North Karelia and Outokumpu have a history of economic transition and have recovered relatively strongly from external shocks
Finland has been hit hard by a convergence of factors over the past decade: the 2009 crisis, technological change in electronics, structural decline in demand for paper pulp, and disruption of trade with Russia. These changes have affected North Karelia negatively as an industrial region that is relatively trade-exposed with a high proportion of the local workforce employed in the public sector. Yet, the regions have recovered. After the 2009 crisis, the gap between the regional and national levels narrowed from 30% (2009) to 24% in (2015). Currently, gross domestic product (GDP) per capita for North Karelia is 76.2% of the national average (2015).
Outokumpu is a small rural municipality in North Karelia that has experienced a long-term transition associated with the closure of a major copper mine in 1989. For most of the 20th century, Outokumpu was the key mining municipality in Finland. The transition from mining to a manufacturing-based economy has been a positive experience, making the municipality one of the most industrialised in the region. Yet, currently, North Karelia and Outokumpu face development challenges, particularly in terms of generating a more dynamic business environment and labour market.
Outokumpu’s location, industrial fabric with mining know-how and enabling environment for mining activities are competitive advantages for the municipality
Outokumpu benefits from a good geographic location, with close proximity to the 2 largest urban centres in East Finland (Joensuu and Kuopio) and to the Russian border (less than 120 kilometres). The municipality of Outokumpu is located within the local labour market (LLM) of Joensuu, which concentrates most of the growth in North Karelia because of its size and diversity to attract skills. The municipality is also located in the so‑called Outokumpu geological area containing copper, zinc and nickel deposits with ongoing exploration projects.
Outokumpu, as North Karelia, is highly specialised in the industrial sector (e.g. mining and manufacturing) and is one of the most industrialised municipality in North Karelia. The manufacturing sector employs 33% of the working-age population in Outokumpu, far above the share of LLM (16%) and the country average (13%). Over the past two decades, the value of mining activity in the region has increased and the mining value chain (extraction and processing) has become more important to the regional economy. This includes the industrial park of Outokumpu, which hosts knowledge-intensive and globally connected companies in the metal technology sector, and the Geological Survey of Finland’s (GTK) mineral processing laboratory.
Furthermore, the social and political environment in Outokumpu is favourable to mining activities. Rooted into the municipality’s development history, the community has a positive perception of mining activity, which provided a number of services (schools, health and security) to the municipality during the half part of the 20th century. Furthermore, the municipality has placed the elaboration of a local mining cluster, the Outokumpu Mining Camp, high in its development agenda, aiming to co-ordinate private sector, universities, research centres (GTK) and government to support mining projects in Finland.