The Green Transition Is an Opportunity Finland Cannot Afford to Miss
The green transition is one of the biggest drivers for change during the current and coming decades. Globally, it is estimated that the required climate-aligned investments will total between $100 trillion and $150 trillion by 2050, representing an average of $3 trillion to $5 trillion per year.
To ensure that Finland seizes this opportunity, Boston Consulting Group (BCG) and Climate Leadership Coalition (CLC) initiated the Moonshot work and interviewed over 60 stakeholders comprising company and industry representatives, researchers and academia with sustainability expertise, senior ministry officials, and representatives from the largest political parties. The report showcases how, through the five Moonshots, Finland can simultaneously drive growth and thereby well-being, reach its own ambitious climate targets, and become greater than its size in solving the climate crisis.
“Finland’s main export sectors—machinery, forest products, metals, and chemicals—will remain the same, but they need to transform within to remain competitive in the green transition.”
—Antti Herlin, Chair, KONE and Chair, Tiina and Antti Herlin Foundation
Finland Has Several Competitive Advantages to Tap into Green Demand…
Finland has a unique starting position to be a forerunner in providing green solutions. As tangible sources of competitive advantage, Finland has valuable natural resources for the green transition, including forests (more than 75% of the country's land area is covered by forest)
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As intangible advantages, Finland can leverage its export industries’ existing competitiveness in process efficiency and digitalization—levers needed for the green transition. The Finnish workforce is highly educated and digitally skilled with Finland ranking 1st in the EU’s Digital Economy and Society Index (DESI).
…and Surprisingly Many Growth Opportunities across Key Value Chains
Finland can maximize its growth and handprint by providing solutions to the five consumer-facing value chains that account for nearly all global GHG emissions when considering end-to-end value chains from raw materials to end-of-life: Housing (~35% of global GHG emissions), Food (~30%), Travel (~20%), Fashion (~10%), and Consumer products (~5%).
The report reveals a total of 28 green growth opportunities for Finnish companies across key value chains. Common themes include, for example, innovative materials, sustainable production processes, supply chain optimization to reduce waste, sustainable product design, and more energy-efficient usage of goods and services.
The Five Moonshots for Green Growth
The report identifies five Moonshots for green growth to future-proof Finland's existing export sectors and create new industrial mainstays, having a total export potential of €85 billion to €100 billion by 2035. The identified Moonshots lean on Finland’s lasting competitive advantages and have the potential to help the country make significant leaps in terms of exports and carbon handprint.
In addition, the Moonshots are not the province of one or two companies but of a larger stakeholder ecosystem, bringing businesses in the value chain together and leveraging academia and research institutions. Finally, the government can play a role as a catalyst, enabling the Moonshots to realize their full potential.
Export potential: €9-12 billion by 2035
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Export potential: €10-13 billion by 2035
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Export potential: €30-32 billion by 2035
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Export potential: €27-29 billion by 2035
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Export potential: €10-12 billion by 2035
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The Acceleration Roadmap: What Government Can Do
Accelerating Green Investments
Finally, private-sector funding is often tied to short-term projects, and investors expect rapid returns. Yet government can support academia and first movers in scaling emerging technologies and bringing them to the point of commercialization by sharing the risk in pilot and demonstration stages. Fertile areas for R&D funding include, for example, industry electrification, energy use optimization, and circularity, especially in the emerging battery value chain.
8. The Organisation for Economic Co-operation and Development (OECD), The Impact of Regulation on International Investment in Finland, May 2021, https://www.oecd.org/daf/inv/investment-policy/The-Impact-of-Regulation-inInternational-Investment-in-Finland-Highlights-EN.pdf
Catalyzing Domestic Green Demand
Government can also encourage private-sector demand and investments through incentives and policies. For example, zoning rules can promote wooden construction and net-zero living. Through blending mandates, government can catalyze the development and adoption of new sustainable fuels. Furthermore, subsidies can enable Finnish solution providers to pilot decarbonization technology and services domestically before scaling abroad.
Ensuring Prerequisites for Growth
Acknowledging that the full potential of the Moonshots will require national coordination and strategic planning across ministries and public institutions, the Finnish government can build on its existing National Climate and Energy Strategy. For example, it can provide planning support for green hydrogen efforts that need access to renewable energy and freshwater.
Finally, developing competitive green offerings requires co-development and collaboration among different value chain players. Ideally, universities and research institutions also contribute to the broader ecosystem. Centers of Excellence can significantly accelerate the exchange of ideas, drive innovation, and facilitate coordination among ecosystem players. These Centers can also support in attracting investment, talent, and partners. By placing the Centers outside the capital region, close to the relevant natural resources, Finland can create jobs and drive attractiveness of less populated areas in Finland.
Positioning Finland as the Forerunner in Green Solutions
Second, Finland could organize an annual, world-leading Green Tech event in Finland (such as Slush) to gather together green tech companies, foreign investors, and global companies looking for green solutions. Finally, a green growth PR strategy promoting Finland’s spearhead offering and key milestones —such as the first circular battery or the world's first net-positive high-rise building—would earn valuable presence in international media and attract further interest toward Finland’s green offering.
