Finland's largest companies intend to invest considerably in digitisation this year. They will also create more jobs and increase the use of subcontracting - mainly outside Finland.
Some glimpses of light are offered by the survey on major Finnish corporations, carried out now for the fourth time. The survey provides unique insight into the views held by the top executives of Finland's largest corporations, as most of the respondents are CEOs and CFOs of major companies.
Particularly bright news relate to investments in digitisation, which the survey estimates to grow this year by more than 10% from last year. Services and manufacturing will especially focus on digitisation while retail trade will surprisingly remain more cautious, the responses suggest.
"Increasing investments in digitisation shows how large companies are shifting the focus of their investments from material into immaterial assets. Digitisation has indeed raised high expectations in terms of growth and efficiency, but the risk is that it will be considered as a magic silver-bullet solution", says Pekka Mattila, Professor, Aalto University School of Business, and Group Managing Director of Aalto University Executive Education.
The annual survey of large corporations covers 250 largest Finnish companies and it is carried out by OP Financial Group and the Nordic Institute of Business and Society (NIBS), a think tank set up by professors of the Aalto University School of Business.
Slight rebound expected in investments
According to the survey, particularly the companies headquartered in Finland have improved their earnings performance and their profitability levels already outpace those of international groups' subsidiaries in Finland.
"The responses suggest that Finnish companies have regained their spirits and intend to clearly focus on growth-oriented development projects," says Mattila.
Compared to last year, the surveyed companies estimated that they will reduce their material investments, i.e. investments in, for example, sales premises or ICT systems. By contrast, they expect to even increase their immaterial investments - such as investments in product or service development - from last year.
Hence, there is some optimism in investments, too.
"The survey forecasts a rebound in investments but, so far, it is just planned, not reality. Increased efficiency but no growth bodes no good for the future. To Finnish companies, I would say 'Go for it!' Let's start investing and put Finland on a new growth path," says Hannu Jaatinen, Executive Vice President, Banking at OP.
Finland's top 250 companies employ less and less people. While at the beginning of 2013 large corporations employed almost 922,000 Finns, the figure is only 860,000 now. The companies headquartered in Finland estimate that their headcount will continue to decrease slightly in Finland but grow abroad.
Intending to keep some production in Finland, the companies' subcontracting investments will mainly be directed abroad. Almost one-third of the responding companies plan to transfer part of their operations to foreign countries whose legislation is more favourable to the company.
"The most important driver of employing people internationally is that growth is considered to be more probable elsewhere. Finland is by no means attractive from the employer's perspective. Even patriotism cannot convince decision-makers to overlook the grim economic facts," says Mattila.
In the autumn of 2015, the OP and Aalto University survey of large corporations received a record number of responses, as the questionnaire was answered by 155 key executives from 109 major companies.
For more information, please contact:
Hannu Jaatinen, Executive Vice President, Banking at OP tel. +358 (0)10 252 2874
Pekka Mattila, Professor, Aalto University School of Business, tel. +358 (0)40 738 7221OP Financial Group is Finland's leading financial services group providing a unique range of banking, wealth management and insurance services. OP's mission is to promote the sustainable prosperity, security and wellbeing of its owner-customers, customers and operating regions. Its objective is to offer the best and most versatile package of loyal customer benefits on the market. OP Financial Group consists of about 180 member cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. The Group has a staff of 12,000 and 4.3 million customers.
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Source: Pohjola Pankki Oyj via Globenewswire