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Tero Luoma

International or isolated? – Why Finland needs foreigners

Let’s face it, in Finland we have 17 people per square kilometres. For contrast, in Seoul there are over 17 000. Thus, there are no physical limits to having more foreigners in Finland. Our limits are mental and social. It is all in our attitude.

There are three main reasons for a foreigner to come to Finland: 1) For Love, 2) For Work, or 3) For Safety. None of these groups has a country as their main criteria. The first choose their spouse, the second their employer’s deal, and the third’s choices are fairly limited. We must understand that foreigners are not all alike: they are all individuals and should all be treated as individuals. Blaming anyone because of his or her background is just not fair.

Politically, foreigners – especially immigrants – are top of the agenda in Europe right now. The US and Silicon Valley are often referred to when talking about how an open society and foreigners are good for the economy. Well, try to get a visa or long-term working license for the US and you will notice that it is extremely hard to get access. Unlike its common image, the US is highly selective towards foreigners.

I fully acknowledge that some people might get angry about this blog. We Finns are quite sensitive about what is written about us, especially abroad. Like journalist Senja Larsen wrote, Finland’s reputation is mostly a thing for Finns. Some people think that Finland or Finns should not be criticized. They think it’s like peeing in your own bed. However, analysis should be separated from criticism and be taken as a way of learning.

Finland is awesome as such, but we must admit that we are not the center of the world, neither politically nor in business. There are hotter hubs than Helsinki. In the Nordics, many innovations are adopted earlier in Sweden. Just as an example, Starbucks finally came to Finland in 2012 – two years after Sweden. Nowadays Estonia is a great example of an early adopter, especially in IT. Somehow we have “a core syndrome”, which means that, if you take a look at Finnish EU policy, Finnish government programs or any foreign policy argument in Finland, you notice how desperately we want to be “in the core” or global “forerunners” in many areas, like cleantech. Fundamentally, this means either showing your expertise to others or aiming for acceptance from others. President Niinistö reminded us well by pointing out we should avoid acting too much like teachers teaching the world our own habits.

Actually, we are an island in many ways. With our weird language, we are not full members of the Nordics. In the East, Russia is culturally, historically and politically a world apart from us. The fact is that with a population of five million, our home markets are just too small from the point of view of global companies. Market size and potential are just too close to irrelevant for many. If you have your EMEA HQ in London or Switzerland, for example, it’s quite natural that Northern Europe or the Nordics is one business area of it, with Stockholm or Copenhagen the area hub. Finland is, in general, just a part of it. Within capital markets, the scale is even clearer: stock exchanges and private equity are more advanced in London and Stockholm, and thus they dominate company ownership structures. If you aim to build a market leader in the Nordics, you will most probably merge a Finnish company with a Swedish platform managed by a Pan-European private equity company. We are daughters, not parents.

Does Finland really need foreigners?

Anyway, we don’t have to fall into melancholy with this situation. Nowadays, new businesses are Born Global and the world is getting smaller and smaller. However, instead of getting isolated, we must get international. In my opinion, foreigners are good for Finland – now and in the future. I have three key points supporting my view:

  1. To keep our society running
  2. To keep our economy and businesses running
  3. To make us all better people

First of all, take a look at the demographics. Our population is not increasing and, on average, our people are getting older. The ratio of workers to people living outside of work, like pensioners, is decreasing dramatically. Something needs to be done in order to keep our social system, pension system, tax system, and the whole welfare state in general, up and running. Although currently we have fairly high unemployment, we still lack workers in many fields. I especially want to highlight one thing: unemployment is not the fault of foreigners. It is our internal political problem. There will never be an end to work in the world. The world will never become ready. We would still have unemployment in Finland even if we had no foreigners – having more foreigners does not increase our unemployment as such. Work creates more work and wealth creates more wealth, if other restrictions are limited. Furthermore, I believe that having more people living here is good for all of us, because it might make unit costs cheaper. In Finland, because of a limited number of people, we have poor use of capacity in many areas, such as retail, transportation and infrastructure. The more people, the better scalability of capacity, and the lower prices for all.

Second, foreigners are crucial for our businesses and economy. Historically, many great Finnish companies have been founded by foreigners. Many businesses have become more successful with the help of foreigners. As noted before, our home markets are just too small. In many business areas there is no living in operating merely in Finland. Our companies must go abroad and thus we must have networks in foreign countries in order to have foreign sales. We need foreigners to help us take Finnish companies global. Unfortunately, currently we are weak in utilizing the potential of foreigners already living in Finland. Local connections and knowhow are important and we should value them better. Furthermore, our companies are too Finnish. Having six over-sixty-year-old Finnish men sitting on the board of directors is both boring and dumb. Too often Finnish language skills are required at all levels. Having foreigners in a team should be seen as a great opportunity for learning. In capitalism, English is the language of companies, but local language skills are needed when communicating with customers. We should understand the value of diversity, difference and dialogue – because that is the way to boost ideas, improvements and internationalization.

Finally, I’m fundamentally a humanist. Neither foreigners nor Finns are better than the other. Still, I believe that the more international communication and cooperation there is, the better for all. I’m an idealist and believe in open dialogue. Being able to learn from other cultures and from people with diverse backgrounds helps us to think outside the box. The more open we are to the world, the more opportunities the world provides for us at all levels. As the world is getting smaller and smaller, I believe that the role of nationalities will become less important and, in the markets, N is approaching one. In the end, it is always your choice.

With these words, I want to express my high respect for Twinkle. I wish it the best success. I hope it becomes a popular phenomenon, a movement and a wide network of internationally-minded people – not just an event. Finally, I hope it can develop our way of thinking.

Tero Luoma, Investment Director and Partner at Taaleritehdas Private Equity Funds, is a private equity professional investing in alternative assets. Tero is currently Chairman of the Board at HappyOrNot, Biotehdas, Gapps, Mattiovi and Watrec, and has served on many boards of directors. Tero has specialized in ownership, entrepreneurship and capital theories and is doing his PhD about Value Creative Ownership at the University of Jyväskylä. Previously he has been a political adviser to Alexander Stubb in the European Parliament and has lived in Brussels, Belgium. Tero has a popular blog called Breathe Business. He lives in Tampere with his wife and two kids.

Tero Luoma


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