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Regional inventory
Northern Ostrobothnia / Oulu Region
Finland
- terms ‘North Ostrobothnia´ and ‘Northern Ostrobothnia´ used in some contexts are synonymous to Oulu Regionwww.ouluregion.fi/northern_ostrobothnia
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1) The region in brief
Figure 1. Map of Oulu Region
Population: 393 800 persons
Average population density: 11 inhabitants/km2. The principal city, Oulu, is the second most important population
centre in the country after the capital, Helsinki. The total population of Oulu and its surrounding districts is nearly 200
000. In contrast, the remaining parts of the region are extremely sparsely populated.
Age distribution: age 0-14 (21%), age 15-64 (65%), age 65 and over (14%)
Education level: 65% of the population has educational degree and 63% of these have basic education and 37% upper
secondary education or tertiary education
Economic Structure: Services 66%, Manufacturing 22%, Construction 6% and Agriculture and forestry 6% (Labour
force by occupation)
The largest employers: City of Oulu, Northern Ostrobothnia Hospital District, Nokia, Nokia Siemens Networks,
University of Oulu, The Oulu Region Joint Authority for Vocational Training, Stora Enso, Kesko, Itella Corporation,
Cooperative Arina Group
Industry: The few more densely populated centres in the area have significant industrial facilities specialized in the
field of wood processing, steelworks, chemistry, and electronics industry. The provincial capital, Oulu, is known for its
high-tech expertise and electronics companies. Both agriculture and forestry still represent essential sources of
income in the rural areas.
Traditional strong industries: forest industry and wood products, chemicals, mechanical wood, metal
and steel working, natural resources and minerals, nature-based tourism, construction, logistics
Modern branches: information and communication technology, content production, media,
wellbeing, biotechnology, environmental technology, business, logistics and entrepreneurship
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History:
1600-1800
1605 City of Oulu is founded
The most important exports are tar, sailing ships and salmon
1776 Oulu becomes the capital of the province
1800-1900
1822 The great fire of Oulu
Tar burghers start investing in the wood processing industry
By the end of the 19th century some 500 sailing ships are produced for international markets in Oulu
1900-2000
The time of reconstruction; development of industry
Åström leather factory becomes the largest manufacturer of leather products in Europe
1958 University of Oulu is founded
1974-75 Nokia Corp. and VTT (Technical Research Centre of Finland) start their operation in Oulu
1984 Oulu declares itself a city of technology
2) Recent and current regional development
Current status / state-of-the-art of the regional business & industry – growing and declining sectors and clusters
Food manufacturing
Building and real estate
Financing and enterprise
services
Forest
Information and
communication
Metal
Community service
Trading
Traffic and tourism
Home and accommodation
Public administration
Education and culture
Health
Figure 2. Business/Industry sectors in Oulu Region and in Finland.
Figure 3. Jobs in different business sectors now and in the future.
