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Country Commercial Guides
FY 2000: Finland
CHAPTER I: EXECUTIVE SUMMARY
This Country Commercial Guide (CCG) presents a comprehensive look at Finland's commercial environment, using economic, political and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. Embassies through the combined efforts of several U.S. government agencies.
Situated in northern Europe, Finland is a country with an open market economy; about 40 percent of GDP comes from foreign trade. Finland's membership in the EU (1995) has resulted in a further opening of the markets to international companies. Most Finnish enterprises are privately owned. Most state-controlled companies operate on a commercial basis, according to free-market principles. Finland's business attitude towards the United States is positive and business relations between Finnish and U.S. companies are often based on many years of mutual experience.
Besides holding a leading position in wood-based industries, Finland is the world leader in the manufacture of paper machinery, cellular phones, medical devices and instruments for environmental measurements. The primary competition for American companies comes from European suppliers, especially German, Swedish, and British (see best prospects section for detailed description of competitor market shares by industry sectors).
Finnish-U.S. Trade
The U.S. position as Finland's most important trading partner outside of Europe was solidified in 1998. With an 8.2 percent share of imports, the United States is Finland's third largest supplier after Germany and Sweden, moving ahead of the United Kingdom and Russia in the past year. The total value of U.S. exports to Finland in 1998 was FIM 14.2 billion (USD 2.7 billion). Major exports from the United States to Finland are aircraft, aircraft parts, computers, peripherals and software, electronic components, electric machinery, chemicals, telecommunications equipment and services, medical equipment, and some agricultural products. This trend is expected to continue through 1999 and 2000.
The main export items from Finland to the United States are paper and paperboard, ships and boats, ferrous and non-ferrous metals, paper industry machinery and electric machinery. The United States is also Finland's fourth largest customer after Germany, Sweden, and the United Kingdom. The U.S. share of Finnish exports in 1998 was 7.3 percent, or FIM 16.8 billion (USD 3.2 billion).
Finland's Surging High-Tech Sector
Finland's electronic and electrical sector overtook the forest products and metal industries as the country's largest export industry. In 1998, high-tech exports were 27 percent of total Finnish exports and increased in volume by 21 percent over 1997. Production in this sector has increased almost five-fold since 1990 and by 33 percent in 1998 alone. The sector also accounts for 63 percent of all industry R&D funds in Finland. The sector's net profits increased by about 25 percent, net sales and exports increased by almost 40 percent in 1998.
Finland's largest company, Nokia, is number one manufacturer of mobile phones in the world. Over 65 percent of Finns own a mobile phone and there are more Internet connections per capita in Finland than in any other country in the world. Finland's impact on the future of the information technology and wireless communications industries will certainly be very significant and not in proportion to the size of the country.
Finland, a Springboard to Russia and the Baltic Countries
Finland's gateway position between east and west was also emphasized when Finland became a member of the EU and will be strengthened during Finland's EU Presidency (July-December 1999). As the only EU member state bordering Russia, Finland is a vital transit channel to the Russian markets. Over 40 percent of the EU's road shipments to Russia are shipped from Finland or arrive via Finland.
Finns know how to do business in Russia and the Baltic States. Finland's excellent infrastructure and its geographical proximity to Russia and the Baltic countries, especially Estonia, give Finland an advantage as a gateway to the east. Many foreign and U.S. companies are using Finland as a base for opening their transportation and marketing activities to the former Soviet Union.
Country Commercial Guides are available for U.S. exporters from the National Trade Data Bank's CD-ROM via the Internet. Please contact STAT-USA at 1-800-STAT-USA for more information. Country Commercial Guides can be accessed via the World Wide Web at http://www.stat-usa.gov, http://1997-2001.state.gov, and http://www.mac.doc.gov. They can also be ordered in hard copy or on diskette from the National Technical Information Service (NTIS) at 1-800-553-NTIS. U.S. exports seeking general export information/assistance and country-specific commercial information should contact the U.S. Department of Commerce, Trade Information Center by phone at 1-800-USA-TRAD(E) or by fax at (202) 482-4473.
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Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title17, United States Code.
