''Global megatrends such as climate change, digitalisation and urbanisation will be the drivers of change''

3.4 Dynamic and thriving Finland

Current situation

Finland, by drawing on its many strengths, is well positioned to succeed as a global leader in skills and innovation. Global megatrends such as climate change, digitalisation and urbanisation will be the drivers of change. The key to our success as a dynamic and thriving Finland will lie in the ability to tap into the opportunities that this change provides. Finland’s key strengths also include an operating environment that is stable and predictable by comparison with many other countries.

Connecting with international demand-driven ecosystems provides companies, research institutes, higher education institutions and other educational institutions an opportunity to together create new business and world-class innovations. This will allow us to significantly boost export growth. Furthermore, by investing in programmes that drive international growth and in a strong entrepreneurship policy Finland can diversify its business structures and create opportunities for sustainable growth for companies of all sizes.

The Government will support growth by investments in RDI, by developing new operating models in public-private partnerships, and by attracting more top international talent to Finland.

A viable and socially strong Finland will be built on the success of the Greater Helsinki region, growing urban districts and rural areas alike.

Another key issue concerning Finland’s future development includes greater demographic concentration in growth centres and the consequences of this. We must foster vitality and the ability to function effectively in all parts of the country. The Greater Helsinki region competes with other metropolitan areas. Cities are crucial for the country’s vitality both in terms of creating growth and in mitigating climate change. It is important for Finland’s vitality that we have sufficient resources to respond to these challenges. Areas all across the country have a major role in the use of renewable natural resources, and the position of the regions is vital in this.

In terms of our transport infrastructure network, it is time to adopt a more systematic approach to long-term planning and development, and to address the problem of prolonged under-funding of investments. Accessibility must be ensured in all parts of the country.

In the long-term, climate change may weaken the production conditions in important food production regions in different parts of the world. This is why we must secure the profitability of agriculture, national food security and a competitive domestic food system as part of the bioeconomy and circular economy package. Domestic food production is important for the security of supply and for employment and the regional structure.

Objective 1

Finland, relying on its value-centric image, will provide solutions to global development challenges

A strategy of sustainable growth will be created for Finland, aiming for a more diverse industrial structure, better productivity, export growth, business renewal and a stronger business environment. The strategy also envisages the creation of international billion- euro ecosystems that will generate positive impacts across Finland. The growth strategy and employment will be supported through an increasingly high level of education and training, world-class competence and strong domestic markets.

Finland will see significant improvements in its research and innovation environment, and rising levels of both tangible and intangible investments.

Climate change mitigation, the bioeconomy and circular economy, technological advances and urbanisation will be the major drivers of change in all activities.

Measures

Ecosystems will be the engines of sustainable growth; new billion-euro ecosystems will be created in Finland, and the existing ones strengthened

Finland’s RDI investments will be put on a growth track. A roadmap will be drawn up to raise RDI investments to 4 per cent of GDP and to make Finland the world’s best environment for innovation and experiments.

Steps will be taken to build a stronger model for public-private partnership in innovation. Overarching management of innovation and research policy, along with growth policy coordination, will be strengthened across central government.

A cross-sectoral programme will be prepared and sufficient resources allocated for promoting efforts to attract and retain international talent and to speed up the processing of granting residence permits. The key personnel act is to be made permanent.

A national intellectual property rights strategy will be created to boost competence and governance, and to make improvements to the current situation.

A cross-sectoral programme to promote exports and international growth to 2030 will be prepared with key players by the end of 2019

The programme will cover key cross-sectoral policy areas for exports and international growth. It will emphasise expertise in international business, measures to raise productivity and added value, and the transition to a low-carbon bioeconomy and circular economy.

Programme implementation will be monitored annually (in connection with the discussions on general government finances) and new decisions will be made as necessary to support the programme objectives.

Additional investments will be made in internationalisation services that are linked to the emerging ecosystems. A programme will be introduced to build the internationalisation capabilities of SMEs. The availability of services will be improved regionally, nationally and internationally; more resources will be provided for international services, and cooperation with players such as Team Finland will be strengthened.

