elinkeinoelämän keskusliitto finlands näringsliv confederation of finnish industries
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Elinkeinoelämän keskusliitto Finlands Näringsliv Confederation of Finnish Industries. 1 EK/Eng/shs11.2004. EK represents. The entire private sector and companies of all sizes 35 branch associations About 16,000 member companies, of which 96% are SMEs Over 70% of Finland’s GDP - PowerPoint PPT PresentationTRANSCRIPT
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Elinkeinoelämän keskusliitto
Finlands Näringsliv
Confederation of Finnish Industries
1 EK/Eng/shs11.2004
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EK represents
• The entire private sector and companies of all sizes
• 35 branch associations
• About 16,000 member companies, of which 96% are SMEs
• Over 70% of Finland’s GDP
• Over 95% of Finland’s exports
• About 950,000 employees in member companies
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Member Federations of EK
• Association of Finnish Furniture and Joinery Industries
• Association of Logistic Enterprises in Finland• Association of Social Services Employers and
Businesses• Association of Support Service Industries, ASSI• Chemical Industry Federation of Finland• Coastal and Internal Waterway Employers’
Association• Confederation of Finnish Construction Industries RT• Employers’ Association for Transport and Special
Services• Employers’ Association of Private Educational
Institutions• Employers’ Association of the Special Branches• Employers’ Federation of Road Transport• Federation of Finnish Commerce • Federation of Finnish Financial Services• Federation of the Finnish Media Industry• Finnish Association of Consulting Firms SKOL• Finnish Energy Industries
• Finnish Food and Drink Industries’ Federation• Finnish Forest Industries Federation• Finnish Hospitality Association• Finnish Plastic Industries Federation• Finnish Port Operators Association• Finnish Shipowners’ Association• Finnish Special Purpose Shipowners' Association• General Industry Federation• Kulutustavararyhmä• Pharma Industry Finland• Private Employment Agencies Association• Private Healthservice Association• Property Maintenance Association• Technology Industries of Finland• The Employers' Association TIKLI• The Finnish Cosmetic, Toiletry and Detergent
Association• The Rubber Manufacturers’ Association of Finland• Ålands Arbetsgivareförening
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EK activitiesEK activities
Regional Offices Regional Offices
EK BrusselsEK Brussels
• Logistics• Energy• Environment
and Climate• Sustainable
Development
• Business Law• Competition• Information
Society• Trade Policy
and International Relations
• Economy• Taxation• Employment• Finance and
Welfare• Business
Cycles and Trends
• Competitive-ness
• Collective Bargaining
• Development of Labour Market
• Labour and Social law
• Statistics and Surveys
• Corporate Security
• Business Development
• Education, Training and Qualification Requirements
• Labour and Immigration
• Research and Technology
• Business Services and Financing
CommunicationsCommunications
BusinessInfrastructure
Business Environment
Economic Policy IndustrialRelations
Innovation Environment
and Competences
SME-Affairs SME-Affairs
How has euro affected the Finnish companies and economy?
27.4.2010
Simo Pinomaa Senior EconomistConfederation of Finnish Industries EK
What happened to the price level in 2002?
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-2
-1
0
1
2
3
4
5
6
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Consumer prices
12-month change, %
United Kingdom
Germany
Sweden
Finland
Source: OECD
19.4.2010/hiin3/jka/EKI Talousgraafit
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92
96
100
104
108
112
116
120
124
128
132
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Consumer Price Index, some commodity groups
Food andnon-alcoholic beverages
Housing, heat and light Transport
Recreation and culture
Index, 2000=100
Source: Statistics Finland
14.4.2010/hiin9/jka/EKI Talousgraafit
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Why did consumers feel that the euro raised prices even though statistics show otherwise?
• Consumers had expected prices to rise as a result of the euro already before the transition had even taken place
• Consumers tend to remember price increases better than decreases
• The prices of many cheap (cup of coffee) items tended to rise affecting price perception although the real affect on prise level was small
• The food prices in January 2002 increased 7.0 percent• Rounded conversion rate in nearly all euro countries happened
to be higher than the precise rate –1.8 percent on average. – In Finland the rounded conversion rate (6) is 0.9 percent higher than the
actual rate (5.94573).
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Impact on markets, sales and competition
• Psychological prices (for example, 99 euros)• A dress costs Fim 299 (about 52 euro)• => 49 euro (6 % reduction)• A candy bar costs Fim 10 (about 1,7 euro)• => 1 euro (41 % reduction)• => The company may have to modify its product design and
packing
=>
• Implications to production and procurement
How has euro affected Finnish economy?
