The Competitiveness of the Construction Industry and the Quality of Construction in Finland

Ahonen AriJunnonen Juha-MattiPuhto JukkaAli-Yrkkö JyrkiAvela AleksiKulvik MarttiKuusi TeroMäkäräinen Kalle


This research project focuses on the competitiveness and product quality of the Finnish construction sector. The project is based on a thorough analysis of the sector’s structure. The construction sector involves complex production value chains involving purchasers, designers, manufacturers, and construction firms. These cooperation relationships are, however, often rather short-term affecting to the quality and innovativeness of the construction sector. Furthermore, the research shows that while productivity growth in construction industry has been almost non-existent throughout the 21st century, productivity in the value chain has increased. This productivity growth has occurred outside of the construction industry, itself. The international aspects of the sector and its ownership structure are also studied. International competition plays a minor role in the construction industry but has a greater impact on the manufacturing of construction products. At present, international activities play a minor role (5%) in the Finnish construction industry, while foreign companies turned out to be less profitable than domestic ones.

Public policy could foster the renewal of the construction industry by demanding new solutions and innovation as a purchaser. As a purchaser, it is important to define targets and push companies to compete with their technical solutions which fulfill these targets. The public sector could promote the productivity of the construction sector by requiring digital building information modeling (BIM) whereupon overlapping work could be avoided, and the problematics could be better recognized beforehand. The key issue in productivity growth, however, are actions that the players in the construction sector carry out by themselves. These include issues such the increase of prefabrication/modularization as well as the deepening cooperation and longer relationships between partners in cooperation. Better coordination and management of timetables could affect the quality of buildings. The construction sector is still heavily governed by regulations. Regulation could be used to promote renewal if regulation concentrated increasingly on target levels instead of technical solutions. Results also suggest that due to the increasing number of foreign-based employees in the construction sector, mandatory language courses should be included in all education levels of the construction sector.

Publications of the Government’s analysis, assessment and research activities, 2020:24.

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Construction, Buildings, Quality, Competitiveness, Development, Economy, Value added
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