Forbes Focus: Helsinki, 2002

By Bill Robinson

Why Helsinki?

When most people think of Finland today, they think of wireless phones--and with good reason. The home of telecommunications giant Nokia , Finland's capital Helsinki is one of the most wireless cities on Earth. Nearly 70% of the country's 5 million people get bus schedules, send text messages and check weather--not to mention make calls--via their cell phones.

But there is more to Helsinki than the latest in mobile handsets. Besides Nokia (nyse: NOK - news - people ), which posted nearly $2.8 billion in revenue for 2001, major employers include paper maker Stora Enso (nyse: SOE - news - people ), oil and gas company Fortum , and food and drug retailer Kesko .

Following the opening of the former Soviet Union, the formation of favorable foreign-ownership laws, and the rapid adaptation and improvement of wireless technology, all of which took place during the 1990s, Finland has become one of the most attractive countries in Europe for American investors. Much of the reason for Finland's economic attractiveness is its reputation for developing cutting-edge technology in the wireless, IT and biotech sectors.

Much of the reason behind the country's embrace of these technologies can be boiled down to three factors: First, because of its increasingly expensive workforce--wages and earnings are growing each year despite a shortage of skilled workers--much effort has been spent on creating laborsaving technology, such as wireless, in order to reduce costs.

Second, geography and climate play a role. More than one-third of the country, which is roughly the size of Montana, is above the Arctic Circle, and the winters are long, dark and cold. Not only is it in the self-interest of the population to come up with technology to keep themselves out of the cold, but there are also many winter months during which researchers would rather stay in their labs than go outside.

Third and last, like a few other fortunate cities--Stanford, Calif., and Cambridge, Mass., come to mind--Helsinki is blessed with top institutions of higher education, the Helsinki University of Technology and the University of Helsinki's Institute of Biotechnology, that compete with and cross-pollinate each other across disciplines. The life sciences, medical, biological, pharmacological, genetic and other related disciplines all rely heavily on computer technology, ever-increasing processor speed and super-computing power to advance their work and research at greater speeds. The speed with which the technology sector moves forward totally empowers the biotech sector. Some cities, such as Amsterdam, Stockholm, Singapore and even Silicon Valley itself, focus mainly on IT areas, while others, such as Copenhagen or Edinburgh, lean towards the biotech side of their economic development. Helsinki is one of the only cities that has developed both areas simultaneously.

People To Watch

he Helsinki University of Technology (HUT) helps propel some of the world's top IT minds into corporate offices, technology labs or high-tech startups. Jussi Räisänen and Mika Ussitalo , the technology wizards who started Smartner , a Helsinki-based software and services firm that counts Radiolinja AB , one of the biggest regional mobile operators, among its operator and service provider clients, studied there. Look for big things from these young entrepreneurs who don't mind rolling up their shirtsleeves to do the hard work--in fact, they thrive on it.

The biotech research and development community is in full swing at the Institute of Biotechnology at University of Helsinki that, like HUT, has developed a strong reputation in the life, health, bio and medical sciences fields. Working in close proximity to the Helsinki University Central Hospital, the Helsinki Science Park and the gleaming new Biomedicum and Technomedicum buildings, the Institute of Biotechnology is lead by Professor Mart Saarma . Saarma, who says, "startups related to the pharmaceutical industry are doing quite well," has presided over the creation of an impressive adjoining Incubator to propel companies founded with research results from the Institute.

The Incubator, which had three startups in 1996 and has 43 now, has helped launch drug, diagnostic, instrument and traditional biotech companies. The Science Park is expanding, and the entire machine is very Finnish-driven with capital investment. Saarma is promoting Helsinki with the clarion call "high quality science based on high quality education," while his Institute has been awarded grants as a "Centre of Excellence" by the Academy of Finland in the areas of neuroscience, bioenergetics, plant molecular biology and virology. Dr. Saarma is passionate about keeping "strong contact between academia and industry," and his passion has resulted in an extraordinarily strong connection in Finland. It is possible this initiative may produce the next Finnish Nobel Prize winner.

One of the most fascinating things about technology and economic development is the idea that it often starts organically. Reference the garage and geek community origins of Silicon Valley and the social beginnings of associations like First Tuesday. In order to "have the biggest sofa in Helsinki" and create a cozy place for ideas, Jyri Engeström and Marko Ahtisaari started Aula so that people--technology and nontechnology, artists, business people, students, virtually anybody--could gather, share food, drink, relaxation and perhaps, if it was comfortable, business or creative pursuits. From their neat second-floor "condensed metropolis" with a 180-degree view of Helsinki's downtown center, they welcome all. As they say, "Anyone can be a member" of their "living room for the network society," which they claim "enables the osmosis of ideas between different subcultures." Aula's "sofa" is rectangular, about 30 feet by 15 feet, and certainly represents a startling success in achieving their goal.

