1. Special Edition
The Federation of Finnish Technology Industries
New paradigms, trends, and changes affecting the world.
FOREWORD
Jukka Viitasaari
Competitiveness of Finland’s IT & AUTHORS
Telecom Industries Today and Tomorrow Teemu Arina
Sam Inkinen
Juhani V. Parda

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3. Foreword – Jukka Viitasaari
The world is changing ever faster. The global changes of today can be radical
and shocking, and they challenge everyone, everywhere in the world. Those
countries which are agile and prepared for discontinuities and changes in the
ecosystems of several industrial sectors will win out. Finland has a number of
core competencies and advantages which many other nations lack. For
Finland, the current global changes can truly be an opportunity.
The Finnish way of life, our organizational structures, and our management
processes are lean, open, and agile. In Finland, the top management normally
listens to input; it is very much accessible to everyone in the organization, as
well as to outsiders. We Finns are creative by nature.
The wealth of nation is derived from innovations – technologies, applications,
services, concepts, and process innovations. The main challenge is the
capability to think in a new, different, and improved way. We have neither oil
nor hardly gold – not even particularly welcoming weather.
Regardless, our base from which to tackle the challenges and changes of today
is brilliant: we have an educational system that is cherished as the world’s
best. Certainly, we, as Finns, can be content that we have one of the world’s
most equal educational systems, in which anybody can become somebody, if
he or she so desires.

4. Corruption is almost nonexistent in Finland, and the country was recently
voted the best in which to live. Our government-funded innovation system
is well appraised abroad. All of this recognition and these awards are just
some of the highlights in a very short time period – only the last couple of
years. These aspects are significant core competencies and advantages
which we Finns too often take for granted.
Finland is one of the top nations in the world in the IT and telecom
sectors. This “world champion”-level of competence and knowledge can
also be well utilized in creating value for other sectors of Finnish
technology industries, as we create the future’s success stories in
products, services, and companies.
Changes naturally challenge us. Even if our starting point is ahead of most
other regions and societies, we must continuously strive for a more
creative, more efficient, smarter, and more flexible way of working. The
Megasignals strategy report will kick off this process. The time to act is
now. Let us create the pillars of well-being in Finland for the 21st century.
Jukka Viitasaari
Director
The Federation of Finnish Technology Industries
www.teknologiateollisuus.fi

5. Contents
Megasignals for the IT & Telecom industries of Finland:
The Challenges of Globalization Posed to Finland
How to increase jobs, assets, and creative buzz in Finland?
Innovations and Supporting Structures
The right judo moves: How do we turn strategies into action?
Agile Processes and Growth Companies
Tomorrow’s platforms, drivers, and working culture.
5

