What Nokia's fall means for Finland? It's not all bad news

Nokia's importance to Finland, a country with vast lands but sparse population, goes without saying. This importance is multifaceted: emotionally, on one hand, and economically, on the other. According to data from the Finnish Economic Research Institute, from 1998 to 2007, Nokia’s R&D expenses accounted for 30% of the national total R&D expenditure, while its exports made up nearly 20% of Finland's total exports. In the year 2000, Nokia's contribution to Finland's GDP reached 4%.

During its most glorious period, Nokia almost became a symbol of Finland. However, for a declining Nokia, the Finns must be feeling rather conflicted. Data from the Finnish Economic Research Institute shows that by 2012, Nokia's contribution to Finland's GDP had become negative.

Nokia phones are no longer the favorite of the Finnish people. The Angry Birds game, which soared across the sky, has become another symbol of Finland outside of Nokia. Ironically, Angry Birds gained popularity thanks to two other platforms.

The Wall Street Journal website recently published an article titled "Nokia's Decline Can Help Finland." From an emotional standpoint, it might seem harsh to say that Nokia's decline is beneficial for Finland's entrepreneurial environment, but this is the objectively observable reality. Miki Kuusi, the managing director of Helsinki startup accelerator Startup Sauna and organizer of the Slush startup conference, holds this view. He said:

"In the short term, what has happened to Nokia is a national pain. Nokia was once the pride of the entire nation, but most people in the startup community believe that this will drive top talent towards startups."

In recent years, Nokia's workforce has been continuously shrinking. In March 2010, Nokia had nearly 126,000 employees, but by the beginning of this year, Nokia's workforce had dropped below 93,000 people. After Microsoft acquired Nokia's Devices and Services division, about 32,000 Nokia employees were absorbed into Microsoft, including 4,700 people located in Finland.

Miki Kuusi stated that some former Nokia employees are now engaged in very forward-looking research work. A former Nokia employee shared with him the idea of using static electricity in the air to wirelessly charge mobile phones.

Take Jolla as another example, a company familiar to many. Antti Saarnio, Chairman of Jolla, stated that approximately 90% of the company's employees come from Nokia. They revived the MeeGo system that Nokia had abandoned to manufacture smartphones. The working experience at Nokia is very useful for the new company, such as in product development and international management operations.

On one hand, Nokia is exporting talent; on the other hand, the decline in Nokia's appeal due to its poor performance is also a factor. Miki Kuusi believes that during Nokia's peak period, almost all excellent Finnish students wanted to work at Nokia, but in recent years, this situation has undergone a significant change.

From the data, Nokia employed a large portion of Finland's engineers and skilled graduates. Again, according to data from the Finnish Economic Research Institute, in 2010, 60% of Nokia's employees were under 30 years old, 43% had undergone professional technical training programs, and about 37% held master's degrees or higher. This sufficiently demonstrates that Nokia was a young, highly skilled, and highly educated company.

A similar situation once occurred with Ericsson in Sweden. For Swedes in the past, Ericsson was their first choice for employment, but things are different now. Many successful tech startups have emerged in Stockholm, making the city a technology hub.

Clearly, labeling Nokia as dead is akin to kicking someone when they're down. Although the Devices and Services division has been sold, the slimmed-down Nokia still has potential. Dmitri Sarle, CEO of the blog Arctic Startup covering the Nordic startup community, said:

"Nokia has money and R&D capabilities, and its devices are still being sold. I don't think this is the end of Nokia. But Nokia's only current opportunity is to focus on R&D. If they do this, we can foresee that a lot of money will be invested into the R&D system."

Staffan Helgesson, a partner at Swedish venture capital firm Creandum Advisor AB, believes that the new Nokia should not repeat the mistakes of the old Nokia. The old Nokia used to solve everything internally rather than creating an ecosystem of startups and entrepreneurs. If there had been an ecosystem surrounding Nokia, Nokia would not have ended up in its current predicament.

Regarding Nokia's influence on entrepreneurship, Doug Dawson, a Nokia spokesperson, has differing opinions. He believes that Nokia itself strongly supports startups. Nokia's Bridge program has given birth to thousands of startups. The AppCampus project, in collaboration with Microsoft, has allocated $23.9 million to support developers on the Windows Phone platform.

For Finland, a country with a population of only over 5.4 million, Nokia has long been attracting the best domestic talent. However, within such a massive company, many talents merely played the role of cogs. After Nokia's downsizing, it may not necessarily be a bad thing for entrepreneurship.

The featured image is of the Jolla phone.