Important industries in the city today are sawmilled and lumber. Paper industry was also very important employer. UPM Kymmene's Kajaani paper mill was the biggest private employer in Kajaani and its history dated back to 1907. Paper was made in Kajaani from 1919 to 2008. However UPM Kymmene decided to close the paper mill by the end of 2008 due to lack of profitability and high energy costs. Closure of a paper mill will be the end of one era in Kajaani's history. UPM's Kajaani sawmill will continue its operations as earlier.
Military base Kainuu Brigade is also an important employer. It is the largest garrison in Finland—the Brigade employs approximately 600 people and trains 4,000 conscripts a year. There is a polytechnic institute in the city.
The engineering and railway rolling stock manufacturer Transtech Oy has a factory at Otanmäki to the south-west of Kajaani. Many of VR's carriages have been built at Otanmäki
