How do we guide Finland forward in the midst of global uncertainty? Ministries’ futures review provides tools for decision-makers

The prolonged COVID-19 pandemic, Russia’s war of aggression in Ukraine and accelerating climate change have led to a situation in Finland and globally where the future seems rather uncertain. In the midst of uncertainty, decision-making is difficult. Finland will hold parliamentary elections in spring 2023, and the new Government Programme will outline policies for the next few years.

To support decision-makers, the ministries publish joint futures reviews that provide a comprehensive picture of the current situation and offer perspectives on how to solve the challenges facing Finland. For the first time, this year’s review will be published as an easy-to-use online publication that readers can browse by theme or using the advanced search function (in Finnish).

In the coming years, our operating environment will pose a wide range of challenges for Finland. We must be able to respond to these challenges not only quickly but also in a way that takes into account the impact of decisions over the longer term. The international situation is politically and economically unstable, and profound changes are taking place in our security environment. Russia’s invasion of Ukraine has further increased tensions between major global powers, weakened the rules-based international system and undermined multilateral cooperation. At the same time, it is clear that we cannot tackle the emerging global challenges without strong international cooperation. Finland’s most important political and economic framework is the European Union, and as an EU Member State, we are able to effectively influence our external operating environment.

Climate change and biodiversity loss have been recognised as the most significant threats to the basic conditions for life on earth. The impacts of climate change can already be seen in Finland in the form of extreme weather phenomena and dwindling biodiversity. Climate change affects every sector of society and everyone operating in it. Its impacts also increase the risks associated with food security, water supplies and pandemics. The demand for natural resources is growing while they are being consumed at an unsustainable rate, and at the same time, we are working to break away from critical import dependencies amid rising prices. This highlights the importance of enhancing the efficiency of the circular economy and the reuse of raw materials, replacing products and energy with renewable equivalents, and developing solutions that promote the green transition.

The short-term economic outlook has darkened since Russia launched its invasion of Ukraine. As a result of the invasion, the West was forced to impose economic sanctions on Russia, which Russia has responded to with its own sanctions. The war has led to a sharp increase in the prices of energy, raw materials and food. In the near future, we will need solutions to safeguard the sustainability of public finances, the conditions for economic growth and the functions of the welfare society.

In the longer term, growth in the economy and the standard of living will be based on increases in labour productivity: compared to its competitor countries, productivity growth in Finland has been weak in recent years. We can increase productivity by investing in competence, high-quality research, education and innovation capabilities, for example. That said, the level of education in Finland has been lagging behind our key competitor countries, and our relative level of competence has deteriorated. When it comes to R&D, Finland’s expenditure-to-GDP ratio has remained below three per cent, even though we have set our target level at four per cent.

Digitalisation offers plenty of opportunities to increase productivity and wellbeing and to promote the green transition. Technological breakthroughs and many social innovations depend on developers having access to reliable, open data that can be used extensively. We can utilise the opportunities presented by digitalisation in a way that is safe and reliable if our legislation is up-to-date and measures have been taken to ensure cyber security.

The overall balance of public finances is also closely linked to the future of our welfare society. In this respect, population growth – supported by both population and immigration policies – plays a key role. The relative share of working age people in Finland is shrinking as the population ages and younger generations become smaller. A shortage of skilled labour is already a significant obstacle to growth. Finland is becoming ever more dependent on labour from abroad, and Finland and Europe are competing with the rest of the world for the best talent. There is a risk that disparities between people will increase, be it with regard to income, health or education. We have also seen growing disparities between regions.

Ministries’ highlights from the futures review:

Ministry of Social Affairs and Health

• We must reverse the rise in inequality while supporting people’s wellbeing and the vitality of regions.
• We must safeguard effective and equal healthcare and social welfare services while ensuring the availability and sufficiency of healthcare and social welfare personnel.
• We must increase employment and inclusion by reforming the social security system.
• All decision-making must take into account wellbeing and economic impacts, ecological sustainability and gender equality.

