Recession vs. Depression – Part One

Part One – Up from Ground Zero

This theme is quite a broad one and thus I have split it into three different themes, Part 1: Up from Ground Zero, Part 2: Anti-Depressants and Part 3: Attitude, Entrepreneurism, Failure, Risk-taking. Parts 2 and 3 will be posted soon.

I have recently spoken with a number of Scandinavian colleagues who have been in Finland on business. Every single one spontaneously asked me what the hell is going on here. The general mood and atmosphere is apathetic if not even apocalyptic and there is an air of desperation. At least in Sweden and Denmark, the vibe is much more positive and general optimism defies statistical evidence. In the case of Denmark, this evidence does not necessarily support heightened optimism. At least what comes to business confidence.

Based on OECD data, Business Confidence Index (BCI) in Scandinavia suggests that Swedes are indeed in a good mood, BCI is above OECD average and has been on a positive trend since November 2012. Denmark has been hovering above the OECD average until March 2014 after which BCI in legoland nosedived. In Finland, BCI plummeted already in 2011 and has been below OECD averages ever since. As for Consumer Confidence Index (CCI) the situation is quite the opposite. Denmark CCI is well above OECD average. Finland is below OECD but climbing and surprisingly Sweden is a mirror image having slid below OECD average.

Economic statistics and other indicators confirm recession. Confidence indices explain what my colleagues witnessed – severe depression. At the 2015 SAP Innovation Forum in Helsinki, US Ambassador to Finland; Bruce Oreck coined the root cause of our depression very bluntly and probably hit a nerve here and there. My interpretation on Oreck’s argument is that our depression is Made in Finland. There is no real reason why we shouldn’t succeed and come up with the same game-changers that others do. Maybe we are suffering from lack of self-confidence or a certain positive arrogance which comes natural to winners.

Regarding the nation’s improvement in future competitiveness, Finland’s recent parliamentary elections left us in a vacuum. The previous government was not able to discover a vaccine against economic plague and it was equally unsuccessful in implementing a positive growth stimulus to the business environment. Thousands of jobs we cut and infectious apathy spread everywhere.

There have been some efforts (many of them borderline frantic) to engineer masterplans to get the country off its knees but result-based evidence suggests that most of these initiatives have ended up being academia or have been suffocated to death by lack of regulatory support. The recently elected new regime is amid negotiations on policy, but so far there has been far too much rhetoric on weight-loss to fuel any optimism on a credible growth agenda.

It is quite obvious the well-being of the SME is close to my heart. Some earlier blogs (e.g. Shooting for the stars and Future of SME) already discussed some of the burning issues. My firm belief is that especially the SME sector would hugely benefit from a much more relaxed tax policy, stronger incentives for R&D and perhaps some more radical measures to get shocked back into sinus rhythm.

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Mika Tanner

Bilot Alumni