2. The Finnish Technology Industry Is Comprised of
Five Sub-Sectors
22/5/2018 Technology Industries
of Finland
ELEKTRONICS AND ELECTROTECHNICAL
INDUSTRY
ABB, Ensto, Microsoft Mobile,
Murata Electronics, Nokia, Planmeca,
Polar Electro, Suunto, Vacon, Vaisala…
METALS INDUSTRY
Boliden, Componenta, Kuusakoski,
Luvata, Outokumpu, Outotec,
Ovako, Sacotec, SSAB …
MECHANICAL ENGINEERING
Abloy, Cargotec, Finn-Power, Fiskars,
Glaston, Kone, Konecranes, Metso,
Meyer Turku, Normet, Oras, Patria,
Pemamek, Ponsse, Stala, Valmet,
Valtra, Wärtsilä…
INFORMATION TECHNOLOGY
Affecto, Basware, Bilot, CGI, Comptel,
Digia, Efecte, Enfo, F-Secure, Fujitsu
Finland, IBM, Innofactor, Knowit,
Microsoft, Nixu, Tieto…
CONSULTING ENGINEERING
A-Insinöörit, Citec, Elomatic, Etteplan, FCG,
Granlund, Neste Jacobs, Pöyry, Ramboll,
Rejlers, SITO, SWECO, WSP…
3. The Finnish Technology Industry Is Comprised of
Five Sub-Sectors
3
ELEKTRONICS AND ELECTROTECHNICAL
INDUSTRY
• Data communications equipment, electrical
machinery, medical technology
• Turnover (2017): 14.7 billion euros
• Personnel (2017): 39,000
METALS INDUSTRY
• Steel products, non-ferrous metals,
castings, metallic minerals
• Turnover (2017): 10.9 billion euros
• Personnel (2017): 15,100
MECHANICAL ENGINEERING
• Machinery, metal products, vehicles
• Turnover (2017): 30 billion euros
• Personnel (2017): 128,000
INFORMATION TECHNOLOGY
• IT services, applications and
programming
• Turnover (2017): 12.4 billion euros
• Personnel (2017): 62,600
CONSULTING ENGINEERING
• Expertise for construction industry and
infrastructure
• Turnover (2017): 6.2 billion euros
• Personnel (2017): 52,500
2/5/2018 Technology Industries
of Finland
4. The Technology Industry –
the Largest Export Sector in Finland
4
• 50 % of total Finnish exports.
• Companies invest about EUR 5.0 billion
annually in Finland.
• 70 % of private-sector R&D investment.
• Some 300,000 employed directly in the
sector, 700,000 employed in total,
equalling about 30% of the entire Finnish
labour force.
• Technology Industries of Finland has over
1,600 member companies.
2/5/2018 Technology Industries
of Finland
5. Turnover of the Technology Industry in Finland
5Source: Macrobond, Statistics Finland, Technology Industries of Finland2/5/2018 Technology Industries
of Finland
6. 6*) In addition to goods exports the sector exported services worth some 12.3 billion euros (2015).
Source: National Board of Customs, Statistics Finland
Export of Technology Industry Goods from Finland
by Area in 2016
Total goods exports 25.2 billion euros*
North America
2.5 billion €
9.8 %
Western Europe
13.7 billion €
53.9 %
South and
Middle America
0.8 billion €
3.2 %
Central and Eastern Europe
3.8 billion €
15.0 %
Africa
0.4 billion €
1.7 %
Middle and
Central East
0.5 billion €
1.8 %
Asia
3.7 billion €
14.6 %
2/5/2018 Technology Industries
of Finland
7. Technology, Forest and Chemical Industries
Provide 80 % of Finland's Goods and Services
Exports Revenue
Goods and service exports: billion euros and the share of Finnish exports in 2016
7*) Service exports industry-specific data for the year 2016 are preliminary information.
