Technology Industry / Finnish Economic Outlook June 2021

Jukka Palokangas Principal Economist [email protected]

6/15/2021 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,, Fiskars, Glaston, Kone, ABB, Ensto, Murata Electronics, Nokia, Luvata, Outokumpu, Ovako, Sacotec, Konecranes, Metso-Outotec, Planmeca, Polar Electro, Suunto, Vacon, SSAB … Meyer Turku, Neles, Normet, Oras, Patria, Vaisala… Pemamek, Ponsse, Prima Power, Stala, Valmet, Valtra, Wärtsilä…

INFORMATION TECHNOLOGY CONSULTING ENGINEERING Basware, Bilot, CGI, Digia, Efecte, Enfo, F- AFRY, A-Insinöörit, Citec, Elomatic, Secure, Fujitsu Finland, IBM, Innofactor, Etteplan, FCG, Granlund, Neste Engineering Knowit, Microsoft, Nixu, TietoEVRY… Solution,, Ramboll, Rejlers, Sitowise, SWECO, WSP…

6/15/2021 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 (2020): 32.4 billion euros machinery, medical technology • Turnover (2020): 9.9 billion euros • Personnel (2020): 133,600 • Turnover (2020): 18.0 billion euros • Personnel (2020): 16,700 • Personnel (2020): 37,600

INFORMATION TECHNOLOGY CONSULTING ENGINEERING • IT services, applications and • Expertise for construction industry and programming infrastructure • Turnover (2020): 15.3 billion euros • Turnover (2020): 6.6 billion euros • Personnel (2020): 72,300 • Personnel (2020): 52,700

6/15/2021 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.

6/15/2021 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)

15.6.2021 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)

15.6.2021 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 %

15.6.2021 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)

15.6.2021 Teknologiateollisuus Source: Economic Impact of the Technology Industry in Finland 11/2018 8 Turnover of the Technology Industry in Finland

6/15/2021 Technology Industries Source: Macrobond, Statistics Finland, Technology Industries of Finland 9 of Finland Export of Technology Industry Goods from Finland by Area in 2020 Total goods exports 30.72 billion euros*

Central and Eastern Europe Western Europe 4.30 billion € North America 16.36 billion € 14.0 % 3.76 billion € 53.3 % 12.2 % Asia 4.21 billion € Middle and 13.7 % Central East 0.44 billion € 1.4 %

South and Africa Middle America 0.48 billion € 1.17 billion € 1.6 % 3.8 %

6/15/2021 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 %

6/15/2021 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

6/15/2021 Technology Industries Source: Macrobond, Statistics Finland 12 of Finland Turnover of the Technology Industry in Finland

6/15/2021 Technology Industries Source: Macrobond, Statistics Finland 13 of Finland Value of New Orders in the Technology Industry* in Finland 14 000 Million euros, at current prices 13 000 12 000 11 000 10 000 Combined 9 000 8 000 7 000 6 000 Export 5 000 4 000 3 000 Domestic 2 000 1 000 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: I/2021 / I,2021 I,2021 / IV,2020 *) Excl. metals Export: +6 % -31 % industry, game industry and data Domestic: +1 % -26 % center companies Combined: +5 % -29 % 6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 14 of Finland companies, latest observation January-March 2021. 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 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: 31.3.2021 / 31.3.2020 31.3.2021 / 31.12.2020 *) Excl. metals Export: +2 % -8 % industry, game industry and data Domestic: +15 % +10 % center companies Combined: +5 % -4 % 15.6.2021 Teknologiateollisuus Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 15 companies, latest observation 31th March 2021. Tender Requests* Received by the Technology Industry Companies in Finland

30 Balance figure 20

0 08 09 10 11 12 13 14 15 16 17 18 19 20 21 -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.”

