Value Network Capability 2018: Changing the course

Competitiveness measures the most prominent aspects of performance, such as additional value created in the regional economy, industrial added value, the relationship between production value and labour input, export intensity, investments, entrepreneurship and growth companies. For the first time in a long time, we are seeing the emergence of an economic upturn, which indicates that industry especially in the Tampere Region has been revitalised. Industry exports have increased clearly (2017: +6.5%), in the same fashion as value added from industrial production, which has been increasing for two years running (2016: +6.6%; 2015: +9.7%). Advance information on export development in early 2018 indicates that the situation in the region has remained very positive. The industrial slump in the Tampere Region seems to have finally solidified to a steady climb.

For the most part, this leap in industrial exports stems from a cluster of production industry fields, including the metal industry, electronics industry and machine industry. The combined exports of these areas increased by as much as 13% last year to EUR 2.85 billion. All in all, industrial exports in the Tampere Region totalled at EUR 6.42 billion in 2017 (2016: EUR 6.03 billion). Proportionally, the biggest improvement took place in the food industry (growth of 21%; imports value EUR 48 million) and the textile industry (+14 %; export EUR 144 million). Regionally significant exports of chemicals, rubber and plastic products increased by 4% to EUR 1.06 billion. Exports of the second largest cornerstone of industry in the region, the forest industry, declined slightly. Forest industry articles were exported for a total worth of EUR 2.1 billion (-2.5%).

The export intensity of companies – i.e. the ratio of export value generated and turnover in the region’s businesses – has been in a slight decline for the almost the entire decade. During the latest statistical year 2016, the export intensity ratio dropped significantly. The situation is explained by reinvigorated demand in the domestic market, which increased the companies’ turnover, while the demand for exports remains unchanged.

The rate of investment reflects the confidence that companies currently have in the future. The proportion of investments made by companies has established to about 21% in recent years. The value of investments, i.e. the gross generation of fixed capital, has stood at approximately EUR 3.7 billion annually in the Tampere Region.

The numbers of growth companies and people operating as entrepreneurs has decreased since the last examination, which raises some concerns about the ability of businesses to reinvent themselves. Almost 7% fewer growth companies were created than in the preceding growth period. The number of growth companies dropped to the lowest level this decade. In the context of this examination, the definition of a growth company is a business that employs at least three people at the beginning of the period and grows at least 10% on average during the period.

The field division of the growth companies varies depending on the size limits selected. The majority of smaller growth companies cropped in with a lower growth requirement operate in construction, trade and professional activities. Growth companies that meet the stricter definitions in terms of employees and growth expectations primarily operate in the fields of construction, administrative and support services, industry, information and communications. A more detailed analysis of the development of growth companies can be found in the Business Growth 2018 section.

The number of entrepreneurs decreased by 2.7% in 2015, and the trend has been negative for a number of years. At the time of the survey, 21,100 residents of the Tampere Region were entrepreneurs. For the sake of ensuring financial growth and resilience against changes, it would be important to shift the development of growth companies and entrepreneurs to a path of growth.

Digitalisation in the region is making progress, and the turnover of digital services increased by 6%, reaching a new peak value of EUR 1.2 billion. Particularly favourable turnover development was seen in information services (+12.8%) as well as software, consultation and related fields (+6.2%). The demand for experts in digital fields has increased in the Tampere Region, and there is fierce competition for professionals in the hottest areas of expertise on the labour market. The topic is covered in more detail in the Situational Picture of Digitalisation 2018.

Similarly, the number of people working in expert professions is increasing. Almost 80,000 residents of the Tampere Region work in expert or specialist positions. The Tampere Region is an area of high-level competence, where expert work is becoming more commonplace with the changes in economic structure and employment demand and the modernisation of job descriptions.

All in all, the situational picture of competitiveness highlights many positive signals on variables significant to the region, such as export, industrial production, production efficiency, digitalisation and changes in job descriptions. The Tampere Region has strengthened its identity as a modern service area with a high level of competence. At the same time, the industry vital to the production structure has perked up and exports have started to increase. If the favourable situation continues, the success of the industry can be expected to improve the region's GDP, which, in recent statistics, has increased at a rate slightly lower than the normal average and the key reference regions.

Competitiveness is the most macro of the indicators used for the situational picture of innovation. Changes take place at a relatively slow pace. In making interpretations, it must also be taken into consideration that some of the indicators are based on regional accounting sources that are updated with a delay.