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Helsinki Metropolitan Area survives recession better than other regions of Finland
Unlike today, a couple of years ago it would not have been possible in practice that Regional Manager Martti Jaatinen would have led workers at the Finnish engineering and consulting company Protacon to eat in the middle of the historic wood processing mill in Kajaani’s Tihisenniemi.
At that point, Protacon - headquartered in Jyväskylä - did not yet operate in Kajaani, while the Renforsin Ranta Business Area did not even exist then. The UPM-Kymmene paper mill in Kajaani was gradually winding up and Finland was sinking along with a worldwide economic downswing.
The paper machines went silent on December 17th 2008, and all 535 employees on the company’s payroll were dismissed.
The hardships caused by the recession cast a shadow over financial statements and other statistics describing the activities of society in plenty of other parts of the country besides Kajaani. A negative trend was inevitable as Finnish GDP took a massive hit of 7.8%.
Timo Aro, a researcher into migration patterns, describes the effects of the recession as very dramatic.
”In no municipality is anything the same as before the slump”, Aro notes.
Municipalities and enterprises met difficulties in a variety of ways, and even in the future, contradictory trends will be seen, Aro estimates.
”The causes and effects of the global economy will reflect directly or indirectly everywhere and on everything”, Aro adds.
The Helsinki Metropolitan Area clearly survived the first phase of the recession best of all, while export industry centres like Kajaani were hit by the recession. At the same time, difficulties were met in Joensuu, Kotka, Kokkola, Lappeenranta, Kouvola, and Mikkeli. Moreover, the deceleration of the electronics industry can also be seen in Salo, where Nokia has substantial production plants.
In 2009, the number of new enterprises set up per 1,000 inhabitants was 7.4 in Helsinki, 4.6 in Seinäjoki in Ostrobothnia, while in Kajaani the number was only 2.9 and in Kotka barely higher at 3.1.
The decline of Tampere’s permanently thriving business community came as a great surprise to Aro. The first sign of the city’s slide into slump is now shown in the statistics. When comparing the growth centres with each other, the financial standing of Turku had made a move towards recession already earlier.
What was particularly interesting was Seinäjoki’s determined progress, which was almost at the level of Helsinki. Oulu and Jyväskylä were almost equal to their rivals Pori and Lahti.
In Aro’s opinion, the master of all activities is the global economy, while the role of the hired hand belongs to the national regional policy and cities’ decision-making.
”The ungrateful task of the hired hand is to react and conform to the master’s decisions”, Aro concludes.
But let us go back to the Renforsin Ranta business park.
Timo Akselin, the President and CEO of Protacon, says that through the business park the company found an opportuity to grow rapidly and become the market leader of automation, electrical, and IT systems. Today it is possible to employ more staff in the Kajaani unit and to strengthen the company’s position for the next upswing in the economy.
UPM KYmmene bore its corporate social responsibility by investing EUR 10 million in the handling of the problems caused by the closedown of the Kajaani mill.
At the moment, only around 60 employees remain unemployed, as former employees have been re-trained for new occupations and certificates.
Marketing Manager Salla Ventonen reports that around one-third of the 100,000 square metre premises left vacant by UPM-Kymmene has been leased out over the past 12 months.
Dozens of enterprises providing a total of more than 250 jobs are already operating in the premises. The aim is to improve the area in order that it could be sold.
This survey of "recession survival" was commissioned by Helsingin Sanomat and conducted by Dr Timo Aro. The survey involved Finland’s 30 largest municipalities in terms of inhabitants. Seven different parameters were used to compare the municipalities’ ability to cope with the recession. The number of points given was from one to four, which means that the maximum score would have been 28 and the minimum seven.
The parameters included such things as the level of unemployment, the change in the number of jobless year-on-year between 2008 and 2009, internal migration gains and losses, and the number of new company starts per 1,000 residents between January and September 2009.
The 15 municiplities that survived the recession best were: Helsinki (23 points out of 28), Seinäjoki (22), Nurmijärvi (20), Järvenpää (20), Kirkkonummi (20), Tuusula (20), Oulu (19), Jyväskylä (19), Porvoo (18), Vantaa (18), Pori (17), Lahti (17), Espoo (17), Vaasa (17), and Kuopio (17).
The two large cities of Turku (16) and Tampere (15) were found in the middle of the pack.
The four cities with the lowest scores were: Kajaani (11), Joensuu (11), Kokkola (11), and Kotka (9).
In Kotka, for instance, internal migration flows were negative and unemployment stood at an a average of 14.2% in 2009, growing by roughly a quarter from the previous year.