Finland and Nokia: Creating the World’s Most Competitive Economy
Internationalization drivers of Nokia
Here presented are the main factors causing Nokia to internationalize after its own market was saturated.
Push factors:
- A penetration level of 70% in the existing saturating markets motivated Nokia to expand business elsewhere.
- The 1990 Crisis in Finland made the real GDP and exports drop, unemployment rose.
- Exports to former crucial areas (Soviet Union) dissolved due to the fall of the berlin wall, causing German reunification and independence of a lot of Soviet States.
- Telecommunications and services act allowed competition to grow: Increase in competitive firms in the communication industry in Europe.
Pull factors:
- Extensive cooperation and long-term commitments between manufactures and suppliers: networking risk control.
- Increased outsourcing which lead to access to key resources.
- Finnish government lacks control on competition movements.
Facilitating factors:
- Becoming a member of the EEA eliminated many trade and investment barriers to other European countries.
- High private and public R&D expenditures in Finland.
- Merging with Swedish firms increased focus in Finnish firms with global reach.
- 30% of venture capital in Finland was towards the telecommunications industry
- Finland has highly skilled IT professionals
- Finland 2001: declining growth rates, weak export markets, shortage skilled labour.
1. Porter’s diamond of Finland and its mobile phone sector for the last decade
Factor conditions
Finnish education is mainly based on efficiency, quality and internationalisation. They see it as a factor of competitiveness of the country, therefore they want to raise the level of education. In graph 1 it shows that most people who did a bachelor degree also did a master degree. This was the case until 2004, then the amount of master students decreased and more people only did a bachelor study. The amount drastically dropped between the years 2007-2008, with 50.000
Here presented are the main factors causing Nokia to internationalize after its own market was saturated.
Push factors:
- A penetration level of 70% in the existing saturating markets motivated Nokia to expand business elsewhere.
- The 1990 Crisis in Finland made the real GDP and exports drop, unemployment rose.
- Exports to former crucial areas (Soviet Union) dissolved due to the fall of the berlin wall, causing German reunification and independence of a lot of Soviet States.
- Telecommunications and services act allowed competition to grow: Increase in competitive firms in the communication industry in Europe.
Pull factors:
- Extensive cooperation and long-term commitments between manufactures and suppliers: networking risk control.
- Increased outsourcing which lead to access to key resources.
- Finnish government lacks control on competition movements.
Facilitating factors:
- Becoming a member of the EEA eliminated many trade and investment barriers to other European countries.
- High private and public R&D expenditures in Finland.
- Merging with Swedish firms increased focus in Finnish firms with global reach.
- 30% of venture capital in Finland was towards the telecommunications industry
- Finland has highly skilled IT professionals
- Finland 2001: declining growth rates, weak export markets, shortage skilled labour.
1. Porter’s diamond of Finland and its mobile phone sector for the last decade
Factor conditions
Finnish education is mainly based on efficiency, quality and internationalisation. They see it as a factor of competitiveness of the country, therefore they want to raise the level of education. In graph 1 it shows that most people who did a bachelor degree also did a master degree. This was the case until 2004, then the amount of master students decreased and more people only did a bachelor study. The amount drastically dropped between the years 2007-2008, with 50.000