At EU level, Finland will support an active industrial policy, calling for an industrial policy strategy that includes a plan for the sustainable development of European business and industry amid the global shifts that are taking place. In addition, active trade policy based on openness, a rules-based multilateral trading system and the promotion of free trade will be pursued, and will take into account the principles of sustainable development.

The international growth programme will include sectoral roadmaps to a low-carbon future.

Actions on business-driven strategic research and development will be coordinated nationally and internationally. Efforts will be made to contribute to the development programmes on competence areas and European ecosystems currently being prepared in the EU, and to new innovative solutions such as initiatives on energy storage and the battery industry. Preparations will be made for potential additional investment needs.

Solutions to global challenges based on national strengths will be provided on a public- private partnership (PPP model) basis.

Nordic cooperation will be strengthened to build a stronger common value-based brand. Cooperation with neighbouring regions will be pursued to drive growth.

Attention will be focused on accelerating growth-oriented initiatives in different industries, along with bold renewal projects to meet the challenges of the future

A report will be prepared on the future of the retail industry, to allow strategic long-term development of the sector.

A national programme covering the tourism sector will be launched to support continuous growth and to encourage entrepreneurship in the sector.

Implementation of measures in accordance with the health sector growth strategy will continue. Flexible and extensive use of healthcare and social welfare data will be encouraged, all the while guaranteeing data protection rights.

A service package for the creative industries will be introduced.

Added value creation will be boosted in wood product processing. Wood construction and exports will be promoted.

In the sustainable food industry, added value creation will be expanded in the domestic market and in exports. Steps will also be taken to improve the sector’s general operating conditions.

A national biogas programme will be drawn up to improve Finland’s vitality and to achieve our climate targets.

Opportunities will be provided for business growth and renewal, with attention paid to the needs of different types of companies.

An entrepreneurship strategy will be created that takes into account companies of different sizes and young growth companies. This will include measures to improve the position of sole entrepreneurs, to facilitate employment by micro-enterprises, to develop value creation and business models in the creative industries, to drive growth and internationalisation in SMEs and mid-cap companies, as well as measures to promote exports together with industry leaders.

The threshold for starting and growing a business will be lowered by fostering an atmosphere that promotes entrepreneurship, and by building skills for working life. This could be achieved by promoting understanding of entrepreneurship and working life and the skills they require, at various levels of education and in public services. Appropriate training will be provided to strengthen world-class business competence.

The readiness of entrepreneurs to take risks will be improved through better opportunities for making a new start in particular situations, such as bankruptcy. In this regard, implementation of the EU Insolvency Directive will be taken into account, and the overall effectiveness of insolvency legislation will be assessed.

The need for legislative action regarding payment defaults, debt collection expenses and payment periods will also be assessed. A positive credit register will be introduced during the Government’s term, and the periods for bad credit records.

Models to support the coping strategies of entrepreneurs will be adopted as part of the business service ecosystem development.

Business continuity will be ensured in cases of ownership change. This will also take into account situations where business operations are continued by members of the personnel.

A new operating model will be introduced that supports the growth, recruitment and ownership expansion of startup companies.

Support will be offered to newly established small-scale entrepreneurs by introducing more flexible payment schedules for tax prepayment.

The formation of business cooperatives will be promoted.

Action will be taken to improve the growth, employment and investment capacity of SMEs by ensuring equal business conditions and predictable taxation and market competition.

The EU will be asked for a derogation to raise the VAT threshold for businesses to EUR 15,000.

A model supporting the way companies hire their first outside employee will be created, and a related pilot project will be conducted.

Information policy and efforts to further the use of digital services and technologies will also take into account the scope for SMEs to seize new opportunities via open interfaces.

Steps will be taken to ensure that internationalisation services and business services are customer-oriented, seamless and easily accessible regionally, nationally and globally.

In decision-making, impacts will always be assessed from the perspective of company growth, employment and investment.

Measures to effectively coordinate entrepreneurs’ social security with other forms of income and to improve their pension cover will be explored.

Well-functioning corporate financing markets will be fostered, solutions will be sought to eliminate any bottlenecks in financing, and domestic ownership will be strengthened

Steps will be taken to offer a wide range of financing options to startups and SMEs.

