Economy of Finland

Finland's climate and soils make growing crops a particular challenge. The country lies between 60° and 70° north latitude - as far north as Alaska - and has severe winters and relatively short growing seasons that are sometimes interrupted by frosts. However, because the Gulf Stream and the North Atlantic Drift Current moderate the climate, and because of the relatively low elevation of the land area, Finland contains half of the world's arable land north of 60° north latitude. In response to the climate, farmers have relied on quick-ripening and frost-resistant varieties of crops. Most farmland had originally been either forest or swamp, and the soil had usually required treatment with lime and years of cultivation to neutralise excess acid and to develop fertility. Irrigation was generally not necessary, but drainage systems were often needed to remove excess water.

The Finnish electronics and electrotechnics industry relies on heavy investment in R&D, and has been accelerated by the liberalisation of global markets. Electrical engineering started in the late 19th century with generators and electric motors built by Gottfried Strömberg, now part of the ABB. Other Finnish companies - such as Instru, Vaisala and Neles (now part of Metso) - have succeeded in areas such as industrial automation, medical and meteorological technology.

Finland has an abundance of minerals, but many large mines have closed down, and most raw materials are now imported. For this reason, companies now tend to focus on high added-value processing of metals. The exports include steel, copper, chromium, gold, zinc and nickel, and finished products such as steel roofing and cladding, welded steel pipes, copper pipe and coated sheets. Outokumpu is known for developing the flash smelting process for copper production and stainless steel. In 2019, the country was the world's 5th largest producer of chromium, the 17th largest world producer of sulfur and the 20th largest world producer of phosphate. With regard to vehicles, the Finnish motor industry consists mostly of manufacturers of tractors (Valtra, formerly Valmet tractor), forest machines (for example, Ponsse), military vehicles (Sisu, Patria), trucks (Sisu Auto), buses and Valmet Automotive, a contract manufacturer, whose factory in Uusikaupunki produces Mercedes-Benz cars. Shipbuilding is an important industry: the world's largest cruise ships are built in Finland; also, the Finnish company Wärtsilä produces the world's largest diesel engines and has market share of 47%. In addition, Finland also produces train rolling stock. The manufacturing industry is a significant employer of about 400,000 people.

The chemical industry is one of Finland's largest industrial sectors with its roots in tar making in the 17th century. It produces an enormous range of products for the use of other industrial sectors, especially for forestry and agriculture. In addition, it produces plastics, chemicals, paints, oil products, pharmaceuticals, environmental products, biotech products and petrochemicals.

Forest products have been the major export industry in the past, but diversification and growth of the economy have reduced its share. Although this share has shrank, pulp and paper is still a major industry with 52 sites across the country. Furthermore, several large international corporations in this business are based in Finland. Stora Enso and UPM were placed No. 1 and No. 3 by output in the world, both producing more than ten million tons. M-real and Myllykoski also appear on the top 100 list.

Finland's energy supply is divided as follows: nuclear power 26%, net imports 20%, hydroelectric power 16%, combined production district heat 18%, combined production industry 13%, condensing power 6%. One half of all the energy consumed in Finland goes to industry, one fifth to heating buildings and one fifth to transport. Lacking indigenous fossil fuel resources, Finland has been an energy importer. This might change in the future since Finland is currently building its fifth nuclear reactor, and approved building permits for its sixth and seventh ones.