6. The Challenges of Globalization Posed to Finland
How to increase jobs, assets, and creative buzz in Finland?

7. Kuva: Sievin kotiseutuarkisto

8. The Challenges of Globalization to Finland
Finland – A Leader in Technology Industries
Key concepts –
yesterday and today: Yesterday
Finland modernized very late, only after the second world war.
• Automatic Data
Development from an agrarian Finland to a modern welfare state and
Processing (ADP) technology-driven “Nokia-Finland” happened in only a few decades.
• information society Finland's educational and innovation systems are well regarded,
• mobile Internet benchmarked, and have been adapted to many other parts of the world.
• NMT, GSM, 3G Today
• SMS, MMS Globalization and socio-technological changes are challenging the
• convergence country. The nation is challenged by tax-free zones and other, more
entrepreneur- and asset-friendly jurisdictions. We are also challenged by
• smart phones
nations and production areas of lower cost levels.
• e-commerce
Despite our well-being and welfare system, growth has slowed in Finland
• outsourcing
due to the global financial crisis. This has also somewhat impacted
• paperless office innovation and the ability to take risks at both the individual and
• knowledge national level. Some of the bottlenecks – which are also future
management opportunities – exist in service innovations, content production, and
understanding the changes to business ecosystems posed by the Internet.
There is concern regarding how to retain top skills and the highest value-
adding jobs and processes in Finland, also in the IT and telecom sectors.
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10. The Challenges of Globalization to Finland
Key concepts – Finland – A Future Leader in Technology Industries?
tomorrow: Tomorrow
• agility The rules and fundamentals of technology industries are changing
• crowdsourcing more and more rapidly. Our opportunity is to better allocate our
capabilities and innovation potential and, through this, create
• cloud computing
wealth and well-being (jobs and growth companies) in Finland.
• social media
The low-cost advantage and lower taxes transfer many business
• virtual companies sectors to Asia and other lower cost areas. It is easier to allow
• ubiquitous society customers to participate in R&D through crowdsourcing. Millions
• open data of well-educated professionals graduate in India and China every
• Internet of Things year. These human resources are ever easier to utilize though the
Internet. At the same time, we are concerned in Finland about the
• Application phones
future of our top talent, employment development,
• hyperconnectivity and wage levels.
• user-centered Cloud computing may significantly save costs in IT and
innovation telecommunications support and maintenance. The outsourcing of
• business ecosystems IT, the distributed technology environment, and social media
capabilities are all impacting organizational processes, R&D,
and corporate culture.
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11. The Challenges of Globalization to Finland
The Nokia Impact: From Production to Software Development
100
employees
600
450
Nokia transfers
production abroad
300
150
0
‘75 ‘77 ‘79 ‘81 ‘83 ‘85 ‘87 ‘89 ‘91 ‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09
IT’s software and service sectors in Finland
Radio, TV, and other high-tech production (Nokia’s production subcontractors)
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12. The Challenges of Globalization to Finland
Market Value: Apple vs. Nokia vs. Exxon (3 Years)
Source: Bloomberg.com, August 11, 2011
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13. The Challenges of Globalization to Finland
Market Value: Apple vs. Nokia vs. Exxon (6 Months)
Market value USD August 11, 2011:
NOK: 18,54 billion
XOM: 336,99 billion
AAPL: 341,25 billion
Source: Bloomberg.com, August 11, 2011
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14. The Challenges of Globalization to Finland
Business Case Hire employees via the Internet
Elance offers a reliable way in which to access capable employees
without complicated contractual negotiations.
Description
The Elance website links potential employees with employers. The
site is a fast, cost-effective, and bureaucracy-free way to hire
employees. Previous employers evaluate the services they
received. The model is disruptive in several sectors of the
economy. By April 2011:
• Over 49,000 work assignments.
• Over 350,000 employees.
• Over 360,000,000 USD of delivered work.
Why?
Services such as Elance make the hiring of labor (high quality,
lower cost) easy, not least due to honest recommendations and
references. This type of service erodes the margins of traditional,
local consulting businesses. Impacted sectors, for example,
include marketing, accounting, customer service, legal services, IT
Screenshot: Elance.com
services, journalism, and copywriting.
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15. Innovations and Supporting Structures
The right judo moves: How do we turn strategies into action?

