Technology Industry / Finnish Economic Outlook December 2020
Jukka Palokangas Principal Economist [email protected]
12/28/2020 Technology Industries 1 of Finland The Finnish Technology Industry Is Comprised of Five Sub-Sectors
ELEKTRONICS AND ELECTROTECHNICAL METALS INDUSTRY MECHANICAL ENGINEERING INDUSTRY Boliden, Componenta, Kuusakoski, Abloy, Cargotec, Finn-Power, Fiskars, ABB, Ensto, Microsoft Mobile, Luvata, Outokumpu, Outotec, Glaston, Kone, Konecranes, Metso, Murata Electronics, Nokia, Planmeca, Ovako, Sacotec, SSAB … Meyer Turku, Normet, Oras, Patria, Polar Electro, Suunto, Vacon, Vaisala… Pemamek, Ponsse, Stala, Valmet, Valtra, Wärtsilä…
INFORMATION TECHNOLOGY CONSULTING ENGINEERING Affecto, Basware, Bilot, CGI, Comptel, A-Insinöörit, Citec, Elomatic, Etteplan, FCG, Digia, Efecte, Enfo, F-Secure, Fujitsu Granlund, Neste Jacobs, Pöyry, Ramboll, Finland, IBM, Innofactor, Knowit, Rejlers, SITO, SWECO, WSP… Microsoft, Nixu, Tieto…
12/28/2020 Technology Industries 2 of Finland The Finnish Technology Industry Is Comprised of Five Sub-Sectors
ELEKTRONICS AND ELECTROTECHNICAL METALS INDUSTRY MECHANICAL ENGINEERING INDUSTRY • Steel products, non-ferrous metals, • Machinery, metal products, vehicles • Data communications equipment, electrical castings, metallic minerals • Turnover (2019): 32.8 billion euros machinery, medical technology • Turnover (2019): 10.7 billion euros • Personnel (2019): 134,200 • Turnover (2019): 18.0 billion euros • Personnel (2019): 15,800 • Personnel (2019): 38,700
INFORMATION TECHNOLOGY CONSULTING ENGINEERING • IT services, applications and • Expertise for construction industry and programming infrastructure • Turnover (2019): 14.8 billion euros • Turnover (2019): 6.6 billion euros • Personnel (2019): 74,100 • Personnel (2019): 56,200
12/28/2020 Technology Industries 3 of Finland The Technology Industry – the Largest Export Sector in Finland
• Some 50 % of total exports. • Some 310,000 employed directly in the sector, including indirect effects 650,000 people. • Effect on value added totaling € 57 billion, or 28% of GDP value added. • Bring to Finland € 18 billion tax revenue annually. • Investments about EUR 5.0 billion annually in Finland. • 70 % of private-sector R&D investment.
