In recent years, one of the hottest topics in the global tech sector is how the decline of Nokia has actually saved the Finnish economy.
Once bestriding the global mobile-phone market like the Colossus, Nokia had a 39 percent share of the market until 2008, accounting for 4 percent of Finland’s gross domestic product and 25 percent of its exports at that time.
However, Nokia’s market share plummeted significantly with the rise of smartphones from Apple Inc. and Samsung Electronics Ltd.
In the face of a continued plunge in sales, Nokia had no choice but to sell its entire handset division to Microsoft Corp. last year.
Finland did undergo a brief economic downturn following the fall of Nokia.
However, as a lot of the tech talent formerly employed by Nokia either re-entered the job market or started their own IT businesses afterward, they injected new energy into the Finnish tech sector and revitalized the country’s economy.
Today, Finland is once again a global hub of tech startups.
Some of the household names include Rovio Entertainment Ltd. — the company that created Angry Birds, a smartphone game that has taken the world by storm — and Supercell — the creator of Clash of Clans, which has turned out to be yet another mega hit for smartphone game players around the world.
What we can learn from the Finnish experience is that the nurturing of talent is instrumental in the development of new technologies, and giant private corporations often play an irreplaceable role in cultivating talent.
Having drawn some insight from the story of Nokia, I have a few suggestions for the newly established Innovation and Technology Bureau (ITB) about how to boost the development of new technologies in Hong Kong:
1. Given the value and importance of high-tech talent, it is crucial that the ITB seek to build partnerships with the leading tech companies in the world and provide incentives for them to set up business divisions in Hong Kong, so that they can help nurture tech talent and facilitate the growth of local startups.
2. Promoting the development of new technologies requires long-term financial commitment, and therefore just setting up a venture capital fund to finance startups in their early stages is not enough.
The government must provide full-scale and continued support for the tech sector as a whole. In fact, to a very large extent, the smartphone game industry in Finland owes its rapid growth to the whole-hearted support of the Finnish government.
3. The ITB must also play a key role in coordinating different sectors to promote the development of the tech industry in Hong Kong, such as by working closely with universities to build startup incubators and encouraging big local businesses to invest more in new technologies.
This article appeared in the Hong Kong Economic Journal on Dec. 10.
Translation by Alan Lee
[Chinese version 中文版]
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