FINNISH ICT INDUSTRY
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- Annis Beatrix Powers
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1 ISSUE : August 2003, Vol. 17 Finland is one of the world s most competitive economies and most technologically developed welfare and information societies. It is also a country currently specialized in the development and production of ICT products and services. Finland offers one of the world's most sophisticated ICT infrastructure and application environments and provides cutting-edge, high efficiency settings for all kinds of business. Nokia, Finland's largest company, is the world's leading mobile phone supplier and a leading supplier of mobile, fixed and IP networks as well as multimedia terminals. Finland is also home to many niche leaders in related fields such as mobile commerce, wireless equipment and data security. Approximately two-thirds of Finnish software companies develop and produce ICT software. Finland went from being one of the least ICT-specialized industrialized nations to become the most specialized one. Some FINNISH ICT INDUSTRY Finnish Market Size basic and far-reaching features within the Finnish ICT sector are easily pinpointed: solid technological infrastructure, open competition, widely shared common vision and co-operation in the development of ICT and information society, government s active role, technology-oriented citizens with high quality education and top caliber skills and knowledge-based technology centres, e.g. Helsinki metropolitan area and cities like Tampere, Oulu, and Jyväskylä, all promoting intense networking activities. In the Finnish model for Information Society, the role of the government and one of the welfare state have been given considerable emphasis to guarantee the development of favorable atmosphere through infrastructure, legislation, and accessibility for all. Interoperability intense and broad interorganizational co-operation both within the industry as well as with other industries and the research sector and neutral forums for promoting information society development have been key factors in Finland Spending (US$ Mn) IT Hardware 1,884 1,987 1,956 Software IT Services 1,496 1,598 1,774 Internal 1,479 1,559 1,649 Other Office Equipment Total IT 5,734 6,283 6,630 Telecommn. 3,059 3,193 3,372 Total ICT 8,793 9,476 10,002 Ratios ICT/GDP 6.8% 7.8% 7.7% ICT/Capita $1,702 $1,835.4 $1,938.2 Software/ Hardware Spending 38% 48.9% 55.5% IT Variables Education Homes Business & Govt Total PCs installed 166, , , , , , , , ,838 1,870,000 1,708,252 1,902,941 (Source: World IT & Services Alliance)
2 Critical to getting to the current level was the Finnish ICT equipment industry cluster that centres on telecommunications equipment manufacturing and service provision. Finnish ICT cluster has been evolving for 100 years on the basis of non-regulation and full competition and the subsequent growth of its member companies through successes - like manufacturing the world s first mobile phone - have reduced the country s dependence on fluctuating raw material based-industries, such as forestry and paper. Thus, the cluster creates an environment critical to the health of the economy and causes government to become closer and more active with the public sector than in other countries. As far as competitive ability is concerned, Finland is a leading country within EU (World Economic Forum 2002). High technology exports have tripled in five years; in industrial productivity Finland has caught up with the United States, which sets the standard for the rest of the world. More than half the growth in productivity is explained through high technology. Approximately 10 per cent of the Finnish GNP already comes from the fields of information and communications technologies. In the future, the role of those technologies will increase significantly, as they are likely to develop faster than other fields. The overall productivity has increased since 1992 annually by 15 per cent, and in electrotechnical and telecommunications fields 25 per cent. Investment in research and development has increased strongly in Finland for almost 20 years, and investments in R&D by companies in Finland are among the highest in the world. Though the growth rate has somewhat slowed down from the peak years, the R&D investments and the number of research and development experts are clearly on the increase. The metal and electronics industry is, by far, the biggest investor in R&D. It is responsible for more than 80 per cent of all the research and development investment in Finland. In 2001 it spent over 4 billion euros on R&D.
3 Finnish Government has 170 service entities available online, e.g. portals for Citizen s Handbook, as well as enterprise and research services. Taxes and import & export levies can be paid via the network. People who are seeking for work can do it online. Enterprises can transact through net with the Government on public procurement. Legal proceeding with the Court of Justice can be started electronically, etc. Also municipalities are developing services, which in many cases are nearer to the citizens. The government has stressed the importance of its Information Strategy for Education and Research , created to provide ICT access and literacy training for those in need, with priority given to the poor and minority groups. All Finnish schools are connected to the Internet. These networked schools offer online administrative functions such as course enrollment and grading as well as online classes and tutorials at the high school and university levels. Computer facilities for games and learning are even provided in public daycare and pre-school facilities. Finland is also a leader in e-commerce. The financial services industry implemented advanced payment, security and verification internal IT systems in the early 1990s, enabling Finnish banks to be among the first in the world to offer online and mobile banking. Though Finnish consumers have been slower to adopt e-commerce for business and retail, evidence of the nation s ICT sophistication can be found in car washes and soda machines paid via mobile phone. Online services are now used widely, and banking and information transfer remain the largest segments of e-commerce for both businesses and consumers.
