Turnover and Employment Decline in Microenterprises – But Service Exports Continue to Grow

The largest and fastest-growing service export sectors among microenterprises are wholesale trade, management consultancy, and software and related consulting services. The geographical distribution of service exports shows a concentration in Western and Southern Finland. In euro terms, service exports to the EU are now larger than goods exports. According to Professor Matti Muhos, Director of Growth Management at the University of Oulu, there is significant untapped potential in increasing direct exports by microenterprises. For example, per capita, Sweden’s microenterprise exports are many times higher than Finland’s.

In 2023, approximately 36 000 new businesses were established - 6 000 fewer than the previous year. At the same time, about 64 000 microenterprises ceased operations. Muhos considers the drop in the rate of new business formation alarming, as Finland is already lagging behind other Nordic countries and Estonia by this measure.

Microenterprises are most numerous in urban areas, but when measured relative to population, they are more common in smaller municipalities and rural areas. Research Director Ossi Kotavaara emphasizes that microenterprises play a critical role in regional vitality in rural areas, where there are often few jobs in large companies or the public sector.

Approximately 13,000 microenterprises received business subsidies in 2023, but most of the public support went to large companies.

This is the first time business subsidies have been included in MY Tilastot. The data includes direct public subsidies from the state, but excludes tax-based supports. The most common forms of support for microenterprises were direct grants and interest subsidies, totaling approximately €184 million in 2023. In contrast, microenterprises received only minimal guarantees. Large enterprises, by comparison, received about €500 million in grants and interest subsidies, and a similar amount in guarantees.

By sector, the software and consulting industry received the most direct grants among microenterprises, while the waste collection, treatment, and recycling sector received the most interest subsidies. The limited guarantees issued to microenterprises were mainly directed toward the real estate sector.

Assistant Professor of Entrepreneurship Robert van der Have sees the analysis of microenterprise subsidies as crucial:

"Given the significant socioeconomic role microenterprises play in employment, economic dynamism, and vitality, I’m excited about this first mapping of public support. The role of business subsidies in fostering microenterprise growth is an important research theme. It’s encouraging to see that support is directed to sectors with strong export potential and to activities that promote sustainable development."

You can explore MY Tilastot here.

A microenterprise is defined as a company with fewer than 10 employees, annual turnover below €2 million, and independent ownership.

Contact information:

Matti Muhos, Professor and Director
University of Oulu Kerttu Saalasti Institute
matti.muhos@oulu.fi
0400 407 590

Robert van der Have, Assistant Professor
University of Oulu Kerttu Saalasti Institute
robert.vanderhave@oulu.fi
050 436 1289

Ossi Kotavaara, Research Director
Regional Excellence (REx) Research Group
University of Oulu Kerttu Saalasti Institute
ossi.kotavaara@oulu.fi
050 573 9124

Photo: Andrea Piacquadio, Pexels