Nokia is dead, long live Finland’s innovation

Ekaterina (Katia) Carra is an eMBA Student at Télécom School of Management following the eMBA program: “Leading Innovation in a Digital World”. With her classmates, she completed a study trip in Finland, reviewing creative approaches that Finland develop to nurture innovation. She presented an executive briefing on November 2014, out of which she and her eMBA group colleagues, shared with us some astonishing innovation take-aways from Finland.

1) Among the different charts and figures you’ve analyzed, what were the most meaningful signals announcing Nokia’s decline?

[KC & eMBA group] What happened to Nokia? They obviously missed the smartphone wave surging across the market. One explanation is that Nokia was focused on hardware at a period where software was bringing the main new functionalities and innovations. The board didn’t anticipate that change, and how can we change a company that has always developed hardware?

This loss of shares on growing mobile market is due to missed innovation opportunity. Nokia did not follow the right strategy at the right time. Another signal was that their brand value fall down was -15% in 2011 vs 2010 according to Interbrand.

2) What are the triggers for Finland innovation ecosystem? Where is rooted its dynamic?

[NB] In your Executive Briefing, one can feel the importance of Education, Collaboration System & Culture, the idea of going global from the beginning, the teaching of Open Innovation, and a culture familiar with rebound. Some of it resonates with Israël innovation culture. Does another DNA come to your mind?

[KC & eMBA group] Finland is innovation leading country according to market analysts. The R&D level of spends is more than 3%GDP which is high. The country is small, and English speakers ratio is significant. These 2 criteria lead automatically Finns to think worldwide.

Moreover, Finns are also leading telecoms market. Finland is a success story shifting from local activities to global business.

• First, their domestic mobile technology cluster with the related software industry succeeded transformation to globalization of business and innovation in the 90's;
• Then, Finland completed a transformation process from a typical telecommunication business made of a lot of hardware and embedded software to a digital services internet economy composed of cloud, internet of things and big data. This has been made acquiring new competences.

Finland is a nation that has learnt to bounce: it’s in its DNA! In fact, it’s a young independent nation that lived under the Swedish influence until 1809 and then became a Grand Duchy of the Russian Empire until 1917. So the death of Nokia is like an anecdote.

Its education system is also one of the most recognized over the world, with its deep links with the corporate world, hiring private sector experts as teachers and teachers moving from universities to companies very often, enhancing creative learning and teaching open innovation.

The Finnish innovation ecosystem is a very original model linking startups with big companies, universities and public bodies. Funds are typically mixed private (Digile…) and public ones (Tekes).

Today, Finland is one of the start-ups hot spots in Europe.

Additional triggers may be the following ones, centered on digital commitment:

• Government: digital agenda for Finland 2011–2020, 100 Mbit/s access for all citizens by 2015, ICT 2015 programme;
• Tekes public agency supporting start ups from which 68% are SME. In the heart of Tekes strategy are digitization and intelligent environments strategy: programms like TRIAL — test environment for cognitive and radio networks 2014, Ubicom — embedded ICT 2013, Digile;
• Finnish participation in European Research Area in the ICT sector;
• University-industry collaboration: active transfer of research results and new technologies to industry through R&D projects conducted in collaboration with companies; and fertile breeding ground for innovation and knowledge-based companies.

3) Is innovation processed differently at Finland innovation flagships: Aalto Design Factory, Tampere Tech University, Demola Tampere New Factory?

[KC & eMBA group] ECT ICT specials:

• Core mission is to drive European leadership in ICT innovation for economic growth and quality of life;
• International , mainly european, presence;
• Research & innovation areas covered : future cloud, cyber-physical systems, future networking solutions, urban life & mobility, health & wellbeing, privacy security & trust, smart energy systems, smart spaces;
• Strong focus on business development boosting entrepreneurial reasearch;
• Shared investment model:40M€ EIT; 130M€ non EIT.

