Blog: Oulu 2.0 – Revisiting Arctic Silicon Valley

During my recent visit to Oulu, the Capital of Northern Scandinavia and the beginning of the Lapland region of Finland, I visited the Oulu Museum of Art which was hosting an exhibit called “The Hype in the Arctic Silicon Valley”. It was a quiet Saturday afternoon and I had the opportunity to visit the exhibit with Juha Ala-Mursula, who today was the head of BusinessOulu, but at the time of the height of the exhibit’s focus around 2010, he was one of the lead Nokia executives in Oulu that was developing the wireless technologies on display. This was his first visit to the exhibit and like a child at Christmas opening familiar presents, his eyes glistened at the sight of his long-lost friends.  “This is the Nokia 6000 Series; I recall my team working on this model and…” and he would be off in another time and place. “….and here is the Nokia E72………..” He and his teams would continue to be proud of their accomplishments that raised this city at the southern end of Lapland into a technological force that few communities could boast about in the world.

According to the exhibition, the Oulu phenomenon reached its peak at the turn of the millennium, but for nearly 40 years preceding it, the northern paper mill town was emerging into one of Finland’s most important centers of information and communications technology. The talent and expertise that was emerging from Oulu was generating an international buzz, invoking celebration around the name of Nokia and building a reputation for its educational institutions in the northern city near the Arctic Circle. Yet, with all the prominence of the Nokia name and its dominance in the mobile wireless market at the time, it began to lose to companies like Apple’s iPhone and Samsung’s Galaxy in the market for commercial wireless dominance. Blackberry in Canada would soon face the same verdict. Between 2010 and 2014, as Nokia’s consumer market dominance withered, it impacted Oulu both economically and psychologically. Oulu lost 3000 jobs over this period, but something different emerged from this experience. People had moved to Oulu over several decades and began to establish roots. The former executives from Nokia’s mobile operations began to meet in the living rooms and kitchens of their homes to plot out new strategies for their future. They were not going to be deterred and succumb to the perceived failure of the company. They were the company. Their brilliance brought the company its universal acclaim. The talent was still here and through the University of Oulu and its polytechnic partner, it was still growing it. Despite huge unemployment at that time, it would continue to survive with its people as the focus. New companies would emerge, not focused on developing the enabling technologies, but its new startups would come up with new applications that the world would need to solve the most pressing challenges of our time.

Oulu has had an illustrious career as a community that has seen many firsts: as far back as 1981, it developed the world’s first NMT network. By 1982, it boasted Europe’s largest technology park. A decade later it developed the world’s first GSM base station. Soon thereafter more accolades would be announced: the first security products for mobile phones would emerge; by 2003 Oulu would have the first free urban area WLAN Network; and by 2007 it would launch the first Mobile WiMAX Network; first pedestrian navigation phone; and first cloud-based mobile security services. As 2010 was being celebrated, Oulu would be the home of the first Linux phone and in 2012, it would boast the world’s first printed technology and world’s first indoor positioning technology. Today, Oulu has emerged as a center for 5G testing as well as its emergence as a leader in 5G healthcare solutions. These same Nokia veterans would emerge in unique businesses from R&D testing and certification service in wireless, healthcare and telecommunications. Today its focus is on the Internet of Things (IoT), artificial intelligence (AI), big data analytics and digitization. Members of the community, both former Nokia employees as well as new entrants from the University of Oulu, Oulu University of Applied Sciences (OMAK) and Oulu University Hospital are leading in new businesses such as wearables like QuietOn, unique noise cancellation earplugs; to Oura, the health and wellness ring that measures sleep quality.  Another is Smartifik, an AI engine that analyzes text that develops chatbots and Big Data intelligent search tools. IOLiving focuses on IoT from the perspectives of lifestyle, food safety, medication control and construction safety and quality control. IndoorAtlas focuses on providing thousands of software developers with scalable cloud platform solutions in which they can build affordable location-based services. In addition to home-grown ICT companies, the city has attracted major companies such as the Taiwanese integrated circuit designers MediaTek as well as Canada’s CGI and several banks which have set up R&D units in the mobile banking services sector in the city.

In the health care environment, companies such as Spektikor have emerged. It is used by the Finnish Army and in emergency rooms across Finland to monitor vital signs. Onni-Care is a platform that can monitor babies and the elderly. Peili Vision is a virtual reality solution for neurological rehabilitation. And Cerenion measures brain functions. These are just a small sample of hundreds of new and exciting companies that have developed in the city of Oulu.

