Finland & Sweden: Incredible Success in ICT
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Transcript of Finland & Sweden: Incredible Success in ICT
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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.
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The Nordic ICT Saga – Some Historical Highlights
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“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.
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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
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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
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GSM
0
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4
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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
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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
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2nd disruption!?
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1011
0101
1100
0010
3D
IoT
Digital Convergence+
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Corporations
Systems/Hardware
Specific Solutions
Tech hegemony
Consumers
Content/Services
Platforms/Ecosystems
Concepts & Customers
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0
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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.
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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
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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
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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
ICT consultants play crucial part
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Sweden has so far adapted wellOpportunities in subsectors(employment by subsector)
A good position globally
• IDC Information Society Index, WEF Network Readiness Index
• Early business interest: Cloud, Internet of things, Social media
• Growing subsectors, e.g.
– Netservices – a decade old subsector & quite large
– Gaming, 200+ firms, 50% established after 2010, most profitable, high growth of revenues, successful games, No 1 globally?
– E-health
Software16%
Net services12%
Repair, maint.
9%
IT operations
10%
Hardware, comp. 6%
IT consultants, commercial
systems9%
IT consultants, R&D
9%
Hardware, products &
systems19%
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Up until the early 2000s, Nordic cooperation greatly contributed to Fin & Swe ICT success
Since then, trajectories & interests departed but, with the 2nd disruption, are again aligned
NMT/GSM per se cannot be replicated, surely there is scope for Nordic cooperation!?
Advertisement: ETLA-KTH study on Nordic ICT in the fall