The condition of the built environment in Finland is mainly satisfactory. For future development, the largest problems are posed by the increasing investment gap and the shortage of research and development activity in the real estate and construction industry. The best development opportunities concern the increased use of digital solutions and creative design. By utilizing them, quality can be improved and the creation of a sustainable built environment can be advanced.

Investment Gap Still Increasing

In Finland, the investment gap of the building stock is estimated at 30–50 billion, the investment gap of the transportation infrastructure at 5 billion, and the investment gap of water, waste and energy services at almost 1 billion euros. In addition, the built environment is rapidly generating development gaps, which pertains to the investments in the upgrading of structures and systems to meet modern-day needs.

Presently the amount of repair and modification investments is partly insufficient, which has resulted in an increasing deterioration rate of the built environment. The lack of maintenance of buildings, transport routes, and water, waste, and energy services further increase risks and repair costs.
What is positive about the development in the past few years, though, is that particularly the investment gap related to transportation infrastructure has begun to be managed in a goal-oriented way. Also the use of digital solutions in the real estate and construction industry has been advanced, due to which various new technologies, applications and services benefiting both professionals and end users have become more common. Otherwise, the research and development activity in the industry seems, in fact, to have declined due to the reduction in the total amount of public and private research and development funding in recent years.

 Deficiencies Cause Significant Societal Losses

The built environment and its quality are of great societal and national economic importance. The built environment represents a major share of our national wealth, and a significant proportion of the annual investments are directed at it. The share of energy used in buildings and construction also makes up a significant part of the final energy consumption and greenhouse gas emissions. The real estate and construction industry is also a significant source of employment. By managing the investment gap accumulated for the built environment, we can also improve the welfare of the nation and environment.

VTT, the Technical Research Centre of Finland, explored the economic losses and employment impacts created by the current condition of the built environment as part of the ROTI project. In addition, VTT investigated the societal benefits produced by the suggested measures. Damages to buildings, poor indoor climatic conditions and energy losses, and congestion and disturbances in the water, waste and energy services annually cause working time losses, decrease in productivity, medical expenses, and other additional costs. The combined annual cost impact of the damages is approximately 3.4 billion euros, which is approximately 1,300 euros per each Finnish household.

Compared to a sustainable level, the annual maintenance deficit has been estimated to be 12%. Over a period of ten years, the value of business operations lost due to the deficit is 57 billion euros. The losses within the national economy and industry are directly reflected in employment. VTT has estimated that on an annual level, the direct and indirect employment impact is as many as 39,000 jobs, which corresponds to an approximately 2% impact on the employment rate.

Investments Are Returned Many Times Over

According to the estimates by VTT, an approximately 16 billion euro investment would be required to manage the investment gap in the next ten years. The economic benefits from the investment would, at the same time, be approximately 34 billion euros. In research and development activity, the leverage would be even more significant. According to monitoring, companies invest on average two euros in research and development activity per each public subsidy euro. Thus, in order to double the research and development activity in the real estate and construction industry to 1% of the industry turnover, a 60 billion euro annual increase in public R&D funding would be enough.