Nokia`s collapse is Finland`s blessing

Every Finn has something to say about Nokia, just like all Koreans have opinions about Samsung Electronics. Finns were proud of Nokia because it made a Scandinavian country with just 5.4 million people a cellphone kingdom. But Nokia does not exist anymore. In 2000, the company accounted for 4 percent of the country’s GDP. But the figure has since plummeted to 1 percent. Nokia cellphones used to control the world`s biggest market share in 1998, accounting for a third of the Finnish economy. With the emergence of the iPhone in 2007, however, Nokia began to sink and is now a big burden on its country. Many words are being used to explain the collapse of Nokia, including, "curse of the winner," "arrogance that refuses to change," and "overlooking speed management while depending on consensus." The Economist, however, quoted many Finns as saying the fall of Nokia was one of the best things to happen to Finland.

The number of companies established by former Nokia employees has surpassed 300, meaning the company`s fall brought about drastic change in the venture industry. College students who used to dream of entering major corporations like Nokia say starting a business is cool. In 2003, three students at Helsinki University of Technology set up ROVIO and developed the hit game "Angry Birds." Finnish college students now look to ROVIO, not Nokia, as their role model. Finland is a barren land with severe weather and lack of natural resources, so it heavily invested in human resources and hi-tech fields. Nokia used to be too big for the country to deal with, but its fall has allowed Finns the chance to fully develop their capabilities.

Despite the fall of Nokia, Finland is still one of the world`s wealthiest countries with per capita GDP of 45,500 U.S. dollars, the least corrupt country on earth, and third in global competitiveness. The nation is also fiscally sound with sovereign debt of about half that of eurozone countries. Witnessing the Nokia crisis, the Finnish government began innovation of its colleges in 2008. Aalto University was established at the time, and students there hosted the event “Summer for Venture” to promote business start-ups. This has helped spread venture enthusiasm in the country. "Venture Sauna" is a name of a venture support zone run by both the government and the private sector. A state body was also set up to back promising venture businesses from funding to management. These achievements were possible not because the Finnish government was big or strong but because it did the right things.

Many Koreans consider Northern European countries as models of the welfare state. Supporters of universal welfare often say Korea needs to expand public welfare to become an advanced country, or that Northern European countries do not reduce social welfare despite the eurozone crisis. Such countries, however, have accumulated wealth before they have become welfare states. Korea`s economic crisis of the 1990s proved that a welfare model of tax more, receive more simply does not work. The success of the Finnish venture industry should not be interpreted as large companies need to collapse for venture companies to grow. If the Korean government can help encourage and foster individual capabilities and initiative, Korea also can be an innovative country like Finland.

Editorial Writer Kim Sun-deok (yuri@donga.com)