17. Innovations and Supporting Structures
Key concepts – Innovations: From Plans to Action
yesterday and today: Yesterday
• R&D One must consider the last few decades to be a success story in
• cluster improving the Finnish innovation system and the national spirit of
the country. For a long time, Finland has no longer meant a
• innovation system
periphery of forests and archipelago; rather, Finland has become a
• innovation dynamic, Nordic EU country – a “futures laboratory.” Finland is
environment particularly well-known as a technology, education, and
• tacit knowledge innovation pioneer.
• Triple Helix Today
• swarm intelligence Clusters and innovation systems are concepts that have impacted
• Creative Class the thinking of researchers, experts, and decision makers
considerably since the 1990s. These days, there is also lots of talk
• creative industries
of a creative economy and innovation ecosystems.
Silicon Valley in California is often described as the successful,
market-driven, future-oriented ecosystem which creates the ideas
and innovations that enrich societies. Finnish growth companies
are actively seeking relationships and presences in Silicon Valley
and Asia.
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18. Innovations and Supporting Structures
Business
model
Challenge: Challenge:
new way to Ecosystemic
What you innovate
create value innovation
Changing
“what” Challenge:
Traditional
product
Changing
“how”
new way to
Product development create value
or service
innovation
Closed How you innovate Open
Source: Henry Chesbrough, 2007 18
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19. Innovations and Supporting Structures
Key concepts – Innovations: From Plans to Action
tomorrow: Tomorrow
• R&D&I One of the biggest challenges for Finland and the entire EU
• Open Innovation regarding innovation is bureaucracy – so-called red tape. Many
entrepreneurs point out that EU processes often take the
• serendipity
administrative angle rather than the business growth angle.
• innovation
The short-term challenge is to make strategic decision making and
ecosystems the political environment more agile. Growth companies play a key
• homo connectus role in creating jobs and well-being in the Finnish society.
• growth companies Global competition and connected cultures transfer innovations in a
• game industry blink of an eye to the other side of the world (for example Angry
Birds, Max Payne, Skype, and Spotify). A small idea can quickly
become a concept that holds mass appeal for millions of consumers.
Global hyperconnectivity and competition require a move from
closed innovation models to open, more transparent ways of
working. We need improved innovation processes in Finland,
as well as work and study environments which cultivate serendipity.
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20. Innovations and Supporting Structures
Top-down Bottom-up
Management and
Idea source Customers and users.
the organization.
Internal resources, product Deep understanding of customer
Drivers
portfolio, and positioning. needs, user-centered design.
Interaction Structured and controlled. Spontaneous and self-organizing.
Inviting customers, partners,
Strategy Protecting competitive advantage.
and competitors.
Processes Clearly defined processes. Agile processes.
Market research, questionnaires, (Net)communities, peer
Methods
and focus groups. production, and crowdsourcing.
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21. Innovations and Supporting Structures
Learning from the users
text
n
Co
Stimulus Insight
Information Knowledge
Products of choosing of using Wisdom
the product the product
n ce
r ie
x pe
E
• parameters • preferences • insight
• presentations • experimentation • research
• specifications • conversation • retrospect
• comparison • recommendation • combination
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22. Innovations and Supporting Structures
Business Case
Flowd is a mobile, social media concept for music
lovers by Digia. It has been built with a start-up
mentality – even bigger companies like Digia can
work in a new way when they utilize opportunities
provided by digital ecosystems, an active Internet
fan base, and beta users’ feedback in the product
development process.
Screenshot: flowd.com
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23. Agile Processes and Growth Companies
Tomorrow’s platforms, drivers, and working culture.

24. +?

