Guest of the week

Johnny Åkerholm


Libera’s Guest of the Week, Lic.Soc.Sc, M.Ec.Sc. Johnny Åkerholm has had a long career in the field of economic policy and financing matters. Åkerholm retired in 2012 from the position of CEO of the Nordic Investment Bank and worked until the end of last year as an economic policy expert for the finance board of the Prime Minister’s Office. Previously, he has worked for the Bank of Finland, as the Secretary general of the EBRD in London, Under-Secretary of State for the Finnish Ministry of Finance and as President of the Economic and Financial Committee of the European Union. Åkerholm is the Chairman of the Board of the University of Vaasa.

What is Finland’s greatest challenge?

“Finland has two inter-related challenges: we should fill the production gap left by the Nokia cluster and the paper industry, and we should be able to adjust the welfare state to fit the international economy.

At the moment, it is not possible to find the necessary hunger for taking risks in Finland. At its best, the welfare state could provide a good framework for risk-taking: the unfortunate ones would not fall without a safety net. However, with us, the welfare state many serves to even out income distribution and not the creation of new earnings. It reduces the need to take risks and, with severe income taxation, punishes those who try and succeed. The term ‘forced entrepreneurship’ describes the current attitude climate extremely well. Where would new jobs come from when entrepreneurship is so off-putting?

Adjusting the welfare state to fit the internationalising economy has also not succeeded. Demand for services is growing but the financing base is crumbling.”

2)What is Finland’s greatest opportunity?

“Finland’s opportunities are based on training and a well-organised society. It has been possible to make use of know-how across a wide range in Finland and investment in research and development has produced exceptionally good results in relation to the size of the country. We have a basis from which to strive onwards: the springboard is in order, but we do not encourage jumpers to try.”

3)What would you change at once?

“Two things should be addressed. Firstly, a realistic picture of the challenges and solution alternatives should be created. Engineering tricks should be stopped. Finland’s structural problems will not go away even if the EU economy picks up, the ECB prints more money or the euro is dissolved. The rise of Finland is possible but it will take time and it is only up to the Finns themselves.

Secondly, the division of work and responsibilities between different parties should be clarified: what the role of the EU is, what the role of the Finnish authorities is and what people’s own responsibility is. The first may offer large markets, the second a stable and predictable framework, but ideas are born in companies and in people’s heads.

Many politicians claim to know what should be produced in Finland in the future. If so, good. Financing can be found for good ideas in the modern world and it could be of benefit for the development of the business climate if as many politicians as possible familiarised themselves closely with the challenges of entrepreneurship and employment by investing their own money.

But if the idea is so bad that to realise it requires investment from the tax-payers, it should be forgotten about. This kind of activity only raises the wrong kinds of expectations and increases the already heavy financing burden of the tax-payers.”

Guest of the week