Finland was named as a world leading innovation hot spot by the Economist Business Intelligence Unit and Harvard Business Review in 2009. At the heart of Finnish originality is Otaniemi, a district in the south bordering the capital Helsinki.

This is the world’s newest Silicone Valley. So what makes it so different? Well, to start with Nokia World HQ. Finland’s most famous exporter and manufacturer, is based here. As is the world’s first ‘innovation university’, The Aalto University. Otaniemi is also home to 32,000 hi-tech professionals, academics, researchers and students from 19 different academic and research organisations.

More than 800 companies reside inside the district’s four square km area, which produces roughly one half of all Finnish hi-tech development and patents. But Otaniemi is about more than statistics, mobile phones and new universities.

According to Ari Huczkowski, CEO of Otaniemi Marketing, success is based on the ‘casual interaction’ between smart people with good ideas, the availability of high spec technology and end-user involvement in design. “All three conditions are easily met in Otaniemi because of the high density of PhD’s, CEO’s and skilled people from 110 different countries,” he says. “In Sweden, Germany and the UK it’s very difficult to find several world headquarters, research and academia organisations and risk financed startups all within a walking distance.”

Population
If Otaniemi’s physical proximity fosters collaboration, it is Finland’s dimensions and population that define much of this cultural sense of community in Europe’s best kept secret. Less than five and a half million Finns live across 130,000 square miles, making it Europe’s eighth largest country and the EU’s most sparsely populated.

“We Finns have this inbuilt manner of doing things together,” says Mr Huczkowski.  “The reason is probably in our past, a rather big land area and relatively few people. It’s always been important to work together. Otaniemi’s physical proximity enables close collaboration. Here everyone seems to know everyone. Casual interaction helps with the sharing of ideas.

“Our cultural characteristics of very low hierarchy and goal oriented way of working are important too. Less hierarchy allows our organisations to become more agile. In a flat organisation everyone is very functional.” These physical and cultural characteristics have twice seen Otaniemi selected by the EU as one of the most innovative regions in Europe.

ICT
The district is famous internationally for ICT thanks to Nokia. But it was the open innovation theories, started by the respected Berkeley Professor, Henry Chesbrough, at the turn of the century that saw the region’s reputation grow. Innovation Mill is an ongoing project that has seen Nokia ‘open up’ several thousand of its unused patents and drawing board models. They are either used in the creation of new companies or to foster the growth of existing ones. New businesses have raised over ¤10m in risk capital since launch last summer. This ‘open innovation’ culture helps Nokia capitalise non-core ideas, while helping new hi-tech companies to be born.

“It’s much better than letting those unused ideas just gather dust on the shelves somewhere,” says Mr Huczkowski. “It’s like taking the lid off to have a chance of success. Closed innovation is the way most companies operate. They do everything internally because they don’t tell anyway. The problem is so many great ideas are left on the shelf, perhaps because a project is no longer part of the organisation’s core business.”

Three top Finnish universities; the University of Art and Design Helsinki (TaiK), the Helsinki University of Technology (TKK) and the Helsinki School of Economics (HSE), have merged to form the new Aalto University for joint research and teaching programs. The merger put three important disciplines – Design (TaIK), Business (HSE) and Science and Technology (TKK) – under a single roof to create the world’s first purely innovation focused university.

Education
The state and private sector will jointly invest €700m in the new university, to create a leader in research, education and innovation by 2020. Innovation Mill is one of the Otaniemi-based projects that will benefit from the region’s talent pool. Mr Huczkowski is confident that the newest ventures, combining business and academia, will match previous success.

“The reason for my confidence lies in the collaboration and the ‘Otaniemi’- spirit,” he says. “Everybody in Otaniemi works together for the success of Aalto University. Big corporations, such as Nokia and Kone, are very much involved in Aalto U development – and when big global corporations put their mind to it (and some cash too) the academics have all the reasons in the world to be successful.”

Aalto Design Factory is another new project that brings together students, businesses and academics to foster ideas. Aalto’s simple philosophy is summed up in a catch phrase: to have fun, to learn, to work like crazy.

“That sums up Otaniemi,” Mr Huczkowski says. “You can feel the ‘buzz’ in the air. You cannot innovate without having fun. One part of the process is playing. That way we remember what it was like when we were most innovative – when we were children. At Design Factory, and many other places in Otaniemi, you can feel that.”
Aalto U Design Factory and Micronova, northern Europe’s biggest micro- and nanotech research centre, are part of the collaborative culture too that helps Otaniemi define itself by what it produces too.

Exports
Finland is an export driven country, and her main technologies are the traditional wood and metal industries as well as mobile and wireless with fast developing industries such as nanotechnology and energy. Mr Huczkowski believes the most important export in the future will become energy.

“Energy technologies, especially cleantech and greentech, will help make this planet more sustainable and healthy,” he says. “At the end of the day I believe it’s the energy technologies that will feature most because they have the greatest long term importance to the world.”

At the forefront of these new technologies is ‘passive housing’ (which requires no energy to heat or cool) and energy storage units derived from the ground, landfill, water and wind. There are plans to integrate Otaniemi into the neighbouring Keilaniemi and Tapiola districts by 2030, creating an expanded campus to combine research, art and design and business across two kilometres. Metroline stations linking up the areas are under construction.
Property prices are expected to reflect investment growth very soon. Another small innovation in a post-recession EU.