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Monday, April 8, 2013

The Future of ICT in Central Finland

Today I visited two events. One was related to Kasvu Open, a competition aimed for startups (both ideas and established ones) while the other focused on the future of the ICT sector in Central Finland. As I have seen events like these before, there was nothing new format-wise. Participating in these events made me think about the future of the sector. And that is what this post is about.

It might not be the most exciting topic but it's still something worth ruminating. I tend to see these things from trenches, the lowest possible level. This is opposed to what the people giving the talks often presented. There were politicians and people that make decisions on these sort of things. It is very easy to use fancy words. Still, the core ideas they entail always have some truth in them.

In this post I will try to get beyond the fancy words and provide some views on how I see the future of the area and more specifically the city. It might not be the most exciting of posts but it is a post I definitely want to write. Nothing is more fun than reading a post later on and seeing how wrong you were about something.

Jyväskylä - Athens of Finland

Before getting any further it's probably a good idea to describe Jyväskylä a bit. It is a smallish city located in Central Finland (roughly 300km from Helsinki and Oulu both). It is also known as Athens of Finland thanks to its strong history related to education. In fact the Finnish education system originated from here. It is a city that has seen a tremendous amount of growth (around 3k people at 1900, 130k now in 2012). This is partly due to the fact that it is a hub of education.

Besides vocational training there is also a university and a university of applied sciences. These higher levels schools serve a bit different purposes although there are some commonalities. Interestingly they both compete from the same resources to some extent and both seem to have their own distinct identity. Especially in the ICT training there is overlap.

Unfortunately being Athens of Finland isn't entirely a good thing these days. As you probably are aware of the situation in Greece we have something similar going on here at Jyväskylä. The city has whopping 8000 euros of debt per person. It has to do with some large investments made lately. And then there was a merger with a neighboring municipality that probably didn't help things, at least short term.

Traditionally the city has relied on wood and metal based industries. There was some change to it thanks to Nokia during the IT boom. Unfortunately Nokia has since left the city. At least the buildings remain and have been put into a good use. Now we are living in a transition stage of sorts.

During the last ten years or so the city has focused on developing a central part known as Lutakko. It is close to completion and the city has put its sights on a new area known as Kangas. Kangas is sort of a relic from the era in which paper was an important source of income for the city. As the facilities were given up the city bought them. And now it aims to transform the area and make it a hub of commerce while providing some residential space as well. This process will take decades of work and is supposed to be ready by 2040 although they expect major progress by 2020 including thousands of new jobs created.

The Current State of ICT in Central Finland

Currently ICT sector employs directly around 6000 people in Central Finland making it the third largest individual sector in the area. As I mentioned it has suffered thanks to the Nokia effect. On the other hand given the layoffs were made earlier than on other parts of Finland, that gave us some time to recover. In that sense we're better off than some other cities.

There is plenty of ICT related education available. Both universities have their programs. And there's also vocational level. Besides that there are more unofficial ways to stay in touch with the field. These include Geek Collision and Hacklab for instance. I personally think it is a very good sign to have some "underground" things such as these going on. They are communities run by volunteers and are not bound by some official agenda. Good things, such as AgileJkl, have been born out of this sort of voluntary action.

There are also official organizations, such as Jykes, that aim to leverage the profile of the area. There are so many of these around even I cannot keep track of them all. That might be weakness on my part, though. That said perhaps it tells you something about the situation.

I know for certain that there are at least 400 companies dealing with ICT in the area. In case you are interested I can share a list I maintain. We have a couple of big ones such as Tieto and Digia. Some international ones such as Cassidian and Fujitsu. And then there are plenty of smaller ones in which I won't get into. Public sector employs ICT people as well. Kela, the social insurance policy institution of Finland, is a good example of this. If I remember correctly Kela employs somewhere between 100 and 200 ICT people here.

At times you receive remarks that it can be difficult to hire people here. Interestingly the representative of Kela mentioned in his presentation that it is not a problem for them at all. I think it all depends on what kind of people you are after. Our salary level is definitely below the national average so that cannot be the issue. It has likely more to do with experience since there can be only so many experienced people in a given technology. And as you know the technology tends to advance at quite the pace.

The talent pool is always limited. And by the time people graduate half of the things they know will be obsolete. In my view especially the university should be about providing the tools that allow the alumni to keep up with the development and maintain their skills. Granted it takes a certain amount of passion to achieve this. Unfortunately the sort of career thinking that for long has been the basis of the whole Finnish system is at its end. You simply cannot expect to be "ready" when you graduate.

The Future of ICT in Central Finland

What sort of future do I envision for ICT in Central Finland and Jyväskylä in particular? I will split my analysis in three possible scenarios: negative, neutral and positive one.

Let's start with the negative one to get that out of the way. Given Jyväskylä is in a dire financial situation already, things can get only worse. Debt per citizen will at least double by 2020. We will lose a major ICT firm and smaller ones to competing cities. The sector will continue to shrink. The local authorities, companies and communities will not find effective ways to collaborate. Kangas will prove to be an expensive mistake and fails to reach the expectations placed upon it.

In a neutral scenario things would stay more or less the same. Jyväskylä will still continue to exist more as a "pass through" city although it will keep on growing steadily but surely. The ICT sector might be able to attract a bigger company or two to the region thanks to the friendly environment, good connections and affordable yet skilled workforce. The collaboration between local authorities, companies and communities will improve ever so slightly although there will still be some overlap and just poor coordination between the parties. Kangas will do okay although it might not reach all the expectations.

In a positive scenario the ICT sector of Jyväskylä will become competitive on a national and in some cases on international level. In fact it will become strong enough and will be able to lure top talent from neighboring cities. This is enabled by stronger coordination between local authorities, companies and communities. A strong startup ecosystem will foster further growth. Success stories feed upon each other and new business will grow. Jyväskylä will become top 2 place for a startup to be right after Helsinki.


I know I am very biased in my analyses. I think the most likely scenario is the neutral one. Not much will happen in a direction or another. There will be fancy talks on how things should change yet they won't. I fear that for major changes to happen something big has be happen as well. That seems to be the nature of Finns. You literally need to shake them into action. But after they manage to do that, nothing can stop them for a while.