Jari Vilen Interview: Conversations with History; Institute of International Studies, UC Berkeley

Finland and the Global 
    Economy: Conversation with Jari Vilen, Minister for Foreign Trade, Finland, 
    January 23, 2003 by Harry Kreisler

Page 4 of 6

Shaping the Future of Technology

The Nokia story is an interesting one, because it started out as a conglomerate in all sorts of areas from forestry to radios, and even toilet paper, from what I read. It's striking how it has moved into being this great success story for your country by being able to take advantage of opportunities that presented themselves. Tell us a little about this development of a standard for cell phones, which was very important in creating a market in which you were prepared to act.

Nokia is truly a remarkable success story of the world and Finland. We do see, still, a Finnish company; the headquarters are in Finland. But we should thank the American audience and the American investors, because most of the stocks of Nokia today are owned here in the USA. Most of the ownership, actually, comes from pension funds of [Americans]. But we do see it still as a very, very Finnish company. And as you correctly pointed out, it actually started making rubber boots for the Finnish Army in the beginning of the last century. But today, they are one of the most successful companies. I just received a text message from Finland informing me that today, Nokia has the 39 percent share of the handset phone market of the world. So they are the truly global leaders in these specific sectors.

But I have to say (this just came in: research of Nokia and its history), it's a success story of errors, good luck, determination, good cooperation between governmental authorities and this private company, and, also, the decisions and commitment of individual personalities. It's a combination of various factors. They were able to sell off the parts which were not profitable, which they thought were not the thing of the future, and find a very narrow field of specialization where they have become the global leaders; for example, the handset and mobile phone sectors.

The challenge for them, of course, is what will come in the future? I would presume that the question -- the battle -- of the future might be even between Nokia and Microsoft.

Is that about the mobile information society where dominance is either in the computer or the handheld device? Is that the conflict?

Exactly. What kind of services you can have in handheld devices, for example. Finland is a small market, there are five million people, but it's an excellent test ground, also. And, actually, a lot of companies use Finland for that. For example, today you can pay your bus fares with the mobile phone. Last year about a million passengers used a mobile phone. When they enter the bus, they pay their bus fares with their mobile phone. So you have all kinds of variations and possibilities. I'm actually doing most of my work with my mobile phone, always. Sending messages, doing everything. The question is what kind of services can you have there, and what kind of services will we have in the future. I think an interesting discussion, which I hope to be able to have here in California, is what is the future of Microsoft? Where are they going? And what is the future of Nokia? What kind of potential is there for Nokia?

In our country when we think about innovation, we think of the entrepreneur, the individual, the individual creative idea. And as part of our culture, we reject the role of government. But from what I'm hearing from you in the case of Finland, you see those things as going together. That is, a muscular role for government, supporting education, helping to build alliances within the society and outside. On the other hand, there's something in the society, possibly through education, through the tradition, that supports the entrepreneurial individual. The Linux operating system comes from one of your citizens [Linus Torvalds], right?

That is true. It is true that the government and public sector have a large role to play in their successes. The fact is that, because we lack the capital compared to some other nations like USA, we've been forced to unite our own forms, using the government as one of the main incubators and sources of strength. For example, today, Finland's share of the research and development is that we invest about 3.4 percent of our GDP in research and development, which is second in the whole world. We've been maintaining this, and we will maintain this for the future, also. But the challenge, of course, is having also the private companies. It is a joint effort between different partners, so that in the beginning, government had a 50 percent of the share in the research and development, and the rest were from private companies. Today, the government has about a 30 percent share of the research and development, everything else comes from the private companies. It shows that the private companies are supporting and accepting the government role there.

It's a question of delicate balance -- how involved the government can be and what is the role of entrepreneurs and private individuals. It is part of our culture that people accept the government's role as long as it's a supporting one, as long as it provides the basic security, but gives the possibility for individuals to fulfill their dreams and desires. Nokia, I think, is a prime example of this kind of culture. Nokia itself has been sometime described as a jazz orchestra. There are a lot of individuals with very bright minds and very logical with their thoughts, and they have a right to explore their capabilities and capacities, and explore the know-how they have. But there's a clear leadership, which then makes [these "musicians"] play as a jazz orchestra.

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