The Mobile Telephone Cluster in the Nordic Countries: Policies to Foster Innovation and Success through Provider Competition and Knowledge Alliance Development

John L. Rice
PhD Student
School of Management
Queensland University of Technology
GPO Box 2434
Brisbane Queensland 4001
Australia
Ph: + 61 7 3864 1345
Fax: + 61 7 3864 1766


Dr Mark A. Shadur
Research Fellow
School of Management
Queensland University of Technology
GPO Box 2434
Brisbane Queensland 4001
Australia
Ph: + 61 7 3864 2053
Fax: + 61 7 3864 1766

Abstract
The Nordic countries, and most especially Finland and Sweden, have been very successful in the development of international leadership in both mobile telephone penetration and mobile terminal and infrastructure manufacturing. Nokia and Ericsson are often discussed as world leaders in product design and innovation for both terminal and network infrastructure. Their success is the product of many years' government focus in developing the mobile telecommunications industry as a whole, with a key policy aim of having a innovative manufacturing sector anchored within an advanced and demanding regional mobile telecommunications market.
We examine here the policy and market environment in these countries that has supported the development of this highly vertically integrated and successful industry. Some attention has been given to the development of science parks, support of collaborative research that has supported both research and development and the development of a skilled labor market to assist firms' growth. Less attention has been given to the success of government policies that have promoted the firms' core technological competencies in supranational fora (most notably the promotion of firm competencies in the GSM standard) and the positive impact of the deregulated competitive telecommunications market, especially in Finland.
The Nordic industry is also quite vertically integrated in that a number of Small and Medium Enterprises contribute to its success. Two of these are examined in this paper.
We draw conclusions from the policy environment of Finland and Sweden and develop recommendations for governments seeking to develop innovative and integrated national telecommunications industries. Further recommendations are drawn from successful firms in the Nordic countries regarding the need for management to be responsive to a range of policy and market factors in their home markets should they wish to develop leading hardware and information services.
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