Competitiveness is an aspect that can be debated from every angle, depending on what you look at. Perhaps the salaries of paper workers in a declining paper industry are too high…
One often hears that there is no investment in Finland because of a lack of competitiveness, as the thread starter also notes. Yet, this lack of investment actually plagues several developed economies, even Germany.
If Germany, where the Hartz reforms ensured (with consequences not so pleasing to the rest of Europe…) competitiveness, does not attract investment, then is the problem solely one of competitiveness?
What if the problem is a global lack of demand, or even the wrong products? If the cause of the symptom is a lack of demand, not weak competitiveness, then improving competitiveness would primarily increase owners’ dividends. That probably doesn’t bother us forum members, but from the perspective of the economy as a whole, it’s mostly shifting money from one pocket to another, which impacts demand and savings.
Domestic demand has been one of the driving forces of the Finnish economy in recent years. If wages and benefits are cut, domestic demand will certainly take a hit, but what if foreign demand for our products doesn’t pick up, and investments still don’t come?
These are difficult problems for which there are no simple solutions.
It often feels like the country has somewhat frozen, hoping for a new Nokia that would fix both the sustainability gap and other problems. Hope is notoriously a bad strategy, but there doesn’t seem to be any urgency in correcting the current situation, and the pressures for it are so far minimal: a lot of talk and hand-waving, less concrete action.