Source: Board of Customs, Statistics Finland (National Accounts, Foreign trade in services), Federation of Finnish Technology Industries
Technology industry
49%
Forest industry
16%
Chemical industry
15%
Other sectors
20%
2/5/2018 Technology Industries
of Finland
8. Turnover of the Industry and Technology Industry
in Finland
8Source: Macrobond, Statistics Finland2/5/2018 Technology Industries
of Finland
9. Turnover of the Technology Industry in Finland
9Source: Macrobond, Statistics Finland2/5/2018 Technology Industries
of Finland
10. Value of New Orders in the Technology Industry*
in Finland
10Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation October-December 2017.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: IV,2017 / IV,2016 IV,2017 / III,2017
Export: +49 % +61 %
Domestic: +16 % +34 %
Combined: +40 % +54 %
*) Excl. metals
industry, game
industry and data
center companies
2/5/2018 Technology Industries
of Finland
11. Value of Order Books in the Technology Industry*
in Finland
11Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation 31.12.2017
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: 31.12.2017 / 31.12.2016 31.12.2017 / 30.9.2017
Export: +32 % +12 %
Domestic: +4 % +5 %
Combined: +25 % +11 %
*) Excl. metals
industry, game
industry and data
center companies
Combined
2/5/2018 Technology Industries
of Finland
12. Tender Requests* Received by Technology
Industry Companies in Finland
12Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies,
the last questionnaire is January 2018
-60
-50
-40
-30
-20
-10
0
10
20
30
40
Balance figure
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
*) Have you experienced a notable increase or decrease in the number of requests for tenders in recent weeks in comparison to the situation three
months ago?”. Balance figure = the number of companies receiving more requests - the number of companies receiving less requests.
2/5/2018 Technology Industries
of Finland
13. Value of New Orders in the Electronics and
Electrotechnical Industry in Finland
13Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation October-December 2017.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
8,000
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: IV,2017 / IV,2016 IV,2017 / III,2017
Export: -3 % +17 %
Domestic: +73 % +7 %
Combined: +9 % +14 %
2/5/2018 Technology Industries
of Finland
14. Value of Order Books in the Electronics and
Electrotechnical Industry in Finland
14Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation 31.12.2017
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
Export
Domestic
Million euros, at current prices
Change: 31.12.2017 / 31.12.2016 31.12.2017 / 30.9.2017
Export: -4 % +8 %
Domestic: +48 % +6 %
Combined: +5 % +8 %
Combined
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2/5/2018 Technology Industries
of Finland
15. Value of New Orders in the Machanical
Engineering in Finland
15Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation October-December 2017.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: IV,2017 / IV,2016 IV,2017 / III,2017
Export: +102 % +97 %
Domestic: +9 % +67 %
Combined: +80 % +93 %
2/5/2018 Technology Industries
of Finland
16. Value of Order Books in the Mechanical
Engineering in Finland
16Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation 31.12.2017
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Export
Domestic
Million euros, at current prices
Change: 31.12.2017 / 31.12.2016 31.12.2017 / 30.9.2017
Export: +46 % +14 %
Domestic: -3 % +7 %
Combined: +38 % +13 %
Combined
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2/5/2018 Technology Industries
of Finland
17. Value of New Orders in the Consulting Engineering
in Finland
17Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation October-December 2017.
0
50
100
150
200
250
300
350
Combined
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: IV,2017 / IV,2016 IV,2017 / III,2017
Export: -38 % +17 %
Domestic: +27 % +42 %
Combined: +19 % +40 %
2/5/2018 Technology Industries
of Finland
18. Value of Order Books in the Consulting
Engineering in Finland
18Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation 31.12.2017.
0
100
200
300
400
500
600
700
800
Export
Domestic
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: 31.12.2017 / 31.12.2016 31.12.2017 / 30.9.2017
Export: -2 % -9 %
Domestic: +19 % +13 %
Combined: +15 % +8 %
Combined
2/5/2018 Technology Industries
of Finland
19. Value of New Orders in the Information
Technology* in Finland
19Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation October-December 2017.
