Oulu, Finland, the 400-year-old Seaside City, Transforms Itself into Hi-tech Growth Cluster

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Nordic survival story of a city coping with pressures of globalization. Oulu is a model city for globalization and structural change. The 400-year-old small town of Northern Finland has doubled its population in a couple of decades and has become prosperous and created itself a new future by transforming into a cradle of hi-tech.

Nordic survival story of a city coping with pressures of globalization. Oulu is a model city for globalization and structural change. The 400-year-old small town of Northern Finland has doubled its population in a couple of decades and has become prosperous and created itself a new future by transforming into a cradle of hi-tech.

"In stead of withering away we decided to turn our focus toward mobile phone technology and start luring top companies, experts, and a top university into our city. Right now we are a major laboratory for the development of tomorrow’s wireless technology. Young, talented experts still flow into our city," Kari Nenonen, the city mayor of Oulu, says.

Oulu is in relative terms Finland’s fastest growing city due to its focus on ICT business.

"Oulu makes a good example for the whole of Europe, in a sense that one should and must develop a few closely picked areas, which can eventually turn into engines of economic growth and employment. The European Union needs to create a centralized European model of expertise, which has already been agreed upon as part of the Lisbon agreement. I challenge European political leaders and city mayors into this discussion. Europe has no reason to lift its hands up within the pressures of globalization," Kari Nenonen stated, referring to his experience with Oulu.

Finland’s city of Oulu was founded in 1605 by King of Sweden Karl IX. For hundreds of years Oulu was a petit bourgeois seaside town, but from the start of the 20th century – after the fall of the sailing ship and tar era – it regressed into a remote town, where economic growth came to a standstill and the state’s coffers were impoverished. The changes in the global economy took a tough toll on Oulu.

The turning point in Oulu’s history came after the town fought itself a university during the 1950s. A true step forward came after the university decided to concentrate its resources on electronic and computer technology sciences, because already then many technology companies were starting to set up R&D operations in the region in a search for a talented workforce. The biggest and most significant player was Nokia Corp, which chose Oulu as a strategically important center for its mobile phone technology’s R&D operations.

More than 200,000 people live within the city of Oulu and its neighboring municipalities. The number of inhabitants has grown by 4,000 to 5,000 people annually. "Without such boom, there could be only some 50,000 of us," Nenonen estimates. Without the city’s focus on high technology, Oulu could be one of those losing towns – those that have been hit by the challenges of structural change and those that can be found throughout Europe.

Globalization is taking an especially hard hit on Europe’s welfare states, a group that also includes Finland due to its high living standard and strong economic growth. Industrial handiwork is transferring to countries of cheap labor.

"We in Oulu are fighting against the negative impacts of globalization with our own tools. We are creating preconditions that make it possible for companies of the new economy and new technology to operate successfully. We seek to keep operational costs low. We have supported the set up of a local technology center by offering reasonably priced land to build on. We support commercialization of innovations by sponsoring company development firms and a company that specializes in boosting the commercialization of innovations. We do not, however, give out plain cash to companies," Nenonen said.

"Our keyword is expertise. We aim at developing our city so that it offers an operational environment, workforce, a pleasant atmosphere, and the needed infrastructure for experts. Knowledge is based on a broad-based top-quality university- and occupational-level education. Our city is the home of some 30,000 higher-level education students," Nenonen emphasized.

Because Oulu is the biggest center of northern Finland, there is naturally some structural long-term unemployment in the region. However, the amount is a mere 2.5 pct of the total workforce, and unemployment is continuously declining. Although the amount of labor-intensive industry is declining as opportunities transfer to Asia as well as Russia, the construction and service sectors are creating new workplaces, as the number of technology and health promoting wellness technology businesses climbs. Already now there are some 600 ICT-sector businesses and 70 wellness technology companies in the Oulu region. Meanwhile, one ICT sector workplace helps to create an additional 3-4 other employment opportunities. The ICT and wellness technology sector employs a combined 20,000 people approximately in the Oulu region. The figure includes jobs created through outsourcing operations, but is even higher when taking into count those jobs created indirectly.

Wireless technology – Oulu’s newest investment

The City of Oulu has decided to invest in its future for the celebration of its 400-year anniversary. The city will offer nearly all of its inhabitants a free wlan-network, which will help to serve both commercial purposes as well as help the city in providing a medium with which to communicate with its residents. The city’s investment is globally unique, and the building of wireless wlan-networks has already begun.

"I believe that investing in such wireless information society is important for the future development of the city. It helps create new companies, workplaces and to boost the creation of commercially-driven content in our city. Thousands of information technology experts and those humanists providing content will be offered new work opportunities as Oulu puts effort into developing the next generations’ information society. This again creates more work and additional tax revenue from the service sector. It also helps the city’s own information provision to its residents. Already now many reserve books from the library by sending an SMS via their mobile phones," Nenonen says.

Oulu is opening up its gates for foreign companies and investments. It is not worth coming to Oulu in the search for cheap assembly labor, but in stead for the search of top expertise and the thousands of educated workers, "brains" that reside in our city. We are happy to offer such to others also, and I am confident that we are competitive in terms of the amount and quality of our workforce, good flight connections, business locations and other general costs,” says Nenonen.

Our newest focal point is wellness technology that combines medicine and information technology sciences. "In that field we have already achieved a lot. Many globally well-recognized companies such as Polar -- known for its heart-rate monitoring devices -- are based in the Oulu region. Many smaller companies have also taken steps to the international markets from the city. Our university and research facilities collaborate closely with companies’ product development and there are several success stories waiting to be made public in yet unopened drawers," he adds.



For further information:

Mr. Kari Nenonen, The Mayor of Oulu, Finland

tel. + 358 8 55841110 (office)

mob: +358 44 7031110

Mrs. Sirkka Keränen

City of Oulu

Head of communications

tel: +358 8 55841140 (office)

mob: +358 44 7031140



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Paavo Vasala