Nokia

Finland and Nokia: Creating the World's Most Competitive Economy

Finland, with a special language and culture, has developed as a country in between the west (the Nordic region and Europe) and the east (especially its neighbor Russia). In the 1980s, a process started of moving out of an investment-driven economy into an innovation-driven one. With the collapse of the Soviet Union around 1990, Finland reached a crisis. This case covers policy changes made in the 1990s and how, by 2002, the country had managed to become one of the most competitive in the world. A large part of the success could be attributed to the dynamic telecommunications cluster--especially Nokia, accounting for some 70% to 80% of the cluster exports and the world leader in mobile phones. Nokia also reached a crisis around 1990.

Case Study Analysis: Finland and Nokia: Creating the World’s Most Competitive Economy Analysis

Nokia’s history begins in 1865 as a pulp mill in the country of Finland. In 1967 the modern corporation of Nokia was merged with a telecommunications cable corporation and electronics business and Finnish Rubber Works. This became the telecomm company that we know today. In Finland the Nordic Mobile Telephone (“NMT”) network was created in 1981 and brought several innovative aspects to the consumers. The NMT pioneered roaming technology that allowed for usage across country borders. The creation of the NMT caused the Nordic region, once a subtle region, to become the largest single mobile market of the time. This network raised the standard of mobile technology and began to be incorporated in other foreign markets. In 1979 Nokia began forming joint ventures and acquiring other companies, expanding its market and in turn becoming the largest consumer electronic company in the Nordic region during the1980’s. Nokia then consolidated the Finnish telecommunications system in 1987,through mergers and acquisitions. In 1999, the telecommunications sector became Finland’s leading...