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: IV,2017 / IV,2016 IV,2017 / III,2017
Combined: -13 % +42 %
*) Excl. game industry and data center
companies.
2/5/2018 Technology Industries
of Finland
20. Value of Order Books in the Information
Technology* in Finland
20Source: The Federation of Finnish Technology Industries’ order book survey’s respondent
companies, latest observation 31.12.2017.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Million euros, at current prices
Change: 31.12.2017 / 31.12.2017 31.12.2017 / 30.9.2017
Combined: -12 % -2 %
*) Excl. game industry and data
center companies.
2/5/2018 Technology Industries
of Finland
21. Technology Industry Personnel
212/5/2018 Technology Industries of
Finland
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond
22. Technology Industry Personnel in Finland by
Branch
222/5/2018 Technology Industries of
Finland
Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond
23. Technology Industry Personnel in Subsidiaries
Abroad by Branch
232/5/2018 Technology Industries of Finland Source: The Federation of Finnish Technology Industries’ labour force survey, Macrobond
24. Retirement of Technology Industry Personnel in
Finland
24
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Number of individuals retired Number of individuals retiring (estimation)
Salaried employees
Blue collar employees
Individuals per year
Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics FinlandTechnology Industries
of Finland
2/5/2018
25. Retirement of Technology Industry Blue Collar
Employees in Finland
25
0
500
1000
1500
2000
2500
3000
3500
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Mechanical engineering Metals industry Electronics and electrotechnical industry
Individuals per year
Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics FinlandTechnology Industries
of Finland
2/5/2018
26. Overview of the Situation in the Technology
Industry and Outlook for the Spring of 2018
26
- Turnover in Finland totalled some EUR 74.1 billion in 2017. Turnover was 10 % higher than
in 2016. In 2008, prior to the financial crises, the corresponding figure was EUR 86 billion.
- The monetary value of new orders reported between October-December 2017 was 54 %
higher than in July-September, and 40 % higher than in the corresponding period in 2016. In
late 2017, the growth was boosted by two large ship orders in particular.
- At the end of December, the value of order books was 11 % higher than at the end of
September, and 25 % higher than in December 2016.
- The turnover of technology industry companies during the spring of 2018 is expected to be
higher than in the corresponding period last year.
- The number of personnel in Finland increased in 2017. Personnel increased by a good of two
per cent, or by 6,400 employees from the average number in 2016. On average, the industry
employed 297,000 people. In 2008, the industry employed a total of 326,000 people in
Finland.
- The recruitment activities picked up markedly in 2017. The companies recruited a total of
42,500 new employees, in 2016 a total of 28,500 employees.
2/5/2018 Technology Industries of Finland
27. World Economic Outlook
- Finland as a Part of Global
Economy
272/5/2018 Technology Industries of Finland
28. GDP also Grows in Finland, but the Backlog for the
Other Euro Area Countries Is up to 8%
28Lähde: MacrobondTechnology Industries
of Finland
2/5/2018
29. Finland’s Exports Jumped in Early 2017, but the
Backlog for the Other Euro Area Countries is 40 %
295.2.2018 Teknologiateollisuus Source: Macrobond, Eurostat
Q4: Estimate
based on goods
exports during
October-
November
30. Recently, Finland's Economic Growth Has also
Been Supported by an Increase in Exports
30Source: Macrobond, Statistics FinlandTechnology Industries
of Finland
2/5/2018
31. Gross Domestic Product Has Grown Long in
Europe and the USA, Finland is Lagging Behind
31Souce: MacrobondTechnology Industries
of Finland
2/5/2018
32. 322/5/2018 Lähde: Macrobond
In China and India Growth Continues, also Brazil
Is Now Growing
Share of global GDP in China, India, Brazil and Russia is 31 % (adjusted for PP)
Technology Industries
of Finland
33. 332/5/2018 Latest information January 2018
Source: Markit