12/28/2020 Technology Industries 4 of Finland Value Added to the Economy Generated by the Technology Industry Is EUR 55 Billion, or over 28% of GDP * (2017) A total of EUR 54.5 billion
10,1; 18 % Impact on technology industry (direct influence) Impact on other industries 28,8; 53 % (indirect influence) 15,6; 29 % Impact on private consumption (income effect)
28.12.2020 Teknologiateollisuus *) GDP value added was EUR 193.3 billion in 2017. 5 Source: Economic Impact of the Technology Industry in Finland 11/2018 Technology Industry Generates nearly 650,000 Jobs in Finland (over 25% of All Employees) (2017) A total of 644 900 employees
10 jobs in the technology industry bring 11 jobs to the rest of the economy 114 600; 18 % Impact on technology industry (direct influence) 304 600; 47 % Impact on other industries (indirect influence)
225 800; 35 % Impact on private consumption (income effect)
28.12.2020 Teknologiateollisuus Source: Economic Impact of the Technology Industry in Finland 11/2018 6 Every Job in the Technology Industry Generates almost another Job in the Services (2017) Impact on other industries and on private consumption: 340,300 employees
33 100; 10 %
12 200; 3 %
Services* Primary production Processing* 295 100; 87 %
28.12.2020 Teknologiateollisuus *) Excl. the services industries in the technology industry. 7 Source: Economic Impact of the Technology Industry in Finland 11/2018 Technology Industry Generates over 18 Billion Euros in Tax Revenue Annually in Finland (2017) A total of EUR 18.2 billion
4,7; 26 % Impact on technology industry (direct influence) Impact on other industries 9,2; 50 % (indirect influence) Impact on private consumption 4,3; 24 % (income effect)
28.12.2020 Teknologiateollisuus Source: Economic Impact of the Technology Industry in Finland 11/2018 8 Turnover of the Technology Industry in Finland
12/28/2020 Technology Industries Source: Macrobond, Statistics Finland, Technology Industries of Finland 9 of Finland Export of Technology Industry Goods from Finland by Area in 2019 Total goods exports 32.5 billion euros*
Central and Eastern Europe Western Europe 5.94 billion € North America 18.23 billion € 17.4 % 3.15 billion € 53.3 % 9.2 % Asia 4.93 billion € Middle and 14.4 % Central East 0.51 billion € 1.5 %
South and Africa Middle America 0.45 billion € 0.99 billion € 1.3 % 2.9 %
12/28/2020 Technology Industries *) In addition to goods exports the sector exported services worth some 14-15 billion euros. 10 of Finland Source: National Board of Customs, Statistics Finland Technology, Forest and Chemical Industries Provide 81 % of Finland's Goods and Services Exports Revenue Goods and service exports: billion euros and the share of Finnish exports in 2017
Other branches; 16,1; 19 %
Chemical industry; Technology industry; 13; 15 % 43,6; 51 %
Forest industry; 12,9; 15 %
12/28/2020 Technology Industries *) Service exports industry-specific data for the year 2017 are preliminary information. 11 of Finland Source: Board of Customs, Statistics Finland (National Accounts, Foreign trade in services), Federation of Finnish Technology Industries Turnover of the Industry and Technology Industry in Finland
12/28/2020 Technology Industries Source: Macrobond, Statistics Finland 12 of Finland Turnover of the Technology Industry in Finland
12/28/2020 Technology Industries Source: Macrobond, Statistics Finland 13 of Finland Value of New Orders in the Technology Industry* in Finland 12 000 Million euros, at current prices 11 000 10 000 9 000 8 000 Combined 7 000 6 000 5 000 Export 4 000 3 000 Domestic 2 000 1 000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: III/2020 / III,2019 III,2020 / II,2020 *) Excl. metals Export: -8 % +13 % industry, game industry and data Domestic: -24 % -4 % center companies Combined: -12 % +8 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 14 of Finland companies, latest observation July-September 2020. Value of Order Books in the Technology Industry* in Finland 30 000 28 000 Million euros, at current prices Combined 26 000 24 000 22 000 20 000 18 000 Export 16 000 14 000 12 000 10 000 8 000 Domestic 6 000 4 000 2 000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: 30.9.2020 / 30.9.2019 30.9.2020 / 30.6.2020 *) Excl. metals Export: -4 % -1 % industry, game industry and data Domestic: -3 % -1 % center companies Combined: -4 % -1 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 15 of Finland companies, latest observation 30th September 2020. Tender Requests* Received by the Technology Industry Companies in Finland
40
30
20 Balance figure 10
0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 -10
-20
-30
-40
-50
-60 *) ”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.”
