Caso Nokia

MICHAE L E . PORTER

Finland and Nokia: Creating the World's Most

Competitive Economy

When an inventor in Silicon Valley opens his garage door to show off his latest idea, he has 50% of the

world market in front of him. When an inventor in Finland opens his garage door, he faces three feet of snow.

—J.O. Nieminen, CEO of Nokia Mobira, 1984

Until the 1990s, Finland was considered a remote and sleepy country in the northeastern corner of

Europe, lying in the shadow of its large neighbor Russia. Finland had been part of Sweden for six

centuries until 1809, when it was ceded to Russia. The Bolshevik revolution in 1917 and the collapse

of the Romanov dynasty led Finland to unilaterally declare independence on December 6, 1917 (still

the national day). After difficult years during World War II, Finland remained somewhat isolated,

and its economy remained highly dependent on the Soviet Union. Following the model of its Nordic

neighbors in the post-war years, Finland was characterized by heavy investments in social welfare

and public infrastructure. There was a history of government involvement in the private sector. The

government had large holdings in many top Finnish companies (see Exhibit 1) and, through its active

involvement in mergers and other investments, influenced the ownership structures of key

industries.

Finland’s prosperity level caught up to the OECD average only slowly. With few exceptions,

notably in pulp and paper and specialty shipbuilding, Finnish companies were absent from

international business rankings.

By 2001, however, Finland had become one of the fastest growing and most competitive

economies in the world. A member of the European Union, it was known for fiscal stability and was

the only Nordic country introducing the Euro in the first wave. In the Competitiveness Rankings of

the Global Competitiveness Report, Finland won the top spot from the United States in 2000. One

Finnish company, Nokia, had outpaced others and cast a long shadow on the entire economy. Its

emergence as the global market leader in mobile telecommunication equipment had made the

company the leading contributor to Finnish exports, R&D expenditures, and market capitalization.

With the slowdown of the global telecommunication market, however, both Nokia and the

Finnish economy were facing challenges. Some experts were raising questions about the

sustainability of the company, and the country’s, recent achievements.

This document is authorized for use only in Estrategia y estructura oct-dic 14 by Jean-yves Simon at IESA Venezuela from October 2014 to December

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