Functions of municipalities and joint municipal authorities

Regional and economic development

Two men with helmets

Finland has 18 regions and the autonomous province of Åland Islands. Mainland Finland is divided into 68, and the Åland Islands into three sub-regional units. Sub-regional units are made up of one or more municipalities.

Regional development in line with the Finnish and EU regional policy requires co-operation between local authorities, sub-regional units and regions. The EU supports transnational cooperation between regions, which is coordinated in Finland by three regional councils. The national regional policy focuses on some of the major growth centres and the development of a network of dozens of regional centres of different sizes and types.

Regional councils are established by two or more municipalities. In their role as regional development authorities, regional councils are in charge of general regional planning. They draw up regional development plans and monitor their implementation, while also coordinating development measures in their region. Regional councils are responsible for regional land use planning and the provision of optional functions agreed upon by the region’s local authorities.

Sub-regional co-operation is increasingly widespread and broad-based. It can involve land use planning, economic development policy, transport and communications systems, environmental management, and other service sectors.

Industrial policy

Cities and municipalities pursue industrial and employment policies to safeguard the region’s competitiveness and vitality. Local industrial policy supports the conditions for businesses and industry, including the development of city centres, the building of technology hubs, advice on business start up and business networking projects.

Active industrial policy can also mean developing public services through private service provision, or local authorities cooperating with businesses to improve local skills and competencies required for participation in the information society.

The development of industrial policy has become a task for the entire municipal organisation. The policy is implemented through economic development companies, business partnerships, enterprise agencies, or incubators, to name a few. Moreover, local authorities manage EU subsidies in their role as the rural business authority. Many local authorities are also involved in business mentor projects that are aimed at reinforcing local business activities.


The recent years have seen employment policy converge towards industrial policy, even though the policy’s main objective still is to address unemployment through a range of measures.

The measures include youth workshops and partnership projects. A new form of operation is the labour force service centres, which offer individually-tailored services under one roof. The services are provided by local authorities, the labour administration, and the Finnish Social Insurance Institution.