12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, the last questionnaire in 16 of Finland October 2020. Value of New Orders in the Electronics and Electrotechnical Industry in Finland 7 500 7 000 Million euros, at current prices 6 500 6 000 5 500 Combined 5 000 4 500 4 000 3 500 Export 3 000 2 500 2 000 1 500 Domestic 1 000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: III,2020 / III,2019 III,2020 / II,2020 Export: -5 % +6 % Domestic: -4 % -10 % Combined: -5 % +3 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 17 of Finland companies, latest observation July-September 2020. Value of Order Books in the Electronics and Electrotechnical Industry in Finland 8 500 Million euros, at current prices 8 000 7 500 7 000 6 500 6 000 Combined 5 500 5 000 Export 4 500 4 000 3 500 3 000 2 500 Domestic 2 000 1 500 1 000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: 30.9.2020 / 30.9.2019 30.9.2020 / 30.6.2020 Export: -4 % +3 % Domestic: -2 % -8 % Combined: -4 % +1 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 18 of Finland companies, latest observation 30th September 2020. Value of New Orders in the Mechanical Engineering in Finland 7 000 Million euros, at current prices 6 500 6 000 5 500 5 000 Combined 4 500 4 000 3 500 Export 3 000 2 500 2 000 Domestic 1 500 1 000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: III,2020 / III,2019 III,2020 / II,2020 Export: -12 % +27 % Domestic: -44 % +10 % Combined: -21 % +23 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 19 of Finland companies, latest observation July-September 2020. Value of Order Books in the Mechanical Engineering in Finland 22 000 Million euros, at current prices 20 000 Combined 18 000 16 000 14 000 Export 12 000 10 000 8 000 Domestic 6 000 4 000 2 000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: 30.9.2020 / 30.9.2019 30.9.2020 / 30.6.2020 Export: -4 % -2 % Domestic: -8 % -2 % Combined: -5 % -2 %
12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 20 of Finland companies, latest observation 30th September 2020. Value of New Orders in the Consulting Engineering in Finland 300 280 Million euros, at current prices 260 240 220 Combined 200 180 160 140 Export 120 100 80 Domestic 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: III,2020 / III,2019 III,2020 / II,2020 Export: -30 % +10 % Domestic: +5 % -22 % Combined: -2 % -19 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 21 of Finland companies, latest observation July-September 2020. Value of Order Books in the Consulting Engineering in Finland 800 750 Million euros, at current prices Combined 700 650 600 550 500 Export 450 400 350 Domestic 300 250 200 150 100 50 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: 30.9.2020 / 30.9.2019 30.9.2020 / 30.6.2020 Export: -3 % -8 % Domestic: +12 % -1 % Combined: +10 % -2 % 12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 22 of Finland companies, latest observation 30th September 2020. Value of New Orders in the Information Technology* in Finland 800 Million euros, at current prices 700
600
500
400
300
200
100
0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: III,2020 / III,2019 III,2020 / II,2020 Combined: -1 % -14 % *) Excl. game industry and data center companies
12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 23 of Finland companies, latest observation July-September 2020. Value of Order Books in the Information Technology* in Finland 2 200 Million euros, at current prices 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Change: 30.9.2020 / 30.9.2019 30.9.2020 / 30.6.2020 Combined: +2 % +2 %
*) Excl. game industry and data center companies
12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 24 of Finland companies, latest observation 30th September 2020. Technology Industry Personnel
Almost 40,000 employees affected by temporary lay- offs 30th September 2020
30th Sep
12/28/2020 Technology Industries of Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond 25 Finland Technology Industry Personnel Recruitment in Finland by Quarters
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
-2 000
-4 000 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3
