iPhone and iPad to blame for Finland's woes, says Prime Minister

But is it really fair to blame Apple for Finland's economic problems stemming from the demise of Nokia and troubles in its paper industry?
Written by Liam Tung, Contributing Writer

Finland's prime minister Alexander Stubb has blamed Apple's iPhone for killing its once mighty mobile industry and the iPad for problems in its paper industry.

In Stubb's view, his country's economic woes leading up to yesterday's S&P credit rating downgrade from AA+ to AAA may be traceable to Apple's two biggest revenue earners undermining Finland's two main exports — paper and mobile. He told CNBC yesterday that "we have two champions which went down" due to the products.

"A little bit paradoxically I guess one could say that the iPhone killed Nokia and the iPad killed the Finnish paper industry, but we'll make a comeback," he said.

Nokia's importance to Finland and its decline since the iPhone arrived is well documented, but lesser known in the tech world is the importance the forestry and paper industry to the country, which some see as threatened by tablets and e-readers, particularly in news print.

It's not the first time Stubb has pointed the finger at Apple with the prime minister telling a Swedish business newspaper in July that "Steve Jobs took our jobs".

While it might seem an exaggeration to blame Apple for Finland's current economic woes — or even Nokia's demise — it's also difficult not to see a link between Apple's 2007 release of the iPhone and Finland's economy in light of Nokia's outsized contribution to the Finnish economy in the decade prior to that year.

As The Economist noted in 2012, during that decade Nokia contributed about a fifth of all Finnish exports, 23 percent of the nation's corporate tax and made up 30 percent of its R&D expenditure. Even as Nokia's Symbian ship was burning, its revenues as a percentage of Finland's GDP in 2011 was still 20 percent. 

Also, without Apple, Android is unlikely to have been the hit it has been for Samsung, which arguably has had a bigger impact on Nokia's lower-priced mobile device sales than Apple's high-end devices. 

The question of Apple's direct impact on the Finnish economy has been kicked around by the nation's business elite for some time. Indeed, Stubb was merely borrowing the simplified explanation from local business tycoon and chairman of Nordea Bank Björn Wahlroos who last year pinned blame on the iPad alone for harming Finland's ICT and paper sectors.

As Finnish broadcaster YLE reported at the time, some local industry watchers saw Wahlroos' explanation as a popular oversimplification but basically correct while others noted Nokia's decline in mobile was already taking place.

As for paper, European Forest Institute's programme director Lauri Hetemäki told YLE that companies in the paper industry once competed among themselves but now compete against electronic communications, which also affect paper industry prices. In other words, digital media in general — rather than the iPad — was the source of its woes.

But, as The Economist noted, Finland was unique in its reliance on a single company. Samsung for example, whose revenues were twice as large as Nokia's, only accounted for 10 percent of South Korea's GDP since its economy was more diversified.

Clearly, Apple is not to blame for Finland's dependence on a single company, nor for Nokia's missteps before and after the iPhone's arrival, but Apple's products and the industry that followed it seem like a reasonable explanation for at least part of Finland's economic problems.

Stubb however remained upbeat about Finland's prospects, noting a potential opportunity in bio energy for the forestry industry, while Nokia Networks attempts to reinvent itself. Previously, he's also pointed to Finland's gaming startups, with prominent successes including Angry Birds maker Rovio and Supercell, the maker of Clash of Clans.

"Usually what happens is that when you have dire times you get a lot of innovation and I think from the public sector our job is to create the platform for it," Stubb said.

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