Finland’s information society development is among the best in the world

Finland is one of the most developed countries in terms of education, research and product development.Finland has achieved exceptionally good results in terms of schoolchildren's learning results, and investments in research and product development are high on the international scale.

In a comparison of e-services of public administration, Finland ranks among the top countries, according to a report on the information society published by the Finnish Government in February.For instance, in a European comparison of social and healthcare services, general practitioners use electronic patient records the most in Denmark (98%), followed by Finland (95%).

The Finnish innovation system is among the best in industrial countries, and on an international scale, IT is used widely in Finnish workplaces.For instance, according to an OECD study, Finnish companies have the highest number of Internet connections – followed by Sweden and Denmark.

Well over a half of Finnish companies use an information network in their order and purchasing system, and one fifth have integrated systems with their collaborative partners or customers.

Information and telecommunications technology is used widely in everyday life, too.The number of Internet users is high in international rankings:80% of Finns have used the Web sometimes, and around half are daily users.

Finns’ trust in Internet services is high.As many as 90% of Internet users consider Internet banking safe.Using direct payment and credit cards on the Internet is not considered as safe as Internet banking, but, on an international scale, Finns’ trust in them is high, too.

According to the report, Finland wants to build an information society based on the Finnish model so that its benefits will be as widely available to businesses and citizens as possible.

The Finnish Information Society Council is an organisation chaired by the Prime Minister that aims to guide the development of the information society, taking care of negotiating and coordination between public administration, organisations and industry and commerce.

Nordic markets and technological expertise are attracting foreign investment to Finland

A recent survey shows that foreign-owned companies increasingly operate in Finland to serve the Finnish and surrounding markets and their short-term expansion plans are centred round Russia, the Baltic countries and Central Europe.  The survey, commissioned by Invest in Finland, reveals that the market sector that foreign-owned companies operate in has a big impact on the reasons why businesses invest in Finland.

Greenfield companies emphasise the market reasons. The opportunity to reach the Finnish and surrounding markets has attracted the majority of Greenfield investment to Finland. This is explained by the fact that nearly 70 percent of foreign-owned Greenfield companies in Finland operate in the wholesale and retail sector. Greenfield companies are also attracted to the cooperation and networking opportunities the Finnish business environment offers. In addition, corporation tax and transport costs have also become more important considerations in recent years.

More foreign-owned companies acquire Finnish companies than launch Greenfield operations, which highlights that the most important motives for the acquisition of Finnish companies is the need to expand existing markets and the opportunities offered by the marketing and business expertise of the acquired company. The Nordic markets, and the conditions for research and development, have also become more significant investment factors for companies making acquisitions.

Findings from the survey show that the sector of foreign-owned companies is a big determiner in how companies establish a presence in Finland. Technological expertise is a significantly more important motive for industrial companies compared to companies working in services, energy and construction and wholesale and retail.

Foreign subsidiaries carrying out development or innovation activities in Finland also see technological expertise as a major competitive advantage and feel it provides benefits for their groups’ foreign units. Consequently, they co-operate with Finnish Universities and education and research institutions more than businesses in other sectors.

The three strongest operational advantages provided by the Finnish business environment are revealed in the survey as the honesty and dependability of Finns, the region’s infrastructure, and access to technological expertise.

The future is bright for foreign-owned companies investing in Finland. They have a higher growth expectation than domestic companies, with those based in the service sector setting the highest projections.  Following an acquisition the majority of Finnish companies also increase in head-count and profitability.

The survey concludes: “The companies have been interested in Finnish markets or market areas that can be served from Finland. This is particularly true for commerce and service sectors. For industrial companies, technology has been a considerable incentive in making the decision to locate in Finland. Foreign companies have clearly been seeking expertise related to the Finnish core businesses, such as the forestry industry and information and communications technology.

The single most important factor influential to a company's future prospects in Finland is the domestic demand for their products. The second most important factor is the excellent Finnish expertise and the third most important factor is the group's regional strategies beyond Finland.”

The survey, ‘Foreign businesses in Finland: investment motives and views on the operating environment’,  is part of a larger report entitled ‘Finland's position in the global marketplace – companies’ motives for locating abroad’ and was carried out by ETLA, the Research Institute of the Finnish Economy. The report involved in-depth interviews with managing directors and senior management personnel in over 1,300 companies operating in Finland.

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