This seems to be a bit of an overestimate. If I remember correctly, the costs are around one percent including external asset managers, but of course, even this is far too much.
It probably sounds like a small amount to most people, but for example, the costs of the Norwegian Oil Fund are 0.04%. If the returns on pension assets could be increased by lowering costs to the same level, the benefit in the long run would be significant.
Claude estimates the average investment period for funded pensions to be about 32 years, and the real return on pension funds is about 4%.
In this case, the final sum of the funded pensions could be increased by about 34%.
That is the unfortunate side of a system that drives people to grind. If everyone is always doing well, there is very little reason to push harder.
I know many people who feel that itâs not worth doing more at work than is absolutely necessary. If this same mindset is expanded more generally, a problem arises where it might not be worth doing anything at all.
I am not suggesting that people donât want to work, or that it is particularly easy to find work right now. In any case, it seems clear that the difference in quality of life between being unemployed vs. finding a job inevitably correlates with how hard one works to find employmentâespecially when considering the readiness to relocate or change industries.
Unemployment security is one of the fundamental pillars of our well-being. It ensures that if unemployment strikes, one doesnât fall into a void.
It is simplistic to think that an unemployed person would suddenly have a job if there were no unemployment benefits. I would argue that very few people actually want to be unemployed. There is a certain percentage of ideologically unemployed, substance users, and general slackers in every country; Finland is no exception.
Finlandâs robust unemployment security is often compared to countries where the protection is weaker. However, people often forget to mention how easy and cheap it is to dismiss an employee in Finland compared to almost any other developed country. For example, Germany has weaker security, but terminating an employee is more expensive for the employer. Various severance packages are also offered to those being laid off. Should employers in Finland also contribute more to the costs of those they let go? That probably wouldnât garner much support.
I donât disagree at all. And perhaps the bigger problem is low wages rather than excessively high benefits. The point is more that the gap between the two is, in many cases, too small (not in all).
Data center investments and their ultimate benefits to the national economy have been discussed extensively here. The concern that the benefit remains smallâor even negative due to energy and other âsubsidiesââis quite valid.
I have been considering a couple of models that could boost the entire supercomputing and AI ecosystem by requiring a moderate quid pro quo from data center operators:
Bare metal quota, e.g., for CSC for commercial distribution or R&D: A commercial data center operator (e.g., Microsoft or Google) would commit, as a condition for permitting or tax incentives, to carving out a portion of their GPU clusters for a national operator like CSC (IT Center for Science), which already has the processes and services in place. The operator would, in turn, grant this capacity to Finnish companies at rates below market price (as CSC already operates).
âCompute vouchersâ for proprietary capacity, e.g., through Business Finland: In this model, the ready-made platforms of hyperscalersâsuch as Microsoft Azure, Google Cloud, or AWS AI tools, pre-trained LLMs, and database connectionsâcould be used directly. This would also align incentives with the hyperscalers, as it would commit users to their stack. This is analogous to the âCalculation Supportâ (Laskentatuki) of years past, but in practice, no costs would be incurred.
This could be a major deal for many AI/Tech scalers, as the kind of VC funding required for large-scale AI development doesnât seem to exist in this country, and this would help solve the issue of not being forced to move abroad at an early stage.
â Of course, one can wish for investments with higher added value, but Finland cannot cherry-pick only the best ones. And these investments have indeed benefited Ireland. Boosted by digital and data companies, the countryâs economy has soared.
If handled well, Finland also has the opportunity to become a significant player in the data economy and derive added value from data centers as they become a central part of AI infrastructure. Nokiaâs current earnings development shows signs of thisâ
Indeed, there is a exceptionally simple remedy for âelectricity fearââmeaning the increasing prevalence of peak prices when wind energy is intermittently functional at the Finnish (and even Nordic) level, consumption is relatively steady, and there are cold spells in winter: namely, placing WĂ€rtsilĂ€ next to a data center. If not for full peak power as per the Irish model, then at least partially.
Strictly speaking, electricity wonât run out; that is ensured by the so-called market price, which in Finland has reached a high of âŹ2.35/kWh so far.
The market does not seem capable of producing steady generation on its own alongside increasing variable generation; on the contrary, steady generation has been partially ramped down with the closure of coal plants, and even peak power capacity is so small that prices of dozens of cents per kWh are encountered unnecessarily and regularly. OL3 was finally completed, but it arrived at a point where it mostly replaced ceased Russian imports instead of providing systemic additional capacity.
In this âmisery-landâ of ours, we canât afford to look down our noses at investmentsâŠ
Regarding Irelandâs rise, an investigative journalist could write another piece about competitive taxation, transfer pricing, etc.
In Ireland, data centers must build fast-starting power plants suitable for balancing power next to the data center, equivalent to their own peak consumption capacity.
Certainly, one can long for investments with higher added value, but Finland cannot cherry-pick the best ones. And these investments have been beneficial for Ireland. The countryâs economy has soared, boosted by digital and data companies.
