OECD Territorial Reviews: Helsinki, Finland 2003

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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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Is Competitiveness Compatible with Egalitarian Norms?

Prior to the competitive success of the Finnish economy in the latter half of the 1990s the implicit social contract in the country was both simple and widely shared. High marginal tax rates in combination with legal rights to a comprehensive set of social services ensured one of the most egalitarian economies in the world seemingly willing to bear the costs of slower economic growth. The severe economic crisis of the early 1990s – indeed, the deepest recession experienced by any OECD member country in the post-war period – forced a critical reassessment of this social equation. Most importantly, the strong rationalist orientation of Finnish governance was unseated by the economic uncertainty that gripped all sectors and social strata of the country....

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