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OECD Territorial Reviews: Helsinki, Finland 2003

image of OECD Territorial Reviews: Helsinki, Finland 2003

The Greater Helsinki Region emerged from the 1990s as an internationally competitive economy. This review examines the factors contributing to this success and the new development challenges it has created. One critical policy question is the Finnish dependence on the telecom/mobile industry. The current strategic positioning of the Finnish ICT cluster builds on a high-return/high-risk scenario. Long-term regional competitiveness requires a more focused strategy of diversification, i.e. developing ICT activities beyond the current cluster scope. Social inclusion is another crucial issue. Persistent unemployment among the less educated population and growing income disparities are calling for the restructuring of past policies. The Greater Helsinki Region needs to find ways to promote new opportunities of social cohesion. Rapid population growth has resulted from greater economic competitiveness requiring renewed commitment to managed growth and compact development. All of these challenges create needs for greater metropolitan co-ordination that are examined in turn.

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Fiscal Implications for Development

Like the other Nordic countries, Finland has a large public sector that provides a generous set of social services. In addition, it relies heavily on local governments to deliver those services. Although heavy reliance on local governments to provide social services is inconsistent with standard models of fiscal federalism, Finland manages this arrangement by imposing quite high standards in the form of “recommendations” from the centre and by efforts to equalise the revenue- raising capacity of the various districts. In some ways, the system is best described as one in which the municipalities serve as agents of the state rather than as one of autonomous local governments making their own decisions about service quality...

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