In a series of interviews Praxity’s Managing Partners give their account on the impact of Covid-19 and the strategies they are using to navigate their firms through these challenging times.
This article was first seen on Praxity.
Finland has had one of the lowest infection rates in Europe and the economic impact has been less severe than its Nordic neighbours. Acting early, decisively, closing borders swiftly and the relative remoteness of Finland has helped. Janne Elo, Managing Partner of Tuokko examines the measures, including the success of the hybrid strategy adopted from the beginning of May.
Preparedness and predictions
Finland took a somewhat rapid response to COVID-19 in early March. ‘Datum level’ emphasis was placed on population-wide hygiene recommendations, local and regional authorities’ actions identifying the root causes of infections, testing and severing of infection chains, but also preparedness for a possible acceleration of the epidemic.
Contagion statistics soon revealed that these recommendations alone weren’t enough to contain the virus and it developed into “intensification phase” and later an “outbreak phase” with stricter limits on public gatherings and socializing. At different epidemic stages, Helsinki’s metropolitan area was even closed to incoming and outgoing traffic.
Limit what’s necessary
Actions have been revised and lifted according to the evolving epidemic situation. Finland’s adaptive principle is characterised as “only limit what’s necessary”. Coordinating with healthcare professionals, politicians and businesses, our hybrid strategy has focused on taking a controlled shift from large-scale restrictive measures tomore targeted ones, and a “test, trace, isolate and treat” approach.
The hybrid strategy introduced at the start of September essentially ensured that local and regional restrictions were targeted and proportionate to the risk. It takes into account the direction and speed of the changes in order to safeguard the resource capacity of the healthcare system and shield and protect people, especially those in risk groups. Currently the chains of infection are accelerating and extensive restrictions on the population may be justified as a last resort to prevent the risk of a serious spread of the epidemic.
Mixed viewpoints on basic income
Basic income has been an ongoing discussion topic for many decades and Finland did a two-year trial between 2017/18. The pandemic has naturally reinvigorated interest in having a basic income system.
A spike in unemployment rates globally has exposed the limitations of current unemployment schemes. Nevertheless, there division about whether a new basic income system responds to the overall failures of the unemployment system or whether it is reacting to the sudden crisis of COVID-19. Regardless, any structure introduced now would be too late in the day for the specific challenges imposed by the pandemic. Interestingly, Finland’s trial revealed very little impact on employment rates between the comparison groups receiving benefits and those claiming regular unemployment benefits. Unequivocally, the current system requires simplification, more equal coverage and better incentives for the unemployed to enter the job market.
Unbiased border controls
Soon after the outbreak it became clear that the epidemic phases varied
considerably between one country and another. We do have one of the tightest border control policies in Europe. To keep the national situation stable, just last week Finland reintroduced internal border checks, and a ban on nonessential travel to and from the rest of the Schengen area.
Rather than adopt the EU traffic light system, Finland instead set clear limits and updated border control guidelines regularly based upon cases per capita figures. Despite these strict limits, the process is unbiased and reviewing the data it has been held up as largely successful in what it has accomplished.
Milder than the rest
It’s clear that no country has been spared from the social and economic drawbacks of the pandemic. Nevertheless, Finland has coped quite well so far and the economy hasn’t plummeted as badly as many forecasts predicted. As with everywhere in the world, there is of course a constant debate on balancing the COVIDrestrictions and subsidies with public health and business rationale in Finland. The decline for the first quarter was modest and our lockdown had a much milder impact on our economy compared to most Eurozone economies.
Ultimately, the overall economic impact will be determined by the duration of the pandemic and how long the economy can sustain itself for. Finland’s public debt and unemployment rates have already risen and government budget is increasingly deficient which provide clear warning signs of the future if the pandemic doesn’t show signs of relent. Our firm’s clients provide a good benchmark for the economic picture and overall our business is doing well. We continue to undertake a good volume of projects, albeit with less variety. Apart from several requests for payment delays we’ve not observed a major impact. In part this has been helped by serving a good spread of clients from different sectors and our robust risk management strategy.
To offset the negative impact of the crisis on the economy, the Finnish government announced a spending and tax package amounting to about 3% of GDP. This was complemented by a tax deferral scheme that is also worth about 2% of GDP. Other measures designed to support businesses included low interest business loans and bank securities. These were targeted towards different sized businesses. Additionally, direct contributions were deployed to support industries that have suffered most of the pandemic.
Part of our culture
According to Eurostat data, Finns are one of the highest working populations in the Eurozone to utilise remote working. Even before COVID-19! In 2019 over 14 percent worked from home regularly. Which made the full transition in March much smoother. At Tuokko, we moved swiftly over to remote work, partly due to our excellent technology systems. It meant our 70 professionals were able to deliver services to clients and collaborate seamlessly with colleagues, without interruption.
The pandemic has not directly affected the execution of our work, although our staff has taken a more innovative and flexible approach to delivering services. It has highlighted the need for a good work-life balance and currently more than half of our professionals are still working from home. Inevitably, some services will continue to be delivered this way. I am convinced it’s why we are regularly named one of the happiest places in the world. Although face-toface meetings and personal service will continue to play a vital role in the future, there is a balance to be found. Trust and job independence are a big part of our national culture, which all help to maintain our energetic team of experts.
This interview was first seen on Praxity.