Companies To Watch

Started in 1990, Space Systems Finland is what's referred to as a "Space Applications Software Provider." In a world where "mission critical" is utilized at the drop of a hat and continuously applied to things trivial, SSF produces software solutions for what they call "demanding environments."

Demanding indeed. In writing onboard software for spacecraft and highly specialized software for spacecraft autonomy, robotics, digital signal processing and data processing, SFF cannot afford to get it wrong--because there's no going back after launch. "We're a small country and we have to focus," said Fredrick von Schoultz , SSF's director of New Ventures, highlighting a competitive challenge and advantage Finland possesses. SSF has 40 employees, most of whom are programmers, software developers and system designers; it works under subcontract with the European Space Agency in Paris, among others.

VDSL Systems , newly headed by Englishman Mark Rooney , has the video services for their customer firmly in mind. "Finland is the most productive country in the world," Rooney observed. "You have all the benefits of the U.S. and Europe. The Finnish education system has got to be the best in the world, so it's no surprise that some of the fastest-growing countries in the world are here. It's idyllic."

After Sept. 11, the stock of VDSL's videoconferencing competitors tripled. With 40 employees last year and 70 now, VDSL offers hardware that is Internet Protocol and ATM-based, and provides organizations with high-speed data transmission needs, such as telcos, ISPs and subsequently publishing and advertising firms that transmit huge graphics and other similar files. One of the key value propositions of VDSL (Very-high-speed Digital Subscriber Line) is that it uses the existing copper-wire infrastructure and doesn't require costly fiber-optic and other upgrades.

Where The Money Is

Risto Linturi is the Finnish George Gilder -type communications, futurology and telecom visionary I've written about before. Now a major venture capitalist and investor, Linturi is focused on a pet project of his-- Lonix , a company where he is chairman.

The company's technology involves building automation (smart houses and smart offices), and creates Linux and Java-based modules that control all functions of a building: heating, ventilation, air-conditioning, electricity, water and safety. In a strategy not unlike the Linux and Bluetooth associations that have helped proliferate new technologies, Lonix has created Connected Open Building Automation, which counts amongst its members: Hewlett-Packard (nyse: HPQ - news - people ), ABB (nyse: ABB - news - people ) and Nokia (which, interestingly, makes a COBA server). Lonix has about 30 employees and last fall received a first round investment of €2.2 million from a local venture capitalist.

Finland is one of the most aggressive countries in terms of government (or taxpayer) funding of technology, biotech and life sciences development. This is a very good thing, as most countries are hesitant to invest directly in entrepreneurial enterprise or commercial R&D (if they consider it at all). They have to be courageous and really believe in their native brainpower--which the Finns do.

Finland has established and funded two government investment vehicles, which take board seats and are very involved in their portfolio companies: TEKES (the National Technology Agency) and SITRA ("working for the Finns and the Finnish society"). Both of these entities have contributed to economic development, entrepreneurs, IT and biotech development in a big way, and are propelling Finland into a head-to-head competition with Sweden for supremacy in the region, a competition that Finland may well win.

Where To Stay

The five-star Hotel Kämp , part of the Sheraton Luxury Collection, is the best hotel in Helsinki. Featuring the best and most luxurious location in Helsinki on the Esplanade Park, the Kämp offers interesting Finnish history. The hotel was the haunt of Finnish artists at the turn of the 20th century, including composer Jean Sibelius . The story goes that Aino, Sibelius' wife, sent a note to her husband--lost to the lures of the hotel--inquiring when he was coming home. The answer was, "I'm a composer, not a clairvoyant."

The majority of the Kämp interior was torn down in the 1960s, and the building was turned into a bank. The hotel reopened in 1999, renovated exactly to its old grandeur.

Equally historic is the Sokos Hotel Torni . Built in 1903, it served as the base of the Soviet control board that supervised Finnish interior politics after Finland surrendered to the Red Army in 1944. Many of the rooms have been kept in the 1940s style. The rooftop bar of the Torni, Ateljee , offers some of the best views of the city. Perhaps the very best view is from the bar's ladies' room--a must for all female patrons!

Where To Eat


A popular destination for Russian biznismen , Helsinki offers some of the best Russian food in the world. Try Hariton across the park from the Kämp hotel, or Alexander Nevski in the St. Petersburg-like old section of Helsinki (built when Finland was part of Tsarist Russia).

More Tsarist essence can be found at Sundman's gourmet restaurant, which has won a star in the Michelin Guide. The restaurant is set in the home of the governor of Helsinki during the Russian era. Sipuli serves Finnish gourmet food under the magnificent Russian Orthodox Uspenski Cathedral; you can admire the cathedral through a skylight over the restaurant's main floor.

For a modern setting, Savoy serves high Finnish cuisine in an acclaimed interior by Alvar Aalto . The interior and the international cuisine of the Teatteri restaurant also appeal to hip palates.

