3.1 Rapid growth and recession
3.2 Forests and brains as natural resources
3.3 Change in corporate structure
3.4 Internationalization
3.5 From tar to printing paper
3.6 A small, open economy
3.7 Standard of living

3.1 Rapid growth and recession

The growing affluence of Finland on the threshold of independence had been largely based on the manufacture and export of sawn goods and paper. As forests disappeared from the European population growth centres, the zero limit of the price of wood was pushed far back into inland. This guaranteed higher incomes in rural parts of the country as well as the urban areas.

In international income comparisons, Finland's position had already improved somewhat by the time the nation gained independence. In 1913, Finnish income levels were about 60 per cent of the industrial countries' average. However the gap between Finland and the wealthiest country in Europe at the time, Great Britain, was significantly greater than this.

During the twentieth century, Finland's total per-capita production grew more than 11-fold, an average of some three per cent annually. This growth was faster than in any other European country.
Measured in internationally comparable prices, Finland clearly exceeded the average income level in the developed industrialized nations (the OECD area) in the late 1980s. At the beginning of the century it was at just half this level.

In the 1990s, the severe recession dropped Finland back down to below the industrial countries' average. Since then, growth has been rapid, and by 2000 Finland had again exceeded the average. Finland has also surpassed its former mother country, Sweden. The development curve has been sharp. Similar speed of growth has been seen only in a few countries in the world during the past century. When Finland gained independence in 1917, its income level was significantly lower than that of many South American countries. Even in the early 1950s, Finland's per-capita GNP was roughly the same as that of Argentina and Chile, for instance. Now the Finnish level is about twice as high.

Table: Per capita GNP in various countries 1913 - 2000