Change in the number of personnel compared to the previous quarter Number of people recruited during the quarter
12/28/2020 Technology Industries Source: The Federation of Finnish Technology Industries’ labour force survey 26 of Finland Technology Industry Personnel in Finland by Industry
30th Sep
12/28/2020 Technology Industries of Source: Statistics Finland, The Federation of Finnish Technology Industries’ labour force survey, Macrobond 27 Finland Technology Industry Personnel in Subsidiaries Abroad by Industry
12/28/2020 Technology Industries of Source: The Federation of Finnish Technology Industries’ labour force survey, Macrobond 28 Finland Technology Industry Personnel in Subsidiaries Abroad by Country Information from year 2019
China, 45 832, 15 %
Other countries, 81 921, 27 %
India, 29 658, 10 %
Canada, 5 171, 2 % USA, 28 391, 10 % Brazil, 6 490, 2 % Italy, 6 780, 2 % Russia, 7 096, 2 %
UK, 8 204, 3 % Germany, 19 701, 7 % France, 11 313, 4 % Sweden, 14 192, 5 % Poland, 18 522, 6 % Mexico, 14 365, 5 %
12/28/2020 Technology Industries of Finland Source: The Federation of Finnish Technology Industries’ labour force survey 29 Retirement of Technology Industry Personnel in Finland
8000 Individuals per year 7000
6000
5000 Salaried employees
4000
3000
2000 Blue collar employees 1000
0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
12/28/2020 Technology Industries Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics Finland 30 of Finland Retirement of Technology Industry Blue Collar Employees in Finland
3500 Individuals per year Number of individuals retired Number of individuals retiring 3000 (estimation)
2500
2000
1500
1000
500
0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Mechanical engineering Metals industry Electronics and electrotechnical industry
12/28/2020 Technology Industries Source: Wage inquiry of the Techonology Industries of Finland, Finnish Centre for Pensions, Statistics Finland 31 of Finland Overview of the Situation in the Technology Industry and Outlook for the Rest of the Year 2020 - Turnover in Finland totalled some EUR 83 billion in 2019. The turnover was up 6% year-on- year. In January-September the turnover was slightly higher than last year at the same period. - The monetary value of new orders reported between July-September 2020 was 8% higher than in the preceding quarter, but 12% lower than in the corresponding period in 2019. - At the end of September, the value of order books was mildly lower as at the end of June, but 4% lower than in September 2019. - The turnover of the technology industry decline in Finland has stopped in late summer, but will be smaller towards the end of the year than at the same time a year ago. - At the end of September, the number of employees in Finland was 1.1 per cent lower than last year's average. At the end of September, there were 309,400 employees, which is about 3,500 less than last year. Of the employees, almost 40,000 were covered by lay-off arrangements at the end of September. - Recruitment of new staff has decreased during the corona pandemic. In July-September, there were a total of 5,500.
12/28/2020 Technology Industries of Finland 32 World Economic Outlook - Finland as a Part of Global Economy
12/28/2020 Technology Industries of Finland 33 The Darkest GDP Projections for 2020 Have Been Somewhat Eased
4 GDP consensus forecasts for 2020, % 3 2 1 0 Eastern Europe -1 Finland -2 Sweden -3 -4 Russia -5 France -6 Germany -7 Italy -8 -9 -10 -11
Forecast period
12/28/2020 Technology Industries Source: Consensus Economics 34 of Finland In the Euro Area Countries, GDP Contracted more Sharply in April-June than in Finland
12/28/2020 Technology Industries Lähde: Macrobond 35 of Finland Finland Is Clearly Behind in the Growth of Exports Relative to the Euro Countries
12/28/2020 Technology Industries Source: Macrobond, Eurostat 36 of Finland Exports and Private Consumption Turned Finland’s Economic Growth Negative in January-June
12/28/2020 Technology Industries Source: Macrobond, Statistics Finland 37 of Finland Corona Crisis Collapsed GDP in All Countries
