16. Industry and services
Contents
16.1 Finnish economy in numbers
The structure of the Finnish economy is similar to those of other developed nations. Agriculture covers approximately 3 % of the total Finnish economic output. Industry takes up 28 %, leaving services to cover the rest, which is approximately 69 %.
Traditionally, the most important Finnish industries have depended on our natural resources. Both forestry and metal production have traditionally been important. Today, the most important Finnish industries are the metal industry, the electronics industry, the forest industry and the chemical industry. The significance of agriculture and forestry has decreased over time, but they remain important livelihoods for many people.
| Sector | 2000 | 2010 | 2018 | 2019 |
| Agriculture, forestry and fishing | 146 | 115 | 101 | 105 |
| Industry and energy production | 473 | 388 | 361 | 353 |
| Construction | 147 | 172 | 198 | 193 |
| Stores, sales and repair services | 277 | 298 | 292 | 287 |
| Transport and storage | 152 | 156 | 143 | 143 |
| Accomodation and nutrition | 77 | 83 | 86 | 97 |
| Information and communications | 89 | 95 | 114 | 123 |
| Finance and housing | 70 | 71 | 77 | 77 |
| Financial services | 184 | 250 | 291 | 300 |
| Civil services and national defense | 115 | 117 | 116 | 113 |
| Education | 165 | 174 | 184 | 187 |
| Health and social sevices | 326 | 379 | 417 | 422 |
| Arts, entertainment and recreation | 109 | 139 | 153 | 157 |
| Unknown sector | 6 | 12 | 7 | 7 |
| Total | 2 335 | 2 447 | 2 540 | 2 566 |
16.2 What is the primary sector?
The primary sector of an economy consists of the jobs that take part in the primary production of goods. The primary sector includes agriculture, foresty, fishing and mining. The final products of the primary sector have not been refined in any way, meaning that they are gathered directly from the environment. The goods that are gathered during primary production area either consumed as products in themselves or refined into other products.
In Finland, the primary production of goods is regulated and controlled. An enterpreneur must always indicate where the primary production of their goods has taken place and send this information forward to the national Food Agency.
Enterpreneurs of the primary sector must also take care that the hygiene and well-being of the environment and their goods are sufficient.
16.3 Finnish agriculture
Agriculture is a term that describes the farming of cultivated crops and livestock. In the middle of the 20th century, most Finns still lived in the countryside and participated in agricultural production. However, because of the development and mechanization of agriculture during the last half-century, the number of people living on the countryside has decreased. Today, only 40 % of the Finnish population continues to live in rural areas.
The regions of Southern, Southwestern and Northwestern Finland comprise the nation's main agricultural region. This region is where most Finnish farms are located and where the majority of the nation's agricultural production is produced. In contrast, Northern and Eastern Finland consist of scarcely populated rural areas.
The rural areas surrounding urban centers are where most of the Finnish rural population is concentrated. These rural areas are peaceful and have a lot of space for families, but they are also close enough to cities in order to make commuting to the cities for work feasible.
The Finnish agriculture is the basis of our food production. A large portion of the groceries and foodstuffs used in Finland are domestic. In addition, the agricultural sector is an important provider of jobs and livelihoods. Together with other forms of food production, agriculture employs over 300 000 Finns. Most of the Finnish agricultural income comes from the sale of agricultural goods. However, many farmers are also supported by various kinds of agricultural aid from the EU and the Finnish government.
Local food is food that is produced near the place where it is consumed. The origin, producer and manufacturer of local food is always known, and it is often of a higher quality and more fresh than non-local food. Eating local food is good for the environment, as large amounts of fossil fuels are not needed to transport the product to the consumer. Organic food is produced with natural methods, without pesticides or artificial fertilizers. In organic food production, livestock are also given more freedom and possibilities to live fulfilling, happy lives.
In Finnish agricultural households, secondary occupations are common. Because agriculture alone is not an economically feasible livelihood for many farmers, secondary occupations help these farmers to gain a more stable livelihood. For many agricultural producers, forestry provides an important secondary occupation.
