Mika Pajarinen, Petri Rouvinen & Pekka Ylä-Anttila ETLA, The Research Institute of the Finnish Economy (Etlatieto Oy) Eric Giertz & Annika Rickne KTH, Royal Institute of Technology (INDEK) Finland & Sweden – Incredible Success in ICT * Assessing past achievements and future potential in ICT: A joint future for Finland and Sweden? Finland’s Embassy in Stockholm, 19 March 2015. * Kindly supported by VINNOVA & Tekes.
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Mika Pajarinen, Petri Rouvinen & Pekka Ylä-AnttilaETLA, The Research Institute of the Finnish Economy (Etlatieto Oy)
Eric Giertz & Annika RickneKTH, Royal Institute of Technology (INDEK)
Finland & Sweden – Incredible Success in ICT*
Assessing past achievements and future potential in ICT: A joint future for Finland and Sweden?Finland’s Embassy in Stockholm, 19 March 2015.
* Kindly supported by VINNOVA & Tekes.
The Nordic ICT Saga – Some Historical Highlights
“Wherever two or three Swedes... or Finns... are gathered together…
immediately establish … a telephone exchange.”
Alfred R. Bennett in 1895.The Telephone Systems of the Continent of Europe.
Proposed by Carl-Gösta Åsdal, Televerket, 1969.
NMT, Nordisk Mobil Telefon, opens in 1981.
The largest mobile market worldwide.
Open & competitive (equipment).
Handset mkt shares, ‘85
Mobira(Nokia)25.7%
Ericsson16.9%
Mitsubishi
1982, GSM, Groupe Spécial Mobile
1987,the 1st tech spec
1991, Roll out
Tech: From analog to digital
New tier of communication
More intense competition
Higher industry speed
GSM
0
2
4
6
8
10
12
1980 1985 1990 1995 2000 2005 2010 2015
ICT Sector% of value added
Sources: OECD (incl. def’n), ETLA, KTH.Note: the denominator is the total value added as defined in the OECD/STAN database, whichis somewhat less than GDP.Ericsson 2000: Nordea.
Finland
FinlandwithoutNokia
Sweden
SwedenwithoutEricsson
NOW: Fin & Swe ICT sectors are similar ...
5–6% of GDP, 3–4% of work hours
... and different:
Fin ICT still +40% of business R&D, Swe 15%
Swe 2× Fin persons employedSwe 6× Fin companies (e.g., +11,000 ICT consultancies)
Swe has been growing & Fin shrinking since 2008 Fin employment decreased by 10,000Swe employment increased by 4,000
2nd disruption!?
1011
0101
1100
0010
3D
IoT
Digital Convergence+
Corporations
Systems/Hardware
Specific Solutions
Tech hegemony
Consumers
Content/Services
Platforms/Ecosystems
Concepts & Customers
0
2
4
6
8
10
1980 1985 1990 1995 2000 2005 2010 2015
ICT Sector% of value added
Finland
Finland– Nokia
Sweden
Sweden– Ericsson
Sweden was forced into the 2nd distruptionseveral years before Finland.
Ericsson & related business decline made a dent – but not a long term negative impact.
Explanatory factors and potential future success stories
From a corporate society to a time of turbulence
• Developing pairs: Ericsson/Televerket, Saab makes computers for public serv.
• Centrally planned infrastructure dev’t
• Competition in mobile communication: Comviq–Televerket
• Fast penetration of PC:s & phones
• Early applications in society (authorities, banking, e-commerce)
Change from a corporate society
• End of telecom operators monopolies
– Telia: IPO, no 3G license, merges with Sonera
• The IT-bubble bursts 2000
– Ericsson almost into bankruptcy
– Young ventures decline (Framfab, Icon Medialab, Spray)
– IT Consultants out of work
A time of turbulence
New specialized venturesICT-related business models
More time to adapt
Resources & competences remain• Fast penetration of 3G
• Ericsson survives with new business concept
New applications and ventures are born
Time & adaption
The importance of R&D-related IT consultancy firms
ICT applications move outside core sector
Growth of ICT consultancy sector
Early adoption of ICT in many different industries