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90
100
110
120
130
140
150
160
170
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Gross Domestic Product
Vol.index 1995=100, sa
Finland
USA
Japan
EU
Source: Eurostat
23.3.2010/kokn1/jka/EKI Talousgraafit
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90
100
110
120
130
140
150
160
170
180
190
200
210
220
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
6. Domestic product
ä
Finland, Gross domestic product at current market prices, Mrd EURO-FIMSweden, Gross domestic product at current market prices, Mrd SEK
19.4.2010
Indeksi, 1995=100
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80
90
100
110
120
130
140
150
160
170
180
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Industrial Production
Vol.index 1990=100, sa
Finland
Sweden
Germany
United Kingdom
Source: Eurostat
13.4.2010/teol5/jka/EKI Talousgraafit
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0
2
4
6
8
10
12
14
16
18
20
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Unemployment Rate*
*Seasonally adjusted
Finland
USA
Japan
EU
Source: OECD
19.4.2010/tyot4/jka/EKI Talousgraafit
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0
2
4
6
8
10
12
14
16
18
20
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Unemployment Rate*
*Seasonally adjusted
Finland
Iceland
NorwaySweden(method break in 4/2005)
Denmark
Source: OECD
19.4.2010/tyot5/jka/EKI Talousgraafit
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Manufacturing Investments in Finland 1975–2009
0
1
2
3
4
5
6
7
8
9
1975 1980 1985 1990 1995 2000 2005 08**09**
EUR billion
Research and development
Fixed investment
Source: Statistics Finland, years 2008–2009 EK Investment Survey
r:/sb/sbwin/kalvot/investointikalvot/2 ENG
Fixed investments and R&D expenditure
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R&D Expenditure in Some Countries
What happened to interest rates?
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0
2
4
6
8
10
12
14
16
18
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
3-Month Market Rates, %
Finland
USA
Japan
Germany
Source: OECD
9.3.2010/kork2/jka/EKI Talousgraafit
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0
2
4
6
8
10
12
14
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Long Term Interest Rates, %
Finland, 10 yr.
USA, >10 yr.
Japan, 10 yr.
Germany, 9-10 yr.
Source: OECD, Bank of Finland
9.3.2010/kork3/jka/EKI Talousgraafit
Is the stability and growth pact difficult for small countries?
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-16 -14 -12 -10 -8 -6 -4 -2 0
Government Fiscal Position in 2010
IrelandUnited Kingdom
GreeceLatviaSpain
LithuaniaFrance
PortugalPolandEU27
SloveniaRomania
NetherlandsSlovakiaBelgium
CyprusAustria
Czech RepublicItaly
GermanyDenmark
FinlandMalta
LuxembourgHungarySwedenEstonia
BulgariaPer cent of GDP
Source: European Commission Forecast (10/2009)
3.12.2009/ennu6/jka/EKI Talousgraafit
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0 20 40 60 80 100 120 140 160 180
General Government ConsolidatedGross Debt in 2010
EstoniaBulgaria
LuxembourgRomaniaDenmarkSlovakia
Czech RepublicLithuaniaSloveniaSwedenFinland
LatviaPolandCyprus
NetherlandsSpainMalta
AustriaGermany
EU27Hungary
United KingdomFranceIreland
PortugalBelgium
ItalyGreece
Per cent of GDP
Source: European Commission Forecast (10/2009)
3.12.2009/ennu7/jka/EKI Talousgraafit
How labour markets have reacted?
- No more devaluations
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Finnish industrial relations model: typical features
• Traditionally a high rate of organization – both employers and employees (70 % of employees are members in trade unions)
• 90 % of employees are covered by collective agreements
• Branch-level collective agreements are generally binding
• Local bargaining today:– Collective agreement is already today allowing local bargaining in many
cases on wage increases and working time arrangements
• Long traditions: employer and employee confederations (=social partners) established over 100 years ago
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The need for more flexible wage system
• It should be possible to adjust wages and other labour costs to cyclical variations. This would require that wage increases can be determined more on the enterprise or division level.
• Variation of basic wages and salaries are often difficult to apply because binding nature of the collective agreements.
• Therefore profit based bonuses have become fairly common in Finland.
• Nowadays about 1/3 of manufacturing blue collar workers and 2/3 of white collar workers receive result based bonuses. In terms of magnitude, they average 5 per cent of annual earnings.
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15,417,7 16,8
19,6
28,9 29,1
33,736,5 37,6 36,7
34,0
38,4
31,535,0 34,1
28,9 29,132,9
37,6
49,247,5
51,8 50,4
57,058,9 58,6
62,6 63,966,2 67,2
0
10
20
30
40
50
60
70
80
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Blue-collar workers White-collar workers
Share of employees received result and profit based bonuses in industry 1994-2008
Source: EK:s wage statistics. Result and profit based bonuses refer to extra bonuses based on financial performance or other business achievements in companies. Bonuses are determined outside collective agreements.
Saukkonen
19.4.2010
%
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Future of collective bargaining in Finland
• In the future, collective bargaining should: – strengthen competitiveness, – boost productivity, – ensure better employment and balanced increase of purchasing power
• EK will no longer negotiate comprehensive income policy agreements; employers and employees will negotiate on sectoral level, shifting more and more emphasis on workplace decision-making
• Change of role, but EK’s role in – drafting labour and social legislation in tripartite co-operation– managing and revising social security schemes in tripartite co-operation– bipartite negotiations with the trade unions
will remain the same• EK encourages wage determination at company level to reflect better
productivity and individual performance • Challenges:
– how to control the wage race better?– how to improve internal and external coordination?
Thank you!