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Ollila: Services and know-how keys to Finnish economic growth

“Drop the ambition that we should be industrial manufacturers”

Ollila: Services and know-how keys to Finnish economic growth
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Jorma Ollila, chairman of the boards of Nokia and Shell, expects Finland to emerge from the economic recession through know-how and the production of services.
      “It seems now that a situation is ahead in which Finnish economic growth will increasingly be built on know-how and services”, Ollila said on Tuesday in an interview with Helsingin Sanomat.
Finland has historically had a clear economic policy based on manufacturing, and occasional devaluations of the currency. The starting point has been that of basing Finnish well-being on a foundation of industrial output.
     Finland’s last devaluation took place in 1991. Ollila feels that the significance of devaluation is often underestimated.
     However, he does not criticise the Finnish past development in which manufacturing took an increasingly big foothold compared with many other industrialised countries. “There were historical reasons for that.”
Ollila does not believe that industrial output will be the way for Finland to get out of the present recession. “The proportion of services will increase inevitably, unless some completely odd narrative emerges that would make Finland a country of cheap labour. For us to rise again from here, we need to be able to create economic growth in a new way through the service sector.”
     Ollila says that Denmark and Sweden have managed much better in their service sector investments than Finland has. “We have good sprouts and beginnings in the service of industry - there is Kone and Wärtsilä. Even with Nokia, more operations involve service activities than one might imagine.”
Ollila says that a cultural and mental change is needed in order to focus more on services.
     “Innovations are not necessarily technological. Instead, they have as a starting point the needs of consumers. They involve design, logistics, and completely new business models.”
Finnish industry nevertheless is calling on the state for stimulus help for projects, which aim specifically at increased manufacturing. Ollila does not see contradictions in this. in fact, he sees the stimulus measures as justified. However, he emphasises that expectations of growth can no longer be based on the foundation of an earlier structure.
     “Naturally, industry will remain, but growth is to be found in the know-how and services side. In distributing the state’s billions, it is worth thinking what the right proportion might be”, Ollila explains.
      In his view, the Finnish Funding Agency for Technology and Innovation (TEKES) has commendably increased product development support into services. “On the side of the new technology, there is already good, and new kind of thinking. Now this simply has to be made to permeate the country’s whole industrial policy. We must not be content to be mere manufacturers.”
In consumer goods, Ollila fels that this kind of thinking means that planning is to take place in Finland, and manufacture somewhere else.
      “Let’s lose the ambition that we should be the industrial producer. planning and research and development are different forms of service. This is not about anything radical, but rather of a bigger investment into that side.”
Ollila also discussed the importance of services on Tuesday at a symposium of the Finnish Business and Policy Forum EVA.
     Representatives of Finnish business, politics, and key organisations converged on Helsinki’s Old Student House, where Ollila, who is also the chairman of the board of EVA, called for more contact between engineers and professionals in the humanities, and for a more stimulating environment.
     He feels that Finland needs more openness and interaction among the various professions - and some craziness as well.

Helsingin Sanomat

  6.5.2009 - TODAY
 Ollila: Services and know-how keys to Finnish economic growth

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