Embracing the Knowledge Economy
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Embracing the Knowledge Economy

The Dynamic Transformation of the Finnish Innovation System

Edited by Gerd Schienstock

In an astonishingly short period of time, Finland has developed into one of the world’s leading knowledge societies whilst retaining a comprehensive welfare state. The book traces this rapid transformation from a resource-based to a knowledge-based society. The authors describe the country’s strengths and weaknesses in the new economy and demonstrate how Finland has been able to catch-up with the leading industrial countries by exploiting new techno-organizational opportunities. Experts from different fields provide rich empirical material on Finnish industries, firms, regions and institutions, and the role they have played in the transformation process. The book also details the business and economic restructuring which was required, and explores new trends in the country's science, technology and innovation policy.
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Chapter 6: Nokia: A giant in the Finnish innovation system

Jyrki Ali-Yrkkö and Raine Hermans


* 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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