Commerce is growing faster than the entire national economy and is a significant creator of local well-being
The value commerce has added to the economy has grown faster than the entire national economy on average. This means that commerce has become an increasingly significant creator of well-being in Finland. Municipalities should pay careful attention to what companies have to say and build functioning cooperation to promote regional vitality.
Commerce is one of the largest individual industries creating well-being and its significance as a creator of well-being has grown quicker than the entire national economy: in 2015–2019, the growth of commerce’s gross value added was 12 per cent, while at the same time the growth of the entire national economy was 9 per cent.
Commerce operates in every loop of the procurement and operations chains. It designs, manufactures, upgrades and procures products and services and sells them to companies and consumers, both domestically and abroad. When it buys services and products from other industries, it creates growth and employment widely in the entire society. When these indirect consequences are included in the estimates, the gross value added and employment impacts of commerce almost double.
“The change in commerce is visible in how it buys more digital and support services than before and enhances the growth of these industries. The more diverse the local economic structure is, the better different industries support each other and the well-being they create together,” explains Jaana Kurjenoja, Chief Economist at the Finnish Commerce Federation.
“Finland’s evolution from an industrial country into a modern, service-based society has started a little slower than in other Western countries. The evolution can be slowed down or even stopped, but that kind of policy will not, in the long term, create growth, not even locally,” Kurjenoja emphasises.
The country- and region-specific graphics that the Finnish Commerce Federation has compiled show the commerce sector’s share in the gross value added, employment and investments in different areas. The compilation only presents the direct influence of commerce, which means that indirect impacts through other industries are not included.
Commerce is close to the everyday life of municipality residents
By providing services, employment and well-being in every municipality, commerce is close to the Finnish people’s everyday life. Retail trade’s nationwide store network and online stores offer services and enable living in both sparsely populated areas and in cities.
“Many daily consumer goods stores offer, in addition to food products, other necessary services, such as post and package distribution and medicine,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.
Technical wholesale trade keeps the industrial and building sectors running. Commerce also has a central role in ensuring the security of supply in both food distribution and supplying of components and materials.
The commerce sector’s goal is to be carbon neutral by 2035. The sector can do its own part to accelerate the achievement of regional climate goals, through both the industry’s own low-carbon efforts and by enabling the customers’ low-carbon choices and environmentally friendly technologies.
“Commerce also provides municipality residents around Finland with safe collecting and recycling services of waste, such as packages, electronic devices and batteries,” Kiviniemi says.
Methods with which decision-makers in municipalities can promote regional vitality
The Finnish Commerce Federation encourages the municipal decision-makers to maintain a dialogue with the representatives of companies and to take into account the opinions and needs of our industry in their decision-making.
As a consequence of the coronavirus pandemic, many entrepreneurs in town centres are in trouble and have to find cost savings in, for example, facility costs and carefully consider what kinds of facilities are necessary and what is a favourable location for the company’s business.
“The vitality of city and municipal centres is supported by good accessibility with all types of transportation. Adequate and reasonably priced parking opportunities are also required,” says Pekka Halonen, Executive Director of Veljekset Halonen Oy.
In decisions concerning town and country planning, municipalities must enable investments and hear what companies have to say about their needs and opinions. Town and country planning can be used to significantly affect a thriving and nature-focused living environment and a predictable operations environment that is favourable for business.
“The land use planning in municipalities must not create a bottleneck for growth, instead, it must be made faster and more agile. It is important to develop commerce services while taking the needs of the changing operating environment into account,” says Jari Alanen, District Director of Kesko Oyj.
Municipalities, cities and the companies they own are a big customer group for commerce. Public contracts of cities and municipalities have a remarkable impact on the commerce sector and local vitality in general. Participating in competitive tendering must be made possible for companies of all sizes. The criteria of public contracts can be used to make achieving the carbon neutrality targets faster.
“Municipalities and cities should absolutely consider committing to the green deal of sustainable procurements (Päästöttömät työmaat),” says Director Mika Eskola from Ramirent Finland Oy.
The constant development of expertise is important in developing local attractiveness at all levels of education. Investments are particularly in demand in close cooperation between secondary education institutions and companies, which links working life closely to the activities of the institutions. This helps recently graduated young people adapt to working life.
“Education and corporate cooperation must be invested in. High-quality corporate cooperation creates success for different areas,” says Minnastina Miettinen, Head of Development at SOK.
Country- and region-specific information about the commerce sector’s gross value added, employment and investments >> (in Finnish)
The commerce sector’s message to municipal decision-makers – municipal elections page of the Finnish Commerce Federation >> (in Finnish)
The Finnish Commerce Federation’s municipal elections webinar on 4 May 2021 from 10 a.m. to 11:15 a.m.
In our municipal elections webinar aimed at the media, candidates and member companies, we will publish the province- and region-specific information about commerce’s significance in the areas and interview experts of commerce sector companies about the important aspects of increasing local vitality.
Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, mari.kiviniemi(at)kauppa.fi
Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, jaana.kurjenoja(at)kauppa.fi
Jari Alanen, District Director, Kesko Oyj, tel. +358 50 620 26, jari.alanen(at)kesko.fi
Mika Eskola, Director, Ramirent Finland Oy, Chair of the Construction Machine Division of the Association of Finnish Technical Traders, tel. +358 40 8222945, mika.eskola(at)ramirent.fi
Pekka Halonen, Executive Director, Veljekset Halonen Oy, tel. +358 50 557 5750, pekka.halonen(at)halonen.fi
Minnastina Miettinen, Head of Development, SOK, Chair of the Education Committee of the Finnish Commerce Federation, +358 50 388 3063, minnastina.miettinen(at)sok.fi