News 11 Jun 2020

Joint report of Statistics Finland and the OECD: Finland strongly dependent on the global market

Enterprises have increasingly organised their production chains globally. In the age of the global economy, compilation of statistics must also offer more accurate information than before on international trade and global value chains. Statistics Finland and the OECD have produced a joint report that examines Finland's integration into global value chains over the past decade.

Globalisation in Finland: The results of the Granular insights into the impact on businesses and employment report are based on a more precise analysis of value chain integration than before. The results show that Finland is even more heavily dependent on the global market than previously estimated.

Value added generated abroad a significant part of Finland's exports

According to the report, value added generated in Finland forms over one-third of Finland's gross exports. It is over 10 percentage points more than estimated in earlier calculations.

Although manufacturing industries still dominate gross exports, their share of exports measured in domestic value added has fallen by around 20 percentage points from the early years of the 2000s. In 2016, service industries overtook manufacturing industries in the share of domestic value added of exports, and in 2018, service industries' share of Finland's value added exports was already 47 per cent and manufacturing industries' share was 44 per cent.

Finnish enterprises have been successful in information-intensive service industries, such as software and consulting, and information service activities. These two industries together accounted for over 15 per cent of the growth in domestic value added exports between 2013 and 2018.

Jobs in service industries dependent on foreign demand

In Finland, around 500,000 jobs depend, either directly or indirectly, on foreign demand. Over one-half of these jobs are in service industries.

The share of jobs that depend on exports of manufacturing industries has fallen considerably over the past decade. The growing exports of services have, however, ensured that the number of jobs dependent on international trade has remained almost unchanged.

Globalisation boosts the polarisation of the labour market

Globalisation appears to accelerate the polarisation of the labour market. Export-intensive and multinational enterprises employ more highly educated employees and their exports also support high-education jobs in other enterprises.  

Pay growth is faster in enterprises that are more strongly integrated into global value chains than in other enterprises. Because more women than men work in industries that are only indirectly linked to global value chains, the development of globalisation may increase the gender pay gap.
Pay differentials within enterprises have grown over the past decade. However, pay differentials within enterprises are smaller in those enterprises that have more strongly integrated into global value chains.

Joint report the first of its kind

The picture of global value chains is specified by means of international statistical projects, one of the best known ones being the Trade in Value Added (TiVA) database developed by the OECD and WTO. Statistics Finland and the OECD have together developed statistics on value added-based international trade describing Finland's economy. Globalisation in Finland: The report Granular insights into the impact on businesses and employment examines value chain integration in addition to industries according to the characteristics of enterprises. The examined characteristics include the enterprise's participation in international trade, relations to multinational enterprises, age and size category.

The joint report of the OECD and Statistics Finland is the first of its kind. The joint report was financed by the Ministry for Foreign Affairs, the Ministry of Finance, the Prime Minister's Office and the Confederation of Finnish Industries and Employers (TT) Foundation.

Globalisation in Finland: Granular insights into the impact on businesses and employment (PDF)

Further information: Senior Statistician Pontus Lindroos, tel. +358 29 551 3242, Head of Development Kristian Taskinen tel. +358 29 551 2238