Finnish capital investment markets will be developed, and investments in funds and direct investments through various entities operating under the Ministry of Economic Affairs and Employment will be increased.

Finnvera will be provided with a level of authorisations that is sufficient in relation to its risk management needs.

A domestic ownership programme will be formulated that will support growth by providing means for building a stronger, more diversified and more equal Finnish ownership base.

Objective 2

Finland’s success will be built collaboratively around the strengths and special features of its regions and cities

Regional and urban development will be socially just, environmentally sustainable and economically responsible. Multi-regional and multi-sectoral ecosystems and a pro-business environment together with good accessibility and services will enable all parts of Finland to engage in growth.

Municipalities will have adequate resources to boost vitality and to organise services.

Measures

A diversity of policies for all corners of a dynamic and thriving Finland

Action will be taken to strengthen the vitality of regions, municipalities and cities in all the diverse aspects as part of the sustainable growth strategy.

Regional strengths will be at the core of development work. The objective is to increase vitality, to encourage a cross-sectoral approach, and to pool regional resources to promote the jointly set objectives.

The conditions for living and entrepreneurship must be secured in all parts of Finland in a diversity of ways, taking into account the different needs of regions and cities: metropolitan area; large cities with a population of more than 100,000, also university towns; medium-sized urban areas in regional centres; regional cities; and sparsely populated areas.

Particularly the metropolitan area and large cities will be identified as strategically important areas of growth and sustainable development.

The objective of regional policy is to reduce the level of divergence between regions and within municipalities.

In order to boost regional growth, the process of strategic land use planning and efforts to increase vitality can be carried out across municipal and regional boundaries and may be taken jointly with many different parties through extensive and committed cooperation.

A regional and/or thematic operating model (for regional development) that takes account of the special characteristics of each region will be created on the basis of agreements and partnerships. Regional agreement packages will be part of Finland’s ecosystem policy and growth programme. The operating model will be specified in more detail in connection with the regional development decision in 2019.

Regional councils will continue to act as the regional development authorities. They will continue to play a central role in promoting regional development and collaboration. Regional development financing will be allocated to regional councils for quick and flexible use (former regional development funds).

Regional councils (18) - together with the Centres for Economic Development, Transport and the Environment - will maintain their role as the intermediaries for EU Structural Funds and other EU programmes in the funding decisions based on programme funding.

Various forms of EU funding will be used as effectively as possible for regional development. The objective of EU cohesion policy is to safeguard the level of regional development financing, and to ensure the special status of the sparsely populated areas in Eastern and Northern Finland and the continuity of regional aid.

Action will be taken to ensure balanced regional distribution of various components  of vitality. Special attention will be paid to ensuring accessibility (functioning transport infrastructure and services, including data connections); distribution of higher education institutions, upper secondary education and R&D activities in various parts of the country; the availability of skilled labour; and land use planning and services to support business.

The results of the preparatory work conducted for the regional government, health and social services reform will be used as extensively as possible. Collaborative experiments between the state, regional councils, municipalities and private entities and organisations will be promoted on a voluntary basis, and new financing models for these will be explored.

Effective utilisation of modern technology will be promoted to enable flexible arrangements for living, working and doing business regardless of location. Government tasks should be organised in a way that enables multi-local living and full utilisation of the opportunities provided by smart technology to work in any location. A reform of legislation on regionalisation must be completed by the end of 2019 within the framework of the strategy to be devised.

Central and local government will focus strongly on the availability of skilled workers, labour migration and integration. Central government, together with municipalities willing to participate, will provide resources for a permanent action plan to attract international  talent.

A national urban strategy will be prepared to respond to the opportunities and challenges of urbanisation, taking into account the broad-based objectives of the UN New Urban Agenda.

Steps will be taken to strengthen the ability of the metropolitan area, comprised of the Greater Helsinki region, to compete with other European metropolitan areas for skilled labour, businesses and cultural experiences that attract tourists.