6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent companies, the last questionnaire in 16 of Finland April 2021. 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 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: I,2021 / I,2020 I,2021 / IV,2020 Export: +5 % -48 % Domestic: +14 % +10 % Combined: +7 % -42 % 6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 17 of Finland companies, latest observation January-March 2021. Value of Order Books in the Electronics and Electrotechnical Industry in Finland 8 500 Million euros, at current prices 8 000 7 500 Combined 7 000 6 500 6 000 5 500 5 000 Export 4 500 4 000 3 500 3 000 2 500 Domestic 2 000 1 500 1 000 500 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: 31.3.2021 / 31.3.2020 31.3.2021 / 31.12.2020 Export: +8 % -38 % Domestic: +10 % +19 % Combined: +8 % -31 % 15.6.2021 Teknologiateollisuus Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 18 companies, latest observation 31th March 2021. Value of New Orders in the Mechanical Engineering 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 Domestic 1 500 1 000 500 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: I,2021 / I,2020 I,2021 / IV,2020 Export: +9 % -4 % Domestic: -5 % -46 % Combined: +5 % -19 % 6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 19 of Finland companies, latest observation January-March 2021. 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 Domestic 8 000 6 000 4 000 2 000 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: 31.3.2021 / 31.3.2020 31.3.2021 / 31.12.2020 Export: +1 % +5 % Domestic: +22 % +12 % Combined: +4 % +6 %

15.6.2021 Teknologiateollisuus Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 20 companies, latest observation 31th March 2021. Value of New Orders in the Consulting Engineering in Finland 340 320 Million euros, at current prices 300 280 260 240 Combined 220 200 180 160 Export 140 120 100 Domestic 80 60 40 20 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: I,2021 / I,2020 I,2021 / IV,2020 Export: -39 % +112 % Domestic: +6 % +6 % Combined: -5 % +14 % 6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 21 of Finland companies, latest observation January-March 2021. Value of Order Books in the Consulting Engineering in Finland 800 Million euros, at current prices Combined 700

600

500 Export

400 Domestic 300

200

100

0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: 31.3.2021 / 31.3.2020 31.3.2021 / 31.12.2020 Export: -41 % -14 % Domestic: +10 % +9 % Combined: +3 % +7 % 15.6.2021 Teknologiateollisuus Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 22 companies, latest observation 31th March 2021. Value of New Orders in the Information Technology* in Finland 700 Million euros, at current prices 600

500

400

300

200

100

0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: I,2021 / I,2020 I,2021 / IV,2020 Combined: -2 % -1 % *) Excl. game industry and data center companies

6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 23 of Finland companies, latest observation January-March 2021. Value of Order Books in the Information Technology* in Finland 2 000 Million euros, at current prices Combined 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21

Change: 31.3.2021 / 31.3.2020 31.3.2021 / 31.12.2020 Combined: +6 % +2 %

*) Pl. pelialan ohjelmistoyritykset ja datakeskukset

15.6.2021 Teknologiateollisuus Source: The Federation of Finnish Technology Industries’ order book survey’s respondent 24 companies, latest observation 31th March 2021. Technology Industry Personnel

10,000 employees affected by temporary lay-offs 31st March 2021

31st Mar

6/15/2021 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

Change in the number of personnel compared to the previous quarter Number of people recruited during the quarter

6/15/2021 Technology Industries Source: The Federation of Finnish Technology Industries’ labour force survey 26 of Finland Technology Industry Personnel in Finland by Industry

31st Mar

6/15/2021 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

6/15/2021 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 2020

China, 45 271, 16 %

Other countries, 80 530, 28 %

India, 28 660, 10 %

Italy, 6 120, 2 % USA, 25 500, 9 % Brazil, 6 628, 2 % Russia, 6 868, 2 % Norway, 6 954, 2 % Poland, 18 462, 6 % UK, 7 743, 3 % France, 10 725, 4 % Germany, 17 211, 6 % Mexico, 13 284, 5 %Sweden, 14 227, 5 %

6/15/2021 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

6/15/2021 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

6/15/2021 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 Summer 2021

- Turnover in Finland totalled some EUR 82 billion in 2020. Growth from the previous year was about one percent for the full year. - The monetary value of new orders reported between January-March 2021 was 29% lower than in the preceding quarter, but 5% higher than in the corresponding period in 2020. - At the end of March, the value of order books was 4% lower than at the end of December, but 5% higher than in March 2020. - The turnover of the technology industry in Finland is estimated to be higher in the summer 2021 than at the same time a year ago. - The number of employees in Finland at the end of March 2021 was slightly less than an average in 2020, but increased compared to December 2020. The number of employees was about 309,600, which is 1,400 less than an average in 2020. - Recruitment of new staff was on the rise again in January-March. There were a total of 9,500 recruitments, compared to just over 28,000 in 2020.