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Strengths and weaknesses of the region and Challenges for the future (in general)
Strengths
International, cross-disciplinary university
Versatile education supply
Natural resources and diversity
ICT expertise, production technology expertise,
environmental technology expertise
Oulu as the locomotive region and a capital of North
Finland
Young age structure
Positive values
Infrastructure
Weaknesses
Lack of willingness to co-operation, inability to combine
resources increasing regional growth, weak cooperation skills
Insufficient amount of international companies and
high growth companies, lack of internationalization
experts
Uneven distribution of welfare, increasing health
problems, pahoinvoinit of children and young people,
unemployment of young people
Lack of regional attraction, best talent moves to
Helsinki
Lack of entrepreneurship among young people
Long distance to international centres
Challenges of public transport
Ineffective lobbying efforts (especially in Helsinki)
Opportunities
Regional structure including mutiple centres, areas
with an ability to grow, cross-regional co-operation
Logistic location, sea routes
Innovation potential, social, systenm and technology
innovations
Geological resources, metals, ore etc. , abundance of
biomass resources
Clean nature appreciated, well.gorown forest,
tourism/nature/wellness
appreciation of Northern Dimension
Gateway Barents
Location close to sea
Multicultrurality
Oulu to be developed as the cultural capital of the
Northernmost part of Europe
Knowhow and wellness infrastructure
Young people
Threats
Deacreasing health of the population
Lack of genuine co-operation
National concentration of universities to Helsinki
region
Decrease of natural diversity
Management of climate change
Develoment in the Northwest Russia, nuclear
catastrophy
Lifelong learning to be forgotten, lack of knowhow and
skills
Lack of courage
Negative net emigration, brain drain, shortage of
labour
Lack of foresight ability, shortsightness
End of EU Regional funds
Violence, anarchy
Regional development strategy employed in recent years
1. The Regional Development Plan 2020
According to its vision, the Council of Oulu Region is “a nationally visible force and an inspirational leader within the
province´. The foundation for the work of the Regional Council is provided by the Regional Development Plan, which
serves as a commonly agreed vision of the desired Oulu region´s future development and the means for achieving
them. Regional Development Plan helps regional actors to anticipate the future development of the region and plan
their operations according to it. It is general by nature and has no direct legal effects.
The Regional Development plan is drawn up in close collaboration with various actors at regional level. The Regional
Development Plan 2020, “Oulu Region – The region of co-operative partnerships´ (only in Finnish) was accepted by the
Regional Assembly in June 2003 and will be updated next in year 2007.
Council draws up annually a regional strategic programme implementation plan based on the regional strategic
programme (“the budget of the region´) in cooperation with the State authorities, municipalities and other parties
financing the regional strategic programmes.
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Vision for Oulu region 2020
The Regional Development Plan 2020 visions the future Oulu region as “a region where people trust each other and
build their future together´, “a successful, diversified region where welfare of the people always comes first´ and “an
environment with suitable conditions for competitive and innovative enterprises, the best example of this being the
city of Oulu, another centre of Finnish business life´.
General themes for the forward-looking regional development work are “sustainable development´, “information
society and wireless technologies´, “urban-rural relations´, “internationalization´ and “the youth´. These themes
underlie all ideas and objectives presented in the Development Plan 2020 and ought to therefore be implicit in all
programmes and projects carried in the region.
The Plan seeks to promote regional will, that is, to summon and strengthen community spirit that supports the
interaction of people, enterprises and officials in all fields of social life. To sum up, the Regional Development Plan
2020 describes “the region of co-operative partnershipping´.
2.
Competitiveness and employment ERDF programme in Northern Finland 2007-2013
Council of Oulu region coordinated the preparation work for the joint Northern Finland (Oulu, Lappi and Central
Ostrobothnia regions) ERDF programme executing the Competitiveness and employment objective. The programme,
which unites European Cohesion strategy, Finnish regional policy and respective regional programmes, adopts a
strategy of strengthening regional competitiveness and thereby slowing down economic concentration and outmigration. Priority subject matters for Northern Finland Competitiveness and Employment Programme include:
enterprises and business environment; innovations, innovative actions and networks; accessibility and quality of living
environments.
3.
ESF Operational Programme for Continental Finland 2007-2013
The ESF programme supports the achievement of the Community's social inclusion objectives laid down in the Lisbon
strategy and the European Employment Strategy as well as the implementation of the relevant National Reform
Programmes. The target of the programme is to concentrate on the most important challenges of the labour,
education and industrial policies, so that ESF measures will complement and bring genuine added value to the
national activities.
The ESF Operational Programme encompasses four priorities. In addition, a priority axis of technical assistance was
prepared. The priorities are based on the Finnish Structural Fund strategy 2007-2013 and the ESF strategy, and they
will be implemented both under the national and the regional sections.
These priorities are:
Priority 1: Development of work organisations, the workforce and enterprises, and promoting entrepreneurship
Priority 2: Promoting access to employment and sustainable inclusion in the labour market and preventing social
exclusion
Priority 3: Development of skills, innovation and services systems that promote the functioning of the labour market
Priority 4: Transnational and inter-regional ESF actions
Priority 5: Technical assistance
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3) Challenges for regional entrepreneurship
The following extract of the Regional SWOT of Oulu Region includes an overview of the regional opinions related to
entrepreneurship.
