NordenBladet — The Government proposes a new temporary section (48a) for the Communicable Diseases Act, under which healthcare and social welfare service providers, i.e. employers, could be required to ensure that their employees do not pose a risk of COVID-19 infection to the persons they are caring for.The section would provide that employees with inadequate vaccination coverage against COVID-19 could work with clients and patients only in exceptional circumstances. The proposed regulation would also apply to public officials and officeholders.If a person had a medical reason for not getting vaccinated against COVID-19, they could, according to the proposal, work if they presented proof of a negative COVID-19 test taken no more than 72 hours prior to working.Employers would have the right to process health data concerning the COVID-19 vaccination coverage of their employees or their employees’ recovery from COVID-19. The data should be stored for as long as is necessary to carry out the supervision of healthcare and social welfare services, but for no longer than three years from the date on which the assessment on the suitability of the person was made. If the employee did not meet the statutory requirements, the employer would, primarily, need to offer the employee equivalent work in accordance with their employment contract, or if this is not possible, other suitable work. If there was no suitable work available or the employee refused to accept it, the employer would not be obligated to pay the employee a salary for the period during which they could not work, unless otherwise agreed. The amendment would require a transition period of one month to ensure that employers could organise their services properly and to give unvaccinated employees the opportunity to get vaccinated. The employer’s right to process data would, however, enter into force immediately.It is proposed that the provision enter into force as soon as possible and remain in force until 31 December 2022.
The Foreign Affairs Committee had a video meeting today with the Minister of Foreign Affairs of Finland Pekka Haavisto to discuss the security situation in the region, Russia’s activities in the border regions of Ukraine, and issues concerning Belarus.
The Chairman of the Committee Marko Mihkelson emphasised that Russia’s activities and any developments in Ukraine must be kept under close scrutiny at all times. The parties highlighted the crucial importance of European Union cohesion, solidarity with Ukraine, and all-round support to free and successful Ukraine.
Regarding Belarus, strict sanctions are both important and necessary. “We must continue supporting the sovereignty of Belarus and demand that new free and fair presidential elections be organised in Belarus. Today, the best way to put pressure on the Lukashenko regime is to enforce strong and effective sanctions,” the Chairman of the Foreign Affairs Committee said.
Mihkelson expressed his happiness over the strong bilateral relations and close exchange of information between Estonia and Finland. He highlighted the report on the future cooperation of Estonia and Finland which is to be completed in February. The report outlines the state of bilateral relations and suggests new opportunities for cooperation.
The Chairman of the Committee raised the issue of qualified majority decisions in the EU foreign and security policy, and the possibilities for enhancing the speed and strength the foreign policy of the Union. The participants also exchanged ideas about the upcoming meeting of EU Ministers of Foreign Affairs, and the OSCE Chairmanship of Finland in 2025.
NordenBladet — The demand for natural products is expected to grow globally. Natural raw materials are expected to generate significant business activities because their economic potential has not yet been fully realised.The turnover of companies in the natural products sector and companies utilising natural products in their business decreased slightly in 2020 compared to the previous year. These are the conclusions of the sector report on the natural products sector published by the Ministry of Economic Affairs and Employment on 8 December 2021.“The growth of the natural products sector both in Finland and internationally is based on growing trends, such as organic origin, responsibility, safety, ecology, health promotion, and the Nordic and Arctic origin. The coronavirus pandemic has strengthened trends related to the growth of the natural products sector. The interest in the nature’s effect on health and wellbeing makes natural products and nature tourism destinations more attractive,” says Sirkku Wacklin, Sector Manager at Ostrobothnia’s ELY Centre.There are approximately 770 companies operating in the natural products sector with a total turnover of EUR 780 million in 2020. More than 70 per cent of the companies in the sector are micro-sized companies that mostly employ between one and five people. The combined turnover of companies in the natural products sector and those utilising natural products in their business increased until 2019, but it fell slightly in 2020 amid the coronavirus epidemic. The decline was caused in particular by a lower turnover of tourism companies and providers of wellbeing services and products.Approximately 2,700 people work in natural product companies. Foreign pickers of natural products also constitute a significant part of the sector’s workforce. In recent years, the number of foreign pickers has varied between 2,500 and 4,300. Companies in the berry sector are highly dependent on foreign labour, because foreign pickers pick 80–90 per cent of the berries for companies engaged in wild berry trade. The new Act on the legal status of foreigners picking natural products reduces the risk of exploitation and creates a more equal competitive environment for companies.Growth in the natural products sector is restricted by availability and consistent quality of raw materials. Finland’s strengths as a producer of natural products lie in extensive picking areas, excellent nutritional value of raw materials and the reliability of origin and supply. Digitalisation and the platform economy enable new types of networking and business. Being organic is a way to create added value for natural products.The natural products sector refers to activities related to wild berries, mushrooms, herbs and other natural products, such as the recovery of raw materials from nature and their further processing and trade. Entrepreneurship in the natural products sector can be carried out, for example, in raw material production and the food sector. Other important sectors for companies include the use of natural valuable substances, i.e. chemical compounds in the wellness, cosmetics, pharmaceutical and chemical industries and the tourism sector. The natural products sector also includes training, advisory services, development work and research.Business Sector Services are expert services provided by the Ministry of Economic Affairs and Employment that collate, analyse and distribute information about the operating environment for companies and the development of sectors.
