Economy and employment
What is the expected economic impact of the Corona-crisis?
- It is hard to estimate as there is no knowledge how long the situation will prolong and when all the lockdown measures restricting movement and business activities can be safely removed. In the most recent estimation by the Ministry of Finance in Finland it is forecasted that the Finnish economy will shrink about 5.5% this year. The ministry also estimated that things will start to pick up and return to the pre-corona time in 2021-2022. The restrictive measures have hit especially hard the service and public transportation sectors as private consumption has been reduced and for example major part of air and sea travel is at a halt. The positive sides can be found in the new business opportunities for digital services and estimated rise in the demand for sustainable solutions.
How is employment affected by the current situation?
- In Finland in general, the number of people employed is falling as the pandemic forces businesses to close. In a survey conducted by ITS Finland 38% of the responders estimated that the corona situation will either likely or highly likely lead to either layoffs or terminations of employment. Compared to another survey by the Chamber of Commerce which covered multiple industries, even 60% of the companies estimated a reduction the workforce either temporarily or permanently. So, in that sense it could be seen as slightly positive that the estimated outcome in the mobility sector may not be as bad as in other sectors.
How will the City of Helsinki enable and support mobility companies after the crisis?
- Helsinki and the whole capital region will continue to do what it does best: it will offer the city as a platform and enable innovation through pilot programs and open calls and continuing to offer open data, to mention a few examples. One ongoing project is the Jätkäsaari Mobility Lab, which assists companies and researchers in testing and developing smart and digital mobility solutions on the streets of Helsinki, with real users.
- The Finnish government and the capital region cities are investing several billion euros to support companies get through the corona crisis. Aid is available in several formats; direct subsidies, reliefs in rents and other costs, waivers, refunds, helplines, ease in employer’s responsibilities and so forth. These are available also for foreign companies that are based in Greater Helsinki. Read more on our article: Covid-19: updating information for companies in Finland and also how NewCo Helsinki can help entrepreneurs affected by the coronavirus.
What are the expected implications and challenges for new mobility businesses until the end of the year?
- Laura Eiro, Program Director from ITS Finland shared results from a recently conducted survey to better understand the effects the corona situation has on the Finnish smart mobility market. The responders covered a wide range of smart mobility actors. Like in all sectors, the adverse impact seems to be significant. When asked about the impact on the companies’ activities and the financial situation in the next six months, two thirds of the responders estimated it will be either negative or very negative. However, when compared with businesses in Finland on average, it seems that the smart mobility industry is a bit more resilient in general. A small number of responders even estimated that they have benefited from the situation with the rise of the digital services. But, as we are in the early stages it is impossible to predict the final impacts of the coronavirus. However, at this stage it seems that the mobility sector is not in the worst position as an industry and the rise of the digital solutions can open some new opportunities for companies. The full results of the survey can be read via the ITS Finland website (in Finnish).
Smart mobility ecosystem and market situation
What is the current state of the mobility and maritime sectors in Helsinki?
- See above for the estimated impacts of the corona pandemic for the mobility sector. In general, Greater Helsinki’s key strengths are in autonomous driving, shared mobility and integrated mobility and maas. At the moment, people are using less shared transportation options, but on the other had we can also see new business models developing within logistics and the transportation of goods. Micromobility and autonomous solutions are being developed to include moving goods in addition to people. Additionally, we can see growth in the electric ecosystem; EV’s and the manufacturing of mega- and giga-factories. The new trends that most likely are here to stay are on-demand, pay-as-you-go and contactless services added with the reinforced aspect of wellbeing and wellness.
- When we look at smart maritime it is obvious that the shipping volumes will go down in short term. Cruise industry is especially badly hit as currently many ships are docked, ports are closed and disembarking passengers is not possible. It will take years to recover and it also has an impact on the shipbuilding industry in Europe where shipyards are more specialised on the complex ships and cruise vessels. State support will be critical for the survival of the ship building industry. Arctic technology, where Greater Helsinki maritime cluster has a very strong know-how, still has big projects on the agenda and keeps the arctic tech field afloat. Helsinki shipyard also has a good pipeline with repair work and two luxury expedition vessels. Digitalisation is the key driver in the maritime sector as well. Companies will continue to search ways to streamline efficiency, optimise operations and fuel consumption.
- Visit our smart mobility and smart maritime pages for more information on the business opportunities and ecosystem players and partners.
What are the plans for active transportation in Helsinki? Are biking and walking considered as a real means of transportation?
