FINLAND: Universities strike it hard

This year will be a momentous one for Finnish universities because it is the first year of a new Universities Act. The act is ushering in the most radical change for several decades via new governance models and by freeing up universities to seek private funding.

The economy suffered setbacks during 2009 and, although there was widespread confidence that the worst was over, three months into the New Year things are not looking so rosy, with strikes affecting universities on and off campus.

Last year, Finland's GDP declined by 7.5% and unemployment increased by 1.8% to 7.9%. The Bank of Finland projected that GDP would be stable during 2010 and rise by 1.6% in 2011.

With its small population, Finland is more dependent than many other countries on exports, which represent about 47% of GDP. Finland's fortunes in 2009 were driven in part by its dependence on its largest export markets, particularly Russia. As Russia was having economic problems of its own, there were knock-on effects to the Finnish economy.

Industrial disputes have become front-page news so far this year but a transport workers' strike that affected trucking and passenger bus services was over in a day. The stevedores' strike that closed down the ports from 4 March has not presented such a quick and happy ending. If this strike continues too much longer, it could dent confidence in the economy and in its expected recovery.

GDP forecasts for 2010 are going to be harder to achieve because of the effect of the strike. About 80% of foreign trade is via its ports so the knock-on effects right through the economy are severe.

According to the Helsingin Sanomat, Finland's main broadsheet daily, the impact will soon be seen on the shelves of grocery stores if the industrial action continues, with imported fresh fruit and vegetables the first items to run out. The strike is also affecting major employers and exporters, such as those in the pulp and paper industry.

Why should a protracted strike at Finland's ports affect universities? The main reason is that it could continue the decline in taxation revenues - one of the outcomes of the economic difficulties in 2009.

This is important to universities because about 89% of their overall funding ultimately comes from government sources and therefore taxation revenue. An extended strike could reduce taxation from all sources.

Strikes have also moved on to the university landscape. University staff trade unions and SYTY, the universities' industrial relations mouthpiece, were unable to agree on a number of matters relating to staff benefits for many months. A strike was called for 18 March but, as reported elsewhere in this edition, was subsequently cancelled after a mutually acceptable agreement was reached.

Outside the strikes arena, most universities have not suffered direct effects from the short-term glitches in Finland's economic well-being. But it has not all been smooth sailing.

As reported in University World News last month, the University of Oulu in the country's north-west has been discussing redundancies as a solution to internal budgetary problems.

Although the situation is evidently worse at Oulu than elsewhere, all Finnish universities have less government funding than they had anticipated: they did not receive expected full supplementation to cover salary and rent increases, and the government's productivity
programme has led to a sector-wide cut of EUR20 million.

Even if these funding issues have come as a bit of a shock to universities, they are not related to the introduction of the new Universities Act. And although the new act means universities can now seek funds from benefactors and through overseas student fees, the income streams from these are unlikely to alleviate the pressure on university budgets.

They will remain dependent on the government for many years to come.

* Dr Ian Dobson is Helsinki correspondent for University World News. An Australian scholar often based in Finland, he is editor of the Australian Universities' Review.