The Dynamic Transformation of the Finnish Innovation System
New Horizons in the Economics of Innovation series
Edited by Gerd Schienstock
* Jyrki Ali-Yrkkö and Raine Hermans 6.1 INTRODUCTION In the 1990s, Nokia grew to become one of the world’s leading high-tech companies. Despite the fact that Nokia has become multinational, a significant share of its activities is still located in Finland. In the latter part of the 1990s, the most visible impact of Nokia on the Finnish economy was its contribution to GDP growth. In 2000, the contribution of Nokia to growth peaked, exceeding 1.6 percentage points. In the same year, Nokia accounted for 2.8 per cent and 20 per cent of Finnish GDP and total exports, respectively (see Ali-Yrkkö et al. 1999). In 2001 the global recession in the telecommunications industry hit Nokia, too, and the company’s contribution to GDP growth dropped close to zero. However, in addition to GDP, GDP growth and exports, Nokia also has an important role in the Finnish innovation system. Nokia’s role is two-sided. On the one hand, Nokia utilizes resources from the innovation system. But at the same time the company produces innovation resources that diffuse outside the company. To evaluate this role more precisely, in this chapter we examine Nokia’s influence on the innovation activities of other companies and universities as well as on public sector income and expenditures. ‘Innovation system’ refers to the operation and interaction of universities, research institutes, other public sector organizations, and private businesses, which together influence the creation, diffusion, and utilization of novel know-how. This study aims to provide answers to the following questions: – How has Nokia influenced...
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