Carl-Gustav Lindén Carl-Gustav Lindén ingdom of Nokia tells a fascinating story of corporatism in Finland. How did the mobile phone giant Nokia make the Finnish elite Kwilling to serve the interests of the company? Nokia became a global player in mobile communications in the 1990s, Kingdom and helped establish Anglo-Saxon capitalism in Finland. Through its success and strong lobbying, the company managed to capture the attention of Finnish politicians, civil servants, and journalists nationwide. With concrete detailed examples, Kingdom of Nokia illustrates how Nokia organised lavishing trips to journalists and paid direct campaign funding of Nokia to politicians to establish its role at the core of Finnish decision-making. As a result, the company influenced important political decisions such as joining the European Union and adopting the euro, and further, Nokia even How a Nation drafted its own law to serve its special interests. All this in a country Nokia Kingdom of considered one of the least corrupt in the world. Served the Needs of One Company Carl-Gustav Lindén is an Associate Professor of Data Journalism at the University of Bergen and Associate Professor (Docent) at the University of Helsinki. Lindén’s background is in journalism, and he was a business journalist working for newspapers, magazines, and television until 2012, when he turned to academia. Carl-Gustav Lindén Kingdom of Nokia How a Nation Served the Needs of One Company Published by Helsinki University Press www.hup.fi Text © Carl-Gustav Lindén 2021 Translation © Patrick Humphreys 2021 First published in 2021 Cover design by Ville Karppanen Cover photo by Martti Kainulainen, Lehtikuva Print and digital versions typeset by Siliconchips Services Ltd. ISBN (Paperback): 978-952-369-030-1 ISBN (PDF): 978-952-369-031-8 ISBN (EPUB): 978-952-369-032-5 ISBN (Mobi): 978-952-369-033-2 DOI: https://doi.org/10.33134/HUP-8 This work is licensed under the Creative Commons Attribution Non- Commercial 4.0 International License (unless stated otherwise within the content of the work). To view a copy of this license, visit https:// creativecommons.org/licenses/by-nc/4.0/ or send a letter to Creative Commons, 444 Castro Street, Suite 900, Mountain View, California, 94041, USA. This license allows sharing and copying any part of the work, providing author attribution is clearly stated. Under this license, the user of the material must indicate if they have modified the material and retain an indication of previous modifications. This license prohibits commercial use of the material. The full text of this book has been peer reviewed to ensure high academic standards. For full review policies, see http://www.hup.fi/ Suggested citation: Lindén, C.-G. (2021). Kingdom of Nokia: How a nation served the needs of one company. Helsinki University Press. DOI: https://doi.org/10.33134/HUP-8. To read the free, open access version of this book online, visit https://doi.org/10.33134 /HUP-8 or scan this QR code with your mobile device: Contents Acknowledgements v Preface ix Chapter 1: Introduction 1 Chapter 2: A Nation Ensnared 29 Chapter 3: To the Open Market 55 Chapter 4: Troubled Media Relations 67 Chapter 5: Who Dared Defy Ollila? 79 Chapter 6: Politics and Lobbying 95 Chapter 7: Raining Riches 103 Chapter 8: Nokialand Is Born 111 Chapter 9: Subcontractors in Crisis 121 Chapter 10: The Fall of Elcoteq 135 Chapter 11: Factory Exodus to China 143 Chapter 12: Shattered Dreams: India 153 Chapter 13: The Tale of Two Cities 161 Chapter 14: The Decisive Year 167 Chapter 15: Symbian Crashes 177 Chapter 16: Debacle in the United States 189 Chapter 17: Surrender to Microsoft 199 Chapter 18: Another Future 209 Notes 221 Appendix A: List of Interviewees 223 References 229 Index 251 Acknowledgements This book is the result of a long personal process starting back in the 1980s, when I was a young business reporter trying to under- stand global business through the prism of Nokia. The profes- sional interest changed from journalistic to reflective academic thinking when I worked on my PhD, National Champions in Combat: Nokia, Ericsson and the Sensemaking of Business News (2012). This was followed up with a book in Swedish published in 2015, and a Finnish edition in 2016, which is also the foundation for this edition. There are so many people I would like to thank, above all those who shared their knowledge when interviewed for this book. I hope you will find it worth the trouble. Others helped me by reading and commenting on different versions of the manuscript. Over the years, I have also enjoyed discussing this topic with many people more knowledgeable than me and the book has benefited immensely from their input. In many senses, this book is the result of a collective process and would certainly have been less insightful and interesting without the input of close to 200 