Olli Lehtonen, Markku Tykkyläinen and Olli Voutilainen
Root causes of rural decline in economic well-being in Finland
This paper analyses how dependence on primary production, distance, climatic conditions and the intensity of land use bring about variations in economic well-being in rural areas. The conventional interpretation in Finland often concludes that economic well-being declines as dependence on primary production increases. The potential oversimplification implied by this statement was studied by testing the explanatory power of distance from the nearest large city, effective temperature sum and the proportion of fields in a comparative setting. The results revealed that economic well-being in rural Finland is best explained by the effective temperature sum, followed by distance, dependence on primary production and the proportion of fields. The only element of well-being which is determined chiefly by dependence on primary production is educational capital, causing a bottleneck preventing rural areas from becoming competitive and hence attractive to new knowledge-intensive industries. These results cast light on the spatial conditions under which the current economic evolution towards a service and knowledge society is taking place and on the spatial manifestations of remnant economic structures in disadvantageous locations.
Despite strong secular economic growth after the crisis of 1990-93, most of rural Finland has continued to face severe job losses. By applying small-area analysis, this paper seeks to explain why some rural areas inevitably experience declining employment while others prosper and grow even faster than urban areas. The variation of job creation in rural small areas derives from local economic conditions, local demographic structure, proximity to larger centers, and natural conditions. Contrary to expectations, the coldest areas with nature reserves have passed the worst job loss. Those areas had a lower burden of declining primary industries than traditional agro-forest areas, and because of tourism, industry has expanded in some places in Lapland. The dependence of an area on the primary sector is a good indicator of the highest rural job losses during the urban-centric economic growth period. Especially the most resource dependent areas have lagged behind and fail in job creation on account of their uncompetitive industrial environment. Persistent labor surplus plagues such areas, implying that established policy measures have been unable to restructure and modernize traditional rural areas. Since Finnish rural and regional policies have been being inefficient they should be reformed especially in resource-based areas in a fundamental way.
In the simplest definition, multi-local living means that a person or family have more than one residence or place to stay. In Finland, multi-locality has become a common phenomenon in recent decades, but the effects of it are not yet considered in decision-making or planning. This is because the “invisible population” created by multi-locality is not reflected in traditional population statistics. The assumption in this article is that multi-locality would provide opportunities to improve accessibility of health and social services in rural areas. The assumption is tested in the North Kymenlaakso region, Finland. The results point to that one-stop services and mobile services are cost-efficient and flexible provision models for rural areas. The results call for making the increasing multi-locality in society more visible and to utilize it better than at present as a resource for the development of rural areas.