Experts analyse deep impact of Nokia decline
Last year Nokia’s share of Finnish GDP was at the same level as it was in 1992, before the company began its meteoric rise.
In 2011 Nokia accounted for half a per cent of Finnish GDP. In 2000 the figure was four per cent, according to calculations by the Research Institute of the Finnish Economy (ETLA).
Because of its weakened market position Nokia cut about 40,000 employees from its payroll last year, according to figures collected by Reuters news agency.
The impact of the information and communications industry in the Finnish economy is considerable, says Matti Pohjola, a professor of economics at the Aalto University.
Last year, in 2008, the information and communications industry accounted for six per cent of Finnish GDP. Now it is down to three per cent.
The change is much greater than the decline of the forest industry, Pohjola notes. He says that the forest industry’s share of GDP declined by 50 per cent in ten years.
The cuts in Finland focus on research and product development, which has wide ripple-effects in Finland.
“Product development creates knowledge, which is useful in other areas of society as well. It is a matter that is much greater than the downsizing of the forest sector.”
In Finland Nokia is cutting 3,700 jobs. Not as many corresponding jobs exist in Finland.
However, Seija Ilmakunnas, Director of the Labour Institute for Economic Research nevertheless believes that well-trained employees will find work in other fields. He feels that the state should nevertheless work more actively to attract foreign companies to come to Finland.
Similar views are voiced by Pasi Holm, managing director of Pellervo Economic research. “Solutions should be concrete. For instance, a working group headed by Jorma Eloranta proposed the simplification of permit procedure, or a reduction in corporate taxation.”
The Nokia cutbacks are not having any long-term impact on Finnish employment, says Juahna Vartiainen, Director-General of the Government Institute for Economic Research (VATT).
“When industrial employees lose their jobs, it is often hard for them to find work right away. In the long term, the closures of factories do not have an impact on structural employment in Finland.”
However, he expects a more lasting impact on the Salo region.
Previously in HS International Edition:
Nokia – a heavy burden for new chairman (9.1.2012)
Nokia to support new companies to employ superfluous R&D staff (23.3.2011)
Knock, Knock, Nokia´s Heavy Fall... (5.10.2010)
Nokia eliminating up to 10,000 jobs in cost-cutting move (14.6.2012)
Nokia´s troubles continue to deepen (12.4.2012)