25. Agile Processes and Growth Companies
Key concepts – Growth Companies in Finland
yesterday and today: Yesterday
Forest (Finland’s green gold), pulp, and paper, as well as metal and
• trade with the
machinery industries, were the growth pillars of the Finnish economy.
Soviet Union Bilateral trade with the Soviet Union was a cornerstone, in addition to a
• bilateral agreements growing export business to other parts of Western Europe. Technological
• Nordic cooperation development and automated manufacturing increased efficiency.
• clearing and bartering Electronics (and the mobile phone sector in particular) grew to become
the third pillar of growth in the 1990s. The Nokia supply cluster became
• West Germany and
a significant provider of employment before its unwinding
the Soviet Union in the last few years.
• Pulp and paper, Today
icebreaker ships
The Nokia-led IT and telecom sectors are a significant part of the Finnish
• European Union business landscape. As Finland joined the EU and the Soviet Union
• subcontracting for the ceased to exist, the Finnish export sector has successfully diversified.
mobile phone sector Our innovation and educational systems support growth companies and
entrepreneurship, but there is still further work to be done in more
optimally allocating funds and resources. Out of necessity, the IT and
telecom sectors have diversified quickly. The game industry has grown
strongly in the last few years, and expectations are high for that sector.
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27. Agile Processes and Growth Companies
Key concepts – Growth Companies in Finland
tomorrow: Tomorrow
The IT and telecom sectors are vital for Finland. The Nokia cluster has
• agility
created top talent in Finland and an ecosystem which currently does not
• global markets exist anywhere else in the world. Finland's challenge is now to utilize
• swarm intelligence these strengths in the big changes and transformations occurring in the
• design thinking IT and telecom sectors. Finland's innovation and educational systems
• free economic zones have to perform even better in supporting growth companies,
entrepreneurship, and further diversification of its technology industries.
• living labs
Executed correctly, we can utilize the existing base of competencies to
• human testbed
maintain our pioneer positioning in the IT and telecom sectors and
• creative class remain at the top of the value creation. A significant part of the work is
• cloud company transferring to virtual space – so-called cloud companies are networked
• game industry around the world, rather than structured traditionally and hierarchically.
• Nokia and Finland needs to develop entrepreneur- and asset-friendly platforms,
Angry Birds drivers, and culture – these are in a key position for tomorrow’s
strategies and decision making. Nurturing agility, creating vibrant buzz,
developing fruitful innovation ecosystems (such as a free economic zone
in Finland) and supporting structures, and efficiently allocating
governmental R&D grants and funding are key focus areas.
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28. Agile Processes and Growth Companies
The significance of small companies for the growth of
Finnish economy is remarkable:
> 500 • Almost half of Finnish employees work for small companies, and
one third of the turnover is generated in these companies.
402 • There are 320,000 companies in Finland. Over 99% of these
companies are small. The share of small companies of the whole
688 national economy has grown in the last few years.
120 < 50
< 500
238
< 250
thousand of employees
Companies Employees Turnover
< 50 99.1 % 47.5 % 34.6 %
< 250 0.7 % 16.4 % 16.4 %
< 500 0.1 % 8.3 % 9.9 %
Employees /
company
> 500 0.1 % 27.8 % 39.0 %
Source: Statistics Finland – Companies, 2009 28
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29. Agile Processes and Growth Companies
June 3, 2011
August 4, 2011
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30. Agile Processes and Growth Companies
Business Case
Angry Birds is the world’s most popular mobile game at the
moment. The game has been downloaded over 300 million
times (July 2011). In addition to game design, the marketing
and licensing of the concept to film production, toys, and
table games are testimonies of the creativity of this Finnish
success story.
Image: Rovio.com
Rovio’s Angry Birds game is a good example of a business
breakthrough through competence, creativity,
and human capital.
Although human capital is recorded as a cost in accounting,
it is a powerful engine of growth which allows companies to
create value almost from thin air.
100 million downloads
(March 2011)
300 million downloads
(July 2011)
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31. Summary
Competitiveness of Finland’s IT & Telecom industries today and tomorrow.

