Abstract

"Co-creation and Co-destruction in the Global Telecommunications Industry: Nokia and Its Suppliers"

Niklas Jensen-Eriksen, University of Helsinki (niklas.jensen-eriksen@helsinki.fi), Anitra Komulainen, AK-Historia Oy (anitra.komulainen@helsinki.fi)

The rise and fall of Nokia as the leading global mobile phone company has attracted a lot of scholarly and journalistic attention. In contrast, there is only a limited amount of research on the impact of the fall of the Finnish mobile phone giant on the industrial cluster that supplied it with components and even manufactured many of the Nokia phones. This cluster emerged in the 1990s, and early 2000s, but by the early 2010s most of it had disappeared.

When the cluster was prospering, many insiders and outsiders argued that it showed how Nokia, its suppliers, universities, research institutes and countries like Mexico and Estonia, where the Finnish companies set up factories, could operate, evolve and grow together and co-create new products. Yet, behind the scenes tension was growing. Many of Nokia’s suppliers claimed that it was treating its Finnish business partners harshly, favouring their main foreign rival, Taiwanese Foxconn and helping Asian equipment suppliers to overcome European ones.

In this paper, we study why some Finnish companies disappeared while others survived. We revisit old debates about interfirm relations in industrial clusters as well as the impact of globalization on companies and communities where they operate. We focus, in particular, on the two largest Finnish component suppliers, Elcoteq, which grew to become the largest Electronics Manufacturing Services (EMS) company in Europe, but went bankrupt in 2011, and Scanfil, which survived and successfully adapted to changing circumstances. Nokia itself had to exit from mobile phone business in 2013, while Foxconn, known for both effectiveness of business operations and harsh labour policies and suicides in its Chinese factories, became the dominant player in global EMS sector. Our paper is based on interviews, printed sources, archival sources and earlier scholarship.