Finland is a vibrant (multi-sector) and well-developed economy, situated in Northern Europe. They lead the world in Competitiveness (Intergenerational mobility, Renewable energy). They possess the world’s best clean energy mix. They are world leaders in Public Institutions, Macro-economic stability, and Human-skills development. They also have some of the finest Financial systems, and possess enviable Business dynamism [1]. It’s easy to start a business here, and the entrepreneurial culture is thriving.

Some of their globally known firms are—Fortum (Renewable energy), Kone (lifts, engineering & construction equipment), Nokia (mobile phones & electronics), Rovio (creator of Angry Birds game), Supercell (creator of Clash of Clans, Clash Royale, etc.).

To understand the new opportunities that open up after COVID-19, let’s have a quick look at the key global events—in 2019, and expected (or occurring) events in 2020.

World Economy: Before COVID-19

Firstly, the year of 2019 was a year of low unemployment [2], and a few shocking events:

1. The U.S. President Trump’s Impeachment trial [3]
2. Boeing 737 Max’s faulty design & stoppage in production of Airbus A-380 [4, 5, 6]
3. Hong-Kong’s long-lasting protests [7]
4. Devastation due to forest fires in many regions [8, 9]

Secondly, it was also a year of low entrepreneurial enthusiasm:

1. Less breakthrough/disruptive innovations
2. Low technological growth (nascent stage) [10]
3. Low growth opportunities for firms worldwide [11, 12, 13, 14]

Thirdly, to boost their economies, many governments provided incentives—help entrepreneurs take bold steps and experiment. For instance, the cost of capital was reduced to almost zero, by many central banks. This also includes the Federal Reserve & the European Central Bank [15, 16, 17, 18, 19, 20, 21].

World Economy: After COVID-19

Firstly, after COVID-19 spread worldwide, we have witnessed a change in perspective by many nations. Shortages of pharmaceutical drugs, PPE, and other basic medical supplies are seen worldwide. Many nations who produce these supplies have put strict export restrictions, to avoid shortages within their borders. Global markets are plagued with counterfeit or low-quality supplies, and many traders hoard supplies, only to be sold to the highest bidder.

Secondly, this pandemic forced nations to evaluate the ‘Open-market system of Capitalism’. It’s possible to witness a ‘New World Order’ after the COVID-19 pandemic fades away.

Thirdly, now, nationalism & self-sufficiency are a high priority for policy makers and businesses, rather than to procure manufactured goods from a country, with most-efficient use of resources & capital [22, 23, 24, 25, 26, 27].

Opportunities After COVID-19: Finland

Firstly, few sectors have the highest potential [28, 29, 30, 31] for growth after COVID-19 ends:

1. Communication Services
2. MedTech Services (Digital Health, Telemedicine)
3. EdTech (eLearning – Academics to Hobbies)
4. Consumer Staples
5. Pharmaceuticals
6. Medical Supplies

Secondly, this pandemic has revealed the fragility of the global supply chain. Many developed & rich nations—face shortages of basic supplies to run hospitals and households [32, 33, 34].

Thirdly, it would be wiser to be prepared for any similar situation:

1. Stimulate local economies
2. Provide more low/semi-skilled employment at home country
3. Prioritize self-sufficiency & quality, over lowest-price of goods in the global market
4. Form stronger regional supply chain networks

Fourthly, it’s possible to face another wave of COVID-19 or another similar catastrophe.  So, major policy changes are required to ensure supply chains are not disrupted. This requires efforts both—by policy makers and industry leaders [35, 36, 37, 38]. That is:

1. Coordinate/restart the production of low-value goods like—consumer staples, generic pharmaceuticals, and medical supplies within the borders of the country
2. Invest in high-quality regional supply chains, over low-cost global supply chains
3. Invest in communication services—ensure social distancing does not impact growth of the economy

Fifthly, being an open, well-rounded (multiple sectors), and a highly equal economy, Finland can incorporate production of low-value goods in their strong manufacturing sector. Having strong regional trading partners—Germany, Russia, Sweden, the Netherlands, the United Kingdom, they can ensure constant high-quality supply chains. Being a leader in technology (software) innovations & an equal country, they can create unique communication services; i.e. Services to help the government monitor pandemic & other infection sources, without a compromise on personal freedom [39, 40, 41, 42, 43, 44, 45, 46].

To conclude, we humans always evolve, when faced with roadblocks of any nature. In this case, the impact of a communicable disease (pandemic) helps us become resilient, re-evaluate economic priorities, and adapt to a changing world.

