Commerce sector companies must be eligible for R&D subsidies to increase productivity

The Finnish Commerce Federation’s recent Tulevaisuuden työvoimatarpeet (“Future labour needs”) report* examines the development of the labour needs of the commerce sector and identifies key trends that affect employment in the sector. According to the report, the need for specialist and expert work has increased and will continue to increase. The share of specialists in the commerce sector has increased from 8 per cent to 11 per cent in 2016–2021. In Sweden, the development has been completely identical. Correspondingly, the share of salespeople and customer service employees is decreasing. The share of salespeople in Finland has decreased from 50 per cent to 44 per cent in 2016–2021. In Sweden, the share has decreased from 39 per cent to 35 per cent.

“Looking at all sectors together in Finland, the need for specialists will increase by a fifth and the need for assisting specialists will increase by nearly a quarter from 2022 to 2035. During the same period, the need for salespeople will decrease by 7 per cent,” says Heidi Lauttamäki, Economist at the Finnish Commerce Federation.

In Finland, the growth of the employment rate in the commerce sector will be moderate; only 1.6 per cent by 2035. The corresponding growth in Sweden is a staggering 14.2 per cent, making it an exception across the EU.

Digitalisation and the green transition create new opportunities

Digitalisation, artificial intelligence and the green transition are significantly changing the tasks of the commerce sector. The report highlights generative AI, which is expected to automate many current work tasks and create new professions. The green transition, on the other hand, increases the need for graduates of higher education and accelerates urbanisation. These development costs may increase the need for work-related immigration, as the share of domestic graduates of higher education is decreasing.
“The macro trends related to the green transition are creating new jobs. More than half of companies anticipate that investments related to supporting the green transition and expanding ESG sustainability reporting will create new jobs in 2023–2027,” says Lauttamäki.

Commerce sector companies must be eligible for R&D subsidies

In Finland, productivity growth in the commerce sector has been slow, at an average annual level of only one per cent in 2010–2023. According to the OECD country report, research and development investments in the commerce sector in Finland are below the OECD average. The country report states that increasing R&D investments could contribute to productivity benefits, especially if R&D investments were directed to innovative companies.
“The commerce sector is a major employer and taxpayer in Finland, but its significance and size are not understood. The current R&D subsidy structures and reforms should definitely be amended so that commerce sector companies are eligible for R&D subsidies. This would be a way to increase productivity, which in turn would increase the demand for employees,” Lauttamäki concludes.

Work-related immigration as a solution to the skills shortage

The share of graduates of higher education in Finland is decreasing, which may hamper productivity growth in the commerce sector. The report emphasises the significance of work-related immigration. Attracting international talent is seen as a significant solution to the skills shortage and to increasing productivity.

“The skills shortage, restrictions on work-related immigration and the decrease in the number of graduates of higher education will have a negative impact on productivity. Promoting work-related immigration and increasing the number of graduates of higher education are key to solving the skills shortage,” says Lauttamäki.

The report emphasises that the success of the commerce sector depends significantly on its ability to adapt and respond to the challenges created by megatrends and to utilise new technologies.

“It’s time to invest in innovation, remember the importance of education and utilise the international workforce potential. Without proactive measures, the sector may fall behind its competitors,” Lauttamäki points out.

*The Finnish Commerce Federation’s Tulevaisuuden työvoimatarpeet (“Future labour needs”) report has been prepared based on the latest research publications and data.

The full report can be read on our member pages > (Only for members of the Finnish Commerce Federation.)

For further information, please contact: Heidi Lauttamäki, Economist, Finnish Commerce Federation, tel. +358 (0)50 565 0790, heidi.lauttamaki(at)kauppa.fi