NordenBladet — Facilitating the employment of persons with disabilities will be the focus of a virtual Nordic conference on Thursday 9 December. The conference will highlight new kinds of intermediate labour markets and successful experiences of employing people with disabilities through social enterprises. The agenda also includes good practices for supporting work ability for people with disabilities at workplaces.Minister of Social Affairs and Health Hanna Sarkkinen and State Secretary Ville Kopra from the Ministry of Economic Affairs and Employment will speak at the conference, in addition to a large number of representatives from companies and organisations. The conference is one of the working life events organised during Finland’s Presidency of the Nordic Council of Ministers. Its purpose is to promote the employment of persons with disabilities through practical experiences and good practices. The topic brings together all Nordic countries, because the obstacles to the employment of persons with disabilities are similar regardless of the country.Social economy is an opportunity to people with disabilitiesThe conference participants will also be briefed on the European Commission’s Action Plan for Social Economy, which will be published on the same day. Social economy has significant potential to improve the employment of people with disabilities too. This calls for cooperation and partnerships with public administration, organisations and social enterprises. Finland has already taken this issue forward. The promotion of social entrepreneurship is included in the Government Programme, and last spring the Government adopted a strategy for social enterprises. One of the strategy’s objectives is to employ people with partial work capacity and those who are otherwise in a difficult labour market position. A Centre of Expertise for Social Enterprises has been established to implement the strategy. Its task is to increase the number of and awareness on new social enterprises and develop their competences, especially in order to improve the effectiveness of their activities. Work and supporting work ability increase wellbeing and equalityA high employment rate and good-quality working life reduce the costs of social exclusion, unemployment and disability to society. At the same time, people’s wellbeing will be supported and equality will be increased.The Government’s objective is to raise the employment rate to 75% by the middle of the decade. The age structure of the population and, consequently, an increasingly smaller number of working-age people will aggravate the problem of prolonged unemployment and shortage of skilled labour. It is therefore important that those currently outside the labour market, including those in a vulnerable position, find work. Employing people with disabilities is a great opportunity for society that has not yet been utilised. In addition to measures that support employment, we need to prevent incapacity for work and improve productivity and wellbeing at work at the same time. Mental health must be considered a resource in working life. Employing people with disabilities and extending their working careers also require changes in attitudes. Work opportunities must be offered with an open mind.