16.4 Non-renewable natural resources
The Finnish bedrock and soil are full of natural resources. These include rocky substances such as sand and gravel, different types of rock, metal ores, minerals and energy sources such as oil and coal. All of these natural resources are non-renewable. They have formed slowly over the course of millions of years, and they do not regenerate.
Rocks and metals are used to construct buildings, machinery, vehicles, roads and energy or information systems. For example, gravel, sand and crushed rock are used to build roads and foundations for buildings. Sand and gravel are used to make cement. Sand is also used to produce glass. Ores are refined into metals.
Coal and oil continue to be one of the most important sources of energy. Oil is also used to produce various plastics. Nowadays, different kinds of metals are used to construct technical and electronic equipment. These hi-tech metals, such as lithium, are quite rare on planet Earth.
Mining rock and ore, refining ore into metal, crushing and using rock materials, burning oil and coal to produce energy and using oil to produce plastics are all processes that take up a lot of energy and release a lot of carbon dioxide into the planet's atmosphere. In addition, mining and industry change the landscape of the surrounding area permanently. Because of these drastic and permanent environmental effects, the planet's natural resources should be used very sparingly and sustainably.
Should there be more or fewer mines in Finland?
16.5 Finnish industry
Industry refines natural resources into different products. By doing so, industry develops the natural resources' degree of processing and constructs more complex products. For example, the food industry uses milk to produce ice cream, whereas the automobile industry uses metals and complex mechanical parts to construct cars.
The industrial revolution began in the British Isles in the 18th century. From there, industry spread into Europe and the rest of the world. The industrial revolution arrived in Finland during the 1860s, when various factories began to be built all over the nation.
Industrial production takes place in factories. It requires specialized machinery and skilled workers that can use this machinery. Industrial production also consumes a lot of energy, especially electricity, and water. Industrial production is based on the natural sciences and requires people with all kinds of skills.
The industrial production on planet Earth continues to increase, which results in the formation of more industrial societies. In many developed nations, such as Finland, the society has reached a stage where various services have become more economically important than traditional forms of industry. However, industrial production continues to be an important part of the Finnish economy to this day
The forest industry focuses on refining wood into various products. The mechanical forest industry is focused in creating planks and boards and refining them into furniture, building materials and for other uses. The chemical forest industry makes paper and paper pulp, as well as special products such as soaps, turpentine and composite wood. The forest industry has traditionally been an important part of the Finnish economy, but its importance has decreased recently as factories have moved into other nations where the production costs are lower.
The machine and metal industry employs approximately 125 000 people. Some of the most important products of the Finnish machine and metal industry include cruise ships, ship and power plant engines, paper machinery, elevators, industrial machinery and farm machinery. The metal industry consumes a lot of electricity.
Finland has a long tradition in ship building. A cruise ship being built in Turku.
The chemical industry is a large field of the industrial sector. In Finland, it has recently surpassed the importance of the forest industry. Most of the products produced in the chemical industry are used in other forms of industry, forestry and agriculture. Such products include pesticides, fertilizers, soaps and cleaning products.
The largest Finnish chemical industry company is Neste Oil, which produces fuels. Another important and rapidly growing sector of the Finnish chemical industry is the pharmaceutical industry. Biotechnology is also a rising sector of the chemical industry.
The food industry is based on agricultural products. It is the fourth largest sector of Finnish industry. It produces the majority of consumer goods we use in our everyday lives. The food sector employs over 33 000 people, but the whole food production chain from agricultural production to stores employs approximately 300 000 people, which is 12 % of the total Finnish workforce. Finns like to consume domestic, local food products, which is one of the reasons why local agriculture and food production are important to Finnish society.
16.6 Finnish services
We all use a number of different services every day.Public services, such as basic education, dental care, health centers and public transport are paid for with tax revenues. Private services are bought from private companies that seek to maximize the amount of profit they make from providing the service.
Private services cover almost three quarters of all Finnish services, and they produce approximately two thirds of the Finnish Gross Domestic Product (GDP).
Stores, shops, social services and health services are important employers in Finnish society. As the Finnish population grows older, the need for social and health services increases. Transport and housing are examples of expensive but profitable services.
Technological services are the fastest-growing field of the service sector. The development and popularization of technological services has changed the number of jobs available in different fields of the service sector. This has been further influenced by the automation of previously non-technological services.