- Corporation looks for new avenues of growth by investing in small companies
"The scale of expertise needed is so broad that not even a company the size of Nokia should try to manage everything by itself," says Marketing Director Timo Poikolainen from Nokia's technology platform-developing unit. Nokia's attitude towards cooperation underwent a change in the late 1990s. The company, which had previously guarded its own technology rather closely, started a deliberate effort to build a cooperation network for itself. These days cooperation is a central factor in our growth strategy.
"In a way, this means distributing sparse resources for us as well. We take part in a venture if we think that the technology is important enough for us. On the other hand, we can seek opportunities to observe fields that were previously unknown to us," Poikolainen explains. In any case, this is not a small venture. At the moment Nokia's people are involved in approximately one hundred cooperating organisations.
The most important partners are often its competitors, i.e., the other equipment manufacturers. Poikolainen emphasises that cooperating and discussing issues with other companies enriches his own way of thinking. He says the spirit of co-operation is mostly good, although each participant's goal is to steer the development of standards into the direction most suited to its own purposes.
"You can do well in negotiations if you are familiar with both your own organisation's needs and the goals of the other participants and know which issues they might be more flexible about. You have to know how to arbitrate and find allies," Poikolainen says.
According to Poikolainen, differences between fields, working methods and cultures pose major challenges that are not always easy to solve; for example, in the telecommunications business, manufacturers of telecom equipment are used to agreeing on the standards to use, leading to compatible products being launched on the market. In the computer business things are the opposite: each producer launched his or her own concept on the market, and everybody waits to see which solution turns out to be the winner," Poikolainen explains.
Nokia is seeking new avenues for growth by investing in small technology companies. One of the ways the company invests is through Nokia Venture Partners organisation, founded in 1998. With its EUR 650 million portfolio, it is one of the largest capital investors concentrating on technology companies.
Source: Helsingin Sanomat, 3 October 2004
The full text available in section E3 Talous & Työ (Economy and Work)
Author: Helena Ranta-aho