Government policies aimed at boosting business competitiveness and other measures to increase the supply of jobs have improved economic growth are responsible for half of open vacancies created, the private sector-backed research organisation Etla says.
The think tank issued a report on Monday asserting that some 100,000 new jobs have been created during the current administration’s term in office, and that its policies were responsible for half of jobs added.
“We observed that Finland’s competitiveness has significantly improved as a result of the [government’s] competitiveness pact. In addition, there have been structural reforms that have increased the number of jobs available,” said Etla CEO Vesa Vihriälä, who has ties to the prime minister's Centre Party. Etla is primarily bankrolled by the main business lobby, the Confederation of Finnish Industries (EK).
Employment rate increase possible
The report said that the next government should be able to raise the employment rate to 75 percent from 71.4 percent reported at the end of September. It added that rising employment should contribute to continued economic growth in the region of two percent. However the analysis called for more structural reforms to maintain this level of economic activity.
"However the reduction of cost levels with a new kind of competitiveness pact would hardly improve jobs growth in the future, so reforms that create jobs and increase productivity should continue. More so because in the years ahead the international environment will hardly support growth as it has done in recent years," Vihriälä noted.
The Etla analysis reviewed the poor development of Finnish output and employment between 2009 and 2015 as well as the country’s rapid economic recovery starting in 2015. It noted that the number of jobs added to the economy initially increased slowly, but accelerated in 2017.
Export pull a factor in recovery
The increase in employment and production took place across much of the economy and touched many sectors throughout the country. Exports and investment and improved rapidly in recent years, it found.
Prime Minister Juha Sipilä’s administration set itself a target of 72 percent employment during its term in office. Current data suggest that it will achieve this goal.
However the report declared that the government’s competitiveness-boosting accord and other reforms do not entirely account for Finland’s improved economic performance – it noted that other factors contributed to the development. It pointed to a pull in the export market that has helped the economy, but that it alone does not explain the acceleration of economic growth in Finland relative to other countries.