Finland’s recovery from a deep recession in the early 1990s is noteworthy: from 1994 to 2005 the country boasted annual GDP growth of 3.4 percent—higher than that of most developed economies. Now, our analysis suggests, Finland must sustain economic growth rates of well over 2 percent (or even close to 3 percent) for decades if it is to afford pensions and health care for its aging population. (The full report, Finland’s Economy: Achievements, Challenges, and Priorities, is available free of charge online.) To achieve this goal through 2020, for instance, Finland’s employment rate must gradually rise to 75 percent by that year, from the current 68 percent, and labor productivity growth would need to remain at well above 2 percent a year.
To reach the employment target, Finland must increase its workforce by 80,000 workers, to 2,480,000, while replacing 150,000 to 200,000 jobs that may be lost as a result of outsourcing and improved productivity in industry, services, and agriculture. Our analysis suggests that most new jobs will come from the private service sector, where Finland’s employment levels lag behind those of comparable economies. The greatest potential is in consumer services (such as retailing and restaurants) and business services (such as marketing and communications). 
About the Authors
Anna Granskog is a principal and Jani Moliis is a consultant in McKinsey’s Helsinki office.