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Finland Metal Industries
The metal industries led Finland's postwar economic
development, and they were crucial to the country's
economic
health. Until World War II, Finland generally produced
relatively
unsophisticated goods for domestic consumption. The
country's
shortages of energy, basic metals, and capital accounted
for the
sector's slow development. Although Finland had produced
ships
and other capital goods for the Russian market since the
late
nineteenth century, the real breakthrough came after 1944.
Then
the metalworking industry, goaded by Soviet reparations
demands,
overcame its handicaps, sharply increasing both the the
quantity
and quality of output. Reparations deliveries ended in
1952, but
the Soviet Union continued to absorb Finnish metal goods.
By the
late 1950s, Finland had built an efficient and innovative
metalworking sector.
In the 1960s, the metalworking sector, stimulated by
the
effects of trade liberalization, embarked on an export
drive in
Western markets. Domestic demand rose as a result of both
the
expansion of the forest and the chemical industries and
major
infrastructure projects. Throughout the 1960s and the
1970s, the
sector prospered, growing at an average annual rate of
over 6
percent, higher than the rates of other industrial
sectors. The
strategy of specializing in a small number of products in
which
the country already possessed a comparative advantage paid
off in
export markets. Finnish design, which integrated
ergonomics,
durability, and attractive appearance, also helped
maintain
sales. Thus, the sector was relatively well prepared to
respond
in the 1970s, when rapid increases in energy prices,
competition
from newly industrialized countries, and worldwide
improvements
in capital-goods technologies threatened profitability.
Beginning in the mid-1970s, metalworking, like the
forest
industries, underwent a period of intense rationalization
and
restructuring--with only limited state help. By the late
1980s,
it appeared that the sector was well on the way to
transforming
itself to meet the conditions of high energy costs.
Indeed,
metalworking grew faster in Finland than it did in most
industrialized countries, and it remained Finland's
leading
industrial sector.
Finnish analysts divided the sector into four branches:
basic
metals, machine building, transport equipment, and
electrical
equipment. Although many companies were active in more
than one
branch, the categories provide a useful framework for
reviewing
industrial developments.
Data as of December 1988
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