SWOT Oulu Region regarding entrepreneurship ( Regional Development Plan /Maakuntaohjelma)
Strengths
Weaknesses
Versatile education supply
Insufficient amount of international companies and
ICT expertise, production technology expertise, high growth companies, lack of internationalization
environmental technology expertise
experts
Oulu as the locomotive region and a capital of North Lack of regional attraction, best talent moves to
Finland with international, cross-disciplinary university
Helsinki
Young age structure
Lack of entrepreneurship among young people
Lack of local venture capital
Opportunities
Innovation potential, social, system and technology
innovations
Multiculturality
Oulu to be developed as the cultural capital of the
Northernmost part of Europe
Know-how and wellness infrastructure
Young people
Threats
Lifelong learning to be forgotten, lack of knowhow and
skills
Lack of courage
Negative net emigration, brain drain, shortage of
labour
Lack of foresight ability, shortsightedness
Attitudes towards entrepreneurship in the region (Regional Development Plan)
The favorable economic development of the Northern Ostrobothnia region is largely based on the direct or indirect
effect of big companies. The amount of SMEs in the region is not very high compared to the national entrepreneurship
in Finland. The population of Northern Ostrobothnia is 7 % of the Finnish population whereas the amount of
companies in the region is only 5,3 % of the amount of companies in entire Finland. As the regional SWOT (above)
illustrates, the region finds the lack of entrepreneurship among young people as one of the major weaknesses of the
region.
Threats and possibilities in a restructuring regional economy
Northern Ostrobothnia has identified the following drivers for the future development: longevity (people live longer),
globalization, changes in work and worklife, technologisation and digitalization, sustainable development,
concentration and localization. The major threats regarding restructuring regional economy include lack of knowhow
and skills especially outside the locomotive region of Oulu, negative net emigration, brain drain, shortage of labour,
lack of foresight ability, shortsightedness, and lack of courage. The possibilities include e.g. innovation potential not
only in the Oulu region (more research and technology-oriented innovations) but also in the peripheral regions (more
doing-using-interacting type of innovation potential).
Coping with a more global economy
The Northern Ostrobothnia region finds the globalization mainly as an opportunity although some big challenges have
been identified, too. Digital economy and ever increasing networking play important roles in globalization. The
traditional industries and branches are affected more and more by the globalization (e.g. imbalance of energy sources
and consumption centres).
Shifts in regional demographics
Northern Ostrobothnia has a population of 393 800, about 7 % of the population in Finland. The population growth in
2000-2009 has been about 0,7% annually. The growth has been fastest in the Oulu region (1,8 % annually). The
natural increase of the population is high in Northern Ostrobothnia. Inside Finland, the Northern Ostrobothnia region
attracts people from northern parts of Finland but loses people especially to the Helsinki region. Northern
Ostrobothnia loses population especially in the age group of 15-30 years (Figure 4.). The amount of foreign people is
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low in the region, only 4 500 or 1,2 % of the population. The amount of immigrants is increasing at the same pace as
nationally in Finland.
Inside the Northern Ostrobotnia region, only Oulu, Ylivieska and Raahe sub-regions have positive net migration in
2000-2008.
Aging population – how to handle the generation shift?
Northern Ostrobothnia loses a significant amount of labour force due to retirement. The region loses 21 000 people
from the labour force by the year 2013 due to retirement. Only the Oulu sub-region enjoys an increasing amount of
people of the age of active work life.
Migration - risk for brain-drain?
Migration is a risk for brain-drain also in Northern Ostrobothnia. Migration inside the region is one element of the
brain-drain: young talent moves to the Oulu region because of better education and job opportunities. The high
migration from the more rural sub-regions to Oulu builds up a challenge in Oulu, too, regarding the employment
opportunities of young people.