6/15/2021 Technology Industries of Finland 32 World Economic Outlook - Finland as a Part of Global Economy

6/15/2021 Technology Industries of Finland 33 In the Euro Area, the GDP Recovery Came to a Halt in Late 2020 and Early 2021

6/15/2021 Technology Industries Lähde: Macrobond 34 of Finland Finland Is Clearly Behind in the Growth of Exports Relative to the Euro Countries

6/15/2021 Technology Industries Source: Macrobond, Eurostat 35 of Finland Finnish GDP Has Decreased, Especially Due to Private Consumption and Construction

6/15/2021 Technology Industries Source: Macrobond, Statistics Finland 36 of Finland In Many Countries, GDP Growth Slowed after Autumn 2020

6/15/2021 Technology Industries Souce: Macrobond 37 of Finland In Developing Countries, Economic Recovery Has Continued

6/15/2021 Technology Industries Lähde: Macrobond 38 of Finland Purchasing Manager Indices for the Entire Business Sector in Finland’s Most Important Export Countries

6/15/2021 Technology Industries Source: Macrobond. Markit 39 of Finland The Recovery in Industrial Production Continues in Several Countries

6/15/2021 Technology Industries Source: Macrobond 40 of Finland The Recovery in Industrial Production Continues in Several Countries

6/15/2021 Technology Industries Source: Macrobond 41 of Finland Industrial Production Is Recovering Globally

6/15/2021 Technology Industries Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis 42 of Finland Industrial Purchasing Managers ’Indices in March Show Continued Growth in Most Countries

15.6.2021 Teknologiateollisuus Lähde: Macrobond, Markit 43 Industrial Production Grew in May in All Major Developing Countries

15.6.2021 Teknologiateollisuus Lähde: Macrobond, Markit 44 Exchange Rates (when the Curve Rises, the Value of the Euro Strengthens Against the Other Currency)

6/15/2021 Technology Industries Source: Macrobond 45 of Finland World Trade Has Recovered Goods export volume

6/15/2021 Technology Industries Source: Macrobond, The CPB Netherlands Bureau for Economic Policy Analysis 46 of Finland Chinese Imports Have Recovered Strongly

6/15/2021 Technology Industries Source: Macrobond 47 of Finland EU Exports to Russia Are Stagnating

6/15/2021 Technology Industries Source: Macrobond 48 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

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

6/15/2021 Technology Industries *) Soviet Union up to 1991 49 of Finland Source: Finnish Customs The Global Economy Is Forecast to Grow by 6 % in 2021, after Decreased by 3.3% in 2020 GDP growth 2021/2020, % 13 India 12 11 10 Growth an average:

+6,0 % Africa 9 China America 8

North America Latin

of of East and East

6 of Eastern

Western Europe Mexico

Rest of Asia Rest

Brazil

Europe Rest

Middle Russia 4 Japan 3 2 1 0 0 10 20 30 40 50 60 70 80 90 100 The width of the bar indicates the share of global GDP in 2020 (adjusted for purchasing power parity), % 6/15/2021 Technology Industries Source: IMF (April 2021) 50 of Finland In the Export Market of the Technology Industry, Demand Will Increase by 4.9 % in 2021 GDP growth 2021/2020, % 13 India 12 11

10 Africa America

9 Brazil Growth an average: China 8 Mexico

+4,9 % Latin North America and East

7 Rest of of of Eastern 6 of

Japan Middle

Western Europe Asia Rest Europe 5 Rest

4 Russia 3 2 1 0 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 2020, % 6/15/2021 Technology Industries Source: IMF (April 2021) 51 of Finland Finland’s Economic Growth Relies on Exports and Investments

6/15/2021 Technology Industries 52 of Finland Finland’s Exports Lagged behind Its Competitors Even before the Corona Crisis

6/15/2021 Technology Industries Source: Macrobond, Eurostat 53 of Finland Central and Local Government Debt Was Already High Before the Corona Crisis

6/15/2021 Technology Industries Source: Macrobond, Eurostat 54 of Finland Unlike the Competitor Countries, in Finland Business Investment Is Still Below the Level in 2008

170 165 Corporate investments, at fixed prices, index 2005=100 160 155 150 145 140 135 USA 130 Sweden 125 Switzerland 120 115 Belgium 110 Germany 105 100 Finland 95 90 85 80 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20e 21e 22e

6/15/2021 Technology Industries Source: OECD, Economic Outlook (December 2020) 55 of Finland Investment Rate in the Technology Industry in Finland Fell after the Financial Crisis Tangible and intangible investments in Finland

