Importing means power because it controls global production networks

Press release 27 September 2004 Globalisaation portinvartijat (Gatekeepers of globalisation) is a new entry in the debate on the China syndrome and Finland’s competitiveness. It draws attention to the fact that we in Finland have yet to grasp the significance of the role played by global purchasing in the new world economy. Purchasing is at the heart of the new international division of labour introduced by globalisation. The publication deals with the buyers of specialist shops and their work. It emphasises, however, that chain stores and the consumer industry operate today in a very similar manner by contracting the manufacture of their brand-name goods in countries with cheap labour. Importing is power because it means controlling global production networks. Importing may also be extremely profitable and provide very many jobs. Globalisaation portinvartijat estimates that even if a garment is manufactured abroad, as much as 75% to 80% of its sale price can stay in Finland if it is designed and sold in Finland. However, the purchasing activities of Finnish companies are characteristically unsystematic, sometimes even impulsive. Specialist chains use various purchasing methods at the same time and an excessive number of suppliers. International procurement is poorly handled because Finnish companies typically focus on exporting. Importing and purchasing of consumer goods are underrated and there is almost no training available or any research conducted. Hennes&Mauritz has become the largest clothing chain in Finland and Ikea stands a good chance of rising to number one in furniture sales when it opens its next outlet. The success of these Swedish chains is based on systematic purchasing and close relationships with contractors. With fine-tuned purchasing systems, they can control the social and environmental circumstances of production more convincingly than chains that practise mixed purchasing. Because of their primitive purchasing methods Finnish companies cannot be sure of production conditions at their contractors. There can be no ethical consumerism without ethical buying. The book makes the following nine recommendations: 1. We must gain a better understanding of how globalisation has altered the mechanisms of the world economy and entrepreneurship.2. The competitiveness of the Finnish retail trade, especially the specialised retail trade, should be boosted with support measures to ensure that Finnish products, especially innovations, will continue to have sales channels.3. Finnish chains should adopt methods from the best global purchasing machineries such as Ikea, H&M, Nokia and Wal-Mart by focusing their concepts, engaging more in design, reducing the number of purchasing methods and contractors used, and reinforcing their presence in production areas.4. The improvement of international purchasing should be supported through training, research and development projects5. Research on purchasing and buyers must be increased6. Training in international buying must be increased on all levels.7. Wages and status of buyers must be improved.8. Finpro could adopt a more active role in supporting the purchasing activities of Finnish businesses.9. Consumers and NGOs could inquire more into the purchasing policies of chain stores and the social and environmental control they apply in importing. Elina Grundström and the five other editors of the book have interviewed over a hundred trade professionals from Finnish and foreign chain stores. Illustrated reports follow the everyday work of a Finnish buyer and take the reader to where the deals are made: the Canton Fair, the Philippines, Älmhult in Sweden and the shopping streets of Lappeenranta in Finland. The Concrete effects of globalisation project launched by Sitra at the beginning of 2003 deals with globalisation at the grass-roots level and introduces people in whose work globalisation is tangible. The project continues the work of the extensive research programme Globalisation, welfare and employment (1997–1999) which surveyed the general nature of globalisation and its effects on Finland. The book Globalisaation portinvartijat (Gatekeepers of globalisation) now released is the second part of the project. The first was the book Työpaikkana maailma (Global workplace) edited by Minna Ruckenstein and published last April. Further information Elina Grundström, editor, tel. +358 50 541 0479, email elina.grundstrom@kolumbus.fi Vesa-Matti Lahti, Sitra, tel. +358 50 387 3188, email vesa-matti.lahti@sitra.fi Publication data Globalisaation portinvartijat (Gatekeepers of globalisation). Eds. Elina Grundström, Irina Haltsonen, Anton Hausen, Josetta Mykkänen, Mattias Möttölä, Susanna Särkkä. Photographs Yrjö Tuunanen. Sitra 268. Edita Publishing Oy, ISBN 951-37-4178-8, ISSN 0785-8388 (Sitra). Helsinki 2004. EUR 27. Available at Edita’s Customer service and bookstores