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Home BUSINESSA slew of local, int’l ventures settle in Oulu last fall
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Fri, 13 Mar, 2015 12:08:24 AM
Find some areas still in short supply of expertise
FTimes Report, Mar 13
Photo of Juha Ala-Mursula. Press Release Photo.
Juha Ala-Mursula, executive director of Business Oulu, the Oulu Region Business Development Centre, believes the city made a history last fall, reported the Finnish business newspaper Kauppalehti.
In only a few months’ time, a total of nearly 20 new companies including domestic small- and medium-size IT enterprises as well as global giants settled in Oulu.
Ala-Mursala said, “If you look at the country’s history of investments, you won’t find such a wonderful performance anywhere else.”
Last summer, in the aftermath of Microsoft and Broadcom, nearly a thousand people were left unemployed. Since then, companies newly-established in the city have employed over 500 people. And their targets for growth are intense.
One such giant is the Taiwanese designer and distributor of integrated circuits MediaTek, which came to Oulu in October for world-class radio technology expertise, Oulu’s university, and the ecosystem of small businesses.
The Asian business plans to expand its services to a variety of wireless devices, and the development is done in Oulu.
“When we realized that Broadcom and Microsoft were ceasing operations, we pounced. We were then able to hire the best,” says MediaTek Site Manager Ville Salmi.
The Taiwanese firm that employs 11,000 people in 12 countries now has a hundred people in its Oulu division.
“This is a good start. This year, we will continue to grow,” says Salmi.
MediaTek is not the only microchip company that has found its way to Oulu.
Wearable technology and the Internet of Things will only increase the need for expertise in wireless technology. Test-driving coming 5G mobile networks has also interested new business in Oulu.
In the fall of 2013, the British semiconductor manufacturer, ARM, bought software developer Sensinode, which has been developing wireless sensor network technology for the Internet of Things.
Norway’s Nordic Semiconductor opened a research and development division in Oulu last autumn.
Most recently, the city has seen the arrival of the Chinese firm Spreadtrum, which has already hired 30 people for their Finnish head office in Oulu.
An increase in sight
More good news happened throughout autumn.
Nordea began recruiting IT professionals for their mobile services development division. Nordea competitor OP-Pohjola is also developing mobile services in Oulu, in a division they established only a few years ago.
Solita, a digital business consulting and services company, opened a new division in Oulu, which will hire some 50 employees by this summer.
Elektrobit Automotive has established an automotive software development division. It already is employing dozens of workers.
“After a few stagnant years, an increase in sight,” says Marko Kallovaara.
Involved with many IT firms, Kallovaara has founded an Oulu division of the Tampere-based Bitwise. The software company, currently employing 60, plans to grow in Oulu in a couple years by 30 people.
According to Kallovaara, the company is reaching from Oulu toward northern Norway.
“In Tromsø, there is a wicked need for software development, and Oulu is not so far.”
“The playing field in Oulu is diversified, and some heavy hitters have come here,” Ala-Mursula pointed out.
Alongside mobile devices and wireless networks, software companies have also begun focusing on the financial sector, health technologies and the automotive industry.
According to Ala-Mursula, Microsoft’s and Broadcom’s employees played a key role in attracting businesses.
“This has been a trial run for the entire region, and the necessary contacts have been found among the employees.”
Venture capital comes to Oulu
Last fall, China's largest search engine company, Baidu, invested approximately 7.6 million euros in its Oulu-based IndoorAtlas, a developer of indoor positioning.
There are other signs that venture capital has made its way to Oulu.
According to statistics compiled by the Finnish Venture Capital Association, southern Finland attracted by far the most capital investment, but the Oulu region came in second.
The total number of venture capital investments in the Oulu fell from the previous year, but in the number of units, far more investments were made in the region than before.
The Oulu-based Butterfly Ventures has played their part in this game.
The company, which manages the Northern Startup Fund, invests in companies operating in the region, while making many smaller investments in several companies and further investing in the most promising.
According to Butterfly Ventures partner Ville Heikkinen, rounds of investment last year for the Fund’s companies reached six million euros, over half of which came from co-investors, and the less than half from the Fund itself.
The Fund, established in 2012, has invested in 23 units in a total of 47 investment rounds.
According to Heikkinen, Northern Startup Fund will continue operating. “We are now collecting new funds and private sector financing.”
Competition for resources
In the aftermath of Nokia, Oulu has seen the rise of more than 400 new businesses in the last few years.
Heikkinen of Butterfly Ventures sees the effects of big business sweeping from one side of the seaside city to the other.
According to Heikkinen, large and small businesses are competing, in part, for the same resources. “Radio technology start-ups have noticed that the best people are fiercely advertising themselves; and when an applicant asks for 2 or 3 thousand euros more than expected, the start-ups panic."
“In certain areas on the ICT side, there is already starting to be a shortage of expertise,” says Business Oulu's Ala-Mursula.
“It looks like there’s a need for more training. Otherwise bottlenecks will start forming in companies.”
Heikkinen hopes that start-ups can find a better place alongside larger companies.
“Smart large companies outsource part of their product development and take advantage of start-ups, which are less encumbered to try out even the craziest of ideas. The start-ups gain access to greater resources and may result in exit paths.”
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