The duration of the MAL agreements of the metropolitan areas and large cities will be extended to 12 years. The MAL agreements can also be expanded to cover new urban centres of more than 100,000 inhabitants. Details will be specified as part of the overall housing policy.

The Government will enable the development of special solutions required to ensure balanced development of the metropolitan area.

Separate programmes/agreements will be drafted with university towns regarding the strategic allocation of public and private RDI funding to strengthen the globally competitive ecosystems.

Measures will be taken to bolster growth around regional cities and towns. These include promoting joint strategic land use planning for multiple municipalities and strengthening the well-functioning public transport services and flexible services for the local residents.

Development work will be based on agreements and will focus on priorities arising from the collaboration between cities and regions and from the needs identified. The objective will be to promote positive structural change (in the economy, employment and investment).

Development of higher education in each county will be safeguarded. This will drive regional specialisation and linkage with global ecosystems. Furthermore, an extensive network of upper secondary education and training must be in place to ensure the availability of skilled labour in all parts of the country.

A programme will be prepared for regional cities, and action will be taken to help regional cities prepare joint development strategies and build networks.

It is acknowledged that the vitality of an entire regional city can often be crucially dependent on individual decisions. The social impacts of such decisions on the region and its flagship companies will be studied and taken into account.

An impact assessment will be carried out on the proposal of the parliamentary working group on sparsely populated areas, and an action plan including experiments to boost vitality and wellbeing will be drafted for areas with a declining population.

Feasible cross-sectoral methods for supporting multi-local living will be explored, and initiatives for legislative reform and new practices to that end will be made.

Opportunities will be taken for the sustainable use of natural resources and tourism and adventure services to open new avenues of development.

Rights to basic public services of people living in sparsely populated areas and in the archipelago will be safeguarded by supporting regional collaboration, by introducing new practices and by guaranteeing sufficient resources (availability of services, social safety, transport).

The continuity of funding under the EU Leader programme will be secured.

Solutions will be sought to personal hardships associated with the dilapidating and devaluing

housing stock. The conditions on which state-guaranteed renovation loans could be granted to housing companies that are located in, for instance, areas of population loss and that are not likely to be granted bank loans for renovation work will be explored.

The position of municipalities

Based on the most recent data, a comprehensive assessment of the current situation in municipalities will be prepared in autumn 2019.

The services to be provided by municipalities will be sustainably financed with municipal tax revenue and with fair and sufficient central government support.

The temporary cuts in central government transfers to municipalities will be discontinued in 2020.

The system of central government transfers to municipalities will be revised as necessary to make it more adaptable to the needs and special characteristics of different regions.

Any measures that will result in an increase or decrease in the number of tasks or obligations for municipalities, and any changes in the tax basis that will affect local government finances will be compensated in net terms with a 100 per cent modification of the central government transfers and/or the corresponding fixed appropriation, or by removing other tasks or obligations.

Municipal collaboration to boost vitality and to organise services will be supported.

Financial obstacles will be removed to encourage municipalities to engage in voluntary structural  reorganisation.

Provisions of the Local Government Act on competition neutrality in municipal economic and industrial policy will be examined to ensure reasonable treatment from the municipalities’ perspective.

Objective 3

Finland will be known as a front runner in technological advances, innovative procurement and the culture of experimentation

Finland will be recognised as a front runner that develops and introduces new solutions enabled by digitalisation and technological advances, doing so across administrative and sectoral boundaries.

Public procurement can help in making technological advances, and can also serve more broadly to drive sustainable development, innovation and life-cycle thinking.

Finland will modify its legislative environment and administration to facilitate advances in digitalisation, sustainable development and a large-scale culture of experimentation.

Measures

Steps will be taken to ensure the proper functioning of competition and consumer policy in order to boost growth and the wellbeing of citizens, and to create a more competitive domestic market

Competition and consumer authorities will be given more powers and resources, and the sanctions available to them will be increased.

Non-governmental organisations will be provided more funding in order to improve the availability of unbiased and independent consumer information.

Opportunities to increase competition in sectors with inadequate competition will be explored.

More extensive obligations will be introduced in legislation for producers of goods and packaging to provide information to consumers regarding the environmental impact of the goods and packaging they sell.