In summertime, many island restaurants offer an intriguing experience, a combination of a boat ride across sections of the gorgeous Helsinki inner harbor and dining in old fortress buildings of the Suomenlinna fortress islands, just minutes away from the port of Helsinki. Walhalla is set in an old ammunition warehouse, Särkänlinna in an artillery hall. In August, the NJK Boat Club is the most famous for Scandinavian crayfish fests: crayfish washed down with copious amounts of chilled vodka.

For casual but fun dining in theme restaurants, try Leningrad Cowboys , with images of old Soviet Union; country-style Finnish food at Zetor (try dining on old tractors!); or American Wild West and wild food at Colorado Bar and Grill .

Where To Go After Work

From the Torni hotel's Ateljee bar, stroll up the street to Mother bar on Eerikinkatu for a drink in one of the most intriguing interiors of the city. Designed by the internationally famed Stefan Lindfors , Mother invokes maternal images of animals, even insects. Trendy young Helsinkians are the clientele.

Further up Eerikinkatu is the Corona bar with pool tables, haunted by some of the more cultural crowd. The bar is owned by the Finnish filmmaker Aki Kaurismäki (Palme D'Or at the Cannes Film Festival this year); the entrance to his movie theatre Andorra --the art-house mecca of Helsinki--goes through Corona. The Moscow bar right next door offers more Kaurismäki flavor. Decorated in the Soviet style of the 1950, Moscow is a step back in history to a culture that no longer is.

Two city blocks to the west of Corona and Moscow is Soda on Uudenmaankatu, one of the most favored bars and nightclubs of the young (20s), beautiful and restless in Helsinki. Back in the heart of the city, at the railway station square, is Barfly , the newest nightclub in Helsinki. Barfly and its neighboring Eatz restaurant together run the most popular summer terrace of Helsinki. Visiting rock stars including Mick Jagger have haunted the Helsinki Club , the oldest--but still very popular--nightclub of the city. If you wish to rock through the night with a view, choose 10th Floor at the rooftop level of the Vaakuna hotel.

Where To Shop

Esplanadi Park

Helsinki offers excellent opportunities for design shopping. The Esplanades, flanking the historic Esplanadi Park, form an avenue of elegant design. The Designer boutique sells top Finnish designers' series of tableware, glass and cutlery of the Arabia, Littala and Hackman brands. Three Marimekko boutiques offer clothing, textiles and small objects by Finnish and international designers. Alvar Aalto's classic furniture is on offer at the Artek showroom.

Stockmann's , the biggest department store in all of Scandinavia, is the central point in Helsinki for all shoppers and offers an extensive variety of design articles under one roof. Just outside the city center, Hackman Designor's factory outlet is another favored destination of design shoppers.

Helsinki continues to be a city that fosters and produces leading design by international standards. Much of this is thanks to the University of Arts and Design Helsinki, the center of excellence of Finnish design. The university is also the center of "the Arts and Design City," a Helsinki suburb that is being developed into a special area of residence, studies and business for Helsinki's arts and design professionals. (For information about the university, see

What To See

Kiasma Museum of Contemporary Art

Labeled the best-designed city in Europe, Helsinki makes arts and design part of the everyday experience. Cultural enjoyment extends from city architecture and exhibitions to shopping opportunities.

Since its opening in May 1998, the Kiasma Museum of Contemporary Art , by the American architect Steven Holl , has been a contemporary landmark in Helsinki. Kiasma has inspired much discussion about the intricate building itself, and about the exhibits and performance art that it houses. The museum continues to be frequented by high numbers of Helsinki residents and visitors. Exhibits feature both Finnish and international art (see

Adjacent to Kiasma, the Lasipalatsi media center accommodates media activities from television to experimental in a recently renovated 1930s functionalist building. The center also houses a public Internet library, part of the Helsinki City Library chain, which received an award in 2000 from the Melinda and Bill Gates Foundation as a world leader in the use of the Internet.

Only steps from Lasipalatsi, an indoor tennis hall has been converted into the Tennispalatsi film and cultural center that houses 15 movie theaters, the Museum of Culture and a branch of the Helsinki City Art Museum (see

The vicinity of Kiasma further includes Sanoma House , the new editorial-offices building of the largest Finnish media company. This notable steel-and-glass building is also the home of the showroom and boutique of Design Forum Finland ; on exhibit are contemporary Finnish designers (see

A new music hall for three local symphony orchestras will also be built in this city section, to complement other bastions of classical music including Finlandia Hall , designed by Alvar Aalto, and the National Opera House , all within a few minutes walk from each other.

A permanent exhibit of Finnish industrial art from the past decades, coupled with special exhibits of Finnish and international design, can be found at the Museum of Art and Design (see

The Museum of Finnish Architecture houses both architectural archives and an exhibition hall (see