Pier Abetti: Creation of Innovative SME

This morning was the start of a course called "Creation of Innovative SME" by Prof. Dr. Pier Abetti from The Lally School of Management and Technology, Rensselaer Polytechnic Institute. Dr. Abetti comes to Helsinki School of Economics once a year to host this course.

He is short and amiable; half-deaf, but animated, lively, and joyful. When he talks with you he grips your arm tight - and he really learns about who you are,

After the frequent chit-chat and tories he told as we (there were about 20 students from TKK, TaiK, HSE and Hanken) introduced ourselves, he told us his life story. 87 years behind him, through the war, working with GE, saw its values quadrupled, and then got fired because a new guy who was young didn't want any old timers.

What was interesting was the suggestion, through examples in his funky overhead projector slides, that brand, brand, and brand add values to businesses. To sum up some of the things that I found interesting or useful:

How did the top ten (most valuable companies) get there? They are:
- built to last (GE, NTT, Shell)
- pioneers (Intel, Microsoft, Nokia)

But they got hit hard during the past several years. Abetti divided companies into three generations:
1st Gen: GE, IBM
2nd Gen: Microsoft, Intel
3rd Gen: Cisco, Dell, Yahoo!, Google
The new waves are the pioneer - but are they built to last?

Finland is the world most competitive country - criteria based on
- basic requirements (institutions, infrastructure)
- efficiency enhancers (higher education and training, technological readiness)
- innovation and sophistication factors (innovation, business sophistications)

But he asked a very good question: "Did Finland make Nokia, or did Nokia made Finland?"

Anyone who has been living or studying in Finland would have learned that Nokia has a very close relationship to academic institutes. I mean, let's face it: all my friends - well, a LOT of them - who have graduated work for Nokia. Half of the graduating class in my year are writing theses in partnership with or for Nokia.

But in a bigger picture, I see a very closely knitted network of academics and private sectors with the aids from the government to really push Finland as a nation of innovation. Almost every design project, business case study, market research, etc. in a Finnish University will involve a real company. It's a good opportunity to build a lot of connections with and learn a lot from the companies/industries.

In this way, the academic bodies receive sufficient funding, while the companies receive academic support and research. Regulating and ensuring balance of influences on academic activities from the private companies could be difficult. In any case, I think it's a very good way to foster innovation, and Finland can be a very good example/role model for other countries who wish to pursue economic growth through technology and innovation.

However, my experience and knowledge here contradicts many researches that show Finland as a competitive and innovative country. Since Finland is a rather small country, a lot of connections in these networks lead back to few corporations (e.g. Nokia...oops). In fact, Nokia's revenue is half of its nation's GDP. I'm tempted add that another 20% of the country comes from local companies, such as food catering services, that serve Nokia's businesses and employees, but I have no solid proof for that.

So what do we have here: a country with a large and extremely successful company that supports its economy. Where will innovation come from? A friend of mine said once that "iPhone would never come out of Finland." It's true. Nokia has been increasing its sales by looking at new market segments and lowering costs. But where are the real innovations?