Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), once a dominating force in Finland, has now almost been written off. Contrary to the belief that the fall of Nokia may impact the country’s economy, many feel that Nokia’s decline could actually be good for the nation and its fast-emerging startup ecosystem. The same thought is shared by Miki Kuusi, managing director at the Helsinki accelerator Startup Sauna, and an organizer of the forthcoming Helsinki Slush startup conference.
Kussi feels that from the near-term perspective, it is a massive loss to the nation because Nokia has been a pride of the country for so long. However, this will enable the startups to hire far more talented people, according to a report from The Wall Street Journal.
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Nokia, once a dominant force in Finland
Nokia’s contribution to the Finnish economy cannot be ruled out. According to data from the Research Institute of the Finnish Economy (ETLA), Nokia’s expense on research and development contributed 30 percent to the entire R&D of the country from 1998 to 2007; in exports, the share of the handset maker was 20 percent. In 2000, Nokia contributed 4 percent in Finland’s Gross Domestic product. Marko Ahtisaari, son of former president Martti Ahtisaari, was an employee in the company.
However, by 2012, Nokia’s contribution in GDP became negative, according to ETLA. In recent years, Nokia has been losing its employees. On March 31, 2010, according to the company’s data, Nokia employed 125,859 people, and in 2013 this number was down to 92,874. After the Nokia-Microsoft deal, 32,000 employees will be transferred to Microsoft, including 4,700 employees in Finland.
Nokia employees a boon for startups
“There are people coming out of Nokia who have been working on some incredible stuff,” said Mr. Kuusi. “I had someone [from Nokia] pitch me an idea about charging your mobile phone wirelessly using the static electricity from the air.”
Jolla Ltd has already taken Nokia’s canned mobile operating system MeeGo, which was developed with Intel Corporation (NASDAQ:INTC), and is planning to launch its own cellphone. According to the chairman of the company, Antti Saarnio, almost 90 percent of employees in this company once worked with Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V). He said that those who left Nokia had all the required skills for a startup company, like building products and how to operate internationally.
Some think otherwise
However, according to Patrik Fagerlund, ex-employee of Sweden’s Ericsson, who established his own startup, Widespace AB, a mobile advertising platform said that the majority of people are not suited to such startups as working is very comfortable in big companies and it is hard to get even a meeting fixed without a big brand name backing.
Dmitri Sarle, CEO at ArcticStartup, a blog that follows the Nordic entrepreneur community, said that it cannot be seen as the end of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) as the company has adequate cash balance, R&D, and if they focus on R&D lots of cash inflow can be expected into the ecosystem.