Finland’s biggest corporate success story is over and Finns are trying to make sense of what’s left.
Liisa Hannula, a 26-year-old soon-to-be teacher in Helsinki, has always had a Nokia phone. Now she says she might opt for a Samsung smartphone instead.
“Nokia is one of Finland’s main brands and it’s what I tell people abroad — that Nokia phones are from Finland,” she said. “Now I can’t say that anymore.”
The sale of Nokia’s handset business to Microsoft sent shock waves through its home country, where the phones are a source of national pride and at one point were carried by 90 percent of Finns. After introducing its first handsets three decades ago, Nokia emerged as Finland’s first major global corporation and symbolized the country’s transformation into a technology-driven economy.
Most Read Business Stories
- Google puts lid on cookie jar and ends an internet era | Commentary
- MacKenzie Scott marries Seattle teacher after Bezos divorce
- FAA safety engineer goes public to slam the agency's oversight of Boeing's 737 MAX
- Bill to limit evictions in Washington state advances
- 55,000 in Washington state may have to pay back thousands in jobless benefits
Nokia, based near Helsinki in Espoo, took off in the 1990s to become the world’s largest mobile-phone maker. At its peak in 2000, it generated about 4 percent of Finland’s gross domestic product. That fell to about minus 0.2 percent in 2012, an unsustainable position driven by heavy losses, according to Jyrki Ali-Yrkkoe, an economist at Helsinki-based researcher ETLA. The deal with Microsoft will help it generate as much as 0.3 percent of GDP next year, he said.
“Nokia has been the flagship company in Finland even as its fortunes have waned,” Ali-Yrkkoe said. “It’s going to take some time for Finland to recover from the shock and get used to the new Nokia.”
Nokia started as a wood-pulp and paper company in 1865 before expanding into rubber, electronics and eventually telecommunications.
“Nokia is the most successful Finnish company of all time, which in its heyday brought Finland enormous amounts of well-being and international prestige, raising Finland’s self-esteem,” Economy Minister Jan Vapaavuori said in a statement. “The biggest impact is on an emotional level. It’s the end of an era in Finland’s economic history.”
The timing of the deal, less than three years after Chief Executive Officer Stephen Elop joined from former employer Microsoft, prompted several of Finland’s biggest newspapers to speculate as to the motivation behind his job switch. Ilta-Sanomat, the biggest tabloid, called him a “Trojan horse” who assisted Microsoft all along. Elop, the first non-Finn to run Nokia, will now return to Microsoft. Peter Wootton, a spokesman for Microsoft, declined to comment.
Yet the company’s failure to maintain its market dominance means “Finns have been distancing themselves emotionally from Nokia for some years,” said Jyrki Alkio, editor-in-chief of the Tekniikka & Talous magazine, who has watched Nokia’s ascent and decline over his 23-year career as a journalist. “If this had happened three years ago, it would have been a shock. We have finally grown to accept that we are not Nokia and it doesn’t define our identity.”
Nokia’s 94 percent share-price plunge from its 2000 peak left thousands of engineers looking for work after the company curtailed local development and moved production to Asia.
Finland shouldn’t throw in the towel just yet, said Alexander Stubb, minister for trade and European affairs.
“Never underestimate the implications of the Finnish sisu, in other words Finnish perseverance and courage,” he said. “There is huge potential in Finnish engineering and you will see that blossoming within the next few years.”
Finland is trying to attract data centers to old paper mills, touting an electricity grid that suffered downtime only once in 30 years. Microsoft said Monday it will invest about 250 million euros in a new data center in Finland after a long negotiation between the company and the government, Economy Minister Vapaavuori said.
“We should look at the silver lining,” Stubb said. “From now on we will have two huge information-technology giants in Finland.”
The shake-up will be good for the country, according to Ilkka Paananen, CEO of Supercell, the maker of tablet games including “Clash of Clans” and “Hay Day.”
“Finland needed this,” he said in a posting on Twitter. “Now let’s all wake up and get to work. New opportunities are everywhere!”