A    S I T E    S E L E C T I O N    I N V E S T M E N T    O P P O R T U N I T Y    R E P O R T

---

b y     T I M    V E N A B L E

Finland, though one of the world's northernmost countries, is far from being on the periphery of the world economy.

There is a good chance that your favorite newspapers and magazines were printed on paper made in Finland. Your mobile phone was probably both made and designed in Finland. And the sophisticated telecom switching gear that carries your voice from a New York City taxi to a customer in London was probably made in Finland too.

Since it joined the European Union (EU) in 1995, Finland, once viewed as a remote northern outpost, has become a strong pole of attraction for international business. As the only EU member to share a border with Russia, Finland occupies a unique position at the center of a rapidly developing marketplace formed by northwestern Russia, Scandinavia and the Baltic republics, with 76 million prospective consumers. What's more, Finland is the only Scandinavian country participating in European monetary union (e.g., the euro).

The Helsinki region forms the vibrant nerve center of this new northern Europe. Home to 1.1 million people (one-fifth of Finland's population), the region is the fastest growing metropolitan area in Europe. It consists of the Finnish capital Helsinki, the neighboring cities of Espoo and Vantaa, and 21 smaller municipalities. The entire region, though, is a cohesive business and working area, where municipal borders do not play much of a role.

Renowned for being at the cutting edge of high technology, with particular expertise in telecommunications and electronics, bio-sciences and logistics, the Helsinki region accounts for more than one-third of Finland's GDP and generates 28 percent of the country's jobs. Well over 1,000 international companies have already been drawn to the region, and more are arriving every year.

"There are about 2,000 foreign companies in Finland, and about 200 more come each year," says Sirkka Aura, chief executive of Helsinki-based Invest in Finland Bureau. Many of those newcomers are establishing operations in the Helsinki region.

"The number of foreign companies in the Helsinki region is increasing all the time," reports Juha Vuorinen, who heads up Helsinki-based consulting firm Realpro Oy, an affiliate of international property consultancy FPDSavills. "About two-thirds of the companies I work with are big multinationals. Most are U.S.-based high-tech companies, but some are from the UK, and some are Scandinavian. Telecom, IT and software are the most active sectors."

Many of them are coming because the region is so ideally placed for establishing a base in northern Europe or for gaining a foothold in the Russian market. Others are attracted by the rare combination of a highly skilled and productive work force; strong R&D support by eight local universities and research centers; an efficient infrastructure; political stability; low crime; and an unspoiled natural environment of great beauty.

Just a few examples of the many leading multinational firms that have set up operations in the Helsinki region are 3M, ABB, Compaq, DHL, Hewlett-Packard, Microsoft, Siemens, Tellabs and UPS. Some 400 international companies, many of them high-tech concerns, are in the city of Espoo alone.

The Helsinki region is particularly well positioned as a corporate headquarters location for the new Northern Europe (e.g., the Scandinavian countries, the Baltic states and northwestern Russia, including Moscow and St. Petersburg).