Oulu has over 50 years of experience in creating wireless technologies and now continues to research and develop products and services in 5G. In fact, the world’s first 5G connection was made at Nokia’s Rusko Campus in Oulu in 2016. Oulu University was first established in 1958, focusing on transistors, which paved the way for microprocessors, and thus has emerged as a leader in wireless technologies. Not surprising then, is the fact that its ICT technologies, developed in Oulu, are used daily by over 2.6 Billion people in the world.

New companies developed in the space left behind by Nokia’s mobile services business disappearance in Oulu. Today, the community is ever-stronger for it. Nokia is still active in Oulu with its network solutions, but it is no longer the dominant player in this sector. With over 540 Health and Life Sciences companies now in Oulu, it is much more diversified. 240 of these companies are hi-tech health-related companies, employing some 4800 people in Oulu. It is also a key player in the ICT world with around 420 companies and 13,000 employees. The great challenges ahead for the world’s civilization will demand the types of products and services that Oulu and its 250,000 population are offering. At 40,000 students strong, 25,000 of them under one roof, literally and physically, the city of talent now no longer is reminiscing of the days of its mobile-phone past but is dreaming of its solutions of the future, today.  One of these new areas to emerge is its aim to be recognized as a “flagship” research center for 5G and beyond to research the future of a 6G ecosystem. According to Matti Latva-aho, Academy Professor and Flagship Director, with EU funding, the University of Oulu will lead 500 researchers in this flagship initiative, plus another 500 that may come from associated partnerships with Espoo’s Aalto University and from Finland-wide VTT’s research capabilities and other partners. This is huge for the university and for Oulu. On April 15, 2015, the Guardian declared the “Oulu Miracle” dead. Well, according to PC Magazine, only two years later, it says that while Oulu may not have done too well in the 4G era, it’s placing a big bet on 5G. In its September 2017 publication: Oulu, Finland: 5G Lives Here, there is an apparent optimism and sense of rebirth that was no-where in sight just two years earlier. Read more about it in: http://uk.pcmag.com/feature/90304/how-a-small-city-in-finland-turned-into-a-5g-pioneer .

Nokia itself has evolved over its 152-year history from a company devoted to its papermill and rubber cable heritage to its focus on telecommunications in the latter part of the 20th Century, especially regarding its contributions in the development of GSM, 3G, LTE and 5G associated with the mobile telephony industry. After Microsoft purchased Nokia’s mobile phone business, Nokia’s market share deteriorated. By mid-2012 the company’s stock price fell significantly prompting cost-cutting measures which shed 10,000 employees by the end of that year. Following its market struggles, Nokia began to focus on its Nokia Solutions and Networks related business, IoT, virtual reality, digital health and its Nokia Bell Labs scientific research activities. Nokia is viewed with national pride by Finns and its former employees are among the brightest startups and emerging companies that make Oulu so successful.

My visit to Oulu was a brief opportunity to see the changes since my last visit in 2013 when I experienced the city and region for the very first time. Oulu was then one of the TOP7 Intelligent Communities in 2012 and 2013 (https://www.intelligentcommunity.org/oulu). The 5 years has witnessed a change in some physical features, but what was most striking was the change in community attitude. In 2013, with great uncertainty about the evolution of Nokia’s mobile services business, a key employer in Oulu at the time, along with high numbers of unemployment, fueled by graduates from University of Oulu and Oulu University of Applied Sciences, the prospects in Oulu could have been better. Today, as the hundreds of companies in the ICT, Health and Life Sciences sectors continue to grow and thrive in Oulu, the positive outlook for a better future are most welcome by everyone. Asked what the major difference in Oulu has been between 2013 and 2018, BusinessOulu’s Executive Director, Juha Ala-Mursula, remarks: “Back then we were focused on businesses in wireless enabling technologies. Today we are developing businesses that result in real things and services and we continue to look for new applications and opportunities.”  After declining by some 3000 jobs in the ICT sector, the region has nearly doubled in its technology related jobs, but more importantly, it is much more diversified. Someone whispers in my ears and then smiles: Oulu has once again risen like a phoenix from the ashes. BusinessOulu attracts and retains investors, jobs and talent. For more information on BusinessOulu, check out www.businessoulu.com

Blog by John G. Jung, ICF Chairman and Co-Founder

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