Events, conferences, and conventions are not just social gatherings but economic powerhouses. These activities, by significantly contributing to the travel and tourism industry, have a positive impact on the Gross National Product (GNP). This article delves into the substantial benefits of such activities on travel accounts and GNP, mainly focusing on their transformative effects in Finland.

Author: Johanna Heinonen

Travel Accounts and GNP

Travel accounts, a crucial part of the balance of payments, meticulously record the expenditures of residents travelling abroad and the spending of foreign visitors in the home country. Events, conferences, and conventions drive inbound travel, leading to a significant increase in foreign exchange earnings. This influx is essential for maintaining a favourable balance of payments and providing robust support to the national economy.

Major international events attract significant foreign visitors who spend on accommodation, food, transportation, and entertainment. In 104 countries worldwide, the meetings industry contributed over USD 1 trillion per annum in 2027 (Lindner 2024). These expenditures contribute directly to the travel account surplus (UNWTO 2014).

GNP, the measure of a country’s total economic output, including income from abroad, is significantly influenced by events and conventions. These events don’t just contribute; they generate direct and indirect economic activities. The direct contributions are evident in the spending on event-related services such as venues, hotels, catering, and transportation. The indirect contributions, on the other hand, are more subtle but equally impactful, as they stem from the increased demand for goods and services in related sectors, such as food production and retail.

The meetings, incentives, conferences, and exhibitions (MICE) sector is a significant part of the tourism industry, often seen as a driver of economic growth. Research indicates that the MICE industry can boost a country’s GNP by fostering international trade, investment, and knowledge exchange (Davidson & Cope, 2003). The sector creates employment opportunities directly in event planning and indirectly in associated industries.

The Case of Finland

Finland, a country known for its innovation and sustainability, has harnessed the power of events, conferences, and conventions to drive economic growth and cultural exchange. The nation’s MICE industry, backed by a robust infrastructure of state-of-the-art conference centres, hotels, and transportation networks, stands as a shining example of how strategic planning and execution can elevate a country’s global standing.

In Finland, the MICE industry is vital to the tourism sector. According to the Finnish Convention Bureau (FCB), the industry contributes significantly to the national economy (ITB 2022). For instance, in 2023, Finland hosted over 529 international congresses (Visit Finland 2024b); in 2022, Finland was the 13th most popular congress country in the world (Visit Finland 2024a). These events generate notable sums in direct spending and indirectly, highlighting the sector’s economic significance.

Moreover, the economic impact extends beyond direct spending. The MICE industry in Finland supports various sectors, including hospitality, transportation, and retail. A study by the University of Turku (2021) found that for every euro spent directly on MICE activities, an additional €1.50 was generated in the broader economy through indirect and induced effects.

Cultural and Social Benefits of Events

Besides economic benefits, events, conferences, and conventions have profound cultural and social impacts. Finland’s commitment to hosting international events fosters not just economic growth but also cultural exchange and knowledge sharing. These events provide vibrant platforms for individuals from diverse backgrounds to come together, learn from each other, and collaborate, contributing significantly to Finland’s innovation and competitiveness. This aspect of events is particularly inspiring, highlighting their broader societal impact.

For example, the annual Slush conference in Helsinki, one of Europe’s most significant startup events, attracts thousands of entrepreneurs, investors, and media representatives worldwide. This event boosts local businesses and positions Finland as a hub for innovation and technology.

Government and Industry Initiatives

The Finnish government and industry stakeholders have implemented a range of initiatives to promote the MICE sector. The Finland Convention Bureau plays a pivotal role in marketing Finland as a premier destination for international events. The bureau collaborates closely with regional convention bureaus, hotels, and service providers to offer comprehensive support to event organisers, ensuring a robust and sustainable MICE industry.

Additionally, the government provides financial incentives and grants to attract large-scale international events. These initiatives are part of a broader strategy to enhance Finland’s competitiveness in the global MICE market. The emphasis on sustainability is also noteworthy, with Finland promoting eco-friendly practices in event management to align with its national sustainability goals.

