Half a job for each job supported by enterprise funding
Study: Funding of the Rural Area Programme creates jobs in rural areas

29.8.2019 13.00 | Published in English on 30.8.2019 at 12.15
Press release

Employment and regional economy in rural areas are reinforced through the Rural Development Programme for Mainland Finland. According to a recently published study on the regional economic and employment impacts of the Rural Development Programme for Mainland Finland, fewer jobs would have been created without funding in the areas.

Funding for development projects and enterprises has identified and levelled off regional development differences. Development project funding has supported local development, which responds to local needs and possibilities. Therefore, funding has been directed to those most in need. The most significant regional economic impact of the structural support for agriculture is connected to maintaining the level of production and renewal capability.

The study on the regional economic and employment impacts of the Rural Development Programme for Mainland Finland examined the development of rural areas from the viewpoints of living, work and entrepreneurship and evaluated the generated regional economic and employment impacts. In addition, the publication examines the allocation of the measures in 2007–2013 in the areas. These measures are investment aid for agriculture, enterprise funding and development project funding.

By European comparison, Finland is still a semi-rural country. Multi-locality living and seasonal population are new examples of various uses of rural areas.

“What we mainly learned from the study is that regional tailoring and place-based policy are very important in the prioritisation of policy measures,” says Hilkka Vihinen, the director responsible for the study from the Natural Resources Institute Finland.

Performance of enterprises receiving funding is convincing

The workplace development, economic performance and regional economic impact of the enterprises that received funding have been larger than those of the comparison enterprises. Enterprise funding is primarily directed to high-growth enterprises. The study data made use of taxation data unique by European standards. Thus, benchmarking was made between enterprises that received funding and other enterprises and the impact could be separated in the development of enterprises that received funding.

“Regional economic and employment impacts are different by area depending on the area's industrial structure, age of enterprises, support measures and location. The multiplier effect of public enterprise funding on jobs in the regional economy is around 1.51. This highlights the importance of funding also for enterprises that have not received it; they get half a job for each job supported by enterprise funding,” says Olli Lehtonen, Senior Scientist from the Natural Resources Institute Finland.
 

Structural support creates jobs on farms

The turnover of farms having received structural support in agriculture has grown faster than average for farms. They also employ more external labour than other farms. The study shows that the most significant and long-lasting regional economic impact of structural support is connected to maintaining the level and continuity of production.

In addition to actual agricultural production, agriculture generates other production in the areas and employs in other fields when acquiring goods and services.

This is part of the evaluation for the Rural Development Programme for Mainland Finland 2014–2020.

Inquiries:

  • Inquiries: Sanna Sihvola, Ministerial Adviser, chair of the steering group, Ministry of Agriculture and Forestry ([email protected]), tel. +358 2951 62264
  • Hilkka Vihinen, Research Professor, director responsible for the study, Natural Resources Institute Finland ([email protected]), tel. +358 2953 26633

Evaluation:

Regional economic and employment impacts of the Rural Development Programme for Mainland Finland. Impact analysis for the period 2007–2013. Publications of the Ministry of Agriculture and Forestry 2019:16. Hilkka Vihinen, Olli Voutilainen and Toivo Muilu (eds.), Olli Lehtonen, Olli Niskanen, Max Strandén and Marja Knuuttila. Natural Resources Institute Finland and University of Vaasa. 

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