![[*]](../../images/pin_bl.gif){kind=small}
The survival rate of small enterprises is relatively high in Finland. More than 80 per cent of starting enterprises are still operating after 5 years
Mr. M. Savander, Senior Vice-President, Repola Corporation, Finland
Summary of proceedings:
The Finnish Local Enterprise Development Centre consists of a network of 910 business advisors (accountants, lawyers, insurance brokers, engineers, etc.), providing free support to selected entrepreneurs in Finland. The Finnish Jobs and Society Association (FJSA) implements the scheme since 1989 in co-ordination with companies, municipalities, government agencies and other support organizations.
The agency receives 85 per cent of its funding from the private sector and 15 per cent from the public sector. While it is an alliance between the private and public sector, it is led by the private sector. A total of 28 enterprise agencies, 54 offices and 850 enterprise specialists has been involved in implementation of the scheme. Between 1989 and 1995 a total of 9,000 new enterprises and 10,000 new jobs were created; in 1994 and 1995 alone, a total of 6,000 new enterprises and 8,000 new jobs opened up.
The objectives of the enterprise agency include transferring know-how, thus increasing skills of enterprises to ensure the health of new enterprises, by confirming the soundness of the business idea and the operational details (however, about 70 per cent of the business ideas are refused further assistance, and the agency aims to address this high turn-down rate); and assisting established entrepreneurs when operational changes are needed.
The advantages of working with enterprise agencies for society are that (a) new jobs are created at reasonable costs: 100,000 ECU per year own costs for the agency, while last year 5,000 consultant days were used; (b) co-operation between public and private sector; (c ) new enterprises create a more efficient economy; small business decreases dependence on large employers in society.
The average candidate profile: 70 per cent give up, never start; 10 per cent postpone start-up, change plans; 20 per cent start up immediately. Finland's unemployment rate of 14 per cent is the second highest in Europe. The country's target is to lower unemployment by the year 2000 from 500,000 to 200,000 (which would bring it to the European Union average rate of 7-8 per cent). Presently, Finland's unemployment rate is 400,000. Other targets for the Year 2000 include an increase of new small enterprises up to 100,000, and 300,000 new jobs to be created. Micro enterprises account for 16.6 per cent of total jobs in Finland (29 per cent is the average in EU).
The survival rate of small enterprises is relatively high in Finland. More than 80 per cent of starting enterprises are still operating after 5 years. Less than 5 per cent are in bankruptcy by the fifth year. This means that the enterprises are relatively healthy, and the jobs created are relatively permanent. In October 1996, a total of 81 enterprise agency service centres were operating in Finland (26 enterprise agencies and 55 branches).
The Finnish Jobs and Society Association operates as an umbrella organization and is also involved in lobbying and management training. In October 1996 the 54 partners and sponsors included the following sectors: manufacturing industry (24); financial institutions (5); insurance companies (2); service industry (4); other private sector organizations, such as employer organizations and trade unions (10); and, ministries and public agencies (9).
New enterprises and jobs 1989-1996: The Finnish Jobs and Society Association is focusing on the entrepreneurs and not so much on the creation of jobs. By 1996 a total of 9,000 new enterprises and 12,000 new jobs were created. The biggest new company now employs 100 people. Sweden and England are running similar schemes. Estonia has 7 agencies in FJSA's network, while Latvia is starting next year.