WTF: Welcome to Finland, love angry bird
After the ‘Nokia Effect’, the city of Helsinki has had to reinvent itself. Has its entrepreneurial verve and notable global success in gaming been able to shake off the ghosts of the past?
By Kajal Sanghrajka, @kajalnyclon
Helsinki is home to 11% of Finland’s 5.8 million inhabitants amongst them, the real Santa Claus and Angry Birds. In Winter, mean temperatures fall well below zero which might explain the staggering estimate of its 3 million saunas. One in particular, the StartUp Sauna at Aalto university is home to a unique entrepreneurial ecosystem built from the ground up.
“The Nordics represent 4% of Europe’s population but 25% of start up unicorns, there is something special going on” Kasper Suomalainen, CMO at StartUp Sauna
Deep humility and honesty are staples of Finnish culture — such statements are not hyperbole. What then is the contribution of Helsinki to the ‘something special’?
In 2009, a few students at Aalto University were told to become investment bankers and forget entrepreneurship. A rebellious ‘why’ led to an inspired trip to the US. What followed was the creation of four highly collaborative, student run organisations — all guided by some of Finland’s most successful entrepreneurs including the founder of Rovio of Angry Birds fame.
Through this network every student gains hand-ons exposure to entrepreneurship. “As student volunteers we also develop a massive global network” commented Slush COO Teemu Laurikainen. Slush, an annual Winter start up event, grew from 300 people to 17,500 global attendees. Quite the hockey stick that put Helsinki firmly on the entrepreneurial map.
Voitto Kangas a graduate of Slush volunteers is a good example of Helsinki’s rising entrepreneurial class. He now leads Maria 01, a community for startups at the site of an old hospital donated by the Government. He has ambitions to revitalise the whole zone to foster entrepreneurship “I come from the new economy, it’s no use exporting anything older than a horse”.
The ‘new economy’ relies heavily on capital and talent. Or “dry powder” as Voitto put it. Capital, at least at the early stage, seems less of a constraint than it was a few years ago. Finnish angel investments doubled to €53mn between 2012 to 2016. Marja-Liisa, CEO of Helsinki Business Hub which helps to attract foreign investors to Finland also highlighted the key role of Tekas, a public agency which funds innovative start ups.
Talent though, is a harder constraint to solve. Finland has the double whammy of the third highest age-dependency ratio in Europe at 35.5 and a declining working age population.
Immigration and integration are critical for simply sustaining economic growth. It is estimated that Finland needs 34,000 new workers per year.
Without this many of its promising start ups will struggle to scale. “We want to make the innovation system more inclusive. We have to enhance the employability of migrants to serve the economy” said Laura Lindeman at the Ministry of Economic Affairs.
Talent Boost is one key initiative from the Ministry which aims to deliver on this — to make Finland more attractive to international talent and better utilise the expertise and network of that talent. Indeed, many of the Finnish economic development initiatives I looked at made strategic sense.
But as Drucker once said of organisations “culture eats strategy for breakfast”. On one hand, the culture of collaboration and equality are significant assets. But on the other, cultural receptivity of domestic businesses to hire international talent remains a barrier.
While the pioneers of the new economy are genetically global, Finland’s large pool of SME’s are trying to adapt. “We want to highlight what international talent can offer Finnish business and remove fears” said Shania Shin at the Helsinki Chamber of Commerce. She is helping to pioneer a new programme Chamber of Multicultural Enterprises which through employer services, mentoring and networking improves readiness of Finland’s business for an international workforce.
Nokia was a good example of a truly global workforce. In 2006, it contributed 1.6% to Finland’s GDP and 16% of its exports. Its decline left deep economic scars. But ex-talent from Nokia is also helping to fuel new ventures “We had a bridge programme to support ex-employees, many became entrepreneurs” said Xavier Jolas previously at Nokia and now leading innovation at JC Decaux.
Asian investment is quickly descending on Helsinki especially after Tencent’s move to buy a majority stake in Supercell. One of Finland’s greatest success stories, Supercell is a $10 billion gaming company founded in Helsinki and famed for some of Apple’s highest grossing games such as Clash of Clans. Mirrored in Berlin via Rocket Internet, Supercell’s home-grown success has had an outsized impact on Helsinki’s entrepreneurial growth.
Despite a number of successes, the Finns frequently spoke of their ‘modesty to a fault’ and their lack of ability in marketing themselves. But I reminded them that an international entrepreneur’s decision to locate and grow in a location is much more than a set of economic criteria; environmental and emotional elements are just as critical.
Given the trajectory of many economies today; Finnish equality, clean air and high quality education will only command higher and higher premiums.
And as for the long Winters? As one entrepreneur put it “there is no bad weather, only bad clothing”.
As a first time visitor to Finland and no previous Monty Python pony trekking prejudices, every single interaction was generous and positive. Helsinki’s unique collaborative culture is its not-so-secret growth sauce. I will be one of the badasses returning in November and unapologetically bullish on its still vast entrepreneurial potential.
Acknowledgements
I’d like to thank the following people for their time and insights during the Churchill Research Fellowship trip to Helsinki:
Marja-Liisa at Helsinki Business Hub, Kasper at StartUp Sauna, Sarianne at HEI Network, Shania and Markku at Helsinki Region Chamber of Commerce, Laura at Ministry of Economic Affairs and Employment Helsinki, Teemu at Slush, Voitto at Maria.io, Xavier at JC Decaux, Ernests at Dripit.io, Patrick at Nosto, Christa at the Finnish-British Chamber of Commerce, Matt at Matt Linden Photography and Jouni Kari.
Sources and Recommended Reading
- Finland no longer the sick man of Europe as Economy Grows / FT
- From Immigrant to Entrepreneur / Confederation of Finnish Industries
- How a small town in Finalnd is revolutionizing the way we learn / LinkedIn
- Tencent Eyes Angry Birds Rovio to strengthen its mobile gaming dominance / Business Insider
- The next Chapter: Our Partnership with Tencent / Supercell
- Magic Leap Heads to Finland’s Silicon Valley / Geektime
- European Age Dependency Ratios / Eurostat
About the Transatlantic Post
Written and edited by Kajal Sanghrajka, founder of Growth Hub and a 2017–18 Churchill Fellow, the Post provides an insider look at entrepreneurial ecosystems in cities across Europe/North America.
We interview pioneers at the frontlines of each city’s entrepreneurial ecosystem with an emphasis on how cities attract and integrate global immigrant entrepreneurs. We report from a different city each month in 2017. You receive findings via a special email letter at the end of each month.
