To: 49thMIMOMander who wrote (8642 ) 1/2/2001 9:38:27 PM From: S100 Respond to of 34857 Here is something else for the Ilmarinen Group in Finland to study. Nokia domination worries Finland By Christopher Brown-Humes Published: January 2 2001 18:20GMT | Last Updated: January 2 2001 20:09GMT The village of Sarkisalo in south-western Finland has more reason than most to be grateful to Nokia, the world's biggest maker of mobile phones and the Finland's largest company. The local tax paid last year by a single Nokia employee who happened to live in the village was enough to fund a much-needed water purification plant as well as buy land for new housing. "This shows that the wealth created by Nokia is benefiting not just its employees but whole communities," says Kari Lehtinen, Sarkisalo mayor. The question, though, is whether Finland is becoming too dependent on Nokia. The company accounts for well over 20 per cent of Finland's exports, about a third of R&D expenditure, and is predicted to have generated about a quarter of the country's economic growth of nearly 6 per cent in 2000. Moreover, nearly all of Finland's biggest taxpayers work at Nokia and the company accounts for a staggering 70 per cent of the market value of the Helsinki Stock Exchange. Given this impact, it is not surprising that Finnish economists now spend almost as much time analysing "the Nokia effect" as they do studying more traditional indicators such as interest rates and oil prices. And Nokia is important not just in itself but for its impact on a whole range of subcontractors and other Finnish IT and electronics companies. "Nokia exports as much by value today as the whole of the pulp and paper sector, Finland's traditional industry," says Tarmo Korpela, deputy director general of the Confederation of Finnish Industry and Employers. So, on the face of it, a downturn for Nokia would mean a downturn for Finland as a whole. Some recall the days when Finland became over-dependent on another source of income - trade with the Soviet Union - and the crash in the Finnish economy in the early 1990s when the USSR collapsed. But Markku Kotilainen head of forecasting at the Research Institute of the Finnish Economy (ETLA) says Nokia and the companies that depend on it, only account for 5 to 6 per cent of total GDP. "This is not excessive," he says. Moreover, Finland was frequently said to be too dependent on pulp and paper and metal engineering in the past. At least Nokia and the electronics industry have given the country a third industrial leg on which to stand. snipnews.ft.com