The ongoing major structural reforms, such as the health and social services reform and the social security reform, will also boost employment. The reform of health, social and rescue services will develop a service system for supporting the work ability of working-age people. The social security reform will provide better opportunities to reconcile work and benefits in different life situations. Improving the employment rate of people with disabilities requires that working life skills are developed by adjusting work and introducing flexible work arrangements. Research data related to employment and work ability as well as an assessment of the effectiveness of the solutions are also needed for decision-making.The theme of the conference is closely related to the work ability programme, which is part of the Government’s employment measures as a whole. The work ability programme promotes the employment of people with partial work capacity and their wellbeing at work. The Ministry of Economic Affairs and Employment is responsible for implementing the work ability programme in cooperation with the Ministry of Social Affairs and Health. The webcast is available online on 9 December beginning at 10.00:Promoting Employment for People with Disabilities (sourcehub.fi)Hashtags on social media are #Norden2021 #TheNordicsTogether
NordenBladet — The Nordic Welfare Forum will be held on 8–9 December 2021 as part of Finland’s Presidency of the Nordic Council of Ministers in 2021. The Forum is one of the main events in the health and social sector during Finland’s Presidency.The Forum is based on the desire to have a discussion platform which enables us to monitor developments and challenges related to wellbeing in the Nordic countries and to promote Nordic wellbeing indicators. The first Forum was held in Stockholm in 2018. This is the second time the Forum is organised.“Our changing society requires new kind of thinking, up-to-date information and knowledge-based decision-making so that we can learn from the current crises and strengthen equality and social sustainability. I am sure that the Nordic Welfare Forum will work to promote this so that our welfare states can also flourish in the future,” says Minister of Health and Social Affairs Hanna Sarkkinen.Minister Sarkkinen will open the event with her address on 8 December, and Minister for Nordic Cooperation and Equality Thomas Blomqvist will give the closing speech at the event. The event will be held in English, and it will bring together Nordic experts, decision-makers, researchers, experts by experience and public officials. Conference theme is Nordic welfare society model and social sustainabilityThis year, the Forum will focus on challenges and solutions in the Nordic countries as a result of the pressure placed on welfare systems by the COVID-19 pandemic. The Forum will address issues such as the effects of the pandemic on the welfare society model and different population groups, the rise of poverty and social exclusion, and demographic challenges.“Despite the challenges posed by the COVID-19 pandemic, the vision of the Nordic countries, which is to become the most sustainable and integrated region in the world by 2030, is as important now than it was two years ago. If anything, the pandemic has only emphasised how important it is to actively pursue this vision. We must make determined efforts to strengthen our cooperation and promote our integration,” says Minister Blomqvist.
At today’s sitting, the Riigikogu received an overview of the Estonian Digital Society Development Plan until 2030.
When introducing the development plan, the Minister of Entrepreneurship and Information Technology Andres Sutt said that Estonia had created a unique ecosystem that was difficult to copy. “Digital prowess has made us known all over the world. World-changing digital solutions crop up and grow into unicorns here. Digital prowess has helped us be bigger than could be presumed by the size of our population or economy. Estonia has been a trailblazer,” Sutt said.
The Minister underlined that, in order to continue to be a trailblazer, just tinkering on what we already had was not enough, and customer-centeredness and adoption of the latest technology were needed as well. “All this will also have to be cybersecure. These are the principles we have observed when drawing up the new digital society development plan,” Sutt said.
The minister enlarged on three sub-aims set out in the development plan: the development of digital governance, connectivity and cybersecurity.
In terms of digital governance, the development plan has put the focus on the quality of public services and public administration, which marks the next maturity level and development stage of digital governance. “Up until now, the use of IT has been targeted mainly at enhancing the public sector, but now we are shifting the focus on the value created for people in the form of user experience,” minister Sutt explained.
As regards connectivity, he said that the aim was simple: by 2030, ultra-high-speed, reliable and affordable telecommunication would be available independently of location in Estonia. “For that, we will improve the availability of communications services and the affordability of accession in rural areas by developing access networks. It is important to develop the 5G‑base infrastructure and the provision of services, in order to also be ready for 6G in the future,” Sutt said.
Regarding cybersecurity, Sutt noted that it was the enabler of digital society. “Without it, there would be no trust, without which digital services have no users, that is, meaning or impact. That is why, in cybersecurity, the aim is to have a cyberspace that is secure, reliable and resilient to cyber threats.”
The minister also spoke of money and explained that the total need had been estimated to be slightly over 1.2 billion euro over ten years.
Chairman of the Economic Affairs Committee Kristen Michal gave an overview of the presentation of the development plan at an Economic Affairs Committee meeting.
During the debate, Andres Metsoja (Isamaa), Kert Kingo (Estonian Conservative People’s Party), Andrei Korobeinik (Centre Party), Heiki Hepner (Isamaa), Peeter Ernits (Estonian Conservative People’s Party) and Kalle Grünthal (Estonian Conservative People’s Party) took the floor.
The Riigikogu passed an Act
The Act on Amendments to the Maritime Safety Act (455 SE), initiated by the Government, is intended to continue supporting international maritime transport through Estonian ports and to motivate consignors to direct their trade flows through Estonian ports where possible.
The Act reduces the fairway dues payable for January to December 2022 by 50 per cent. According to the explanatory memorandum, the reduction of fairway dues will contribute to ensuring preservation of jobs in the sector, which will have a direct positive impact on the state budget and will help prevent an extensive need to make employees redundant.
