Key Figures – <strong>Finnish</strong> Economy 2001 2002 2003 2004 2005 2006 2007 2008 <strong>2009</strong>** 2010** GDP (change in vol) 2,6 1,6 1,8 3,7 2,8 4,9* 4,2* 0,9* -1,3 1,5 Inflation 2,6 1,6 0,9 0,2 0,9 1,6 2,5 4,1 0,8 1,3 Unemployment rate 9,1 9,1 9,0 8,8 8,4 7,7 6,9 6,4 7,2 8,0 Interest rates 3 months 4,3 3,3 2,3 2,1 2,2 3,1 4,3 4,6 2,8 3,2 10 years 5,0 5,0 4,1 4,1 3,4 3,8 4,3 4,3 4,3 4,6 * estimate ** forecasts Source: Bank of Finland, Statistics Finland, Nordea Bank 12 there will be a shortage of skilled labour in certain labourintensive service industries, in particular, including welfare services, as well as construction and property services. Economic upswing together with high demand for skilled labour resulted in relatively vigorous wage increases during the past few years. In economic upswings, it is typical for <strong>Finnish</strong> labour markets to agree on salaries at the union level, which happened in late 2007, as well. On average, wages increased and will increase by some 4–5% in 2008 and <strong>2009</strong>, with some industry-specific exceptions. <strong>The</strong>se increases will support private consumption, on the one hand, but have a negative impact on employers’ competitiveness, on the other. 2.5 Finland’s international competitiveness is still strong Finland has held one of the top positions in international competitiveness rankings during the past few years, even though they have deteriorated slightly in 2007 and 2008. In the World Economic Forum’s Global Competitiveness Index rankings for 2008–<strong>2009</strong>, Finland maintained its sixth position after having fallen to that place from the top position in 2006. Finland’s strong position is based on high scores for both primary and higher education and high-quality institutional environment. Nonexistence of corruption and low business costs of crime and violence are regarded as major strengths of the business environment, together with transparency and functionality of the legal framework. Finland also scores high, in second place, in innovation. On the other hand, inflexibility and restrictiveness of labour market regulations are seen as the major disadvantages from the country’s competitiveness point of view. Limited market size is also one constraint of the <strong>Finnish</strong> economy. Another international comparison where Finland has performed well is OECD’s Program for International Student Assessment (PISA), which assesses students near the end of compulsory education. <strong>Finnish</strong> 15-year-old students have scored the highest in all PISA surveys so far, which assesses skills in science, mathematics and reading. <strong>The</strong> <strong>Finnish</strong> education system’s strength in these studies has proven to be the exceptionally small differences between schools and regions, which are ensured by the egalitarian and free schooling system and competent teachers. <strong>The</strong> <strong>Finnish</strong> higher education system is currently being developed by an extensive University reform, which will extend universities’ autonomy. Starting from the beginning of 2010, the universities will be independent legal personalities, either public corporations or foundations under private law. At the same time, their management and decision-making system will be reformed. As a part of this reform, the new Aalto University will be created through a merger between <strong>The</strong> most competitive national economies of <strong>2009</strong> (ranking in 2008) <strong>The</strong> <strong>Finnish</strong> <strong>Property</strong> <strong>Market</strong> <strong>2009</strong> GCI <strong>2009</strong> score United States (1.) 5,74 Switzerland (2.) 5,61 Denmark (3.) 5,58 Sweden (4.) 5,53 Singapore (7.) 5,53 Finland (6.) 5,50 Germany (5.) 5,46 Netherlands (10.) 5,41 Japan (8.) 5,38 Canada (13.) 5,37 5,0 5,2 5,4 5,6 5,8 Source: World Economic Forum
the Helsinki School of Economics, the University of Art and Design Helsinki and the Helsinki University of Technology. Dubbed the “innovation university”, Aalto University is aiming at bridging technology, design and business in a novel way. ULI & PWC: European property market prospects – top ten markets Munich Hamburg ■ Development ■ Investment Istanbul ““<strong>The</strong> <strong>Finnish</strong> university system is under reform” Zürich London Moscow Helsinki Paris Finland’s competitiveness and favourable business environment have also played an important role in the development of the real estate market, which has undergone a period of rapid internationalisation in the past five years. In Price WaterhouseCooper’s and ULI’s report “Emerging trends in Real Estate <strong>2009</strong>” Helsinki’s investment prospects were ranked in the seventh place and development prospects in the fifth place among European cities. Relatively moderate yield compression during the past years, as well as limited volatility, was regarded as the strengths of the <strong>Finnish</strong> market in this study. <strong>The</strong> <strong>Finnish</strong> market has also scored well in the Jones Lang LaSalle’s Real Estate Transparency Index, receiving a thirteenth place ranking in 2008. Berlin Frankfurt 1 2 3 4 5 6 7 8 9 Abysmal Fair Excellent Source: Urband Land Institute (ULI) and PricewaterhouseCoopers (PwC) 13 <strong>The</strong> <strong>Finnish</strong> <strong>Property</strong> <strong>Market</strong> <strong>2009</strong>