Finland’s Economical Growth Requires Risk-Taking and a Vision for Renewal

Why growth matters now more than ever

Growth isn’t just an abstract economic goal, it’s the bedrock of Finland’s social security, public services, and pension system. With economic momentum stalled for almost 18 years, the consequences are becoming harder to ignore: public finances are stretched, opportunities missed, and the country’s ability to adapt hampered.

Pettersson emphasizes that growth is no longer a luxury; it’s a necessity. The country’s fiscal flexibility is limited, demographic trends are challenging, and existing systems are under strain. Without renewal and investment, the burden on taxpayers will only increase, threatening the sustainability of essential services.

One of the most pressing challenges is Finland’s—and many European countries’—declining birth rate. Annual births aren’t just temporally dipping; the ongoing structural change has far-reaching implications. Shrinking future workforce raises questions about who will fill jobs, pay taxes, and support an ageing population.

The dependency ratio (the number of non-working-age people compared to those of working age) is rising sharply, meaning that the pressure on those still working intensifies. The sustainability of the pension system and public services depends on reversing these trends or finding new solutions.

Fiscal constraints: taxation and debt

Finland’s tax burden has steadily increased since the 1960s, leaving less room for individuals and businesses to maneuver. When raising taxes became untenable, public spending continued to grow through increased borrowing. Today, public debt is climbing, and tomorrow’s money is being spent today. This limits future generations’ ability to address their own challenges.

Pettersson points out that Finland and many other European countries maintain structures designed for a different era. Renewing these systems is essential, but it requires courage, imagination, and a willingness to let go of outdated models.

A vision for renewal and confidence in the future

Despite the challenges, Pettersson remains optimistic. He believes Finland has the potential to succeed if it chooses to act. The country needs a shared vision, a story of success that goes beyond economics to encompass social and cultural aspirations. Finland should be seen as a place where companies can thrive, families can flourish, and the future is created.

Elo’s approach reflects this optimism. The company invests over 50 million euros annually in domestic private equity and venture capital funds, supporting hundreds of Finnish growth initiatives. Globally, unlisted equity investments make up 13% of Elo’s portfolio, with a significant portion allocated to Finland. This commitment is not just about supporting local companies; it’s a financially sound strategy that aligns with Elo’s long-term goals.

The importance of investment, risk-taking and the human factor in growth

Finland’s venture capital landscape has evolved, and there is now capital available for companies with credible growth potential. However, attracting both domestic and foreign investment is crucial. Pettersson argues that Finland must become more comfortable with risk and better at marketing it. Investors are increasingly willing to back bold ventures, but the business community needs to foster a culture where risk-taking is seen as an opportunity.

Growth depends on skilled, motivated, and healthy people. Pettersson highlights the significant cost of poor work ability in Finland—4.1 billion euros lost annually to sickness absence. Each day of absence costs employers around 370 euros, and disability pensions can reach hundreds of thousands per case. Investing in employee well-being isn’t just compassionate; it’s a strategic and financial imperative.

Companies need to collect data on motivation and well-being, invest in leadership, and support supervisors. Taking care of people is central to creating results and driving growth.

Looking ahead: building the future together

Finland’s path to renewed growth will be shaped by decisions made today by policymakers, investors, and business leaders. The challenges are real, but so is the potential. By nurturing courage, embracing risk, and investing in people, Finland can unlock new opportunities and build a more resilient future.

Pettersson’s message is clear: growth happens through ambition, collaboration, and trust in the future. The seeds of tomorrow’s success are already being planted in Finnish companies and communities. It’s up to all stakeholders to ensure they flourish.