The Ministry of Employment and the Economy is gearing up to launch an experiment aimed at finding employment for a total of 2,500 immigrants in Finland.
The experiment will be carried out by means of a so-called social impact bond, a performance-based funding agreement where the return on investment is contingent on the achievement of pre-determined social outcomes.
The financial risks associated with the experiment will thus be borne entirely by the investors, while the public sector will only pay for the measurable outcomes – in this case, whenever an immigrant finds employment, explains Jari Gustafsson, the permanent secretary at the Ministry of Employment and the Economy.
A total of 13.5 million euros has already been invested in the social impact bond, making it the largest social impact bond in terms of invested capital in Europe. The European Investment Fund (EIF) alone has invested ten million euros in the experiment.
The participating businesses include the S Group and Valmet Automotive, which has already recruited immigrants at its assembly plant in Uusikaupunki, Finland.
Tomi Salo, the director of human resources at Valmet Automotive, revealed that the automotive manufacturer has been delighted with the high level of motivation and commitment shown by its current immigrant employees.
“I believe we will find more of them in the future,” he states in a press release. “The way we see it, we also have an important role in supporting the integration of immigrants by employing them.”
“The commitment of businesses to resolving societal challenges is the greatest element of [the experiment],” Jyrki Katainen, the Vice-President for Jobs, Growth, Investment and Competitiveness at the European Commission, commented in a press conference held in Helsinki on 2 June, 2017.
The European Union, he estimated, will monitor the outcomes of the experiment closely, as many of the member states are faced with the exact same challenges as Finland.
“The integration of immigrants is a major societal challenge. The countries that succeed the best in integrating immigrants will be the ones who succeed the best also in other respects. [Integration] is a way to promote competitiveness, innovation and other benefits arising from multi-cultural environments – and thus [a way to promote] economic growth and social cohesion,” he said.
Gustafsson: More innovative instruments needed
The objective of the experiment is to facilitate and expedite the entry of immigrants to the labour markets by providing integration training, customised for the requirements of the job, at workplaces.
The unemployment rate for immigrants has for years been more than two times as high as that for the native-born population in Finland.
The businesses participating in the experiment are largely from sectors plagued by a labour shortage, such as the retail, service construction and manufacturing sectors. The experiment will initially be launched in Uusimaa and Varsinais-Suomi and, as considered necessary, expanded to other regions of Finland.
Gustafsson conceded that finding employment for 2,500 immigrants over a three-year period is an ambitious objective in light of the 13.5 million euro budget of the experiment.
He also reminded that the experiment will be launched under circumstances in which the government has introduced considerable cuts in public spending. The greater the cuts in public spending, he argued, the greater the demand for “such innovative” instruments will be in the future.
“Our total integration expenditure in the field of education is currently some 150 million euros. This [social impact bond] alone represents ten per cent of the funding we would’ve had to take from the pockets of taxpayers had it not been for the project,” says Gustafsson.
The Finnish government agreed to launch the social impact bond in its mid-term policy review session in April.
Aleksi Teivainen – HT
Photo: Heikki Saukkomaa – Lehtikuva
Source: Uusi Suomi