6 000 Investments, million euros, Investment rate (investments / 35 at current prices value added), % 5 000 30

25 4 000 20 3 000 15 2 000 10

1 000 5

0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e2021e Tangible investments Intangible investments Investment rate, tangible Investment rate, intangible Investment rate, combined

15.6.2021 Teknologiateollisuus Source: Eurostat (National Accounts), EK Investment Survey (January 2021) 56 *) Intangible investments include e.g. investment in research and development and computer software. Industrial Tangible and Intangible Investment* in Finland Have Not Yet Reached the 2007-2008 Levels

7 Billion euros, at fixed 2015 prices

5 Tangible investment

Intangible investment 3

2 Intangible investment (excl. electronics industry)

0 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20e 21e

6/15/2021 Technology Industries *) Including software investments. 57 of Finland Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey January 2021 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 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20e 21e

6/15/2021 Technology Industries *) Including software investments. 58 of Finland Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey January 2021 Tangible Investments by Industry in Finland Are Now at the Level of the Consumption of Capital

12 Billion euros, at fixed 2015 prices 11 10 9 8 7 Tangible investment 6 5 4 Consumption of tangible capital 3 2 1 0 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20e 21e

6/15/2021 Technology Industries Source: Statistics Finland (National Accounts), Confederation of Finnish Industries’ Investment Survey January 2021 59 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

0 05 06 07 08 09 10 11 12 13 4 15 16 17 18 19

6/15/2021 Technology Industries Information on consumption of tangible capital is at 2010 prices. 60 of Finland Source: Statistics Finland (National Accounts) Industrial Tangible Investment Growth in Finland Has Lagged behind that of Competitors

220 Billion euros, at fixed 2015 prices, index 2005=100 210 Hungary 200 Poland 190 180 Netherlands 170 160 Austria 150 140 Germany 130 Czech 120 Republic 110 Sweden 100 90 Belgium 80 Finland 70 60 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20e 21e

6/15/2021 Technology Industries Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2021 61 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 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

6/15/2021 Technology Industries Source: Eurostat (National Accounts) 62 of Finland Industrial Intangible Investments * in Finland Have almost Halved since 2005

300 Hungary 280 Billion euros, at fixed 2015 prices, index 2005=100 Poland 260 240 Netherlands 220 Austria

200 Germany 180 Czech Republic 160 Sweden 140 120 Belgium

100 Finland, excl. 80 electronics industry Finland 60 40 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20e 21e

6/15/2021 Technology Industries *) Intangible investments include research and development and software investments etc. 63 of Finland Source: Eurostat (National Accounts), Confederation of Finnish Industries’ investment survey, January 2021 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 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

6/15/2021 Technology Industries *) Intangible investments include research and development and software investments. 64 of Finland Source: Eurostat (National Accounts) Investments and productivity* are Decisive for Finland’s Success

6/15/2021 Technology Industries of *) Productivity is measured as real value added per hours worked. When productivity grows 65 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

6/15/2021 Technology Industries of Latest information October-December 2020. 66 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

6/15/2021 Technology Industries of Latest information October-December 2020. 67 Finland Source: Eurostat: Quarterly National Accounts The Investment Rate of Companies in Finland Is Clearly Lower than in the Main Competitor Countries

32 Corporate fixed investment compared to value added, % (excl. financial sector)

Sweden 26 Austria Belgium 24 Denmark Finland 22

6/15/2021 Technology Industries Lates information October-December 2020. 68 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 112

110

108 Finland’s price and cost competitiveness 2000=100 106 declines

104 2005=100 102 Finland’s price and cost 100 competitiveness improves 2008=100 98

94 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

6/15/2021 Technology Industries *) In the ECB Harmonised Competitiveness Index, the average effective exchange rate of each country is calculated vis-à-vis 38 69 of Finland main trade partners, as well as the development of unit labour costs for the total economy. Latest information October-December 2020. Source: European Central Bank Member Companies of the Federation of Finnish Technology Industries

6/15/2021 Technology Industries 70 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

6/15/2021 Technology Industries 71 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

6/15/2021 Technology Industries 72 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 6/15/2021 Technology Industries Source: Statistics Finland 73 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 6/15/2021 Technology Industries Source: Statistics Finland 74 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 6/15/2021 Technology Industries Source: Statistics Finland 75 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 6/15/2021 Technology Industries Source: Statistics Finland 76 of Finland