During the debate, Aivar Kokk (Isamaa), Mihhail Stalnuhhin (Centre Party), Peeter Ernits (Estonian Conservative People’s Party) and Annely Akkermann (Reform Party) took the floor.
73 members of the Riigikogu were in favour of passing the Act.
Two Bills passed the second reading
The Bill on Amendments to the Medicinal Products Act and Amendments to Other Associated Acts (413 SE), initiated by the Government, will bring the Medicinal Products Act into conformity with the legal acts of the European Union that provide for rules on clinical trials on medicinal products for human use, clinical trials for veterinary medicinal products, and medicinal products under hospital exemption.
The Bill provides for the possibility to prepare and use advanced therapy medicinal products on a non-routine basis in hospitals. Standards will be set to ensure the quality and safety of medicinal products, and monitoring of treatment. Such advanced therapy medicinal products can be prepared and used only in accordance with the specifications of a specialist in Estonia and under his or her professional responsibility to treat an individual patient in hospital. They are medicinal products called advanced therapy medicinal products in the EU that are divided into gene therapy, somatic cell therapy and tissue engineered medicinal products and that offer patients advanced therapies for the treatment of certain types of diseases and dysfunctions. On the basis of the data obtained from the use of a medicinal product under hospital exemption, it will be possible later to start clinical trials with the medicinal product and then to reach application for marketing authorisation. The hospital exemption regulation allows planning specific development paths and cooperation opportunities between Estonian universities, biotechnology companies and hospitals.
The Bill will simplify the process for applying for authorisation for clinical trials, in particular when the applicant wishes to conduct a trial in many EU member states. In this case, throughout the whole process, the applicant communicates with the medicines agency of one Member State who coordinates the whole process and information exchange between the applicant and other Member States in the EU and who prepares the report on the scientific assessment of the application for trial. In the future, application for authorisation for a clinical trial will take place on the basis of a single application in all Member States with the help of a single authorisation application dossier through the clinical trials portal and in a paper-free manner. In the future, the sponsor will also pay a one-off payment in a Member State upon application for a clinical trial. At present, the sponsor pays three different fees in Estonia: a fee to the State Agency of Medicines, a fee to the ethics committee and a state fee. The Member States will assess an application for a clinical trial jointly and a single joint final decision will be drafted. The final results of a clinical trial will be in a joint database and publicly accessible and therefore more information will be public. The summary of the assessment of the trial as well as the results of the trial and the inspection will be made public.
Standards will also be set in order to ensure the quality and safety of the medicinal products that are administered to subjects in the course of clinical trials. Special attention will be paid to high-level protection of patient rights and safety.
During the debate, Anti Poolamets and Kalle Grünthal from the Estonian Conservative People’s Party took the floor.
The amendments proposed under the Bill on Amendments to the State Assets Act (421 SE), initiated by the Government, concern the activities of partially State-owned companies and foundations established by the State as well as the activities of ministries in performing the functions of the State as a shareholder or a founder.
In January last year, the Government approved the principles of participation policy on why and how the State is involved in companies. The Bill provides for setting out the consequent amendments in the Act.
The approved principles set the direction that the State would have a holding only in the companies where this is necessary in view of public interest or for some other strategic consideration. Earning revenue through participation in business is not an independent aim for the State, but an additional aim accompanying acting in public interests. In the future, the participation of the State will be renewed regularly at least every five years.
The most important amendment in the Bill is making it obligatory to set out the expectations of the State as the owner and regularly updating them every three years. The reporting principles of partially State-owned companies and of foundations whose founders include the State will be amended. The presentation of forecasts will be synchronised with the state budget strategy process.
With the Bill, deciding on the retaining of holdings kept only for the purposes of gaining revenue will be transferred from the ministerial level to the level of Government, but in the case of smaller holdings, where the participation does not exceed 10 per cent, the right to make decisions will be granted to the ministries.
Pursuant to the Bill, the accounting services of State foundations will be consolidated under the State Shared Service Centre.
The explanatory memorandum to the Bill points out that the new regulation will concern the activities of all ministries, as well as 28 companies and 65 active foundations where the State was an owner or a (co-)founder as at June 2021. At the end of 2020, the volume of assets of such companies and foundations was 7.8 billion euro and 2.2 billion euro respectively, the volume of revenues 1.7 billion euro and 0.9 billion euro, and the number of employees around 12,000 and 13,700.
