Diversifying Finland

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"Diversifying Finland"

Annie Lowrey’s article on Angry Birds ends with an interesting factoid about Nokia’s decreasing centrality to the Finnish economy:

Tram Time

There is one place, though, where the love for Angry Birds is slightly more complicated: Finland itself. The country boasts a highly educated populous, generous government support for innovation, and a big tech sector. But for years, a single company dominated the field. Mobile giant Nokia once made up some 3.5 percent of Finnish GDP—in the United States, that would mean as much as McDonald’s, Wal-Mart, and Citigroup combined. It now makes up just 1.6 percent. And Angry Birds found fame on the iPhone, one of the competitors responsible for sapping Nokia’s market share. Nevertheless, Finns—big consumers of the game, to be sure—are hoping Rovio’s success creates a boomlet in startups. And Rovio itself is thinking sky-high.

Good for Finland.

To think a bit about a broader question, our “Econ 101″ textbooks seem to implicitly assume that we’re dealing with an economy full of Nokias. Full of device manufacturers, that is, where production cost curves slope upward at some point. But for firms like Rovio, that’s not the case. And in general, developed economies are shifting in the direction of less Nokia and more Rovio. But I’m far from certain we’ve thought the implications of this through properly.

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