Front Matter Page

© 2001 International Monetary Fund

November 2001

IMF Country Report No. 01/215

Finland: Selected Issues

This Selected Issues report on Finland was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on September 27, 2001. The views expressed in this document are those of the staff team and do not necessary reflect the views of the government of Finland or the Executive Board of the IMF.

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Front Matter Page

INTERNATIONAL MONETARY FUND

FINLAND

Selected Issues

Prepared by Nancy Wagner and Matthias Vocke (all EU1)

Approved by European I Department

September 27, 2001

Contents

• I. A Note on Finland’s “New Economy”

  • A. Introductory Remarks

  • B. A Radical Structural Change

  • C. Why Finland?

  • D. But Is It Just Nokia?

  • E. What Has Been ICT’s Impact On the Larger Economy?

  • F. Looking Forward

• Figures

• 1. The ICT Sector—The Horsepower Behind the Finnish Economic Recovery

• 2. Export Shares by Industry Group

• 3. Employment Growth Indices in the ICT Cluster and Economy

• 4. Developments in the Helsinki Stock Market, 1995–2001

• 5a. Worldwide Mobile Phone Market Shares, Ql 2001

• 5b. Mobile Phone Penetration Rates by Region, 2001

• Tables

• 1. ICT Sector’s Share in Value Added of Market Production

• 2. Developments in the Manufacturing Sector, 1980–2000

• 3. Venture Capital Investments, 1995–2000

• 4. Contributions to Finland’s Market-Based Output Growth

• 5. Income Shares of Inputs in the Finnish Economy

• 6. Labor Productivity Growth Rates in Finland

• References

• II. Labor Market Challenges: Job Creation in the Services Sector

  • A. Introduction

  • B. A Closer Look at Some Relevant Data

  • C. What is Impeding Employment Growth in the Services Sector?

  • D. Concluding Remarks

• Figures

• 1. The Beveridge Curve (1990–99)

• 2. GVA per Employee and Employment Share in Relation to the United Kingdom

• 3. Employment in Low Skill Services

• 4. Services with Low Gross Value Added (GVA) per Employee

• 5. Employment in Private Personal Services

• Tables

• 1. Employment Shares of the Services Sector

• 2. Classification and Abbreviations of Services

• 3a. Effective Tax Burden in Low Paid Jobs

• 3b. Net Replacement Rates for Low Paid Unemployment

• Annex I

  • The Public Services Sector

• Figures

• A.1. Employment in Different Economic Sectors, 1989–99

• A.2. Employment in Publicly Dominated Services Sectors

• Annex II

  • The Business Services Sector

• Figures

• A.1. Employment in Business Services

• A.2. Services with High Gross Value Added (GVA) per Employee

• References