© Sudhanshu Vuppuluri, 26-04-2020

References:

1. https://www.weforum.org/reports/how-to-end-a-decade-of-lost-productivity-growth
2. https://www-statista-com.libproxy.lib.unc.edu/statistics/279777/global-unemployment-rate/
3. https://www.bbc.com/news/world-us-canada-50813696
4. https://edition.cnn.com/2020/03/10/business/boeing-737-max-cost/index.html
5. https://fortune.com/2019/02/14/airbus-ends-production-a380/
6. https://www.wired.co.uk/article/airbus-a380-retirement
7. https://www.bbc.com/news/world-asia-china-49317695
8. https://www.nationalgeographic.com/environment/2019/08/amazon-fires-cause-deforestation-graphic-map/
9. https://www.theguardian.com/australia-news/2019/dec/25/factcheck-why-australias-monster-2019-bushfires-are-unprecedented
10. https://www2.deloitte.com/content/dam/Deloitte/br/Documents/technology/DI_TechTrends2019.pdf
11. https://www.oliveboard.in/blog/major-events-2019-india-world/
12. https://www.worldbank.org/en/news/immersive-story/2019/06/04/the-global-economy-heightened-tensions-subdued-growth
13. https://www.worldbank.org/en/news/press-release/2019/06/04/global-growth-to-weaken-to-26-in-2019-substantial-risks-seen
14. https://www-statista-com.libproxy.lib.unc.edu/chart/18787/imf-growth-projections-for-the-global-economy/
15. https://www.theguardian.com/world/2018/dec/31/2019-the-events-to-watch-out-for-in-world-politics-sport-and-arts
16. https://www.cfr.org/blog/ten-most-significant-world-events-2019
17. https://www.theverge.com/streaming-wars
18. https://www.nytimes.com/2019/10/30/business/economy/federal-reserve-interest-rates.html
19. https://markets.businessinsider.com/news/stocks/global-central-bank-september-meeting-schedule-rate-expectations-7-countries-2019-9-1028521610#2-swiss-national-bank2
20. https://edition.cnn.com/2019/12/31/investing/stock-market-2020-outlook/index.html
21. https://www-statista-com.libproxy.lib.unc.edu/chart/18841/federal-funds-rate-vs-euro-zone-interest-rate/
22. https://youtu.be/AtYt8Z4tOCk
23. https://youtu.be/WA1Ji-Hj1qo
24. https://youtu.be/yXHeORUsEFw
25. https://youtu.be/dKN2slRqZik
26. https://youtu.be/BlP_KzTeON0
27. https://youtu.be/MfgIXP4NWjw
28. https://www.forbes.com/sites/investor/2011/12/07/whats-the-best-sector-buffett-walmart-unilever-coke/#316d4ee69ddc
29. https://www.schwab.com/resource-center/insights/content/sector-views
30. https://www.forbes.com/sites/jrose/2020/02/03/the-7-best-investments-to-make-in-2020/#222eb612a5cd
31. https://venturebeat.com/2019/12/30/10-technology-trends-that-will-impact-our-lives-in-2020/
32. https://www.scmp.com/news/china/diplomacy/article/3077428/netherlands-recalls-600000-face-masks-china-due-low-quality
33. https://www.bloombergquint.com/politics/faulty-virus-tests- cloud-china-s-european-outreach-over-covid-19
34. https://www.latimes.com/world-nation/story/2020-04-10/china-beijing-supply-world-coronavirus-fight-quality-control
35. https://youtu.be/IaR1StKajvY
36. https://www-statista-com.libproxy.lib.unc.edu/chart/17687/global-gdp-growth-by-region/
37. https://www-statista-com.libproxy.lib.unc.edu/chart/21397/global-gdp-growth-forecasts-before-and-during-the-covid-19-pandemic/
38. https://www.worldbank.org/en/news/press-release/2020/01/08/modest-pickup-in-2020-amid-mounting-debt-and-slowing-productivity-growth
39. https://www.oecd.org/economy/finland-economic-snapshot/
40. https://www.forbes.com/places/finland/
41. https://www.cia.gov/library/publications/the-world-factbook/geos/fi.html
42. https://en.wikipedia.org/wiki/Economy_of_Finland
43. https://www.britannica.com/place/Finland/Resources-and-power
44. https://www.forbes.com/sites/niallmccarthy/2019/07/25/the-worlds-most-innovative-countries-in-2019-infographic/#2b1eb3076265
45. https://www-statista-com.libproxy.lib.unc.edu/statistics/327513/share-of-economic-sectors-in-the-gdp-in-finland/
46. https://www-statista-com.libproxy.lib.unc.edu/statistics/328297/unemployment-rate-in-finland/
47. Pxhere.com (Photo by form PxHere), (Photo by form PxHere)