Ministry of Education and Culture

• We must strengthen and reform education, research and culture in order to secure socially, economically and ecologically sustainable growth.
• We will increase the overall level of education, invest in basic skills and strengthen educational continuums. Half of all young people will have higher education degrees by the beginning of the 2030s. Adult education leading to a qualification will be targeted in order to raise the level of education. R&D funding will be increased to four per cent of GDP.
• Measures will be taken to ensure equal access to education and culture. Structures related to organising educational and cultural services will be reformed and funding will be expanded to take into account differences in service needs. Legislation on early childhood education and care, pre-primary education and primary and lower secondary education and the Act on the Financing of Education and Culture will be reformed.

Ministry of the Environment

• Carbon negative Finland has halted biodiversity loss and pollution: The timeframe for making decisions is limited.
• The green transition is the foundation for growth: Finding solutions to the climate and ecological crises will require significant investments in the green transition and circular economy as well as major changes in the way we use natural resources. 
• Living environments and new solutions support smooth everyday life in all life situations: There will be enough housing for different population groups and it will meet the needs of residents.
• Decision-making steers society towards the green transition: Implementing the green transition requires consistent decision-making in society.

Ministry of Agriculture and Forestry

• Safeguarding self-sufficiency and the vitality of rural areas is an important part of comprehensive security.
• We will ensure sustainable growth and wellbeing while supporting the carrying capacity of nature.
• High-quality spatial data will enable digitalisation and new business.

Ministry of Economic Affairs and Employment

• Wide-ranging investments in research, development and innovation - Public and private R&D investments will rise to 4 per cent of GDP by 2030.
• We will work towards an 80% employment rate with a focus on skills.
• We must ensure security of supply and energy self-sufficiency amidst the transformation of global economic value chains.

Ministry of Transport and Communications

• Finland must improve its international accessibility and logistical position.
• Developing an emission-free transport system that enables investments will require a reform of transport financing and taxation. We must further strengthen the information-based transport system plan (Transport 12) agreed on in Parliament.
• We need to create well-functioning markets for transport services, while also ensuring that basic transport services remain available.
• We must increase investments in digitalisation, data economy and cyber security and continue to develop cross-sectoral management and operating models.

Ministry of Finance

• We must strengthen public finances by improving the conditions for economic growth, choosing expenditures wisely and securing tax revenue.
• In order to succeed, the green transition requires effective financial policies. 
• We must strengthen public finances by improving the conditions for economic growth, making wise choices between expenditure items and securing tax revenue.
• Building people-oriented digitalisation through automation will require significant changes in society’s operating models and better utilisation of data.

Ministry of Justice

• Safeguarding the rule of law in everyday life  
• We will work to maintain trust and promote society’s ability to adapt to changes
• We will ensure the functioning of the criminal procedure chain and the ability of the authorities to respond to the diversification of crime
•  We will implement measures to prevent social exclusion, crime and over-indebtedness 
•  We will ensure that basic legislation is clear and up to date

Ministry of the Interior

• The authorities must strengthen their functional capacity and resilience
• Finland must prepare for wide-ranging influence activities
• Finland needs a comprehensive migration policy
• We must strengthen our competence capital

Ministry for Foreign Affairs

• The return of power politics, Russia’s invasion of Ukraine and growing geopolitical tensions challenge the operating environment for foreign policy. Finland will define its profile as a member of NATO and strengthen its security through international partnerships.
• The emergence of authoritarian challengers to the Western world order is a key uncertainty factor. Relations with China and Russia are being managed in an increasingly challenging situation.
• Climate change creates conflicts and migratory pressures, but also accelerates the green transition. We must address the root causes of conflicts, seize the opportunities offered by the green transition and strengthen Finnish expertise in promoting sustainable development.
• The gap between the Western world and the Global South is growing and creating tensions and pressures for development policy. In addition to diversifying relations, we must promote solutions that channel private capital into investments in sustainable development in developing countries. 
• There are significant stress factors and risks to open world trade in the global economy. We must safeguard Finland’s commercial and economic interests and make efforts to promote exports and strengthen international norms.

