Openness to international trade and foreign direct investment, a high education level, a strong innovation record, and social safety nets that support those adversely affected, put Finland in a good position to benefit from the opportunities offered by globalisation. However, the fiscal challenges posed by ageing suggest that the Nordic model of social support will not be sustainable without significantly higher employment together with more efficient public spending and taxation. In addition, labour market institutions and some other policies do not permit sufficient flexibility to promote the rapid reallocation of resources that globalisation and technical change demand, while the tax and welfare systems distort economic choices in a number of areas. As a result, labour shortages are rising, despite a still high level of unemployment, and some industries are facing severe competitive pressures. By considering these problems through the lens of globalisation, this chapter identifies the key challenges facing the economy – challenges that are taken up in more detail in the following chapters.