Finland’s new Prime Minister and new Trade Minister opened a recent SME Forum with speeches setting out how the government intends to keep Finland competitive in the global markets for SME’s, achieve higher employment rates and economic growth.
They spoke about the need for maintaining a safe and secure environment where SMEs can feel confident about making new investments.
The two politicians promised support for training and education of staff to meet the needs of SME’s in the current tight labour markets.
Both ministers talked about the promise of increased future support for exports as well as a promise of increased cooperation with the other Nordic countries.
In response to comments from the audience, they also mentioned that they would look into the possibility of supporting female and immigrants to become entrepreneurs.
There was an interesting presentation from the CEO of ETLA, a right-wing think tank, who claimed that the present government is focusing too much on single person companies. These are companies that generally do not grow much. He reviewed statistics showing that the average number of people employed in Finnish SMEs is actually becoming smaller and that is a cause for concern. There appears to be too many small SME’s in Finland compared to the USA, where the average size of SMEs has been growing.
Furthermore, he was of the opinion that the biggest problems faced by SMEs is not finance, or higher operating costs, but a lack of labour. He also said that there are too many risk-adverse owners in the SME sector that also create a bottleneck for growth.
He went on to propose that the new government should focus more on supporting growing SMEs that have more than one person working there. He also made the point that wage support payments from the government should only be granted for new employees taken on by the private sector only. He saw no lasting value in increasing the size of the public sector though such a policy.
The forum ended with a panel discussion from four experienced SME owners, who made the following points to the ministers and the audience:
- Investments by private companies can only be made when they know that there will be no surprises in the regulations and laws relating to ownership and taxation.
- In the present market there are quite severe lack of supply of labour, and many companies are not able to grow because of the difficulty in finding qualified staff.
- One member of the panel stated that very small SMEs do not have adequate resources to look for and employ new employees and this is naturally a bottleneck without outside help.
- Another member of the panel mentioned that bureaucracy at the municipal level was not consistent in the way they dealt with SMEs. He said that there is a need for a standardisation of the way SMEs are treated by civil servants.
The interesting take from this Forum is that the Conservative Party, the second largest party in the last government did not support growth SME’s with any special measures and yet here they are, through the voice of their right-wing think tank ETLA, suddenly waking up to the fact that such support is necessary! For the last 10 years official statistics have clearly indicated that the SME sector has driven both employment and economic growth in Finland. Large companies have not been dynamos of growth, even though they are dominant players in the economy.
For the record, this party spent almost decades in government shovelling billions of Euros in innovation grants to the largest companies who in turn paid out huge bonuses from record “profits” – with a big thank you to taxpayers many of whom lost their jobs thanks to plant closures. The idea of helping growth SME’s has never been mooted before they arrived in opposition!