Scottish Rural Communities Policy Review: stage 2 - Finland case study

2. Overview of Rural Areas in Finland

Northern and sparsely populated, yet widely inhabited, Finland is a Northern rural country located entirely north of the 60th parallel. The country covers a total area of 338,000 km² and has a population of approximately 5.6 million. With an average population density of 19 inhabitants per square kilometre, Finland is the third most sparsely populated country in Europe after Iceland and Norway. 95% of the country’s land area is classified as rural.

The population is unevenly distributed, with the largest cities and urban areas located in the south and southwest. The capital region, including Helsinki and its surrounding cities, accounts for about 28% of Finland's total population, approximately 1.5 million people. Nevertheless, approximately the same number of people - 1.4 million - live in areas classified as rural, representing about 26% of the total population.

2.1 Diverse Ruralities

Rural Finland forms a continuum of diverse settlement types, without strict population thresholds separating them. The areas are classified into three urban and four rural categories based on geospatial data, using a model developed originally by the Finnish Environment Institute in 2014 and the Department of Geography of the University of Oulu (Helminen et al. 2014). The rural and urban categories are:

• Sparsely populated rural areas – remote countryside with very low population density. Most of the land areas are forested.
• Rural heartland areas – traditional farming or village areas with less urban influence.
• Rural areas close to urban areas – countryside near cities with strong commuting ties.
• Local centres in rural areas – small population centres (towns) outside urban areas that are providing local services in rural regions.
• Peri-urban areas – transitional zones adjacent to cities, linking urban and rural areas.
• Outer urban areas – less dense urban zones extending from the inner core.
• Inner urban areas – compact, densely built urban cores.

The geospatial rural–urban classification adds value to statistics by remaining independent of existing administrative boundaries and their related classifications. It was developed to improve understanding of regional differences and to support policy-making (see Statistics Finland 2025).

According to Finland’s Common Agricultural Policy (CAP) Strategic Plan 2023–2027, approximately 2.2 million people (39% of the population) fall within the programme’s target group. This apparent discrepancy in terms of the size of the rural population is a result of negotiation on the part of Local Action Groups (LAGs) and the Centres for Economic Development, Transport and the Environment (ELY Centres) - the regionally based government authorities responsible for implementing European Union (EU) rural development programmes – on the delineation of eligible rural areas in each region. According to the Ministry of Agriculture and Forestry (hereafter also MMM), an area may be classified as rural—and thus eligible for rural development funding—if the settlement has no more than 30,000 inhabitants and its inclusion or boundaries are set in the co-operation agreement between the ELY Centre and the relevant Leader group (MMM 2022).

2.2 Land Use and Livelihoods

Rural Finland is characterised by vast forests (covering approximately 75% of the land area), numerous lakes, a scattered settlement pattern, and agricultural land. Agriculture and forestry continue to be important, particularly in the rural heartland regions. However, both the number of active farms (currently around 44,000) and the share of agriculture in the overall rural economy have continued to decline. Across all rural areas, the primary economic activity is in public and private services. Tourism and second homes (estimated at around 500,000 nationwide) also play an increasingly significant role in many local economies (Maaseutukatsaus 2017).

Population mobility — not only migration to cities — is a key trend and an important driver of development in Finland. Seasonal living and multi-locality radically reshape the real demographic picture of rural areas. (Vihinen 2025). Multi-local living is one form of population mobility in Finland, with the term referring to a lifestyle in which individuals or households regularly reside in more than one location. A common example is the use of second homes, originally intended for leisure purposes, as semi-permanent dwellings and remote work locations.

2.3 Key Challenges and Assets

Rural areas of Finland face several challenges, including an ageing population, youth outmigration, and the decline of local services. Due to the scattered settlement structure, broadband is costly to build and its coverage remains limited in many areas. It is also increasingly viewed that regional differentiation, for example, in terms of access to services and infrastructure, threatens democratic equality (Kestilä-Kekkonen 2025). At the same time, rural areas benefit from a strong civil society, abundant space, a high quality of life, and the appeal of second homes - often located by lakes. In Finland overall, rural residents report greater satisfaction, happiness, and a stronger sense of meaning in life (Hanell 2025).

A key part of rural Finland’s strong civil society is its active village-based associations, which are local volunteer-based groups promoting hobbies, community well-being and local development for the common good. Trends such as multi-local living, remote work, and the green transition - for example, sustainable food and energy systems that are best realised at the local level (Helenius 2025) - are seen as growing opportunities for sustainable rural development (e.g. Kattilakoski et al. 2021).