Finland secured over 40 per cent of the 328 FDI projects initiated across the Nordics in 2016.
Finland was the most popular destination for foreign direct investment in the Nordics in 2016, according to the 2017 Nordic Attractiveness Report.
The country accounted for over 40 per cent of the 328 projects initiated by foreign direct investors across the Nordics, leading the region already for the fifth consecutive year with 133 projects – 27 per cent more than in the previous year.
Finland has recorded an increase in the number of projects by foreign direct investors for five years in succession and, in the process, emerged as one of the most popular investment destinations in all of Europe, ranking 11th in 2016.
Greater Helsinki, meanwhile, broke into the top ten of the most attractive metropolitan areas on the continent after recording a 45 per cent surge in the number of projects and securing 94 of the 133 projects initiated in Finland.
The assessments are based on the EY European Investment Monitor (EIM) a proprietary business data tool developed by EY and Oxford Intelligence.
The findings are corroborated by statistics compiled by Invest in Finland. The statistics, which also include the mergers, acquisitions and retail projects, indicate that a total of 270 foreign businesses entered Finland in 2016.
The number of such foreign businesses has grown every year since 2012, according to the statistics.
Improved competitiveness, closer global connections
“The positive development is a sign of our economy being more globally connected than ever before. Our country’s competitiveness has improved following the adoption of tax and wage agreements that benefit businesses,” analysed Jaakko Hirvola, the chief executive officer at EY Finland.
Finland, he views, appeals to foreign investors especially due to the ready availability of skilled, highly educated labour at a lower cost than in Denmark, Norway and Sweden.
Finland - one of the most popular investment destinations in all of Europe.
His assessment is corroborated by Antti Aumo, the head of Finpro’s Invest in Finland and an executive vice president at Finpro: “Finland is leading the digital revolution that is transforming so many industries across the globe. Companies large and small see Finland as an attractive location to future-proof their business.”
Hirvola says he expects the country to be able to continue attracting foreign investment especially if it commits to fostering innovation and education, and developing its tax and administrative structures further.
“Finland should be able to take better advantage of the co-operation opportunities between the innovation hubs of businesses, research centres and higher education institutions,” he states, adding that a prime example of such co-operation are EY and Finpro’s joint efforts to develop the health sector in Finland.
Swedes more than double projects in Finland
Swedish, American, German and Chinese investors together were responsible for over half of the projects announced in Finland in 2016. Swedish investors, for example, initiated a total of 32 projects – more than two times as in the previous year – while Chinese investors initiated 9 of their 17 projects in the Nordics in Finland.
Over three-quarters of the investments were made in the manufacturing, and business and financial services sectors.
Nordic labour markets shifting focus to knowledge-intensive jobs
The Nordics, as a whole, recorded a 31 per cent increase in the number of projects announced by foreign direct investors, more than double the increase recorded across Europe, according to the Nordic Attractiveness Report.
The number of jobs created by foreign direct investment, on the other hand, fell by almost a third from the previous year.
EY points out in its executive summary that while the drop may seem disconcerting, it likely reflects both the variety of the projects secured and shifts in the Nordic labour markets towards fewer but more knowledge-intensive jobs.