The Finnish economy: basic structure
Finland has a market-based economy combined with a strong public sector. Economic activity is shaped by international trade, a skilled workforce, and public institutions that support welfare and stability. Understanding the basic structure of the Finnish economy helps explain how prosperity and social security are financed.
A market economy with public responsibility
Finland operates a market economy, where most goods and services are produced by private companies and prices are determined by supply and demand. Businesses compete in domestic and international markets.
At the same time, the public sector plays an important role. The state and municipalities provide services, regulate markets, and correct inequalities through taxation and social policy.
Key economic sectors
The Finnish economy is diversified. Important sectors include manufacturing, technology, forestry, services, and education.
Services employ the majority of the workforce, while industry and technology play a major role in exports. Natural resources such as forests remain economically significant.
International trade and openness
Finland is a small, open economy that depends heavily on international trade. Exports and imports are essential for economic growth and employment.
Membership in the European Union facilitates access to the internal market and shapes trade policy. Global economic conditions therefore have a direct impact on Finland.
The role of the public sector
The public sector is responsible for welfare services such as healthcare, education, and social security. These services are mainly financed through taxation.
Public spending also supports infrastructure, research, and innovation, contributing to long-term economic development.
Workforce and productivity
A well-educated workforce is a key strength of the Finnish economy. Education and skills development support productivity and competitiveness.
Cooperation between employers, employees, and public authorities contributes to stable labour relations and economic predictability.