An article in Helsingin Sanomat regarding Helsinkiâs popularity as a tourist destination:
Back then, 2019 was a record-breaking year, but due to the coronavirus pandemic, the number of overnight stays in Helsinki decreased by 64 percent the following year. The 2019 level was not surpassed until 2024. A new record was broken the following year. And last yearâs level will be exceeded this year.
Well, well. Is the Finnish business world finally starting to wake up after all these decades? For the first time ever, you hear someone talking about how endless price hikes arenât the only way to increase sales
It is more profitable for a festival to get as many people to attend as possible than to sell very expensive tickets. After all, people consume other services within the festival area, says Jenna Lahtinen, Executive Director of LiveFIN.
In another thread, there was a mention that Fazer has reduced the size of its chocolate bars due to the high price of cocoa. There were cautious inquiries about whether the bar size would increase while pricing remains the same.
On the radio, it was mentioned that a drink in Helsinki nowadays costs between 15â20 euros at a terrace/restaurant. I just visited Haparanda on the Swedish side. The place isnât big, but I was surprised by the congestion on the bridges crossing the river and at the roundabout. The reason was quite clear: there were queues of Finns at the nearest gas stations. In the shops, you could hear Finnish being spoken, and people were buying chocolate, sweets, and coffee. The world market price for both chocolate and coffee has dropped, but the package price isnât dropping in Finland, whereas in Sweden it is. Additionally, I got coffee and a bun at Ikea for âŹ2.18, and two hot dogs were just over âŹ2. I canât even get a coffee for the price of that coffee-and-bun deal on the other side of the border. At Ikea, I can get 3â6 hot dogs for the price of one at a public event in Finland. Returning to that drink price: I visited Austria in the spring. In a local Irish pub, I had an Irish coffee for âŹ4. What causes this massive price difference? It is taxation, and specifically âsin taxesâ (excise duties). If you plan on having even a few drinks, a ferry ticket to Estonia or Stockholm is worth considering pretty quickly. In our country, taxation and pricing have, in many respects, exceeded the pain threshold for achieving the best result. We should really start considering lowering the alcohol tax for the summer, for example, to keep the Euros at home rather than sending them across the borders. The same should be done with any tax. Lower at least some of them temporarily to see if trade picks up and state revenues increase. With modern technology, such a study shouldnât be very difficult to conduct.
As an additional observation, the shops on the Finnish side looked quite quiet. There was one employer visible, though: a Customs car was parked on watch both ways.
Thatâs nothing new. People have been getting all sorts of merchandise from the Swedish side, both legally and illegally (during wartime and the prohibition era), probably for as long as the border has existed since the end of Swedish rule In principle, there has never really been a border there, except for a brief period at the start of COVID when they asked a few questions, and even that wasnât related to trade.
Yeah, itâs definitely not a new thing, and judging by your username, we have an expert on the subject. Snus-runs, Systembolaget, and Candy World near the border are nothing new, given how our government has adjusted excise taxes. Still, it was a surprise waiting at the Coop checkout while Finns were signing up for loyalty cards with a new cashier. Well, a more experienced Finnish-speaking staff member came to help and the lines started moving. Just a normal Wednesday evening. IKEA was surprisingly quiet. Just as a question, whatâs been added to the GrĂ€nsen shopping center in Tornio that the (wealthy) Swedes are going there for? Iâve heard people get car tires from Haparanda a lot too. Is there anything being bought from the Finnish side?
Actually, at Ikea in Finland, a bun + coffee costs âŹ1.48 and âŹ0.98 for members, hot dogs are âŹ1/each, and veggie dogs are âŹ0.70/each. And for example, at Biltema, hot dogs are âŹ1 and a bun + coffee is also âŹ1.
Iâve been wondering why we havenât already moved to one-day settlement (T+1) for stock trades here in Finland (and Europe), as they did in America. I would imagine this would be even easier here than in the US, since their banking system seems more outdated, considering they still use paper paychecks. It wouldnât be a massive revolution, but it would get money circulating faster and play its part.
The banks might disagree, though, since they currently get to hold that money for an extra day for free and would likely bake the loss of that benefit into their pricing.
Clothes and certain foods/ingredients that arenât really sold in Sweden. I believe they also go there for the movies.
Ikea is the only one in the vicinity and is practically right on the border. People visit it from all over Northern Sweden and Northern Finland. Perhaps occasionally from Norway as well.
Since I live less than 80km from Haparanda, I visit there occasionally myself. However, even though Sweden is cheap, a large number of people from the Swedish side come to Finland to buy groceries that are more expensive in Swedenâfor example, milk and meat productsâand the selection in Finland is significantly wider. I was a bit amused this spring when they interviewed people shopping on the Swedish side on the news about how cheap it is there, but nobody realized to mention the rather essential point of how cheap it is to shop for groceries in Finland. Alcohol, fuel, tobacco, and sweets are significantly cheaper in Sweden, as are some building materials.
Regarding Irelandâs rise, an investigative journalist could write another piece about competitive taxation, transfer pricing, etc.
In principle, there has never really been a border there, except for a brief period at the start of COVID when they asked a few questions, and even that wasnât related to trade.