Director of Business and Economic Development,
City of Uusikaupunki, Finland
As is typical for small national economies, Finland also emphasises the importance of exporting goods and also services for our well-being. As far as industrial production in particular is concerned, it can be said that our domestic demand alone does not allow for any competitive domestic industrial production. All our production is based on exports. This is, of course, because only through exports will we reach a sufficiently large market and production volumes to enable competitive production efficiency and the development of new product innovations in Finland in general. This also applies, as a rule, to industrial companies that do not have their own exports. In the end, however, their production is also linked to how their customers succeed in exporting efforts.
The majority of the value of Finland’s total exports, just under 70%, consists of exports of goods and over 30% of services. Examining all sectors individually, industry generates an even greater share, around 80% of total exports, as industrial exports also increasingly include services due to, among other things, installation and maintenance services of products sold. As is often repeated, Finland lives off exports. And since industry plays a crucial role in our exports, it can be said that Finland’s well-being largely relies on the competitiveness of our industry.
Like many other Member States of the European Union, the most important export country for Finland is Germany, which accounted for almost 15% of our total exports in 2019. Sweden was next (10.4%) and the USA (7.4%) third. Germany has always been an important export country for Finland, but over the decades Germany has become increasingly important. Over the past fifty years, the real value of Finland’s German exports has increased more than fivefold. At the same time, Germany has emerged from the fourth most important exporting country into the most important one.
The Uusikaupunki region has traditionally had strong export-driven industries. In fact, the whole establishment of the city of Uusikaupunki is based on export trade. More than 400 years ago, the region had developed a very efficient production of containers in relation to that time. The quality and efficiency of production was so good that strong exports were also generated. However, since foreign trade was only allowed for cities, the king had to establish one. This is how the city of Uusikaupunki was founded.
From the point of view of industrial production and exports, the only car factory in Finland located in the area makes the Uusikaupunki area special. Measured by the number of personnel, it is also Finland’s largest industrial production facility and exceptionally significant for Finnish exports. In 2019, the value of passenger car exports was EUR 2.9 billion, which corresponds to 4.4% of the value of all Finnish exports. Consequently, this single factory is of considerable importance for all Finnish exports.
Similarly, given the population of the Uusikaupunki region, it can roughly be said that the value of our industry’s exports per capita is as much as eight times the national average. The figures are rough and partly indicative, but clearly indicate that the Uusikaupunki region is perhaps Finland’s most export-driven economic area in relative terms.
In the light of the statistics, the German market is dominating the industrial exports of Uusikaupunki. On the other hand, these figures are influenced by a kind of statistical illusion, which arises from the fact that all exports of passenger cars, excluding exports to Russia, are recorded as exports to Germany. Even though the customer of the car factory is German, the cars built in Uusikaupunki end up around the world.
However, this does not remove the fact that Germany is of particular importance to the economy of the Uusikaupunki region. A large German customer has made it possible to significantly increase the production of the car factory, which is also reflected in many ways in other business activities in the region. At the same time, a strong car industry has been built, and therefore the prerequisites for the development of a new industry cluster have been built. This would not only have local significance, but would be a nationally significant concentration of production and innovation.
Expert article 2841
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