Annika Forsander (ed.) Immigration and Economy in the Globalization Process The Case of Finland Sitra Reports series 20 2 Sitra Report series 20 Copyright: the authors and Sitra Graphic design: Leena Seppänen ISBN 951-563-415-6 (print) ISSN 1457-571X (print) ISBN 951-563-416-4 (URL: http://www.sitra.fi/) ISSN 1457-5728 (URL: http://www.sitra.fi/) The Sitra Reports series consists of research publications, reports and evaluation studies especially for the use of experts. To order copies of publications in the Sitra Reports series, please contact Sitra at tel. +358 9 618 991 or e-mail [email protected]. Tummavuoren Kirjapaino Oy Vantaa 2002 3 Contents Introduction: The migration of people and the flow of capital.................. 4 Annika Forsander and Marja-Liisa Trux 1 The two faces of globalization: migration and globalization of cultures ........................................................................................10 Maaria Ylänkö 2 From Hanseatic trade to hamburger chains – a historical survey.........48 Tuula Joronen and Mika Pajarinen and Pekka Ylä-Anttila 3 Finland in the world economy – the era of liberalization.......................66 Jyrki Ali-Yrkkö and Tuula Joronen and Pekka Ylä-Anttila 4 Glocalizing capital and labor – old structures, new challenges ............81 Annika Forsander 5 Immigrant entrepreneurship in Finland in the 1990s.............................119 Tuula Joronen 6 Diversity under the Northern Star ............................................................... 175 Marja-Liisa Trux Conclusion: Toward new immigration strategies? ..................................... 226 Annika Forsander and Marja-Liisa Trux Notes on the contributors .................................................................................. 235 4 Introduction: The migration of people and the flow of capital Annika Forsander & Marja-Liisa Trux ANNIKA FORSANDER & MARJA-LIISA TRUX 5 The world is shrinking. The rapid rate of economic globalization is diluting the diver- sity of local cultures and spreading an American-style business model, and a model of consumption that springs from the same origins. People all over the world are mix- ing and matching components according to their own interpretations, depending on their values and origins. There is an illusion of being the same, part of a common world, which will persist as long as the economy is in an upswing. English is the com- mon language, people use the same concepts, move about in the same global business circles, and cultural differences usually only emerge when collaboration presents se- rious challenges, or when the trust between employer and employee is broken. Sud- denly there is the realization that although people us the same concepts, they have understood them in entirely different ways, and that this may have been going on for years, in fact perhaps from the very start. We inhabit a world that each of us looks at through his or her own, highly culturally tinged spectacles. While a globalizing economy blends cultural influences, local cultures are assum- ing an important role in the general awareness. The post-Cold War world is charac- terized by politicized ethnicity in where demands of minorities and indigenous pop- ulations, separatist movements, and the new self-image of nation-states test the ten- ability of these states. On the flipside of the coin, ‘ethnicity’ and local color have been rediscovered as resources by the business economy. Paradoxically, the globalizing economy sorely needs local knowledge. Being successful requires being familiar with local markets and national consumption habits. The traditions and know-how of local cultures must be utilized. One must also be careful not to aggravate local minority issues or to cause misunderstandings between differently identified employees. In terms of immigration policy, Europe is in transition. The zero immigration era of recent decades is drawing to a close and European countries are once more recruiting new workforce. Many countries are opening up legal channels for finding employ- ment in Europe. One central question is where to find the skilled professionals to re- place those ageing employees who will soon retire. More and more countries are al- ready looking for qualified professionals to remain competitive. As the population ag- es, the issue will not only affect the IT industry’s top professionals – other sectors too will need employees with the right skills and motivation. Switching to an active im- migration policy would provide the preconditions for acquiring the needed expertise. In the labor market, immigration is increasingly seen as a solution instead of a prob- lem. Immigration policy should, however, incorporate elements that help integrate people into society, and take into account the needs of immigrants’ families. Previous experiences with recruiting immigrant workforce to Europe have taught us that not all immigrants go home once they have contributed their labor, settling instead with their families in the new country and gradually becoming permanent minorities. The Finnish National Fund for Research