12/28/2020 Technology Industries Souce: Macrobond 38 of Finland In China, the Economy Contracted Sharply in January-March 2020, but Recovered in April-June
12/28/2020 Technology Industries Lähde: Macrobond 39 of Finland Purchasing Manager Indices for the Entire Business Sector in Finland’s Most Important Export Countries
12/28/2020 Technology Industries Source: Macrobond. Markit 40 of Finland In Finland, Industrial Production Has Withstood Better than in Competing Countries
12/28/2020 Technology Industries Source: Macrobond 41 of Finland In Finland, Industrial Production Has Withstood Better than in Most Other EU Countries
12/28/2020 Technology Industries Source: Macrobond 42 of Finland Industrial Production Is Already Recovering in China and Globally
12/28/2020 Technology Industries Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis 43 of Finland Industrial Purchasing Managers' Indices Report a Return to Growth in Many Countries
28.12.2020 Teknologiateollisuus Lähde: Macrobond, Markit 44 Industrial Production Grew in October in All Major Developing Countries, Except in Russia
28.12.2020 Teknologiateollisuus Lähde: Macrobond, Markit 45 Exchange Rates (when the Curve Rises, the Value of the Euro Strengthens Against the Other Currency)
12/28/2020 Technology Industries Source: Macrobond 46 of Finland Corona Pandemic Affected World Trade by Force Goods export volume
12/28/2020 Technology Industries Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis 47 of Finland Chinese Imports Declined in the Spring but Rebounded During the Summer and Autumn
12/28/2020 Technology Industries Source: Macrobond 48 of Finland EU Exports to Russia Are Stagnating
12/28/2020 Technology Industries Source: Macrobond 49 of Finland Russia’s* Share of the Technology Industry's Finnish Exports Has Fallen to about 5 Percent
42 40 38 % 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2
0
1983 1999 2015 1975 1976 1977 1978 1979 1980 1981 1982 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2016 2017 2018 2019 2020(1-9)
12/28/2020 Technology Industries *) Soviet Union up to 1991 50 of Finland Source: Finnish Customs The Global Economy Is Forecast to Shrink by 4.4% in 2020, but to Grow by 5.2% in 2021 GDP growth 2020/2019, %
3 Lat.
China East ot
2 of Africa
1 Rest of
Brazil
Russia America
Japan India Rest Rest
North America Europe Asia
Middle and 0 Mexico -1 -2 -3 -4 -5 -6 -7 Kasvu keskimäärin: -8 -4,4 % -9 -10 -11 0 10 20 30 40 50 60 70 80 90 100 The width of the bar indicates the share of global GDP in 2019 (adjusted for purchasing power parity), % 12/28/2020 Technology Industries Source: IMF (June 2020) 51 of Finland In the Export Market of the Technology Industry, Demand Will Decrease by 6.5% in 2020 GDP growth 2020/2019, % 3
China India of of 2 Am. of Lat.
Rest Mexico
1 Of
Russia
Rest Europe
Africa East and East North America Western Europe Middle Japan Rest 0 Asia Brazil -1 -2 -3 -4 -5 -6 -7 -8 Kasvu keskimäärin: -9 -6,5 % -10 -11 0 10 20 30 40 50 60 70 80 90 100 The width of the bar indicates the export share of technology industry from Finland in 2019, % 12/28/2020 Technology Industries Source: IMF (June 2020) 52 of Finland Finland’s Economic Growth Relies on Exports and Investments
12/28/2020 Technology Industries 53 of Finland Finland’s Exports Lagged behind Its Competitors Even before the Corona Crisis
12/28/2020 Technology Industries Source: Macrobond, Eurostat 54 of Finland Central and Local Government Debt Was Already High Before the Corona Crisis
12/28/2020 Technology Industries Source: Macrobond, Eurostat 55 of Finland Unlike the Competitor Countries, in Finland Business Investment Is Still Below the Level in 2008
175 170 Corporate investments, at fixed prices, index 2005=100 165 160 155 150 145 140 USA 135 Sweden 130 125 Switzerland 120 Belgium 115 110 Germany 105 Finland 100 95 90 85 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e 2021e
12/28/2020 Technology Industries Source: OECD, Economic Outlook (June 2020) 56 of Finland Investment Rate in the Technology Industry in Finland Fell after the Financial Crisis Tangible and intangible investments in Finland
