At the end of January 2020, a Chinese tourist was isolated at Lapland Central Hospital with a suspected coronavirus infection. Approximately one and a half months later, emergency laws were introduced in Finland. This also marked the beginning of a real state of emergency for North Karelian companies.
Stage 1: Shock – is this really happening?
– At the very beginning, I thought that this is the kind of thing we’ve experienced before. After all, we had already been through the recession of the early 1990s and the 2008 financial crisis. It quickly became clear, however, that now we were facing something quite different. The coaching approach of the business development organisation had to be quickly reorientated towards crisis work. We needed to get down to assessing the seriousness of the situation,’ explains Business Joensuu’s Service Director Tuomo Roivas.
Remote work, remote school, disbelief, the isolation of Uusimaa. At the same time as toilet paper, preservatives and dry food were disappearing from the shop shelves, a power team was being put together at Business Joensuu to take on the crisis.
– There was a fresh need for the business emergency number that had earlier been introduced. It became the crisis helpline answered by the power team. Ten of our employees with experience in crisis work were brought into the team. The service was dashed together in just two days.
During the busiest times, the crisis phone was ringing nearly a hundred times a day. Companies were facing a real emergency.
Fear of bankruptcy
Reaction phase – what actually happened in the end?
At the end of 2019, there were more than 11,300 industrial jobs in North Karelia, with 8,700 of these being in the Joensuu region. In the metal and plastic industry alone, approximately 5,300 people worked in the Joensuu region. This sector’s annual exports reach over a billion euro, and until 2020 it was pushing forward with an annual growth of around 8%.
At the beginning of the year, mainland China, Iran, South Korea, Italy, Tirol in Austria, and the German State of North Rhine-Westphalia were designated as coronavirus epidemic areas. The news caused some slight concern to the industry regarding the availability of materials and components.
The global economy was starting to react, and prices in financial and stock markets were swinging wildly.
In the service sectors, the outlook got darker and darker. North Karelia was also facing a serious situation when coronavirus measures bolted the doors of the restaurants at the start of April. There were fears of bankruptcies in the tourism and hotel sector.
In normal times, nearly 2,000 business customers have come for business advice at the Länsikatu offices – in simple face-to-face meetings. Even though coronavirus stopped face-to-face meetings, our customer service was at no point interrupted or halted.
About 1,300 people attended remote meetings. In addition to webinars, communication channels included the website, social media channels and remote conference connections.
A need for advice
Processing phase – how am I going to get through this?
At the busiest stage, about half of Business Joensuu’s personnel were devoting almost all their time to dealing with coronavirus issues. We were advising, negotiating, and supporting entrepreneurs in different financial matters.
One of the most common discussion topics with our customer companies was company personnel. Should it be lay-offs, redundancies or neither? Considering the options was painful for many.
– As a rule, people cannot be kept on the payroll if there is not enough money to pay their wages. Should you then safeguard your own income and make people redundant? But what if business picks up again? Where do you then get the skilled workforce from? For many, the situation was very difficult. A great deal of calculations and assessments were being made in a climate of great uncertainty where no one had any ready answers to offer..
A key part of the processing phase of the corona crisis was the release of the Government’s coronavirus support package. This included sole entrepreneur support, ELY support for companies employing 1–5 people, Business Finland development support for larger companies, State Treasury cost support, and support for eating and drinking establishments provided via the Development and Administration Centre of the ELY centres and TE offices.
At one point, a dispute arose over the development aid provided by Business Finland, which operates under the Ministry of Economic Affairs and Employment. The support did not help companies facing a cash flow crisis, as the law stated that Business Finland could only distribute support for development purposes. Ill feeling also arose from cases where people felt that the support had gone to the wrong recipients. Roivas understands the criticism.
– Official communications were not really consistent, and the regulations were changing on the fly.
Business Joensuu was particularly concerned about the large number of companies that had never applied for public funds or used electronic channels to deal with the authorities..
– In practice, a development plan had to be drawn up for these companies in the same way, and a great many such plans were made. All in all, around 15 per cent of the support funds from Business Finland and ELY that came to North Karelia were channeled through us.
Roivas also opens up the everyday reality of the application phase by mentioning how the funders reported in the middle of the process that the number of applications from North Karelia was in danger of falling behind that of other regions. There was a need to strengthen communication.
– We therefore advertised the support in a variety of ways on ‘the Karelian’ website homepage. The advertising produced results and the final number of applications reached the national average.
There were also understandable complaints about the restaurant support and cost support, which Tuomo Roivas says involved complex criteria and turnover thresholds that were very high. This matter is due to be remedied, as long as Parliament is able to decide on the procedures for the new round of cost support.
”A great effort by the City of Joensuu”
Business Joensuu also played a role when the City of Joensuu decided to allocate one million euros of its employment appropriations for a municipal subsidy to boost employment of Joensuu residents. The subsidy enabled 267 employment relationships to be established. According to Roivas, many of these involved signing an employment contract that is valid until further notice.
– This municipal subsidy is available at other times as well, but the decision by the City doubled its size. Also, social criteria were dropped from the subsidy conditions, and an additional bonus for companies was that the municipal subsidy was paid to companies in advance. This was a truly great effort by the City by Joensuu. Getting good things done is often simply a matter of will!
Reorientation phase – the coronavirus pandemic has not been beaten yet. Nevertheless, the situation is beginning to become a part of normal everyday life.
The positive things mentioned by Tuomo Roivas even include causes for celebration. Although the hotel and tourism sector was in deep waters in the spring, the summer was a different story. Many companies in the industry had their best tourist summer ever. Food sales went well, and transport services have been developed to become more customer-oriented. Like many other Finns, the North Karelians have been tweaking and revamping their homes and sprucing up their yards and gardens. Another cause for celebration is the success of the plastic industry and, in particular, the medical industry. The jobs are still there.
– As a whole, the state of industry in the region is still unclear. So far, businesses have coped well, but the order books have evaporated and new orders are not coming in at the same rate as before. The exceptionally strong growth in the Joensuu region has levelled off, although this was to be expected even without the arrival of coronavirus.
The pandemic also set North Karelia companies to developing new business opportunities. Services have been updated, digitalised and customised. One of the main things taken on board during the coronavirus crisis is the importance of a customer-oriented approach.
According to Roivas, being able to respond rapidly has been essential in dealing with the crisis. Through these quick reactions and investments in development, he believes that companies are now in better shape and ready for revived growth.
Self-employed support through cooperation
The municipalities of Heinävesi, Ilomantsi, Joensuu, Kitee, Liperi, Nurmes, Outokumpu, Polvijärvi, Rääkkylä and Tohmajärvi agreed together that, up to the end of September, sole entrepreneurs may submit their support applications centrally through a secure service located on the Business Joensuu website. The actual support decision and payment were made by the municipality of residence of the sole entrepreneur in question.
– In small municipalities, taking care of the matter independently would have been an impossible task. It was also a question of equality. If all municipalities had taken care of the support process themselves, companies could have been on a very unequal standing,’ explains Tuomo Roivas, Director of Business Joensuu Services.
MEAE’s criteria for support for soul entrepreneurs were eagerly awaited in the days before Easter. There was no time to lose, and the Business Joensuu team used the Easter holidays to build the electronic application system. A total of 799 statements on support for sole entrepreneurs were made across the ten municipalities. Of these, 702 were positive. The system also processed a total of 414 applications for support from KETI, PIKES and Liperte. With its speed and its digital service for obtaining support, Business Joensuu was a national pioneer.