people. vi Kingdom of Nokia The downside of writing non-fiction books is that facts can be checked and any errors are certainly my sole responsibility. PhD student Andreas Eklund spent many hours transcribing interviews, while Professor Susanna Fellman introduced me to the dynamics of Nordic capitalism and Patrik Westerback provided valuable help with transforming historical prices and values. The editor for the first version of this book, Jonna Brander at Schildts & Söderströms, firmly helped me turn my random reflections into a readable structure that smoothed the way for the subsequent editions. Pekka Nykänen, a journalist with a deep knowledge of Nokia, expertly translated the manuscript into Finnish. My editor at Gaudeamus, Teemu Ojanne, gave the text a rigorous treatment and proposed excellent changes. And, for the English edition, journalist Pat Humphreys translated the text with a keen sense of what would be understandable to a non-Finnish readership. It was with great joy I found out that Anna-Mari Vesterinen at Helsinki University Press would be my editor. We worked closely together in our previous jobs where she made a strong impression as a professional who seeks excellence in academic publishing. I am immensely grateful to Leena Kaakinen, Publishing Director at Helsinki University Press, Publishing Coordinator Heta Björklund and their colleagues for accepting and processing the manu- script for publication. Three anonymous reviewers gave valuable comments that helped me steer the work towards a stakeholder perspective. Unfortunately, I have still been unable to follow the advice and turn the manuscript into a series of podcasts. Finan- cially, my work was made possible by generous grants from the Association of Finnish Non-fiction Writers and the Finnish Asso- ciation of Science Editors and Journalists, as well as Stiftelsen Finlandssvensk Bokkultur. I have worked on this book in many European countries, and also in the United States and India. However, most of the text emerged during a long stay at Villa Lante al Gianicolo, the Finnish Institute in Rome. My sincere thanks go to intendant Simo Örmä for accepting me at the residence, which has become my favourite space for writing books. Standing one evening on the beautiful Acknowledgements vii terrace and letting my gaze travel across Rome, I thought of the confluence of the city’s history with the rise and fall of the Nokian Empire. Rome used the same method for gaining and maintaining power: divide and conquer. Both splintered their opponents into small groups that could be picked off, one by one. At the same time, I came up with a witty question for a general knowledge quiz: What is the difference between the Nokian and Roman empires? Answer: 480 years. Nokia divided and conquered for less than 20 years, Rome for 500. I will leave this metaphor to the study of others, but, as a hint to those interested, the bookshelves of Villa Lante groan with profound analyses of the fall of the Roman Empire. Preface This book examines an iconic tech company that transformed the world by providing a new communication tool, the mobile phone, on an affordable and massive scale. However, the company resides in a small country in Northern Europe, Finland. This monograph presents the fascinating story of how a huge global company and a Nordic country emerged in co-evolution and formed what became a brand nation that we here call ‘Kingdom of Nokia’. The title of the book comes from the idea that Nokia for around 15 years managed to capture the attention of the Finnish elite, from politi- cians and civil servants to journalists willing to serve in the best interest of the global company that put Finland on the world map. We trace the development of Nokia’s success in mobile phones back to the development of radio technology in the 1930s and Finnish military spending on radio phones in the 1960s. We can track path dependence back to the coordinated Nordic development of the Nordic Mobile Telephony (NMT) standard, the first fully automatic cellular phone system which later, through concerted lobbying efforts at the European level, turned into the European standard GSM (1G). The standard is still used today and 5G is x Kingdom of Nokia the latest addition. The Finnish government also helped with state support for R&D in relevant technologies and processes, such as advanced manufacturing of electronic devices. One important theme is Nokia’s struggle with new technology, moving from hardware to software and internet to web. The book deals with the failed attempt to introduce a new operating system for mobile phones, getting away from the impossi- bly dated Symbian to modern systems. The struggle has been attributed to the incapability of Finnish software engineers to understand modern software, but the book points at strategic and managerial shortcomings.