and Development (Sitra) launched a re- search project in 1999 to examine topics connected to migration and multicultural- ism from the vantage point of economic development. The project’s findings are com- piled in this book, which was previously published in an expanded Finnish-language edition. The aim of our book is to link together the separate discussions about migra- tion of people and the flow of capital. Behind the process of creating this book there 6 is a need to view migration and the globalization of economy as two sides of the same coin, and dismantle established ways of talking about the international movement of money solely in the language of economics, and of the migration of people as the cause and effect of social problems. Uncontrolled migration is one of the popular doomsday images attached to the cur- rent globalization, in addition to the increasing power of multinational corporations, growing inequality and environmental threats. Migration flows are an outcome of the world economy, but they do not represent – perhaps excluding the biggest refugee cri- ses – the kind of blindly moving tidal waves of people that are depicted in such dooms- day imagery. Only certain people migrate, and they always have a reason and a desti- nation. Their paths emulate economic, political and cultural ties between regions. Mi- gration flows reoccur and are closely connected to the needs of the economy. Figure 1 shows the parallels between the flow of capital and human migration in Finland by analyzing the development of the volume of foreign-born and foreign na- tionals and direct foreign investment in 1980-2000. Fluctuations in direct invest- ments’ share in the GNP reflect the immense changes that took place in the Finnish economy in the 1990s, partially as a result of opening up the economy to internation- al competition. The similar growth trends of immigration and foreign investment rep- resent different sides of a Finland’s integration into the global economy, especially since the 1990s. The movement of people and capital are concrete manifestations of the same globalization development. Figure 1. Foreign and foreign-born population and direct investments to Finland 1980-2000. Foreign and foreign-born population in thousands, and net capital flows as % of the GNP. Sources: The Research Institute of the Finnish Economy, The Bank of Finland, Statistics Finland. ANNIKA FORSANDER & MARJA-LIISA TRUX 7 Apart from the consequences of the flow of capital and people, this book is also about Finland and the rapid changes the country is experiencing. Finland is one of those peripheral nations of the European Union that in recent decades have trans- formed from countries of outward to inward migration. The larger European coun- tries, which have been receiving immigrants for much longer, have dominated the discourse on the terms and conditions of migration and multiculturalism. But new perspectives on these issues may be opening up on Europe’s outermost fringes. We believe that our context, Finland, will increase an understanding of the whole picture of European migration flows. During the last several decades, following a 70-year period of isolation, a relatively large number of people have immigrated to Finland. In just one decade, the number of foreign nationals has grown five-fold, even though they still only make up less than two percent of the total population. This change has reverberated powerfully in Finn- ish society because of the speed at which it has occurred, but partially also because Finnish national identity has been based on homogeneity, in spite of its established language minorities and ethnic minorities.1 The periphery thinking that is embedded in its national identity assumes, on the basis of historical experience, that there are many reasons to leave Finland, but there can be no sensible or acceptable reasons to move there. History can make us blind, though, as witnessed by the powerful informa- tion and media clusters that have emerged in the country. Since the second half of the 1980s, Finns have discussed immigration as a prob- lem. Main conversation topics have been refugees and the so-called remigrants from the former Soviet Union. The talk has focused on whether they should be received, and if so, how many people should be allowed to immigrate. Where they come from, and why, has elicited less interest. Immigrants have been viewed as social problems to be assimilated out of sight through means available to the welfare state. The ways in which migration is linked to the world economy and shifts in the world political situation have been ignored almost entirely. Yet, for example, the breakdown of the Soviet Union has had a central impact on migration flows to Finland. The area of the former super power forms a new region of origin as well as a route for those attempt- ing to get to Western Europe. Seen from Moscow, Finland is the closest western coun- try and a gateway to the rest of Europe. The article in this book by Maaria Ylänkö looks at how the discussion of immigra- tion has occurred in the realm of the socio-political sector.