The first reading of a Bill was adjourned
Due to the end of the sitting, the deliberation of the Bill on Amendments to the Constitution of the Republic of Estonia for Changing the Procedure for the Election of the President of the Republic (462 SE), initiated by members of the Riigikogu Jaanus Karilaid, Kersti Sarapuu, Viktor Vassiljev, Peeter Rahnel, Mihhail Stalnuhhin, Dmitri Dmitrijev, Maria Jufereva-Skuratovski, Marko Šorin, Enn Eesmaa, Aadu Must, Kaido Höövelson, Tarmo Tamm, Jüri Ratas, Oudekki Loone, Siret Kotka, Erki Savisaar, Natalia Malleus, Igor Kravtšenko, Imre Sooäär, Marek Jürgenson, Mihhail Korb, Martin Repinski, Marika Tuus-Laul, Mailis Reps, Martin Helme, Urmas Reitelmann, Leo Kunnas, Uno Kaskpeit, Merry Aart, Peeter Ernits, Riho Breivel, Kert Kingo, Kalle Grünthal, Jaak Valge, Paul Puustusmaa, Alar Laneman, Helle-Moonika Helme, Rene Kokk, Henn Põlluaas, Mart Helme, Anti Poolamets, Siim Pohlak, Ruuben Kaalep, Andrei Korobeinik and Raimond Kaljulaid, which provides for the direct election of the President of the Republic, will continue at tomorrow’s sitting.
The explanatory memorandum emphasises that the election of the President of the Republic directly by the people meets the expectations of society and gives the people an additional opportunity to participate in making decisions that are important to the nation, thereby bringing people closer to the state.
NordenBladet — The Prime Minister of Sweden, Magdalena Andersson, visited Finland on Wednesday 8 December at the invitation of Prime Minister Sanna Marin. During her visit, Prime Minister Andersson also met with President of the Republic Sauli Niinistö.At their meeting, Prime Minister Marin and Prime Minister Andersson discussed bilateral relations between the two countries and topical EU issues. The EU’s actions to halt climate change, for instance, are very important for both Finland and Sweden. The Prime Ministers also discussed their countries’ common objectives in developing the Union’s forest policy and security and defence policy. In addition, the Prime Ministers discussed migration and the COVID-19 pandemic in the Union.
This is Prime Minister Andersson’s first visit abroad since she began her term of office. According to tradition, Finnish and Swedish prime ministers meet shortly after taking office. Prime Minister Marin also made her first visit to Sweden.
NordenBladet — Minister for Nordic Cooperation Thomas Blomqvist will participate virtually in a conference on strong democratic systems typical of the Nordic countries. The conference, which will be held in Copenhagen on 8 December aims to show how sustainable democracy in the Nordic region is strengthened by the participation of the Faroe Islands, Greenland and Åland in Nordic cooperation alongside with the Nordic states.The conference is a joint initiative of Finland and Åland under Finland’s current Presidency of the Nordic Council of Ministers. The organiser of the conference is the Finnish Institute of International Affairs (FIIA), supported by the Secretariat of the Nordic Council of Ministers. The conference will be opened by Ministers for Nordic Cooperation from Finland and Åland, Thomas Blomqvist and Annette Holmberg-Jansson. The conference coincides with the 100th anniversary of Åland.
“The overall vision for Nordic Cooperation is to make the Nordics the most sustainable and integrated region in the world”, minister Blomqvist states. “This conference is the culmination of a joint Presidency project by Finland and Åland, with the aim of promoting successful forms of democratic governance and thus contributing to sustainable development and the Nordic vision. Close Nordic cooperation is a great asset to us all, including to the Faroe Islands, Greenland and Åland, bringing multiple benefits to the whole region.”The conference supports the vision of the Nordic prime ministers to make the Nordic region the most sustainable and integrated region in the world by 2030. The fact that the Faroe Islands, Greenland and Åland participate in Nordic cooperation can serve as an example of the benefits of democratic structures and practices for all parties also in wider contexts.The conference is intended for diplomats and international audiences from both the Nordic countries and outside the region. Speakers at the conference include former President of Finland Tarja Halonen, Assistant Secretary-General for Human Rights at the UN Ilze Brands Kehris, ministers for Nordic cooperation, researchers and public officials.In connection with the conference on 7 December, the Finnish Institute of International Affairs and the Åland Islands Peace Institute has published their research report on the participation of the Faroe Islands, Greenland and Åland in Nordic cooperation. The conference will be held at 13.30–17.30 Finnish time. A webcast of the event will be available on YouTube. The programme of the meeting is available here Read more about the research report on the website of the Finnish Institute of International Affairs.
