With the rise of Nokia’s mobile phone industry Finland’s economy became increasingly reliant on the success of a single company. At its peak the telecom equipment sector built up around Nokia accounted for 20 % of Finnish goods exports.
Within a few years, exports of telecom equipment collapsed to practically zero. Simultaneously the global economy experienced its deepest recession after World War II, followed by the downturn in the economy of Finland’s largest trading partner, Russia.
Considering the shocks that the Finnish economy has suffered the consequences have been relatively mild. The living standard of the average Finn has suffered fairly little and unemployment remains on single digit levels. This reflects the prudent policies conducted before the crisis that Finland needs to build upon in order to achieve a sustainable recovery.
In Managing the Nokia Shock economist Roger Wessman looks at the Finnish experiences and tackles the unavoidable question: Where is Finnish growth going to come from in the future?