Michael E. Porter, Orjan Solvell
Harvard Business School (702427-PDF-ENG)
January 25, 2002
Finland has developed as a country between the west (the Nordic region and Europe) and the east (especially its neighbor Russia) with a particular language and culture. In the 1980s, a process of transition began from an economy driven by investment to one driven by innovation. With the collapse of the Soviet Union around 1990, Finland went into crisis. This case is about the policy changes made in the 1990s and how the country managed to become one of the most competitive in the world in 2002. Much of the success has been attributed to the dynamic telecommunications cluster, notably Nokia, which represents about 70 to 80% of the cluster’s exports and is the world leader in cell phones. Nokia also went into crisis around 1990.
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