Following the boom years of Nokia-led growth, the early 2010s were tough times for ICT sector in Finland’s northern city Oulu as Nokia and then Microsoft steadily cut back on their mobile phone product development in the city. The summer of 2014 was the lowest point, with both Microsoft and wireless modem manufacturer Broadcom announcing the closure of their research sites. Many subcontractors in the Nokia cluster also cut back or closed their operations. Altogether about 4500 ICT jobs were lost, mainly in product development.
Now four years later, Oulu’s ICT sector is thriving once again thanks to a recovery that has been nothing short of spectacular. What are the crucial factors behind this remarkable turnaround?
Watch BBC’s interview on “The fall of Nokia: How this Finnish city fought back”. Hear the story how re-invention of the world class hub for ICT talent took place in Oulu. Arto Pussinen (picture) states that today's ICT industry is much more diversified in Oulu.
Facing the challenge
“Firstly, individual people who had lost their jobs became active and started searching for companies that could be interested in coming to Oulu. Through their own global business contacts, they found companies that knew about the wealth of talent that was available in Oulu and recognised what had been achieved here,” explains Arto Pussinen, Head of Industry, ICT & Digitalization, Invest in Finland.
“Secondly, Nokia and Microsoft they took on their social responsibility role in a commendable way and actively supported entrepreneurship in Oulu. As a result, about 400 startups were established in the city.”
Public sector actors like BusinessOulu, Finpro and Tekes (now merged as Business Finland), and the independent KAATO association (now part of Invest in Finland), also played an important role. KAATO is a pro bono business community initiative where experienced executives and experts from different fields help international companies to quickly establish and expand operations in Finland.
“We worked with all the different parties, provided sparring and materials for the activists as well as funding and supporting the activities designed to attract new companies to Oulu,” says Pussinen.
Recognised hub for ICT talent
Already in September 2014, Norwegian company Nordic Semiconductor ASA announced the opening of its new R&D office in Oulu. “We are strengthening our R&D resources by adding highly qualified engineers from the IT hub that has been built in Northern Finland during the last years,” said Svenn-Tore Larsen, CEO, Nordic Semiconductor ASA, in a statement.
“I think that Oulu’s recovery was the result of the seamless cooperation between the different actors. The way we worked together, openly shared information with each other, and the straightforward spirit of cooperation – all this also made an impression on the companies that came here,” says Pussinen.
Oulu’s ICT sector is stronger than ever
Today Oulu’s ICT sector employs more people than during the high point of the Nokia cluster. According to Pussinen, the sector is also stronger because it is no longer centred around one or two companies.
“Oulu’s ICT scene is now much more diverse and not so vulnerable to sudden changes. Wireless technology is still a major strength in Oulu, but it now extends across and is supported by many other fields of activity. For example, we have companies working fintech, health technology and software and electronics for the automotive industry,” he says.
Born during Oulu’s difficult years, startups like Haltian, Tosibox and Indoor Atlas are on a strong growth-path and have attracted international investments. Nokia Networks remains a global player and has a product development site in Oulu.