GDP Growth in the Euro Area Has Picked up During
the last Months
Purchase Managers’ Index (PMI), 50 = no change from previous month
Technology Industries
of Finland
36. Finland’s Industrial Production Has Lagged Behind
the Competition Countries
36Source: Macrobond, The CPB Netherlands Bureau for Economic Policy AnalysisTechnology Industries
of Finland
2/5/2018
37. 372/5/2018 Latest information December 2017
Source: Markit
Industrial Production in China is Growing Slightly
Purchase Managers’ Index (PMI) in manufacturing industry in China
Technology Industries
of Finland
38. 382/5/2018 Latest information December 2017
Source: Markit
Industrial Production in Russia is Growing
Purchase Managers’ Index (PMI) in manufacturing industry in China
Technology Industries
of Finland
39. 392/5/2018 Latest information December 2017
Source: Markit
Industrial Production in Brazil Is Growing
Purchase Managers’ Index (PMI) in manufacturing industry in China
Technology Industries
of Finland
40. 40Source: Macrobond
Industrial Production in the USA is Growing
Purchase Managers’ Index (PMI) in manufacturing industry
50 = no change from previous month
Technology Industries
of Finland
2/5/2018
41. 41Source: Macrobond
Growth of Residence Construction Has Lowered in
China
Share of China in Asian GDP is 42% (adjusted for PP)
Technology Industries
of Finland
2/5/2018
42. 42Souce: Macrobond
Fixed Investment Is Gaining Momentum in Brazil
Share of Russia in European GDP is 13 % (adjusted for PP)
Share of Brazil in Latin American GDP is 35 % (adjusted for PP)
Technology Industries
of Finland
2/5/2018
43. 43Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis
World Trade Has Picked up Again
Technology Industries
of Finland
2/5/2018
44. Imports to China Have Increased from Several
Countries
44Source: MacrobondTechnology Industries
of Finland
2/5/2018
45. EU Exports to Russia Have Recovered Slightly
45Source: MacrobondTechnology Industries
of Finland
2/5/2018
46. Russia’s Share* of Technology Industry Exports
from Finland Has Lowered to Some 5-6 Per Cent
46*) Soviet Union up to 1991
Source: Finnish Customs
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
32
34
36
38
40
42
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017(1-10)
Technology Industries
of Finland
2/5/2018
%
47. 47Source: IMF (January 2018)
The World Economy Is Projected to Grow by 3.9%
in 2018
GDP growth in 2018 / 2017, %
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
0 10 20 30 40 50 60 70 80 90 100
North America
Western Europe
Japan
China
India
RestofEastern
Europe
Russia
Brazil
Mexico
RestofLatin
America
MiddleEast
andAfrica
Average growth:
+3,9 %
The width of the bar indicates the share of global GDP in 2017 (adjusted for purchasing power parity), %
Rest
of Asia
Technology Industries
of Finland
2/5/2018
48. 48Source: IMF (January 2018), Finnish Customs
Demand in the Finnish Technology Industry Export
Market is Expected to Grow by 2.8 % in 2018
GDP growth in 2018 / 2017, %
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
0 10 20 30 40 50 60 70 80 90 100
North America Western Europe Japan
China
India
Rest
of Asia
Restof
Eastern
Europe
Russia
Brazil
RestofLatinAmerica
MiddleEastandAfrica
Average growth:
+2,8 %
Mexico
The width of the bar indicates the export share of technology industry from Finland in 2016, %
Technology Industries
of Finland
2/5/2018
51. Finnish Exports Have Lagged Behind the
Competition Countries
51Source: Macrobond, EurostatTechnology Industries
of Finland
2/5/2018
52. Growth Paradox: the Downsized Industry Has
Limited Opportunities to Increase Finnish Exports
52Source: Statistics Finland / industrial production volume index
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
70
75
80
85
90
95
100
105
110
115
120
125
Industrial
production, with
capacity in full use
(theoretical level),
left axis
Industrial
production, at fixed
prices (2008 = 100),
left axis
Industrial capacity
utilization,%, right
axis-16 %
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-18 %
Technology Industries
of Finland
2/5/2018
53. 53Source: Macrobond, Eurostat
The Decline in Exports and Recession: the Public
Debt and Total Tax Rate Increased Significantly
Increased cost burden requires cuts to public sector