Figure 4. Population changes in Oulu Region.
4) Inter-regional exchange
Dependence on other regions
Oulu Region is living from wood, steel, ICT –technology and tourism. High standard processing raw materials and
manufacturing different high quality goods are the cornerstones of Oulu Region. Good education possibilities and high
input to R&D has been main factors to that Oulu Region has been successful compared to other regions in Finland
during the last years.
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GPD of Oulu Region was in year 2007 app. 28 000 € when average GPD in Finland was app. 30 000 €. Highest GPD app.
42 500 € was in the southern coast line including the capital region. Lowest GPD app. 25 500 € in turn it was in the
centre Finland. According to latest figures GPD in Finland was increased to app. 36 000 € in the beginning 2010.
Oulu Region depends on other regions in Finland and outside insignificant. Raw materials to pulp and paper industry
are imported in small scale from other regions in Finland. From abroad some raw materials are imported for paper
(chemicals) and steel production (iron pellets). Export from Oulu Region was 1,2 billion € in 2009 from which 95,3 %
came from different industry (steel, paper, chemicals, timber and etc.), from trade 2,4% and others 2,3 %.
Foreign shareholders are present only in few international companies which have production or R&D work in City of
Oulu and its surroundings. For example Finnish and Swedish own Stora Enso Plc (pulp and paper, bio energy), Telia
Sonera Plc ( ICT –technology)and Tieto Plc ( IT –technology), U.S. own Arizona Chemicals Plc (chemical industry),
German own Bauhaus and Lidl (commerce).
In some ICT companies R&D work done in Oulu Region is depending on the international markets and decision made
by headquarters located in other regions in Finland. Altogether in City of Oulu and its surroundings were app. 60
foreign own small technology companies in year 2007, mostly USA based.
In Oulu Region was total 1 460 629 overnights in year 2009. Value of accommodation turnover was app. 54 million €.
(Doesn`t include overnights in the camping areas and smaller holiday cottages.) The biggest group of visitors was
Finnish people 1,2 million overnights. From other countries the biggest group was Russia 41 021, then was Great
Britain 40 767, Norway 30 402, Germany 29 288, Netherlands 19 768 and Sweden 17 554. Tourism in Oulu Region is
focused to four major location; City of Oulu(525 661), Hiekkasärkät beach in town Kalajoki (248 612), ski resort Iso –
Syöte in town Pudasjärvi (65 085) and ski resort Ruka in town Kuusamo (415 374 ).
Branch of Business
Computer, electronic and optical products
2007
Milj. €
2008
2009
4617316797 2855958587 408543984
2007
Order
2008
2009
1
1
1
Metallurgy
x
x
x
2
2
2
Other machinery manufacturing
189400852
46096115
25874468
3
8
9
Wood and wood products manufacturing
164946132
144004843 126209320
4
3
3
Motor vehicles
x
x
x
5
4
7
Metal products manufacturing
50599253
54384431
33250474
6
6
6
Collection services of waste, treatment and disposal
x
7
<20
<20
Furniture manufacturing
x
x
x
8
7
10
Chemicals and chemical products manufacturing
x
x
x
9
5
4
Wholesale trade
25262101
26208052
28412459
10
9
8
Leather and leather products manufacturing
x
x
x
11
10
11
Electrical equipment manufacturing
10790189
x
x
12
12
5
Other vehicles manufacturing
x
x
13
13
Software, consulting and related activities
x
x
x
14
15
12
Rubber and plastic products manufacturing
x
x
x
15
14
15
Food manufacturing
x
x
x
16
16
13
Other manufacturing
x
x
x
17
18
16
Metal ores and mining
x
x
x
18
11
17
Architectural and engineering services
3141300
x
x
19
19
14
Retail trade
x
x
x
20
<20
<20
Printing and reproduction services of recorded media
x
x
x
<20
20
18
Coke and refined petroleum products
x
x
x
<20
<20
20
Other non-metal mineral products manufacturing
x
x
x
<20
17
<20
Land transport services and transport services via pipelines
x
x
x
<20
<20
19
X= less than 10 companies
Figure 5. Export in the largest branch of businesses in Oulu Region 2007-2009.
