Business and economy - yhteiskuntaorientaatio.fi
The service sector has grown significantly since the 1950s
Before the Second World War, most of the working population in Finland worked in agriculture. Since the 1950s, the number of people who receive their livelihood from agriculture has rapidly decreased. People shifted to industry and the service sector.
The number of people working in the service sector has grown significantly. The service sector contains many different fields. The industry includes such job titles as waiters, bus drivers, schoolteachers, violinists, software designers and management consultants.
Changes in industrial structure began in Finland later than in some other European countries, but the change has been quick. The number of people working in health and social services grew as the Finnish state began to develop its public services. Though the growth of the service sector has been especially significant, the manufacturing industry has also developed rapidly in Finland. The largest traditional industries are the forest industry, the wood industry, the paper industry, the metal industry and the mechanical industry.
Currently in Finland, under 3% of all employees work in agriculture and forestry, around 75% work in the service sector, and 21% work in the manufacturing industry sector. These numbers vary slightly depending on the region in Finland, but the service sector is clearly the largest employer in the whole country.
Exports and foreign trade are important for Finland’s economy
Finland is highly dependent on exports and trade with other countries. Exports mean that Finnish companies sell goods and services to other countries. Finnish companies pay their taxes to Finland and pay salaries to their employees. This brings money to Finland. Importing means goods and services are brought from other countries into Finland. This means that Finnish companies and people pay for goods and services to companies operating in other countries.
The most important exports for Finland are products from the technology sector, such as electronics and electricity industry products, as well as machinery and metal industry products. Other important exports include products from the chemical industry and the forest industry.
The information and communications technology field (ICT) is also important for Finland. Finland used to produce a lot of mobile phones. Now the ICT field employs people in the server market, gaming industry, and software development.
Over half of Finland’s exports are delivered to other European countries. The most important exports partners of Finland are the United States, Sweden, Germany, China and the Netherlands. Russia used to be an important country for Finnish exports.
Finland is an open market economy where the state is involved in some fields
The Finnish economic system is based on open market economy. This means that Finland trades with other countries and exports are an important part of the Finnish economy. In a market economy, the prices of goods and services are determined in the free market according to supply and demand. Anyone can become an entrepreneur and start a company. Private companies produce goods and services and trade on the markets’ terms.
Finland, as almost all other countries, has a mixed economy. Though the economy is based on the free supply and demand of goods and services, the government regulates the activities of the markets and also owns some companies. The Finnish state is either the sole or majority owner of the postal service Posti, the rail company VR and the airline company Finnair. The state has a monopoly on the sales of strong alcoholic drinks, managed by Alko.
The private sector generates profits and tax revenue, the public sector uses taxes to increase wellbeing
When we talk about the economy and jobs, we often talk about the private sector and the public sector. The private sector mainly means the corporate activities owned by private persons or groups. The private sector includes all companies, both small companies and large transnational companies. The purpose of companies is to accrue profits for their owners. Companies listen to what paying customers want and need and serve their clients these goods and services. Companies pay state taxes. Taxes fund services in the public sector.
The public sector means the state, municipalities and wellbeing services counties. They provide services which promote the wellbeing of people. The public sector’s purpose is not tied to profits. The public sector is a large employer in Finland. People who work for the state, municipality or wellbeing services county may work in public hospitals, day care centres, schools and social services, as well as in the police, tax administration and defence forces.
The third and fourth sectors do not seek profits
In addition to the public and private sectors, there is also the third sector. The third sector means organisations and associations, such as sporting clubs, nature conservationist groups and political organisations. Most organisations want to improve the conditions of people and society on a social or societal level. Some third sector employees are paid a salary for their work, but a lot of the work is done by volunteers. Associations are not meant to generate profit.
Recently there has also been talk about the fourth sector. This means free-form and dispersed civil society. The civil action of the fourth sector has increased its significance alongside more traditional association activities. The fourth sector includes, for example, urban agriculture groups and recycling groups which often organise their activities through social media.