- Active transportation, meaning walking, cycling and public transportation is very much in the core of Helsinki’s intelligent transport system development program. An example from the program is that it aims to have rail transport and cycling connections between the city centers making sustainable mobility a competitive option for private cars. All the Greater Helsinki region cities work closely together and with eg. the Helsinki Regional Transport Authority (HSL) to improve the biking infrastructure and attractiveness. For example, Helsinki aims to increase the number of journeys made by bicycle to 15% by 2020. Micromobility also took a leap last year in the region with many escooter and bike companies entering the market. Helsinki also ranked number one in a report comparing the popularity of city bikes in different cities around the world in 2019.
What are the opportunities around autonomous systems in the marine industry in Finland?
- The Finnish government has recently adjusted the legislation to better enable the testing and development of autonomous maritime operations, vehicles and technologies. This has paved the way for the first test area for autonomous shipping in the world. The test area is part of the One Sea ecosystem, which works towards an operating autonomous maritime ecosystem by 2025. The ecosystem combines top research, state-of-the-art information technology and global businesses. Another example is RAAS, an interdisciplinary innovation ecosystem and service platform for autonomous systems R&D
Market entry, startups and collaboration
Are there any international programs that can help new startup companies come to Finland?
- There are several different paths for startups to set up in Finland. For example, for founders coming outside the European Union there is an instrument called Startup Permit, provided by Business Finland. The permit makes it possible for international growth companies to build a startup company in Finland. Helsinki Business Hub together with Israel Innovation Authority leads a pilot program which provides Israeli and Finnish startups funding and free-of-charge matching services in the respective country to pilot their solutions. The pilot program is focus especially on (but not limited to) digital health, smart mobility and information and communication technologies. Other options are available, contact Helsinki Business Hub’s advisors to help with your soft landing to Finland.
What options are available for introducing smart mobility technologies, to connect with investors and to expand collaboration?
- The next opportunity to get introduced to the Finnish mobility sector is on 11 June 2020 at the Green & smart recovery – Mobility 2.0 virtual congress. The congress will discuss the topics that should be tackled at both European and global level to ensure Green Recovery after COVID-19 and to establish the role of smart and green mobility solutions and sustainable investments during the recovery phase. The event offers an immersive 3D experience with inspirational international keynotes, an extraordinary environment for virtual networking and an expo showcasing the latest smart mobility solutions from Finland. Save the date, register and stay tuned for the full program.
- If you are looking for quality dealflow from Finland and Greater Helsinki, Helsinki Business Hub’s investor services will gladly introduce you to the local growth company ecosystem. We have around 1,200 startups from all industries in our database and our advisors are here to help you find your match.
- To stay up to date on the latest news, events and opportunities in the future as well, subscribe to the Helsinki Business Hub’s smart mobility newsletter and the ITS Finland newsletter.
How to become an electric vehicle manufacturing from scratch in Finland?
- Finland has expertise and talent both in the more traditional manufacturing, like cars, tractors and trucks, and in the new mobility sector. We are leading the way in the development of autonomous driving solutions and especially in solutions for all weather conditions, FABULOS and Sensible 4 as examples. Testing vehicles in all weather conditions is also possible in Finland. Though electric vehicles as such are not manufactured in Finland, expertise, solutions and parts used in EV’s are available here. Contact our smart mobility advisors and we are sure we can find the perfect solution for you from manufacturing to testing and logistics.
Sustainability and green recovery
Is the sustainability-agenda expected to be hit by the financial implications of the Corona-crisis?
- “Uncertainty in the market has an impact on new investments and for business owners the first priority is to ensure their business is viable. Therefore, the risk levels are scrutinized more strictly than earlier, and any investment decision will go through a tighter evaluation. However, we have seen through our communication with customers that investments in sustainability have not stopped. Many customers look at this pandemic as a temporary issue and they know that in the longer term the investment in finding alternatives to fossil fuels is important,” said Jukka Kuuskoski, CSO, Norsepower regarding the sustainability agenda in the maritime sector.
- The Finnish government has issued a statement on the measures regarding sustainability they are about to take after the corona crisis. In short, they are perceived to proceed with actions that are in line with the government’s goal of Finland becoming carbon neutral by 2035 and carbon negative quickly thereafter. On a national and European level the green recovery agenda should include smart mobility as well. “I believe there will be a demand for sustainable transport solutions in post-covid times too and also public investments will be steered to give those who fight climate change,” said Laura Eiro, ITS Finland. For some projects and programmes around sustainability the schedule has been altered or extended, like the Helsinki Energy Challenge, but the sustainability agenda is still very much on in the region.
Have the ESG (environmental, social and governance) scoring been taken into use in smart mobility in Finland?
- There are several pilot projects covering this topic in Finland. One example is run by the City of Lahti where they piloted an application called Kulkukauppa which rewarded the users for choosing more sustainable ways of transportation. It also enabled the user to measure their carbon footprint and was integrated to an emission trading system.