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Turnover of metal cluster
in Northern Ostrobothnia
150
160
140
150
130
140
Index 2005=100
Index 2005=100
Number of employees in the healthcare cluster
in Northern Ostrobothnia
120
110
100
90
130
120
110
100
90
80
80
70
70
60
60
01/2000 01/2001 01/2002 01/2003 01/2004 01/2005 01/2006 01/2007 01/2008 01/2009 01/2010
01/2000 01/2001 01/2002 01/2003 01/2004 01/2005 01/2006 01/2007 01/2008 01/2009 01/2010
Original series
Seasonally adjusted
Original series
Trend
Source: Statistics Finland
Turnover of information and
communications cluster in Northern Ostrobothnia
Trend
Exports of all industries in Northern Ostrobothnia
150
150
140
140
130
130
Index 2005=100
Index 2005=100
Seasonally adjusted
Source: Statistics Finland
120
110
100
90
120
110
100
90
80
80
70
70
60
60
01/2000 01/2001 01/2002 01/2003 01/2004 01/2005 01/2006 01/2007 01/2008 01/2009 01/2010
Original series
Seasonally adjusted
01/2000 01/2001 01/2002 01/2003 01/2004 01/2005 01/2006 01/2007 01/2008 01/2009 01/2010
Trend
Source: Statistics Finland
Original series
Seasonally adjusted
Trend
Source: Statistics Finland
Turnover of tourism cluster in Northern Ostrobothnia
Turnover of forest cluster
in Northern Ostrobothnia
140
160
130
140
Index 2005=100
Index 2005=100
120
110
100
90
120
100
80
80
60
70
60
40
01/2000 01/2001 01/2002 01/2003 01/2004 01/2005 01/2006 01/2007 01/2008 01/2009 01/2010
Original series
Source: Statistics Finland
Seasonally adjusted
01/2000 01/2001 01/2002 01/2003 01/2004 01/2005 01/2006 01/2007 01/2008 01/2009 01/2010
Trend
Original series
Seasonally adjusted
Trend
Source: Statistics Finland
Figure 6. Turnover and export in selected business sectors in Oulu Region.
Governmental influence in the region (for instance funding support schemes etc)






ERDF – funding in year 2011 in Oulu Region is 26,911 million € from EU and 20,388 million € from Finnish
state.
ESF – funding in year 2011 is from EU 5,298 million € and from Finnish state 4,010 million €.
Annually Tekes – the Finnish Funding Agency for Technology and Innovation is awarding 40 -60 million € to
R&D work according to how successful the applications of companies, university and research institutes are
in competition.
Regional Cohesion and Competitiveness programme 'COCO' started 1.1.2010 in whole Oulu Region. There are
6 different sub regions which are supported by Finnish state. The total budget of the programme amounts to
some 20 million €, of which 50 per cent comprises financing by Finnish state and 50 per cent municipal cofunding.
Centre of Expertise Programme turns top-level expertise into new business and jobs. In Oulu Region
programme is running in Oulu and Raahe. In year 2010 to Oulu was funded 900 000 € and to Raahe 180 000 €
by Finnish state which is 50 % from running cost.
Finnvera is a specialised financing company owned by the State of Finland. It provides its clients with loans,
guarantees, venture capital investments and export credit guarantees. In year 2009 Finnvera was financing
companies in Oulu Region by 88 million €.
