Anyone that has been watching Finland over the last few years knows that what started as one big disaster is turning into many opportunities that promise a bright future for this Nordic country.
At its peak in 2007, Nokia had a market capitalization of $250 billion. That was before the iPhone and Android phones took the lions-share of the smartphone market away from Nokia's disappointing smartphone line-up. Before its deal with Microsoft was announced, Nokia's stock price was trading somewhere between $3 and $4 per share - giving it a market value between 2 and 3% of its 2007 value. Nokia's decline and subsequent sale of its handset business to Microsoft has had a more serious negative impact on Finland's economy than many originally thought. As reported in the UK edition of Wired Magazine,
"By 2000, Nokia accounted for a mindboggling 4 per cent of Finnish GDP, 70 per cent of Helsinki's stock exchange market capital, 43 per cent of corporate R&D, 21 per cent of total exports and 14 per cent of corporate tax revenues."
Even successes from Neste (oil refining), Wärtsilä (power systems), Kone (maker of elevators and escalators), Rovio (creator of Angry Birds, which recently announced its own layoffs), Supercell (creator of Clash of Clans), and many others have not been enough to counteract the negative impact Nokia's decline has had on the Finnish economy and its world-wide footprint.
The even greater positive
Nature has a way of taking disasters and turning them into successes. Roughly 66 million years ago, a comet or asteroid struck the Earth and killed the dinosaurs and 75% of all living species. This catastrophic event cleared the way for the evolution of mammals, and enabled humans to thrive on a planet where they would be dinosaur hors d'oeuvres.
"I am willing to say that the Elopcalypse (what many call the huge layoffs and selling of Nokia's handset business to Microsoft under then CEO Stephen Elop) was the best thing to happen to Finnish ICT."
Thriving and growing tech ecosystem
Highly skilled and trained former Nokia employees are starting companies, conferences, venture organizations, and all the bits and pieces needed to create a thriving entrepreneurial tech sector in Finland. Patrik Sallner, former Nokia director of insight and foresight, said in Techworld,
"The good thing about Nokia's demise right now is there's a lot of experienced managers available... Leaders of publicly listed companies and startups in Finland have their background in Nokia."
Recognizing the availability of tech talent, companies from Silicon Valley and Asia are setting up R&D facilities in Finland.
Slush, a combination of rain and snow, is characteristic of Finnish weather in November. Peter Vesterbacka, chief marketing officer of Rovio - the maker of video game Angry Birds, adopted the name for a high-tech start-up Conference he initiated. In just a few years, this conference has grown from its humble beginnings to a sold out global event with 15,000 attendees, 1,700 startups, 800 VC investors, and 630 journalists from all over the world. It is indicative of the high-tech start-up culture that has propagated in Finland after Nokia laid-off thousands of employees and sold its mobile phone business to Microsoft.
Supportive infrastructureFormer Nokia employees are not the only reason Finland is being called the Silicon Valley of Europe. Finland has an infrastructure that is hospitable to technology and start-ups. The following are just some of the reasons.
- Top of the world education. Finland frequently tops the world in education. Finnish students are ranked among the top three in the world.
- Advanced technology infrastructure. It has turned into europe's leading information society, second only to the USA in the use of information technology, and it has the world's highest number of mobile phones and Internet nodes per capita.
- Impressive universities and research centers. Finland has numerous universities and research Centers of Excellence. Aalto University, which includes the former Helsinki University of Technology, has become one of the top technical educational institutions in the world.
- Supportive Government. Finnish Parliament has a Committee of the Future, Sitra is the Finnish Innovation Fund, and Tekes (the National Technology Agency of Finland) finances R&D and innovation.
- Leading in R&D. It is leading nation in R&D expenditures as a percentage of GDP.
- Easy to communicate. The official business language is English.
- Western-style government. It is a western parliamentary democracy led by a President.
- In all the right clubs. Its international affiliations include membership in the EU, UN, WTO, OECD, IMF, World Bank, EBRD, AsDB, AfDB, IDB, the Nordic Council, ESA, CERN, and EUREKA.
- Bridge between East and West. Finland has the location, expertise, and long-standing history of bridging the gulf between businesses in the East and West.
- Advanced financial infrastructure. It has the world's most developed electronic banking system.
- High-performing stock market. Finland's stock market frequently outperforms many of the world's capital markets.
- Uses the Euro. Finland's monetary unit is the Euro - one of the world's four hard currencies.
- Industrial leader. It is a world leader in forest products, pulp, paper, board technology, and shipbuilding.
- Lower tax rates. Finland has the lowest corporate and capital tax rates of any EU country.
- Safety. It is a safe and virtual risk-free environment.
- Most wired and wireless. With its sophisticated digital and fiber optic voice and data processing networks, Wired Magazine has called Finland "the most wired and wireless country in the world."
- Lowest corruption. Finland is tied with Denmark for having the least corruption in the world.
For high-tech start-ups that want to get a foothold in an EU country, Finland is a great choice.
The Finns have Sisu
In addition to its advanced infrastructure, Finland's history is one of overcoming adversity from foreign domination, weather, famine, and other adverse conditions. Necessity is the mother of invention, and the Finns have had to be innovative to survive and thrive. Sisu is the word that Finns use to describe their combination of stoic determination, bravery, guts, resilience, perseverance and hardiness to overcome this adversity. It has become part of their national character and culture. It is an important characteristic for competing in a very competitive world.
Make no mistake... Nokia is not dead
While too many equate Nokia with mobile phones (the part of the company acquired by Microsoft), there is another very successful business-to-business part of the organization that continues to thrive - Nokia Networks. In fact, it recently acquired Alcatel-Lucent for $16.6 billion - making the combined company, which is called Nokia Corporation, the second largest mobile equipment manufacturer in the world behind Swedish giant Ericsson.
Not all is perfect
While the above paints a very rosy picture of the tech start-up scene, the real world is far from perfect. For Finnish-grown tech start-ups, the missing piece is marketing. To overcome Finland's "best kept secret" syndrome, Finnish organizations need to focus on effective marketing. Rather than produce flashy brochures that bury the benefits in the body copy (those are the ones I have seen), these benefits need to be highlighted in headlines. If Finns have difficulty overcoming their cultural inclination to be self-effacing, they should employ non-Finns to tell the world for them. I have said this before, and I am repeating it now because I'd like my Finnish friends to be less worried about their economy and more focused on continuing to provide the many great things Finland has to offer.
Things work in Finland
Who needs perfection? Most people and companies need products, infrastructures, and societies that work. In Finland, things not only work, they work really well. Kiitos, and have a great Holiday.