Wednesday, October 5, 2011

After Nokia, the Next Silicon Valley?

Nokia did not become the largest telephone manufacturer in the world by doing what it is doing now. As the company’s management sets it on a course of slow-motion self-destruction, some observers believe this could make Finland the next Silicon Valley.

The latest cost-cutting measures announced last week at Nokia involve closing a major factory in Romania and locations in two other countries, with only 300 job cuts in Finland. Yet there have already been major job cuts in Finland and more are seen as inevitable as the company commits its dwindling resources to the ultra-low-margin business of making Microsoft handsets.

Where will thousands of high-skill Nokia workers go after their Nokia jobs evaporate? It is fair to guess that most of them will remain in southern Finland and will try to keep working in electronic devices. Already former Nokia engineers have created some interesting start-up businesses, and this is a trend that could snowball if it is encouraged by a few early successes, successes that could easily come around the same time as the bulk of Nokia’s work force is sent packing.