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Sustainable growth must be underpinned by an active industrial policy
The green transition and combating climate change are challenges for industries. Finland is an attractive investment target for industry, but we must also ensure that this continues.
Achieving the objective
- A moderate trend must be maintained in fuel and electricity prices
- Research and innovation must be supported, in particular by direct subsidies.
- New technologies such as small nuclear power stations and the hydrogen economy must be promoted through regulation, and through joint ventures between central government and the private sector where necessary.
- We must invest in competence. The standard of vocational training in particular must be improved, with funding secured.
- The regulatory environment must be predictable to ensure security of investment (e.g. through a prior authorisation system).
Why is this objective important?
Besides payroll expenses, the costs of industry comprise the costs of energy, logistics, raw materials and components, and of investments and their financing. Finland is an attractive location for industrial investment, with scope for wage increases when these costs remain at a reasonable level compared to competitor countries.
The green transition and combating climate change are fostering reforms in many sectors. Public sector risk resilience and private sector capital and skills must be combined to ensure rapid development of new technologies. It must be possible to set up new state-owned companies to create new industries where necessary.
Through investment in research and innovation, we can ensure the regeneration of businesses operating in Finland and growing productivity in our national economy. RDI subsidies should favour the most effective approaches.
Examples of industrial plants that failed at an unfortunately late stage (such as the BASF plant in Harjavalta) have arisen in Finland in recent years. While strict regulation should be maintained, the licensing system should be improved through such measures as developing a system of prior authorisation in order to ensure legal certainty for operators and overall investment security.
Support should be provided for the tourism sector buffeted by various crises
The COVID-19 pandemic dealt an exceptionally heavy blow to the tourism industry, and the war in Ukraine has further exacerbated the situation. Tourists must be encouraged to return to Finland, with Finnish tourism raised to a new level of prosperity.
Achieving the objective
- Funding for Visit Finland must be increased to the level of other Nordic countries,
- Finland must become a country of all-year-round tourism.
- Electricity tax must be reduced to the manufacturing industry level for energy-intensive services.
Why is this objective important?
Visit Finland is a Business Finland organisation that promotes the Finnish tourism industry. Many Finnish tourism businesses are too small to engage in foreign marketing. An increase in the resources of Visit Finland could improve awareness of Finland as a travel destination.
The Finnish tourism industry has traditionally been seasonal. Making tourism more of an all-year-round sector would improve its profitability and boost regional development. An all-year-round industry would be more appealing for investment and ease workforce problems. Developing all-year-round tourism would also have broader favourable impacts.
Many sectors of tourism, such as ski resorts, are energy-intensive operations. Reducing their electricity tax to the category of manufacturing industry would boost their operating conditions.
Transport investment must focus on cost-effectiveness, and funding must be secured for maintaining basic transport infrastructure
The financing needs of transport infrastructure in Finland are greater than in other countries, due to our remote location and transport-intensive industry. The transport network maintenance debt has been growing, with the looming prospect of more costly non-recurrent investments required in future.
Achieving the objective
- The funding level for basic road maintenance should be increased to EUR 1.4 billion as an index-linked figure. EUR 600 million will be invested in transport every year. We shall comply with the Transport 12 report approved by the Finnish Parliament.
- Major rail investments should be prioritised according to genuine needs.
- The basis for planning transport projects must be the functionality of travel chains, as opposed to travelling time.
Why is this objective important?
The transport network maintenance debt has been rising at an increasing pace. This increases emissions and costs, causes traffic congestion, and damages functional reliability. The financing needs of transport infrastructure in Finland are greater than in other countries, due to our remote location and to heavy and transport-intensive industry. Neglecting transport network maintenance will lead to more costly non-recurrent future investment.
Finland will not be able to implement three major rail projects (the One-hour Turku Rail Link, Main Line and Eastern Rail Link projects) in parallel. Only the major Main Line investment is justified to some extent in terms of cost-effectiveness. Almost equal benefits can be achieved on the other track sections at a fraction of the cost of these major investments. A commitment to rectifying and clearing known transport bottlenecks should be a condition of shelving major rail projects.
Transport planning has typically focused on reducing travelling times by increasing the speed of vehicles. This is sometimes inappropriate, as even small increases in speed can require disproportionately large investments. Travelling times can be reduced more effectively by synchronising individual vehicle schedules to form travel chains. Well-planned schedules and interchanges can reduce travelling times cost-effectively. A synchronised transport system that provides the greatest overall service speeds may even sometimes require slower vehicles and connections.