Challenges and Future Outlook

Despite the Finnish MICE industry facing global competition and economic fluctuations, it has demonstrated remarkable resilience and adaptability. The COVID-19 pandemic, a global crisis that led to event cancellations and financial losses, served as a catalyst for rapid innovation. The industry swiftly shifted to virtual and hybrid event formats, showcasing its ability to evolve and meet the changing needs of the market.

National budget cuts for tourism have emerged as a significant challenge, potentially stifling the growth of events and conventions (Eduskunta 2023). Such reductions in funding can hinder the ability of destinations to attract significant events, which are crucial for economic and social benefits.

Looking ahead, Finland aims to leverage digitalisation and technological advancements to enhance its MICE offerings. But perhaps most importantly, Finland’s commitment to sustainability is a key pillar of its future strategy. By promoting eco-friendly practices in event management, Finland is not only aligning with its national sustainability goals but also positioning itself as a leader in hosting green events. This commitment to sustainability reassures the audience about the industry’s future, demonstrating its ability to adapt to evolving global trends.

Events, conferences, and conventions are integral to any country’s economic and social fabric. They boost travel accounts through increased foreign spending and contribute to GNP by generating economic activities across various sectors. Finland exemplifies the positive impact of the MICE industry with its well-developed infrastructure, supportive government policies, and innovative approaches. As the global landscape evolves, Finland’s focus on sustainability and digitalisation will be vital in maintaining its competitive edge in the international MICE market.

References

Davidson, R. & Cope, B. 2003. Business travel: Conferences, incentive travel, exhibitions, corporate hospitality and corporate travel. Pearson Education.

Eduskunta. 2023. Asia: HE 41/2023 vp Hallituksen esitys eduskunnalle valtion talousarvioksi vuodelle 2024 Teema: PL 32 Matkailun edistäminen.  Cited 17.6.2024. Available at https://www.riksdagen.fi/FI/vaski/JulkaisuMetatieto/Documents/EDK-2023-AK-40037.pdf

ITB. 2022. Finland juggles mice activities and sustainable tourism. News 4.11.2022. Cited 17.6.2024. Available at https://news.itb.com/topics/csr/d3_finland-1-2p/

Jauhiainen  and the working group. 2021. Event industries and other event organizers in Finland:  from the COVID-19 pandemic  towards sustainable development and virtual realities. Turun yliopisto, BIIDEA project1, Geography Section at the University of Turku. Cited 17.6.2024. Available at https://sites.utu.fi/biidea/wp-content/uploads/sites/855/2021/06/Biidea_report-6_event-industry.pdf

Lindner, J. 2024. Meetings And Events Industry Statistics. Cited 17.6.2024. Available at https://worldmetrics.org/meetings-and-events-industry-statistics/

UNWTO. 2014. Global Report on the Meetings Industry. Cited 17.6.2024. Available at https://www.e-unwto.org/doi/book/10.18111/9789284416097

Visit Finland. 2024a. Finland Convention Bureau – FCB. Cited 17.6.2024. Available at https://www.visitfinland.fi/kongressit-ja-yritystapahtumat-fcb

Visit Finland. 2024b. Kongressivuosi 2023 – tiedonjakoa ja suomalaista osaamista. News 13.3.2024. Cited 17.6.2024. Available at https://www.visitfinland.fi/ajankohtaista/uutiset/2024/kongressivuosi-2023–tiedonjakoa-ja-suomalaista-osaamista

Author

Johanna Heinonen works as a senior lecturer and RDI specialist at LAB University of Applied Sciences. In particular, the diverse development of tourism, digital communication, and customer experience are close to her heart. In the EKTAK project, she works as an RDI specialist and is responsible for the cooperation of educational institutions.

Illustration: https://pixabay.com/fi/photos/bitcoin-taloudellinen-idea-3091789/ (Mohamed_hassan, Pixabay License)

Reference to this article

Heinonen, J. 2024. The Impact of Events for a Country. LAB Pro. Cited and the date of citation. Available at https://www.labopen.fi/en/lab-pro/the-impact-of-events-for-a-country/