The Finnish economy is slowly recovering from a deep recession. As in other economically developed countries, productivity growth has weakened, but Finland also has an opportunity to achieve higher, more sustainable growth, according to the Organisation for Economic Co-operation and Development (OECD).

The latest OECD country report on the Finnish economy focuses on higher education, attracting skilled people to Finland from abroad, and the green transition.

Cheap, renewable electricity, innovation and good engineering skills mean that Finland has more to gain from the green industrial transition than most other OECD countries.

Reining in the welfare system

According to the OECD, Finland needs to improve the efficiency of public spending and address matching problems in the labour market in order to achieve a positive development.

The OECD wants Finland to reduce state aid to companies that do not promote productivity and to strengthen the state's fiscal management of wellbeing services counties.

According to the report, the Ministry of Finance should automatically initiate assessment procedures for welfare sectors that exceed their budget ceilings.

Finland should gradually abolish the home care allowance, which, according to the organisation's experts, would get women with young children into the workforce faster.

Finns taking too many degrees

The OECD notes that 10 percent of university spots in Finland go to students who already have a degree. According to the organisation, this reduces the number of places for first-time students.

It also says that the lack of fees and the lack of alternative study programmes actually encourage students to study for a second bachelor's degree. The solution, according to the OECD, is to introduce fees for second degrees or additional degrees at the same field.

The OECD also would like to see an overall increase the number of places available for new students in higher education.

Companies should be encouraged to adopt more flexible language practices in the workplace, so that English becomes a more common working language. This would make it easier for foreign workers to work and integrate.

Biodiversity targets

Finland has a target in place of zero net greenhouse gas emissions by 2035, but at the current rate this goal will not be achieved.

The OECD suggests a streamlining of the authorisation processes for wind, solar and nuclear power, and the promotion of smart grids and energy storage solutions.

Furthermore, the government should implement a package to boost forest growth and legislate biodiversity targets. Biodiversity should be given the same weight as economic development.

Emission calculation methods should be reviewed to take into account actual emission reductions throughout product life cycles, says the OECD.