Nokia and Finland

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Case study: Finland and Nokia

1. How was Finland able to move from a sleepy economy to one of the most competitive nations in the world by the end of the 1990’s? Finland was considered a sleepy country even after their independence from Sweden, depending its economy mainly on the Soviet Union by exporting its natural resources. Finland however slowly but constantly developed its economy up to the OECD average, following the models of its Nordic neighbors to invest highly in social welfare and public infrastructure. Also, Finland had gone though dramatic change in its macroeconomic policy starting from 1970s, featuring fixed nominal exchange rate, centralized wage bargaining, and an increasing fiscal budget though the 1980s. Strict financial market regulations held Finish companies incompatible in international market but by the end of 1980s the financial markets were liberalized and access to international capital markets had become easier. Finish companies also have strong ties with Finish banks, giving greater advantages in competition with other Nordic countries. Another industry which Finland invested greatly to precede its development was on education. Finland spend more money on education compared to other European countries. Such investment helped Finland’s development and made Finland more compatible to other nations.

2. How was Finland able to become a world-leading nation in mobile communications? Why did this cluster emerge rather than others? One distinctive reason why Finland could be a world-leading nation in mobile communication is because of the initial demand of such need. Due to Finland’s geographical character, Finish population is spread thinly across the country and only few cities such as Helsinki, Espoo and Vantaa is heavily populated. For such reason, a wired communication was not suitable in Finland and the need for wireless communication grew, naturally developing mobile communication technology. Despite such stimulant which...
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