New companies established less actively – labour market waking up after COVID-19

Nov 16, 2022

During January-September, a total of 4,803 new companies were established through Finnish Enterprise Agencies. This is four per cent less than in the comparison period in 2021 and one per cent less than in 2019 before the COVID-19 pandemic. The reason for this decline could be that the labour market is in good standing after lay-offs due to COVID-19. Even though the number of new companies established has decreased, people are visiting the advisory services more often before establishing a company.

During January–September 2022, a total of 4,803 new companies were established with the help of the personal business advice services provided by Finnish Enterprise Agencies. This number is almost the same as in the comparison period in 2019 before the COVID-19 pandemic, when a total of 4,871 companies were established. During January-September 2022, a total of 650 new companies were established with the help of NewCo Helsinki.

“In terms of how actively people are establishing companies, we are likely now seeing that people have been able to return to the labour market after the lay-offs caused by the COVID-19 pandemic. Establishing a company may no longer have been as important an alternative to finding employment as during COVID-19, since many industries are suffering from labour shortages. In addition, the general uncertainty about the market situation may be affecting the number of new companies established,” says Piia Malmberg, CEO of Finnish Enterprise Agencies.

Business advisory services were used extensively and more often than before

The free of charge advisory services provided by Finnish Enterprise Agencies were used more than 20,300 times during January–September. The current market uncertainty is also noticeable in the business advisory services.

“We want to consider the issues related to entrepreneurship in more detail, and people tend to visit the advisory services several times before making their final decision. The visits have also become longer, which means that people greatly need business advisory services now,” Malmberg points out.

Even though online meetings are here to stay, the business advisory services have partially also returned to offering face-to-face meetings. People in small regions would like more face-to-face meetings, whereas people in central cities want remote services.

Advisory services also focus on promoting changes of ownership

Finnish Enterprise Agencies are also involved in the activities of Omistajanvaihdosfoorumi (Change of Ownership Forum) and thus also promote entrepreneurship along with company acquisitions. The aim is for more and more people planning on becoming entrepreneurs to consider purchasing a company or its business activities as a viable option in starting their own journey as an entrepreneur.

“There is a significant number of companies in Finland that are at risk of going out of business unless they find someone to continue their activities. In Finnish Enterprise Agencies, we play our part in promoting changes of ownership, and during business advisory meetings, we always also mention that it is possible to become an entrepreneur through a company acquisition. We are also actively involved in the project Maaseutuyritysten omistajanvaihdospalvelut (Change of Ownership Services for Enterprises in the Countryside) You not always need to start the journey as an entrepreneur from scratch,” Malmberg points out.

You can take a look at the regional data on companies established with the help of Finnish Enterprise Agencies here (PDF, in Finnish).

Photo: City of Helsinki/Jussi Hellsten

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