5 July, 2001
Reviving the pan-Nordic wireless utopia
...Engineering-focused Finnish entrepreneurs are developing hard technology startups operating in encryption, networking and location-based services. Kim Groop, a technology analyst at 3i Finland, says, "In Finland, people are shyer and not strong in marketing. They stay in the cellar and develop technology."
Marketing-oriented Swedes focus more on high-tech consulting and consumer-oriented ventures, which explain their early success in the Internet economy. With a handful of multinational corporations such as ABB and Scania AB doling out lucrative projects, Swedes are now developing wireless consulting companies and mobile commerce.
"Sweden has a more entrepreneurial culture than the rest of Europe," said Staffan Lindo, a business development manager at Microsoft in Stockholm.
And despite the economic downturn, the two countries are the undisputed technology champions in Europe. A European Commission working report found that Finns topped the EU in high-tech patent applications, with 67 high-tech patents per million people. This figure outpaces second-place Sweden by 25 and tripled the Netherlands, in third place.
The report also found that Sweden and Finland topped the entire EU in public expenditures on research and development as a percentage of GDP in 1998, installed computer power base, Internet penetration and the number of mobile phone subscribers as a percentage of the total population in 1999.
So with introverted Finns experienced with building back-end solutions and commercializing technology and extroverted Swedes best at launching front-end solutions and marketing products, how can the two countries deal with the downturn in the wireless market?
Merging the countries is one solution. After all, they share a long border and have developed export-based economies with globally competitive technologies. However, ever since the Swedes were forced out as Finland's rulers in 1810, most Finns favor continued sovereignty.
Short of political unity, the answer is closer business cooperation. The quicker they share their complementary skills, the faster a recovery in mobile development.
With nearly four times as many venture firms and twice as much capital for early stage high-tech investment, Sweden could provide the brawn.
Finland, which launched Nokia, the world's largest maker of mobile handsets, and scores of technology gurus such as Linux creator Linus Torvalds, could provide the brains.
The combination has occurred in the banking world with the creation of the Finnish/Swedish/Danish financial group Nordea. And now, there are rumors of consolidation in the region's telecommunications sector.
The region's leading venture capital firms are certainly embracing the pan-Nordic model. Eqvitec Partners Oy and CapMan both plan to open Stockholm offices by year's end. Stockholm-based Startupfactory already has 10-year Nokia veteran Pekka Lundmark on the ground in Helsinki.
But, the newness of next generation wireless networks means that it will likely be startups that drive Sweden and Finland to positions of leadership. One model for the future is BlueGiga Technologies, a startup developing an embedded Bluetooth technology platform targeted at electronics manufacturers.
The company, with co-headquarters in Espoo, Finland and Stockholm, secured a �1.5 million ($1.3 million) seed round of financing from Finnish merchant bank Eficor Oy and a consortium of private funds and investors in both countries, largely on the back of its dual headquarters.
"We're trying to exploit the advantages in both countries," said Jarkko Jukarainen, BlueGiga CEO. "We have the main R&D; activities in Finland while driving marketing out of Sweden."
If more startups follow BlueGiga's lead and leverage Sweden and Finland's respective skills, Nordic startups and investors could expedite the recovery process and plant the seeds for a second wireless renaissance.
If they can achieve that, they might even be able to draw visitors in winter.
By Joshua Jaffe