Technology Industries
of Finland
2/5/2018
54. Corporate Investments in Finland Are in Real
Terms Almost 6 Billion Euros Lower than in 2008
Production and R&D investments in Finland
54Source: Statistics Finland, National Accounts
20
21
22
23
24
25
26
27
28
29
30
31
32
2008 2009 2010 2011 2012 2013 2014 2015 2016
Billion euros, in the 2016 price level
Technology Industries
of Finland
2/5/2018
55. Unlike the Competition Countries, in Finland
Business Investment Is Still Below the Level in 2008
555.2.2018 Teknologiateollisuus Source: OECD, Economic Outlook (December 2017)
70
75
80
85
90
95
100
105
110
115
120
125
130
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e
Corporate investments, at fixed prices, index 2008=100
USA
Netherlands
Sweden
Switzerland
Germany
Finland
56. 56Source: Statistics Finland, (National Accounts), The Confederation of Finnish Industries* investment survey (June 2017)
Investments in the Manufacturing and Technology
Industry in Finland Do Not Promise Long-Term
Strong Growth
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e
Manufacturing industry (incl. technology industry)
Technology industry (incl. information technology and consulting engineering)
Production and R&D investments in Finland, million euros, at current prices
Technology Industries
of Finland
2/5/2018
57. Investments and productivity* are Decisive for
Finland’s Success
Productivity of export sector is 10 % lower than in 2007-2008, productivity of entire
national economy is 3 % lower
57
*) Productivity is measured as real value added per hours worked. When productivity grows (the curve rises) value added grows
more than hours worked. Value added = turnover – purchasing of materials and services
Value added = labour costs + rents + depreciations + profits
Source: Statistics Finland / National Accounts
Technology Industries
of Finland
2/5/2018
58. Rapid Growth in Labour Costs Has Weakened the
Ability of Companies to Invest in Finland
58*) Both wages and R & D investments include R&D staff wage costs
Source: Statistics Finland (National Accounts)
50
55
60
65
70
75
80
85
90
95
100
105
110
115
2008 2009 2010 2011 2012 2013 2014 2015 2016
Corporate wages and
social security costs*
Corporate production
and R&D investments*
Corporate profits after
taxes
At current prices, index 2008=100
Technology Industries
of Finland
2/5/2018
59. 59
Finland’s Price and Cost Competitiveness vis-à-vis
the Euro Countries Is still to be Improved
Unit labour costs in the whole economy = labour costs / productivity, including the influence of effective
exchange rates
94
96
98
100
102
104
106
108
110
112
114
2000=100
2005=100
2008=100
Finland’s price
and cost
competitiveness
declines
Finland’s price
and cost
competitiveness
improves
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
2/5/2018 Technology Industries
of Finland
*) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 38
main trade partners, as well as the development of unit labour costs for the total economy.
Latest information July-September 2017. Source: European Central Bank
60. What Should Be Done in Finland?
60
• Support the renewal of the industry.
• Taxes should support growth and investment in Finland.
• Support decision making in companies related to compensation
and working time
• No new European nor national burdens on companies, which
are deteriorating the competitiveness.
Technology Industries
of Finland
2/5/2018
61. Long-Term Outlook and Challenges
61
• Global Structural Change Set to Continue Apace
o Industrial production and services will relocate to rapidly developing economic areas
o Strong growth, large markets, cheap labour and increasing expertise will increase the
attractiveness of these regions.
• Competition over Skills and Raw Materials Set to Increase
o Due to an increase in retirement, the sector’s annual recruitment need in Finland will
rise considerably in the coming years.
o The availability of reasonably-priced energy also threatens to become an investment
bottleneck in Finland
• Combating Climate Change
o A challenge as costs are set to grow faster than in competitor countries
o An opportunity for new environmental and energy technologies
Technology Industries
of Finland
2/5/2018