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Finland Imagines Life Without Nokia

As the mobile-phone giant shrinks, its grip on the economy weakens
Finland Imagines Life Without Nokia
Photograph by Simon Dawson/Bloomberg

When your country is closely aligned with a single company, there can be wonderful highs. In 2000, Nokia was the world’s dominant cell-phone manufacturer. When paradise ends, though, the consequences are brutal. Nokia’s 94 percent share-price plunge from its 2000 peak has left thousands of engineers looking for work now that Nokia is curtailing local development and moving production to Asia. Nokia’s share of gross domestic product probably shrank to 0.8 percent in 2011 from as high as 4 percent in 2000, according to Jyrki Ali-Yrkkö, an economist at Helsinki-based researcher ETLA. By the end of this year, Nokia’s Finnish staff will have fallen 40 percent in six years, according to the Economy Ministry.

Nokia’s smartphone business is being eaten up by Apple’s iPhone and the Android handset makers. Its affordable phones for emerging markets are being undercut on price by Chinese rivals. Finns have shown their faith by buying Nokia shares. Finland’s households now hold about 10 percent of Nokia stock, up from 5.4 percent two years earlier.