4 Jyväskylä Science Park During the past decade, Information and Communication Technology (ICT) has become one of the cornerstones of industry in Jyväskylä. ICT businesses in Central Finland currently employ about 4,000 professionals with the number of new openings increasing at an annual rate of 15 20%. The slow development of Electronic industry has been more than compensated by the positive development of software sector. Strong growth is predicted to continue in the near future and the number of employees in the region s ICT industry is expected to more than double in the coming years reaching nearly 10,000 by ICT professionals will also be employed in other fields and industries effectively transforming the region into an Information Society. The fast growth of vacancies in the ICT industry is largely a result of increased educational opportunities provided both by the University of Jyväskylä and Jyväskylä Polytechnic. With some 700 new ICT majors admitted in autumn 2002, the total number of students in the field will rise to 3,500 by The correct timing of educational investments has enabled quick development of ICT business activities in Central Finland. Thanks to additional investments in education and training, the availability of ICT professionals in Jyväskylä will be good in the years to come. ICT companies in Central Finland focus on software, data communications, digital media, utilization of network technologies, and industrial automation. The teaching and research practiced at the University of Jyväskylä and Jyväskylä Polytechnic provide ample support for the region s current ICT businesses as well as expertise for future needs in fields such as digital media, the Internet, mobility, content, and their combination. One of the future breakthrough areas will definitely be handheld devices and mobile applications for their worldwide exploitation. Nokia started its operations in Jyväskylä at the end of Nokia s units in Jyväskylä include Nokia Mobile Phones and Nokia Networks.Nokia Mobile Phones focuses its product development on cellular phones and TETRA (Transeuropean Trunking Radio) terminals while Nokia Networks develops software for IP (Internet Protocol) mobility networks. Besides Nokia s own staff, that has since 1999 risen to about 400 people, Nokia employs a number of local subcontractors. Most ICT companies in Central Finland operate in global markets. Small and medium -sized growth companies have been involved in the national Global Software Program targeting the U.S. markets. The program provides software companies with the opportunity to implement their internationalization strategy through hands on training. Jyväskylä is also the site of one of the best technology company incubators among the Finnish Technology Centers. Incubation activities in Jyväskylä, managed by the Jyväskylä Science Park, have ten years history during which some 140 companies have been incubated. Three fourths of the companies work in the ICT industry and by 2010 an estimated 300 tech companies with a total revenues of hundreds of millions of euros have undergone the incubation process. In addition to injecting more versatility into the region s industry, the incubation activities have also helped several startup companies grow into considerable medium -sized enterprises. Most technology companies are located by the lake, in the center of Jyväskylä. The Jyväskylä Science Park area, also near the lake and adjacent to the University and Polytechnic, is well on its way to housing a considerable part of the region s high-tech businesses. The district currently employs some 2,400 people in 170 companies with a target of 3,000 employees in Adding to this figure other people involved in the ICT industry, including ICT teachers, researchers, and majors, the total number of ICT persons that are working in the vicinity of the Jyväskylä Science Park will rise from 7,000 to 10,000 by 2006.
5 ELMO - Miniaturising Electronics Technology Programme The aim of the Finnish electronics programme ELMO is to ensure the competitiveness of the Finnish ICT industry in the long run. The span of the programme is from 2002 to 2005 and the estimated volume of the programme will be approximately 100 million euros, of which Tekes provides some 50%. ELMO makes funding available for R&D projects in which universities, research institutes and companies work together to achieve common goals. Some funded projects by ELMO are as follows: Flexible Design Methods for DSP Systems (FlexDSP) The project has two principal objectives: development of methodologies and tools for designing embedded systems, especially for digital signal processing (DSP) tasks, and development of embedded DSP systems utilising the developed methodologies. The design methodologies are developed to allow more efficient customisation of the implementation architectures according to the given application. The developed methods and tools are to be demonstrated by applying the design methods for design cases specified by the participating industrial companies. The project contains research collaboration with Berkeley Wireless Research Center, University of California, USA; Delft University of Technology, the Netherlands and Texas Instruments, France. The national collaboration parties are Elektrobit, Instrumentointi, Nokia Mobile Phones, Nokia Networks, Metso, Patria New Technologies, Vaisala, Finnish Navy Research Institute, Tampere University of Technology/ Software Systems Laboratory. Towards Lighter Technologies (TORCH) The objective of TORCH is to improve the expertise of researchers to strengthen cooperation between universities and to promote the competitiveness of Finnish industry in the fields of ultra-fast optical telecommunications and optoelectronics. The prime research subjects are the future light sources and subsystems. The project is divided into two parts: Part 1: The research on the new GaAs -based lasers, the monolithic VCSELs, the quantum mechanical mirrors and the modulators for the wavelengths of nm. The basic material is GaInAsN, the diluted nitride alloy. With this material it is possible to manufacture components which can operate outside the spectrum range achieved by the conventional GaAs technologies. None of these components are available in the markets, but the research results achieved in many laboratories, also in ORC, are very promising. Part 2: The research on the new technology: the splitting of the spectrum. The objective is to develop the transmitter in which the wide continuous spectrum is formed by many quantum wells in one component, probably in the LED-type light source. The spectrum will be divided into narrow bands and will be driven into the different channels. Alternatively, the spectrum will be generated from the super continuous field of the fibre laser based on the non-linear phenomenon. PRINTO In the Printo-project roll-to-roll related mass production techniques (gravure printing, embossing, digital printing, offset etc.), optical, electrical and optoelectrical components are evaluated and developed. Polymeric, inorganic and hybrid materials suitable to be used as an electrical or optical ink for the roll-to-roll manufacturing process are also tested, modified and developed. The driving force of this project is the integration of the cost effective and mass-producible optical, electrical and optoelectrical components and modules for tomorrow's product packages and printed papers. Research work will be carried out in close cooperation between VTT Electronics, VTT Information Technology and the universities of Joensuu, Oulu, Jyväskylä and Lapland. During this project, a cooperation network between Finnish research institutes and internationally notable roll-to-roll electronics research institutes will also be set up. Please send in your comments at mait@vsnl.com Disclaimer: This report is published by MAIT for limited circulation. This report has been prepared using sources believed to be reliable and accurate. MAIT does not accept any liability for any direct or consequential use of this report or its contents. The information and opinions contained in this report are subject to change without notice. The contents of this report may be reproduced only after prior permission from MAIT. In case you have missed out on our earlier newsletters, please download them from
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