Aalto Design Factory is built in different spirit: perhaps the spirit of Alvar Aalto, this famous Finnish architect and designer who died in 1976. Its 3 000 m2 look like a.. factory. The electroshop and machineshop are creative environments with large selection of electronic and hand tools. A great place to conduct a wide range of electronics, artistic and engineering experimentation. The factory is equipped with a rich set of equipment that any company can rent. Its main concept is based on the mixing of students from different backgrounds in order to create disruptive innovation; what would be better as mixing engineers, managers and designers? It’s just an explosive mixture!

Demola new factory interfaces with 3 big universities based at Tampere, and representing 38 0000 students: Tampere University of applied sciences, Tampere university of Technology, and University of Tampere. It is operated by Hermia, the leading Finnish innovation agency in the field of ICT and mechanical engineering and a major networker in the energy industry. Demola provides collaboration and real world experience with leading companies, start-ups and public companies. Its moto is “make it low risk and move fast”. Demola started from Tampere in 2008 and now there are 6 innovation centers in the international network: Vilnius, Budapest, Oulu, East Sweden, South Sweden.

[NB]: Demola is an utterly slick initiative of open innovation: it’s a cocreation hub for students from various universities, and companies. Watch out one of the output:

[youtube=http://www.youtube.com/watch?feature=player_embedded&v=Qqk1gN8iP3o]

4) Innovation contests and tech-hubs are thriving worldwide, what are the Finland success stories? Can you explain Start-up sauna program, summer of start-up, Slush conference?

[KC & eMBA group] The most successful and well know Finnish start ups are:

• Rovio — mostly known with its hit game called Angry Birds. Created in 2003, they started with mobile games, but extended to social, TV, learning. Nowadays, their licensing includes a worldwide large coverage. The city of Tampere is typically a hub hosting more than 60 software-game companies.

• F Secure — security solutions provided created in 1988. F-secure is one of the leading worldwide solutions for anti-virus. The company needs to deliver its code in real time so it has developed real-time feedback system where customers are deeply involved. F-Secure also participates to the Cloud Software Program with other 30 private companies in order to improve position of Finnish software industry.
• Futurice: mobile, digital and IT solutions provider. It was selected n°1 employer in Europe in 2012. Futurice is a typical example to show that innovation doesn’t only take place in products and solutions but also in management and organization. The company has setup an interesting flat-decision-making organization with a 3H concept: Happy customers, Happy end-users, Happy employees. Futurice was founded in 2000 and now having premises at Tampere, Helsinki, Berlin, London.

Finland also launches a lot of initiative that foster innovation within students and professionals.

• Startup Sauna Program is a framework where early-stage startups get coached by experienced serial entrepreneurs and investors, in an intense one-month program in Helsinki;
• Startup Sauna Internship for university graduates to intern at high-growth companies in Helsinki and Silicon Valley. More than 60 interns have been employed through the program to date;
• The Summer of Startup is a 10 weeks regrouping 40 students program;
• The SLUSH conference brings together the early-stage startup ecosystem in the region to meet top-tier venture capitalists and media from around the world. In 2012, SLUSH gathered more than 3.500 attendees, 550 companies and 250 investors and journalists for two days in Helsinki.

Some other hot finnish start-ups >>

5) Accelerating Finnish ICT and digital business is the aim of Digile: tell us more about it, and can we replicate?

[KC & eMBA group] Digile is a private nonprofit company founded in 2008. According to Jakko Talvitie, director of Digile Business Ecosystem Creation, Internet is the only business growing at 8% per year. DIGILE is the Digital Business Shok owned by industry, universities and other Finnish innovation players.

Finland is active in national innovation system and has established 6 SHOKs for selected industry vertical to carry out industry driven research and to support industries’ competence development and renewal. SHOKs are industry driven public private partnerships contributing to the Finnish industrial innovation and growth.

Its services include cooperative research programs, facilitation of business concept creation, coordination in international research activities and newly created Forge Service Lab where private companies can easily share part of their software development following open source and open innovation rules.