The possibilities for restricting aggressive and inappropriate direct marketing will be examined. To better protect consumers, the Government will introduce new restrictions and other provisions concerning telephone and door-to-door sales.

The technology and digitalisation capabilities of the public sector will be improved, and cooperation between the public and the private sector will be enhanced

A programme will be put together for promoting digitalisation, and a requirement put in place for public services to be available digitally to individuals and businesses by 2023.

A joint high-level advisory board, including a secretariat, will be appointed for the public and private sector to act as an advisory body in technology.

A strategy and an action plan will be prepared for opening up and utilising public sector data, taking into account the impact of data protection regulations and any legislative needs. The aim will be that public sector organisations will open interfaces unless there is a special reason for not doing so.

Data sharing between companies and entrepreneurs within ecosystems will be promoted. The use of e-invoices and receipts will be widely adopted to drive the real-time economy.

Licence and permit systems will be developed to build a one-stop-shop for digital licences and permits.

Secure and ethically sustainable development of the AuroraAI network will be continued, as permitted by the overall spending limits, in order to make everyday life and business easier.

The development of effective identification solutions enabling the use of various devices will be promoted.

The scope for individuals to manage personal information on themselves held in public services will be secured in accordance with the MyData principles.

Digital systems will be developed together with partner countries such as the other Nordic countries and Estonia.

Measures will be taken to improve the accessibility of electronic public services and to ensure sufficient support services. This will allow us to ensure the equal treatment of all citizens.

In carrying out large-scale digitalisation projects, it must be ensured that the language rights are fulfilled in practice.

The overall effectiveness of the laws on privacy protection, data protection and public access to information, within the framework of the General Data Protection Regulation, will be ensured.

Action will be taken to increase innovative procurement and thereby to improve services, generate growth and enable the creation of a reference market

Innovative procurement will account for 10 per cent of all public procurement by the end of the parliamentary term. The fulfilment of this objective will be monitored annually.

The Government’s joint objectives and concrete policies will be agreed on, and ministries will increase their cooperation at the practical level.

Public procurement will be used as a means to drive the achievement of social, climate and sustainability targets.

Training and best practices will be used to build up skills in contracting entities.

Opportunities for spreading the risk involved in innovative procurement by measures such as setting up risk funds will be explored.

Any defects in the Act on Public Procurement and Concession Contracts will be corrected

The need to amend the existing Act on Public Procurement and Concession Contracts will be assessed in connection with the reform of healthcare and social welfare.

To increase the efficiency of public procurement, the Government will take action to have more emphasis placed on quality criteria in public tenders. The Act on Public Procurement and Concession Contracts will be modified to encourage contracting entities to consider the price-quality ratio and the overall cost as the primary criteria for the most economically advantageous solution, and to use the procurement price as the sole criterion in limited cases only.

Responsibility aspects of procurements will be emphasised. To promote this objective, the need to expand the exclusion criteria for environmental, social and labour law violations in the Act on Public Procurement and Concession Contracts, and the means for emphasising corporate and tax responsibility will be assessed. Based on this assessment, decisions on any necessary modifications will be made.

Bilingual procurement will be promoted, and any legislative problems will be addressed.

Finland will become a leader in social responsibility

A report will be prepared with the objective of enacting a corporate social responsibility act based on a duty of care imposed on companies regarding their operations in Finland and abroad. This report will be prepared together with confederations and organisations for industries, entrepreneurs and employees, paying special attention to the position of small and medium-sized enterprises. Similar goals will be promoted in the EU.

Measures will be taken to introduce a system of stricter control of quality and responsibility in health and social services.

All administrative branches will be encouraged to foster a cross-sectoral culture of experimentation

Legislative means will be used to support the sharing economy, taking into account the rights of employees and the rules of fair competition in companies.

The recommendations of the parliamentary advisory board for promoting new approaches will be implemented to bolster piloting and experimenting.

Experiments and test platforms will be consistently promoted in collaboration with municipalities.

Legislation will be developed by gradually expanding the One for One principle. Instead of quantity, emphasis should be placed on making sure the legislation is suitable for the purpose.