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5) Competence and competence development needs
In the Regional Development Plan 2011–2014 the focal areas in the know-how and education sector are adult
education (re-education), training programmes focused to specific company needs and activities for promoting
innovation and entrepreneurship among highly educated people. In addition, the universities and universities of
applied sciences aim to intensify educational provision and cooperation regarding basic degree programs, put into
place regional forecasting and evaluation processes in education, and to increase cultural awareness and competency
in the humanities. Intensive, internationally-oriented activity in education, research, and development is key to raising
the skills level in the region. A major task is to increase in research and innovation activities in northern Finland (Figure
7.). An innovation network focusing on both future and traditional fields (see section 1) of development and on
promoting wellness and cultural competencies in the region serves to improve global competitiveness as well as the
region’s attractiveness and quality of life. Large-scale joint projects in the traditional and future areas are seen to be a
priority by the universities and polytechnics involved.
Figure 7. Research and development investments in Oulu Region (yellow color) and other regions in Finland 19952007 in million euros.
In Oulu region subcontracting has been a relatively strong sector especially among ICT companies. Now global
economic trends has revealed that subcontracting is more challenging in high cost regions. More and more companies
should focus on international product and service businesses. Activities to integrate companies’ businesses into
international market are following: a) Encourage entrepreneurs to evaluate and develop
international businesses to customer orientated, b) promote and support joint export, c) Identification of high-growth
companies and support their growth.
Companies’ additional training needs are mostly related to marketing, financial management and taxation in Oulu
region (Figure 8.). SMEs are more active to participate to the offered educational and training programmes.
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Marketing
51
Financial administration
45
Taxation
42
Management
31
Employer skills
31
Entrepreneurship
21
Internationalization
19
Manufacturing
18
R&D activity
Others
%
14
4
Figure 8. Companies’ additional training needs in Oulu Region (77 answers).
6) References (mostly in Finnish)
1.
Pohjois-Pohjanmaan maakuntaohjelma 2011-2014 (Regional Development Plan in Oulu Region 2011–2014),
Council of Oulu Region, 2010 (http://www.pohjois-pohjanmaa.fi/file.php?5256)
2. Pohjois-Pohjanmaan yrityspalveluiden asiakas- ja kehittämistarveselvitys, Keimo Sillanpää, Tommi Ålander,
Harri Mähönen, 2010 (http://www.elykeskus.fi/fi/ELYkeskukset/pohjoispohjanmaanely/Ajankohtaista/Julkaisut/julkaisusarja/Documents/1_2010_P
ohjois-Pohjanmaan_yrityspalveluiden_asiakas-_ja_kehittamistarveselvitys.pdf)
3. Teräs-Alatossava, Volterra 2010 (Manuscript)
4. Pohjois – Pohjanmaan matkailun tunnuslukuja, PPL:n tiedote 16.2.2010
(https://www.pohjois-pohjanmaa.fi/index.php?id=866&cat_ids=x195x#cat195)
5. Tilastokeskus Pohjois- Pohjanmaan matkailu (http://pxweb2.stat.fi/Dialog/Saveshow.asp)
6. Minustako yrittäjä 15.09.2010 Finnvera (http://yritysrekisteri.ouka.fi/koulutusmateriaalit/tiedostot)
7. Osaamiskeskusten perusrahoitus (http://oske-netbin.directo.fi/@Bin/ea4b8d397b11d288ae96927aa0411584/1290964561/application/xmsword/203592/Osaamiskeskusten perusrahoitus 2010.doc)
8. Regional Cohesion and Competitiveness programme 'COCO' (http://www.tem.fi/?l=en&s=3102)
9. Tilastokuvaus: Tavaroiden ulkomaankauppa maakunnittain
(http://www.tulli.fi/fi/suomen_tulli/ulkomaankauppatilastot/tilastointi/tilastoluettelo/maakunnat/index.jsp)
10. Pohjois-Pohjanmaan maakuntaohjelman 2011 - 2014 toteuttamissuunnitelma 2011 - 2012
(http://www.pohjois-pohjanmaa.fi/file.php?5381)
11. CDP per capita Finland (http://www.tradingeconomics.com/Economics/GDP-Per-CapitaPPP.aspx?Symbol=FIM)
12. Bruttokansantuote maakunnittain 2000 -2007 (http://www.stat.fi/tup/seutunet/pohjois_elinkeino.html)