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The Finnish Begin

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DQI Bureau
New Update

After East Asia and America, Northwest Europe is blooming to become the next

big destination for the Indian ICT industry. Finland, most famous for being

Nokia's cradle, has, in the last decade, seen rapid economic growth. Though

forests are still Finland's most crucial resource, the engineering and high

technology industries led by Nokia have long been the leading lights of its

success story.

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There has now begun a major drive to offer Indian companies a great deal of

opportunity for locating there. Invest in Finland is a national organization

based in Helsinki, promoting FDI in Finland. Funded by the ministry of trade and

technology, it offers Indian ICT companies assistance to come and set up shop,

primarily to do research. According to Taneli Saari, director, location

services, Invest in Finland, "Finland is the hub of ICT research in

Europe." Though this agency offers helpful information on business

environment and investment conditions, and selecting the best business partners

and locations, Saari says, "We are not saying just give us your money. We

are saying give us your ideas, and we will help you turn them into success

stories."

“Finland ranks No.1 in growth competitiveness and is ranked second in business competitiveness after the United States”

Finland is an excellent Northern European center in terms of access to

growing markets, excellence in technological know-how and top-level business

environment. Maximum potential for expansion and growth of trade and investment

lies in areas like software, security, telecommunications, mobile and wireless

solutions and biotechnology. Finland's most important export market is

Germany, followed by UK, USA, Sweden and Russia.

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As per the World Economic Forum's Global Competitiveness Report, 2004

Finland ranks first in growth competitiveness and is ranked second in business

competitiveness after the USA. Said to be a relatively easy market to enter,

foreign companies are welcome and treated on an equal footing with Finnish

companies. The rapid company registration process and R&D funding make

Finland a worthwhile investment.According to Vesa Kaasalainen, director, Tampere

International Business Office, "To come and start operations in Finland one

does not need any local partners or a license-just come and start

operations."

Finland has a multi-lingual workforce with English in wide use. The current

29% corporate tax too is being brought down to 26% in 2005. Coupled with the

sophisticated infrastructure and competitive operating costs as compared to

other European countries, the Finnish government offers an attractive business

environment. These initiatives are supported by the Finnish government's

technology-based economic policy to increase R&D expenditure by Euro 235 mn,

i.e. 5% annually, on average.

The real goldmine here lies for the SMEs, who can obtain special development

aid for improving their competitiveness. They are entitled to tax relief on

fixed assets in certain development regions. Also, the National Technology

Agency of Finland (Tekes) provides them grants for research and development that

lead to internationally competitive products, processes and services. "Last

year the Finnish government gave away Euro 330 mn in investment grants to such

companies", informed Saari.

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Indian companies like Blue Star Infotech, Tata group, Wipro and Zensar

Technologies are already cashing in on first mover advantages. Expanding further

on its strategy of offering global execution model, Wipro established a

development center in Tampere, Finland, in 2003.

With near-shoring being the need of the hour, the Indian industry only stands

to gain from accepting the warm welcom extended it to capture bigger projects

serving an European clientele

Jasmine Kaur with inputs from

Ibrahim Ahmad

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