Microeconomics of Competitiveness:
Firms, Clusters, and Economic Development
Submission of Assignment
Student
: Mas Wigrantoro Roes Setiyadi
NPM
: 8605210299
Program
: S3 – Ilmu Manajemen – Pasca FEUI
Date of Submission : September 13, 2005
Case: Finland and Nokia
Assignment:
1. How was Finland able to move from a sleepy economy to one of the most competitive nations in the world by the end of the 1990s?
2. How was Finland able to become a world-leading nation in mobile communications? Why did this cluster emerge rather than others?
3. Why did Nokia become the world leader in mobile handsets?
4. What are the critical challenges for the Finnish government in 2001? For participants in the
Finnish mobile communications
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Using The Diamond of National Advantage theory (Porter, 1998), the strategy adopted by
Finland begun with crafting factor conditions by creating a standard (Nordic Mobile
Telephone / NMT) and adoption of global standards (GSM, CDMA, WCDMA), as a country has strong influence in making technology standard will enjoy economic and other intangible benefits (Goleniewski, 2002).
In addition, Finland applied industry cluster strategy, despite though competition in mobile communication business. There are factors that shape the cluster emerge rather than others:
a. The cluster represents inclusive approach accommodating all related players in telecommunication equipment industry, it based on value creation from direct raw material to valuable goods and services benefited by users;
b. Members of the cluster also coming from capital market as well as education and research institutions;
c. Strong personality character as factor conditions owned by Finnish such as pragmatic, honest, quiet, and serious;
d. Finnish local customers are sophisticated and demanding for products that may have string impact to global market;
e. The cluster also acts as market of production factors for input to the industry, industry benefits from this efficient domestic market; and
f.
Finish government encourage investment and sustained upgrade for
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In addition, it helps to optimise the configuration and utilisation of global factors. A country’s production is limited by its factor
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5. What are the factors of production? How can economies grow when one or more of the factors is weak?
1. How was Finland able to move from a sleepy economy to one of the most competitive nations in the world by the end of the 1990’s?
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