Ministry of Defence

• The security situation in Europe is serious and poses a variety of risks: Russia’s war of aggression will have a long-term impact on security in Europe and Finland. 
• A strong national defence capability is the foundation of Finland’s security in all security policy solutions. Finland’s defence will continue to be based on conscription service, a trained reserve, the defence of the entire country, a strong will to defend the country and a high level of materiel preparedness.
• We must safeguard the conditions for defence by developing defence on a long-term basis and as a single entity with parliamentary support. The changes in the military operating environment require measures to strengthen Finland’s defence capabilities and an immediate and permanent increase in the level of the defence budget.  
• Finland will integrate its defence into NATO’s collective defence. A strong defence capability and NATO membership will form a credible security solution for Finland far into the future. 
• Finland will strengthen its defence through international defence cooperation. Finland will continue its close bilateral and multilateral defence cooperation as a member of NATO. NATO membership provides an opportunity to further deepen Finland’s many existing cooperation arrangements.
• Finland’s security is built through cooperation. This requires comprehensive national solutions and regulatory development in the cyber, space and information operating environments, among others.

Prime Minister’s Office

• In the coming government terms, it will be even more important to prioritise and use limited resources wisely, for example by anticipating and assessing the long-term sustainability of the policy decisions made.
• It would be wise for the Government to pay particular attention to ensuring the conditions for managing and implementing important strategic themes at the very beginning of its term of office.

Inquiries: Seppo Määttä, Director General, Prime Minister’s Office, +358 295 160 598,  Jouni Varanka, Head of Unit, Prime Minister’s Office, tel. +358 295 160 177, Ulla Rosenström, Chief Specialist, tel. +358 295 160 188
Inquiries concerning ministry-specific items:
Ministry of Finance: Lauri Kajanoja, Economic Policy Coordinator, tel. +358 295 530 554, Lauri.Kajanoja(at)gov.fi
Ministry of Justice: Vava Lunabba, Head of Unit, tel. +358 295 150 120, Vava.Lunabba(at)gov.fi
Ministry of Economic Affairs and Employment: Jussi Toppila, Senior Ministerial Adviser, tel. +358 295 048 070, Jussi.Toppila(at)gov.fi
Ministry of Agriculture and Forestry: Elina Nikkola, Ministerial Adviser, tel. +358 295 162 333, Elina.Nikkola(at)gov.fi
Ministry of the Environment: Juho Korpi, Development Director, tel. +358 295 250 136, Juho.Korpi(at)gov.fi
Ministry of Education and Culture: Aleksi Kalenius, Ministerial Adviser, tel. +358 295 330 291, Aleksi.Kalenius(at)gov.fi
Prime Minister’s Office: Hanna Kivistö, Chief Specialist, tel. +358 295 160 309, Hanna.Kivisto(at)gov.fi
Ministry of Defence: Karoliina Honkanen, Ministerial Adviser, tel. +358 295 140 354, Karoliina.Honkanen(at)gov.fi
Ministry of Social Affairs and Health: Pasi Pohjola, Director of Strategic Affairs, tel. +358 295 163 585, Pasi.Pohjola(at)gov.fi
Ministry for Foreign Affairs: Sini Paukkunen-Mykkänen, Counsellor, tel. +358 295 351 759, Sini.Paukkunen-Mykkanen(at)formin.fi
Ministry of the Interior: Harri Martikainen, Director of Strategic Steering and Development, tel. +358 295 488 512, Harri.Martikainen(at)govsec.fi
Ministry of Transport and Communications: Johanna Särkijärvi, Director of Strategic Affairs, tel. +358 295 342 024, Johanna.Sarkijarvi(at)gov.fi