What could Finland learn from Iceland, the ”Island of Legends and Tales”?

I just returned from Iceland where I was with the Regional Organisation of Enterprises in Southern Karelia. During the trip, we got an excellent insight into Iceland as a country and as a business environment. The country is small - there are only 320.000 residents - and the nature is exciting with waterfalls, volcanoes, gorges and steaming springs. The financial crisis of 2008 influenced many things, but especially the banking and finance sector. The little country decided to pull it back together: the government took three biggest banks to its self. The country survived from the catastrophic situation and from recession i.a. with IMF’s two billion dollar funding. Since then, the supervision of banks has increased dramatically. The amount of foreign investments has nearly collapsed because currency cannot be transferred outside of Iceland and profits cannot be repatriated without an authorization issued by the Central Bank. The small country has made right decisions during the last five years, and at the moment Iceland is one of the top countries both in economic growth and in welfare. Iceland's energy self-sufficiency - due to the hot springs, waterpower and volcanism - is 60 %. For example, the heating costs for a detached house 200 m2 are 40 EUR in a month. Corporate tax of 20%, capital tax 20 % as well, and VAT of 10 %. Unemployment rate is less than 4 %, economic growth of 4.5 %, GDP 39.000 EUR / person (in Finland GDP is approximately 35.000 EUR / person).

What could Finland learn from Iceland? Well, we could try at least a few things. Economic growth, employment and activity have been reached by making taxation lighter. Social exclusion of young people has been prevented by education and by influencing the attitudes. Already from the elementary school the students are required to work during their summer holidays in small projects like park cleaning etc. and therefore they earn to take responsibility and work. They also receive a small compensation for their work. This method could also promote entrepreneurship. One more thing that caught my eyes was the clean environment, which is due to the fact that by parenting and attitude education the children learn already when they are small not to throw garbage on the ground. I guess that as the Finnish idiom says: what is learned as a child, is mastered when you are old. Would this be the time for an attitude campaign for schoolchildren and to the rest of us in Finland? Let’s keep Finland neat and tidy and not throw the garbage to the ground. Cleanliness is a matter of attitude.


Pirjo Karhu,
Yrittäjäneuvos, CEO
Centre d’ Expertise Oy


The blog post has been published in Finnish at the websites of The Federation of Finnish Enterprises.