6 000 20 Investments, million euros, Investment rate (investments / 18 at current prices value added), % 5 000 16 14 4 000 12 3 000 10 8 2 000 6 4 1 000 2 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e Tangible investments Intangible investments Investment rate, tangible Investment rate, intangible Investment rate, combined
28.12.2020 Teknologiateollisuus Source: Statistics Finland (National Accounts), Statistics Finland (Research and Development), EK Investment Survey (June 57 2020) Industrial Tangible and Intangible Investment* in Finland Have Not Yet Reached the 2007-2008 Levels
7 Billion euros, at fixed 2015 prices
6
5 Tangible investment 4
Intangible investment 3
2 Intangible investment (excl. electronics industry) 1
0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
12/28/2020 Technology Industries *) Including software investments. 58 of Finland Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2020 Total Industrial Investment in Finland Is Now at Around the Level of Capital Consumption
12 Billion euros, at fixed 2015 prices 11 10 9 8 7 Tangible and intangible investment* 6 5
4 Consumption of Fixed Capital 3 2 1 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
12/28/2020 Technology Industries *) Including software investments. 59 of Finland Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2020 Tangible Investments by Industry in Finland Are Now at the Level of the Consumption of Capital
5 Billion euros, at fixed 2015 prices
4
3 Tangible investment
2 Consumption of tangible capital 1
0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
12/28/2020 Technology Industries Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey June 2020 60 of Finland Industrial Production Capital in Finland Has Disappeared Significantly, Especially after 2008
55 Billion euros, at fixed 2015 prices 50 =6,4 bill. € 45
40 Cumulative consumption 35 of tangible capital 30 25 Cumulative tangible 20 investment 15
10
5
0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
12/28/2020 Technology Industries Information on consumption of tangible capital is at 2010 prices. 61 of Finland Source: Statistics Finland (National Accounts) Industrial Tangible Investment Growth in Finland Has Lagged behind that of Competitors
180 Billion euros, at fixed 2015 prices, index 2005=100 Hungary 170 160 Poland 150 Netherlands 140 130 Austria
120 Germany 110 Czech 100 Republic 90 Sweden 80 Belgium 70 60 Finland
12/28/2020 Technology Industries Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2020 62 of Finland Investment Rate in Industrial Tangible Investments Is at a Low Level in Finland
34 Tangible investments / value added, % Hungary 32 30 Poland 28 Netherlands 26 24 Austria 22 20 Germany 18 Czech 16 Republic 14 Sweden
12 Belgium 10 8 Finland 6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
12/28/2020 Technology Industries Source: Eurostat (National Accounts) 63 of Finland Industrial Intangible Investments * in Finland Have almost Halved since 2005
260 Hungary Billion euros, at fixed 2015 prices, 240 index 2005=100 Poland 220 Netherlands 200 Austria 180 Germany 160 Czech Republic 140 Sweden 120 Belgium 100 Finland, excl. 80 electronics industry Finland 60
40 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e
12/28/2020 Technology Industries *) Intangible investments include research and development and software investments etc. 64 of Finland Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2020 Investment Rate of Industrial Intangible Investments* Has Dropped Significantly in Finland
24 Hungary Intangible investments / value added, % 22 Poland 20 Netherlands 18 16 Austria
14 Germany 12 Czech Republic 10 Sweden 8 Belgium 6 4 Finland, excl. electronics industry 2 Finland 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
12/28/2020 Technology Industries *) Intangible investments include research and development and software investments. 65 of Finland Source: Eurostat (National Accounts) Investments and productivity* are Decisive for Finland’s Success
12/28/2020 Technology Industries of *) Productivity is measured as real value added per hours worked. When productivity grows 66 Finland (the curve rises) value added grows more than hours worked. Source: Statistics Finland Finland’s GDP Productivity Has Lagged Behind Other EU and Euro Countries GDP at fixed prices / hours worked
