The Differing Themes of Finland’s Business Landscape

Traveling through the Nordic countries and visiting hand-picked businesses that represent the best that Scandinavia has to offer has so far been an extremely informative and positive experience. We notice commonalities across each of the companies and academic institutions that transcend industry, size, and maturity.  While our preparations for the travel course gave us a window into how business is conducted in Scandinavia, seeing evidence for the themes we were told to expect was very interesting.  The first leg of our journey was in Helsinki and had us visiting a variety of companies that would begin to show us the breadth of the industries impacted by the so-called “Nordic Model” of doing business.  The first visit of the trip took us to Nordea, a large banking group that largely focuses on corporate and retail banking within the Nordic region.  We spoke with Dr. Jukka Vesala, Director of Credit Risk Control, who gave background information regarding the firm as well as some detailed information about his specific area of expertise and the priorities and concerns of his specific business unit.  As predicted, a Nordic model of management was certainly noticeable, but rather muted than we had been prompted to expect from Scandinavian countries.  The reasons for this are two-fold: the banking industry in general is known for being more resistant to change and more hierarchical than other industries, and to add to that, Finland has the reputation among the Nordics as being direct, hierarchical, and authoritative in its business practices. 

Nordea certainly seemed to fit that mold and their emphasis on risk reduction was surprising to me even considering the demographics of their customer base offered predictably low risk baseline as it is.  In a different business and banking culture, I would have expected to see a bank leveraging its lower risk portions of its portfolio as a basis for making riskier investments elsewhere.  This tends to support the notion that banks in the Nordics especially are not interested in funding new or risky entrepreneurial ventures and tend to gravitate towards issuing relatively predictable notes to well-established and historically survivable companies. 

While this type of approach to economic activity was to be expected given the industry and department we had the  pleasure of interacting with in our visit, we were also exposed to the other side of the economic coin in Finland when we visited AaltoES and the Kiuas Accelerator, which showed us the depth of entrepreneurial spirit present in Finland and the promising trend of increasing business development, especially among the younger generation of university students.  We even had the pleasure to have one of the student/leaders of the university run venture-capital group join us during a culturally relevant dinner to explain the work they do sponsoring new start-ups and how the economic activity that the organization fosters helps not only the startup community and the employees of the venture capital organization, but also Finland as a whole.