32. Summary
Science and technology parks Cost advantage and cost-efficiency
Business incubators and accelerators Creative culture and the creative class
Future labs Globalization
Entrepreneur-friendly environments Competent and educated employees
Asset-friendly platforms Encouraging entrepreneural culture
s
rm
Social media
Dr
tfo
ive
Pla
rs
Ecosystem
Global + Local = Glocal
Distance and mobile working
Hyperconnectivity
Distributed systems
Virtuality
Networks
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33. Summary
Summary: Competitiveness of Finland’s IT & Telecom Industries
Today and Tomorrow
The IT and telecom sectors – and technology industries in general – are important
sectors on their own; they also play a major role in increasing efficiency as the
engines of the other parts of the economy.
Finland has an opportunity to utilize its global position as an industry leader in the
mobile telecom sector. This can be the engine of growth for the entire economy.
Business realities are constantly changing – yesterday’s truths do not apply in the
present, and tomorrow’s challenges will be different from those of today.
Some of the key focus areas for decision makers will be systemic
changes in the economy and the nation’s ways of creating and
developing new businesses. New innovation ecosystems, open
innovation, and an entrepreneur-friendly culture will play
significant roles in future developments.
The Internet, as a platform, means business, but, more importantly, it also means a new way to
organize work and processes. Apart from business process reengineering, further cultural
changes in marketing, sales, and management will be key to our success.
For growth companies, structural development in creating more entrepreneur- and asset-
friendly platforms and environments is crucial. New ways of adding value, as well as dynamic
drivers and platforms, are the basis for tomorrow’s success.
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34. Recommendations
The Challenges of Globalization Posed to Finland
• Defining and developing the nation’s core competencies.
• Finland’s competitive advantage has been based on a high level of
education: this lead should be further extended by lifelong learning,
Internet-based learning, and new pedagogical models.
• The nation needs to fully utilize the opportunities provided by the
connected and networked world: crowdsourcing, social media, and
networks are some examples of these opportunities.
• Opportunity windows are short and constantly changing: the time to
market (TTM) for products and services must become shorter.
Innovations and Supporting Structures
• Even more efficient product development processes. Ideas outside the
organization need to be utilized (open innovation).
• Finland needs to focus on the strategically significant and value-
adding segments of its innovation ecosystems. Other (less significant)
parts and processes can be outsourced and crowdsourced abroad.
• Moving further from technology and business process reengineering
toward more holistic views of business models, service, content, and
design innovations.
• From bureaucracies and hierarchies to real action: even more creative,
open, lean, and agile structures are required.
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35. Recommendations
Agile Processes and Growth Companies
• Culture: From administration to action and creating real value.
Promoting entrepreneurship as a career choice and a
model of success.
• International expansion: New markets open major opportunities
(such as Asia, South America, Middle East and Africa).
• Managing and tolerating uncertainty and failures: Implementation of
strategic visions and missions (including project and venture capital).
• Further improvements in entrepreneur- and asset-friendly structures.
• Development of the venture capital market and structures: Venture
capital needs an attractive tax base (benchmarking with Estonia, the
Emirates, and many other completely tax-free or low-tax zones). Low-
bureaucracy structures and openness to foreign ownership are also
important topics.
• Business incubators, accelerators, and science and technology parks:
In addition to physical space, fully utilizing digital spaces,
and working tools.
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36. Juhani V. Parda
Authors
• Partner, Translink Corporate Finance Middle East and Africa.
• M. Sc. (Eng.), CFA III Candidate, corporate trainer, and coach.
• Has done business on 6 continents. Travelled around the world 55 times,
lived in 8 countries, and discovered approximately 100 countries.
• Previously GM of Nokia Multimedia Service Business in Latin America, Chief Negotiator, Ericsson
Telecommunications, Asia-Pacific.
• Key strengths: High growth markets in Latin America, Asia, the Middle East, and Africa.
Technology and innovation assessment and investment + market entry process.
Dr. Sam Inkinen
• Media scholar, futures researcher, writer, curator, and senior consultant.
• Author, co-author, editor and co-editor of over 30 books. Publications include Mediapolis
(1999), Understanding Innovation Dynamics (2009), and the four-volume large
The Integrated Media Machine (1999–2005).
• Over 100 countries discovered on six continents.
• Key strengths: Media technologies, digital culture, creative processes, open innovation,
arts and design, experience economy, foresight, and network society.
Teemu Arina
• Technology entrepreneur, speaker, writer, author, and consultant (digital strategies).
• Keynote presentations at recognized conferences, business summits, and universities in Germany,
the U.S., the UK, Belgium, the Netherlands, Finland, and Italy.
• CEO of Dicole and Meetin.gs technology startup.
• Key strengths: Social media, open innovation, net generation, knowledge management, service
design, digital ecosystems, collaborative learning, and e-learning.
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37. About the Authors
Megasignals is a joint book and media project initiated by three
internationally known writers, consultants, and researchers:
Mr. Teemu Arina , Dr. Sam Inkinen, and Mr. Juhani V. Parda.
The authors live a nomadic lifestyle exploring markets, cultures and
societies, writing articles and books, giving presentations at major
conferences, and providing advice to leading organizations on all
continents. They have a background in the high-tech, media and telecom
industries, and the academic context.
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