114 112 Index 2008=100 (the year before the collapse of Finnish industrial production capacity) 110 108 106 104 102 100 Euro countries 98 Sweden 96 Finland 94 Germany 92 90 88 86 84 82
12/28/2020 Technology Industries of Latest information April-June 2020. 67 Finland Source: Eurostat: Quarterly National Accounts In Industrial Productivity, Finland Is Still Behind the EU and Eurozone Average Industrial value added at fixed prices / hours worked 135 2008=100 (the year before the collapse of Finnish industrial production capacity) 130 125 120 115 110 105 Euro countries 100 Sweden 95 Finland 90 85 Germany 80 75 70 65 60
12/28/2020 Technology Industries of Latest information April-June 2020. 68 Finland Source: Eurostat: Quarterly National Accounts The Investment Rate of Companies in Finland Is Clearly Lower than the EU Average
30 Corporate fixed investment compared to value added, % (excl. financial sector)
28
26 Sweden Autsria 24 Belgium Denmark 22 Finland
20
18
12/28/2020 Technology Industries Lates information April-June 2020. 69 of Finland Source: Eurostat There Is Still Room for Improvement in Finland’s Cost Competitiveness Unit labour costs in the whole economy = labour costs / productivity, including the influence of effective exchange rates 114
112
110 Finland’s price and cost 108 competitiveness 2000=100 declines 106
104 2005=100 102 Finland’s price and cost 100 competitiveness improves 2008=100 98
96
94 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
12/28/2020 Technology Industries *) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 38 70 of Finland main trade partners, as well as the development of unit labour costs for the total economy. Latest information April-June 2020. Source: European Central Bank Member Companies of the Federation of Finnish Technology Industries
12/28/2020 Technology Industries 71 of Finland The Federation’s Member Companies 2019
Number of enterprises / 1,608 Number of personnel / 192,299 38 86 2.5% 24 5.7% 1.8%
59 435 31 % 72 755 38 %
1 449 27 555 90.1% 14 % 32 554 17 %
1–249 employees 500–999 employees 250–499 employees 1000– employees
12/28/2020 Technology Industries 72 of Finland The Federation’s SME Member Companies 2019
Number of enterprises / 1,449 Number of personnel / 72,755
5 140 209 7.1% 14.4% 482 15 832 33.3% 31 691 21.8% 43.5% 288 19.8%
20 092 483 27.6% 31.5%
1–19 employees 50–99 employees 20–49 employees 100–249 employees
12/28/2020 Technology Industries 73 of Finland Operating Profit in the Member Companies of Technology Industries of Finland in 2019 Operating profit-% = operating result / turnover * 100 (before taxes and financial income and expenses) 30 (Median: 4.6%) 25 20 15 Good (26%) 10 Satisfactory (23%) 5 Weak (29 %) 0 Unprofitable -5 (21 %) -10 -15 -20 -25 -30 Companies in random order 12/28/2020 Technology Industries Source: Statistics Finland 74 of Finland Net Profit in the Member Companies of Technology Industries of Finland in 2019 Net profit -% = net profit / turnover * 100 (after tax and financial income and expenses)
30 (Median: 3.9%) 25 20 15 Good (21%) 10 Satisfactory (21%) 5 Weak (34%) 0 -5 Unprofitable (24%) -10 -15 -20 -25 -30 Companies in random order 12/28/2020 Technology Industries Source: Statistics Finland 75 of Finland Return on Assets in the Member Companies of Technology Industries of Finland in 2019 Return on assets -% = (net income + financial expenses + taxes) / (capital invested in the financial year) * 100
30 (Median: 11.0%) 25 20 Good (42%) 15 Satisfactory (11%) 10 5 Mediocre (28%) 0 Weak (19%) -5 -10 -15 -20 -25 -30 Companies in random order 12/28/2020 Technology Industries Source: Statistics Finland 76 of Finland Equity Ratio in the Member Companies of Technology Industries of Finland in 2019 Equity ratio -% = (total equity + total appropriations accrued) / adjusted balance sheet * 100
100 95 (Median: 42.6%) 90 85 80 75 70 65 Good (53%) 60 55 50 45 40 35 30 Satisfactory (24%) 25 20 15 10 Weak (23%) 5 0 Companies in random order 12/28/2020 Technology Industries Source: Statistics Finland 77 of Finland