materials and should employ between 70 and 80 people by
2003. Five new companies have so far set up in the region, with a significant
knock-on effect on the local economy.
Contact: Municipality of Parikkala, Marjatta Pahkala, Municipal Manager,
Harjukuja 6, FIN-59100 Parikkala, Finland,
Tel: + 358 5 686 1250,
Fax: + 358 5 686 1290,
Finnish development programmes 2000-06
Less developed regions
Commission adopted two Objective 1 programmes for the 2000-06 period. They attract
a Community contribution of EUR 948 million, two thirds of which is allocated
to Eastern Finland and the remaining third to northern Finland.
Finnish programmes cover Kainuu, Northern Karelia, North Savo, South Savo, Lapland
and the regions of Northern Ostrobothnia, Central Ostrobothnia and Central Finland.
In all, 20.4% of the Finnish population will qualify for assistance from the four
Structural Funds (ERDF, ESF, EAGGF and FIFG) between 2000 and 2006.
of the Finnish areas covered by Objective 1 already received Community aid in
the period 1994-99 under Objective 6 (sparsely populated areas).
Objective 1 programmes are based on four major priorities:
- The development of rural regions
technology and employment
of areas in difficulty
30.2% of Finns live in regions qualifying for
Objective 2. This Objective incorporates Objectives 2 and 5(b) from the preceding
period (1994-99). The Community budget for Objective 2 in Finland amounts to almost
EUR 500 million. The aid is concentrated mainly on industrial and rural areas.
An interview with Veijo Kavonius
of regional development at the Ministry of the Interior
|Finland is experiencing enviable economic
growth, but is still struggling to bring down high unemployment. How many jobs
were created with Structural Funds' assistance during the 1994-99 programming
We estimated in October 1999 that Objectives 2, 5(b) and 6 together
had created 40 000 jobs in the period 1994-99. This is slightly below what we
forecast. However, the total number of jobs created as a result of structural
assistance in the previous period cannot yet be quantified exactly since the programmes
are still under way this year. The programmes also have long-term effects that
are not easy to quantify at this time.
It is also extremely difficult to
assess the number of jobs maintained with the help of these programmes. However,
the figures advanced represent twice or even three times the number of jobs created,
i.e. 80 000 or 120 000 jobs maintained.
Still on the topic of job creation,
what do you expect to achieve in the next programming period?
programmes for Objectives 1 and 2 will be implemented in Finland in 2000-06. These
new programmes should make it possible to create about 80 000 new jobs, 30 000
of which will be in the Objective 1 regions. It is also expected that the programmes
will save 160 000 existing jobs.
Has assistance from the Structural
Funds resulted in an increase in the number of SMEs?
Funds' aid for company development focused primarily on developing SMEs and encouraging
new company start-ups. According to our estimates, 5 000 new companies were created
by October 1999 as a direct result of the Structural Funds support.
are Finland's priorities in the 2000-06 programming period?
In this programming period, regional development will focus more on a strategy
of reform: efforts will be made to raise the region's competitiveness rather than
maintain a policy of preservation. That will require the development of technology
and know-how and various forms of cooperation between universities, research institutes
This strategy is also being supported through
private funding. The priorities in the Objectives 1 and 2 programmes are generally
similar and aim to improve, on the one hand, the region's attractiveness and business
competitiveness and, on the other hand, to develop skills and expertise, human
resources, technology, the regional structure and the environment. In the rural
regions covered by Objective 1, the diversification of production and structural
improvements are our main areas of concern.