Private services’ share of our national economy’s added value was already over 50 per cent in 2016. This was more than primary production, processing and the public sector combined.
For decades, commerce has generated added value and in the 2000s, its share of gross value added was around 9 to 10 per cent, which makes it one of the biggest private branches of business.
The private service sector has a significant role in employment. Almost half of all hours worked in Finland are carried out under private services, while the combined portion of processing, primary production and the public sector is less than 30 per cent.
Commerce’s huge role as a creator of economical growth comes as no surprise, since the sector operates and employs over 280,000 Finnish people in Finland. Commerce also employs others indirectly, as its procurements and investments create jobs in other businesses.
Since 1995, private services have doubled their investments in Finland. The private service sector also largely finances the public sector by creating a tax base in Finland through its operations.
Commerce is one of the largest investors in the economy, with much domestic procurement and investments in Finland. In so doing, it creates growth and employment opportunities for other companies operating in Finland.
Taxation and economic policies to speed up service industries
The starting point of Finland’s economic policies has been the point of view of industry, construction and the public sector, meaning that private services have not been given enough resources to develop. Because of that, for example, the central operations of commerce’s international chains are not located in Finland. But product development would add more value for our country than performative work. The political decision-makers acknowledge the importance of development work to economic growth in industry, but not yet in consumer services or commerce.
If it is to become the country operations of the strategic development work and product development of international chains, online store and digital commerce platforms, Finland must become a more attractive business environment. For example, through the development of digitalisation, automisation and, perhaps, analytics, productivity can be increased to meet both national and international competition.
Hi taxation drains and slows the growth and development of private services. As taxes and similar payments become a higher factor in the price of service work, it becomes expensive to carry it out. We are in a situation in which the price of work is comparatively much higher than the purchasing power of employees. This is challenging for the development of private services.