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Guilty and Not Guilty Industries for Low Economic Growth

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  • Kangasharju, Aki

Abstract

After a difficult start to the 2010s, the rise in the material living standards in Finland started again in 2015. However, economic growth still lagged behind both the other Nordic countries and the euro area in 2015–2024. The problems are located in the market sector of free price formation, and especially in construction, transport and trade. Economic growth was sustained by the tax-funded health and social services sector, which grew more heavily than the market sector, and which increased employment. In the market sector, knowledge-intensive services, such as data processing and employment services, fared best. Growth policy must ensure the continued success of the knowledge-intensive sector through the immigration of experts, ensure structural change in industry based on green electricity through investment incentives, and solve the problems of sectors struggling with growth problems on a sector-by-sector basis.

Suggested Citation

  • Kangasharju, Aki, 2025. "Guilty and Not Guilty Industries for Low Economic Growth," ETLA Brief 162, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:162
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    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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