NordenBladet — The Climate Policy Roundtable will hold its 12th meeting on Thursday 9 December. The main theme is low-carbon construction.Construction and buildings produce about a third of Finland’s greenhouse gas emissions. Emissions from the construction sector must be reduced to make sure that Finland will be able to reach its national and international climate targets. The topics to be discussed at the Climate Policy Roundtable include how we can boost the transition to low-carbon construction while at the same time ensuring social justice. The members will also consider what kind of incentives the regions, municipalities, cities, companies and sectoral organisations would need.“To achieve the target of a carbon-neutral Finland by 2035, climate actions are needed in all sectors of society. Emission reductions in the built environment have a key role in this. Houses built today will still be standing in 2100. This is why a low-carbon built environment must be designed and promoted with foresight and a long-term perspective,” says Minister of the Environment and Climate Change Emma Kari, who chairs the Roundtable.Roadmap for low-carbon construction: climate study for buildings, emission limits for new buildingsMost of the emissions from the built environment are associated with the energy consumed by buildings. As new buildings are already highly energy efficient, the perspective must be extended to construction materials and emissions during the entire life cycle of the building.The aim of the roadmap to low-carbon construction prepared at the Ministry of the Environment since 2016 is that, by the mid-2020s, the life cycle carbon footprint of buildings would be regulated by law.The key elements of the roadmap include climate studies for buildings and carbon budgets for new buildings. The climate studies would show the climate impacts of the entire life cycle of a new building and of extensive renovation of a building and the time after that. The climate studies of buildings would serve as the basis for emission limits to be set for new buildings. The draft Decree of the Ministry of the Environment on the climate study for buildings was circulated for comments in summer 2021. This Decree is part of the process to reform the Land Use and Building Act. The deadline for submitting comments on this ended on 7 December.The Climate Policy Roundtable brings together a broad spectrum of stakeholders from different sectors of society. The purpose of the Roundtable is to create a common understanding of how Finland can make a just transition to a carbon neutral society by 2035. With its work, the Roundtable supports the preparation and implementation of Finland’s national climate policy.To follow the work of the Roundtable in social media use #ilmastonpyöreäpöytä and #hiilineutraali2035.
NordenBladet — Labour productivity in Finland’s national economy has been stagnating at the 2007 level for more than a decade. How is the development of labour productivity affected by resource allocation and structural changes in different sectors? According to a study published on 8 December, there is room for improvement when it comes to resource allocation, but the strongest factor behind productivity growth is the favourable development of individual businesses.The favourable development of productivity is the most important factor for long-term economic growth, which is why research literature has long tried to identify the sources of productivity growth. Effective allocation of labour and capital is one of the key questions in economics, and research has sought solutions to the causes and consequences of inefficient allocation.A new study commissioned by the Government reveals that the reallocation of resources has failed to promote productivity growth in the Finnish business sector. The study examines the impacts of the allocation of labour and capital and structural changes in various sectors on the development of labour productivity in Finland’s manufacturing and service sectors, information and communication technology industry, and the business sector as a whole in 2000-2018.“Further improvements are needed when it comes to resource allocation,” says Chief Research Scientist Terhi Maczulskij from the Research Institute of the Finnish Economy ETLA, who was responsible for the project.“While the role of resources reallocation in productivity has increased slightly over time, there is still plenty of room for improvement. Inefficient allocation of inputs between sectors also weakens productivity growth in the business sector as a whole,” says Maczulskij.The study revealed differences between the sectors, but also several similarities. Favourable development within individual businesses is the main driver of productivity, especially during an economic upturn. Most of the productivity growth observed in the study took place within firms with ongoing operations, where reallocation has clearly played a secondary role.During a recession, however, the reallocation of inputs between firms with ongoing operations is highlighted, which shows that creative destruction plays a stronger role. Creative destruction itself is an important mechanism for productivity growth, whereby old businesses, products and occupations disappear, making way for new, better and more productive ones.“It should also be noted that in the ICT sector, the reallocation of labour and capital has actually had significant negative impacts on productivity growth. This may be explained by the fact that some companies in the sector invest heavily and grow their size before they become more productive,” says ETLA Researcher Paolo Fornaro.The study was conducted by the Research Institute of the Finnish Economy ETLA and Aalto University. The report is part of the implementation of the 2021 Government plan for analysis, assessment and research and serves the needs of the Economic Council in particular.
