The growth of publicly listed large corporations in Finland has significantly lagged behind international peers over the past decade, according to a new McKinsey study.
Finland’s largest companies have experienced slower growth compared to international peers over the past decade. On average, large corporations headquartered in Finland grew by 3% annually, while the international average was 8%. This difference in growth rates indicates that Finnish companies’ revenues could be approximately €100 billion higher based on international benchmarks. Inflation or sector exposure do not explain this difference. Inflation or sector exposure does not explain the variance.
This finding matters for Finland's economic revival. Startups and SMEs are growing, but only large-cap companies have enough scale to significantly impact the overall economy.
Three factors driving the growth gap
According to McKinsey’s analysis, Finnish corporations face three main barriers to growth:
- Lack of ambition: Only one in ten large companies sets its growth targets at the level of global average growth. Without ambitious goals, there can be no credible plans, incentives, or systematic risk-taking at the necessary scale.
- Lower investments: The balance sheets and profitability of Finnish companies have strengthened, but their international peers invest up to three times more in research and development as well as acquisitions. Investments in fixed assets such as production capacity or information systems are also more than 65% higher in the comparison group than in Finnish companies.
- Corporate culture: Fast-growing companies excel, for example, in constructive challenge and other cultural factors that support growth – Finnish companies often rank in the lowest quartile in these areas. Challenge is perceived as a lack of trust, innovations progress slowly, the termination of unsuccessful projects is sluggish, and incentive systems are more modest than those of international competitors. In addition, too many resources are allocated to middle management instead of sales and technical development.
Strong position to change course
Despite the challenges of the past decade, Finnish companies have strong foundations to accelerate growth: they have strong balance sheets, global-scale competitive advantages, and a track record of successful turnarounds.
“Achieving growth requires first a higher growth aspiration from owners and boards. Corporate management needs to have credible plans that take into account required resource reallocations, as well as courage to rethink established practices. Growth barriers hidden in corporate culture must be identified and dismantled – this is a shared responsibility of the entire business ecosystem”, says Tapio Melgin, Partner in McKinsey’s Helsinki office.
In Finland, the operational environment is also well-positioned to support the growth: stable and transparent business environment, access to a highly educated workforce, and institutional stability. In addition, affordable clean energy and a reliable power grid offer a significant competitive advantage, particularly for energy-intensive industries.
The conditions for resolving Finland’s growth crisis are therefore stronger than ever. Raising the average growth of Finnish companies to or above the global benchmark could pull the entire national economy into a new growth era.
About the research
McKinsey’s study Seizing Finland’s growth opportunity analyzed top 20 listed Finnish companies that rank among the world’s 5,000 largest firms. The analysis used time-series data from 2013–2023, comparing these companies to both global and regional peers across financial and cultural metrics. It also assessed how employee resources are allocated across functions relative to peers.