Ask an investor what they know about Finland and their response will no longer contain lexicons such as Nokia, snow and sauna, with their thoughts instead drawn towards innovative companies such as Rovio and Supercell.
For decades, Finland was synonymous with Nokia in the business world, and the mobile phone company represented a shift in the mindset of Finns when it came to competing on a global scale. However, while Nokia has now been purchased by the Microsoft brand, a new wave of boundary-pushing entrepreneurs is emerging in Helsinki and they want to base their global operations in the Finnish capital.
There is a groundswell of change occurring and everyone wants to be involved. Indeed, between 2008 and 2011 there were 758 growth companies employing 87 000 people and generating more than eight billion euros of revenue. Finland, therefore, switched its attention away from growth companies towards start-ups, in order to ensure the future of business in the country – as a result, there are now more than 300 start-up tech companies based in Helsinki.
Helping companies to succeed in Finland
It is not just Finns who are benefitting from this start-up revolution, as their companies are attracting investment from around the world. Supercell, one of Finland’s latest start-up successes, has just sold 51% of its company to Japanese firm Softbank and GungHo for €1.1 billion, while the Finnish Venture Capital Association’s latest report concludes that, “Foreign private equity investments in Finnish companies totalled 286 million euros by the third quarter. In the whole year 2012 foreign private equity investments worth 224 million euros were made in Finnish companies.”
To aid international investment, a number of bodies and companies have been established. Their aim is to draw both investment and entrepreneurs to Helsinki and then help them assimilate and succeed in Finland. One such body is Helsinki Business Hub, which has set up the International VC Zone. This service is designed for top-tier venture capital organisations which are interested in providing risk capital to the best companies in the Baltic Sea region. Furthermore, all the services offered are completely free of charge and provided by a partnership between public and private players who are dedicated to entrepreneurship.
Europe’s hottest startup hub
Good News Finland and Arctic Startup are both online services which follow the actions of start-up companies in Finland, as well as highlighting the positive side of Finnish business. Greg Anderson is the Editor-in-Chief of Arctic Startup and he says of the entrepreneurial revolution: “The start-up scene in Finland has been both rapidly growing and maturing since I started covering it. Everyone knows our big gaming companies, like Rovio and Supercell, but this year at Slush I think we’re going to see the next generation of start-ups make some big announcements.”
Such is the growing popularity of Helsinki as an entrepreneurial hub, the international media are now taking notice – as evidenced by a recent article in the New York Times which featured Finnish business owner Esa Niiranen. In the article, Micah Gland, Helsinki Business Hub’s Chief Executive, is quoted as saying that before Nokia, “Finns tended to look negatively at people setting up on their own and often thought, ‘Why can’t this person get a permanent position somewhere?’ But young people look at the example of Rovio Entertainment and find themselves inspired.”
Finland has come a long way in a short period of time, but its desire to support and invest in innovation and entrepreneurs alike has ensured that this Nordic country has a substantial contribution to make to global business in the 21st century. The IBM Plant Location International currently rates Finland as the 12th most attractive European country in which to invest, but the aim is to be within the top five by the end of the decade. Judging by the success achieved in recent years, few would bet against the people involved reaching that goal.
Text: Craig Houston