Which Are The Job Creating Organisations In Finland?

The Bank of Finland’s Bulletin page is a bookmarked page for me. They have very informative monthly reports and articles analysing the data they have. One of their recent articles from June 2016 was Job creation in firms – does Finland lack gazelles? by Juuso Vanhala and Matti Virén.

One of the key points they make is that a small number of firms create a significant portion of new jobs in Finland while in a large portion of firms, job creation remains limited or the number of jobs is actually decreasing. They do the analysis by focusing mainly on changes in employment over three-year periods since it gives a much clearer picture of the length of employment cycles.

But there is a catch to the number of new firms starting and employing people.

Their insight is that each year certain number of new firms start up, and around an equal number close down.

A large proportion of all new jobs are created by a very limited group of companies.

The share of startups in the total number of firms in Finland is among the lowest in international comparisons: in many countries, startups account for about 15–25% of all firms, compared with less than 10% in Finland.


Number of startups and exiting firms

Startups employ less than before

Percentage growth rate of number of employees

The key point they make is

A small group of gazelles creates a large share of jobs

Gazelles are described as businesses with annual growth over 20%. So these Gazelles are 6% of all companies, but create over 50% of all new jobs. The remaining new jobs seem to be created by a larger group of firms that grow at a slower pace. These Gazelles exist in all industries and sectors, not just high-tech industries.

Not surprisingly the article concludes that the share of firms that have downsized by a lot has increased in times of recession, first in 2009 and thereafter to a notable degree during 2012–2014. And the downsizing had led to reduced net employment.

Also since 2009, one in every 3 Gazelles seem to also have the number of employed decline by more than 50%.

A really informative article. You should really read the whole article and go through the references they have as well.

Author: Venkata Gandikota

Venkata has more than 13 years of technical engineering, research, ideation, strategy and business modeling experience. Based on his experience with the Indian market and realizing also the need for affordable & sustainable solutions for Finland and other European markets, he started The Nordic Frugal Innovation Society in late 2013 with 2 colleagues. By organizing ideation workshops and 2 major conferences involving Cities, Universities, and businesses he started to mainstream the concept in Finland and the Nordics. Gandikota has also written several articles focusing on frugal innovations in the Finnish media. He has also been helping Finnish businesses in India as CEO of Indianeer Consulting and gives guest lectures at JAMK University of Applied Sciences in Jyväskylä. He has a Bachelors in Chemical Engineering from India and a Masters in Environmental Engineering from USA.