As the tech world heads to Helsinki for Slush, it’s also worth looking even further up North, not far from the arctic circle, where Finland’s second busiest tech town, Oulu, is making a comeback from the Nokia-led redundancies that nearly crippled the city’s booming IT and tech industry.
A city of 200,000 residents has lost thousands of jobs in the years following Nokia’s decline, but instead of Oulu turning into a zombie land of unemployed engineers, new industries have emerged to reap the fruits of Nokia’s downfall. Today the city’s IT sector employs over 7000 people, a figure similar to the region’s pre-layoffs heyday, according to Juha Ala-Mursula from BusinessOulu. The tech industry at large employs 13,000 workers.
From one, many
Unlike most of Finland with meagre economic growth, the Oulu region is once again blossoming with the most dramatic population growth in the Nordics together with a talented pool of engineers incubated by Nokia and Microsoft, spread across Oulu and the region, building new companies and attracting global players.
“Since the layoffs few multinational companies have entered Oulu as some were able to recruit even whole teams of experienced people instead of single engineers. As a result, the structural risk of having only one or two spearhead companies driving activities has decreased,” said Sakari Sipola, assistant professor at University of Oulu, whose research focuses on understanding the process of building and financing technology-based startups for high growth.
Oulu’s IT and tech scene is driven by IoT, 5G and FinTech with multinational companies smelling the opportunity. Two years ago Norwegian Nordic Semiconductor ASA opened its own research facility in Oulu and earlier this month Israel-based Altair Semiconductor announced that it will set up an R&D site in Oulu to develop core LTE IoT technology and only
The city is also home to fast-growing startups such as KNL Networks, an alternative to satellite communications in the “Internet Anywhere” space, announced in October a Series A round of $10 million and Bittium, the maker of Tough Mobile smartphone tailored for governments and actors with safety concerns.
Other interesting companies to look at are Oura, a wellness ring and app for better sleep and performance, Valossa, an AI-powered video search technology, IndoorAtlas, a geomagnetic indoor positioning technology and TactoTek, a maker of 3D injection moulded structural electronics (IMSE) solutions, which recently announced their expansion to Detroit.
FinTech is also emerging in Oulu with several banks heading north. “FinTech has a strong presence, banks like OP and Nordea have R&D here and also startups like MistralMobile are active in this field,” said Sipola.
Foreign investment + local R&D
With an active startup life, the city is competing for the attention of global tech elites with an annual Polar Bear Pitching competition. I had the pleasure of attending last year’s event, which attracted global attention and the presence of top diplomats from the US and Canada.
Having spent a few intense days in Oulu I got a glimpse of the local tech scene. Helsinki is similar to continental startup hubs with all the glitz and glory while Oulu is more reserved, but gives the impression of deeply embedded knowhow.
The presence of companies like Altair indicates that Oulu is on its way to becoming an R&D destination. It’s unlikely the city will ever become a hub for apps and gimmicky novelty tech for millennials.
Although situated in a remote corner of the world, the strong and stable IT and tech industry in Oulu might attract a flurry of global multinationals competing for the next best thing in mobile innovation, IoT and wireless tech. Foreign money coupled with local knowhow can be the ideal combination for Oulu’s future growth plans.
“I don’t have a crystal ball, but I would like to see our startups attract more foreign investment to enable further growth and either IPOs or M&A deals in which the local startup would become a significant R&D site of the company making the acquisition. This would enable the creation of serial entrepreneurs with new startups and a stronger angel and venture capital market,” Sipola said.