Nokia Downsizing

Nokia and Microsoft coming together worry the Finnish unions as well as the government. The relatively large impact of Nokia in the Finnish economy and the potential negative impact any policy change in the company may have on the economy has worried the government for several years. The downsizing expected (size not known yet-introduce link here) of even 10% only of the 20,000 employees the firm has in Finland could mean 2,000 new job seekers on the market at one go. For a relatively small country to absorb such a rush of people would take time and some effort.
In Israel there have been talks that the economy needs some international local giants. However it is important to remember that once such giants are created, any strategic change, whether in response to market changes, technology shift, emergence of new markets, mergers and Acquisitions, could lead to massive lay-offs and thus to economic and social crisis.
Medium size companies "well entrenched" in the local economy with a view towards export would seem to have a better chance of stabilizing the economy. They can increase production, or retract with marginal over-all effect on the economy. Even if purchased or merged into others they will lay-off smaller numbers of employees that the sectors will absorb faster than large numbers. If such firms are dispersed over diversified sectors they will also reduce the national economy sensitivity to international market changes.
A variety of firms with 50-200 Million $ in sales will enable a stable economy that can deal with changes in international markets, provide employment on reliable basis and one that is less sensitive to the changes in any single firm.
Finland has been trying for several years to encourage the growth mechanisms of small companies so that they could grow into medium size players- so far with limited success. The change in Nokia will create a crisis in the Finnish economy, hopefully not too sever. It could also be the break that Finland needs from the decisive role Nokia plays in its economy. Unfortunately due to the trouble it is having with its southern parts the EU will probably be able to assist Finland only in a limited way.

Which came first Technology or market demand?

Before you rush forward with the answer, or get annoyed, this is more than just a philosophical question. When you start learning marketing or economics you learn about demand and supply, you learn to draw the curves and to fix a price. Of course for marketing, once there is a demand in the market, the rest is a long solved problem on how to respond. So if your answer if that the demand came before the supply, than at least in the classical world of marketing, you know how to proceed.
But, I can hear some of you asking, about those few cases in which the technology preceded the demand, the internet and its environment are such cases, there were many services / products that did not exist before and demand did not exist.
So it would seem that the right answer to the question above would be "YES". While you think about that I would like to mention a small joke that anyone learning marketing in Israel must have heard at one point at least (could be just an Urban legend): in the 1950's a shoe factory in a kibbutz sent two salesmen to Africa one to east Africa and one to the western parts, to assess the marketing potential of the factory. The first evening the first salesman calls the factory and says:"There is nothing here for us, everybody is walking barefoot, I return tomorrow". Before they can get their balance back, the other one calls and says:" start working in three shifts, the market is enormous, everyone here is barefoot". The story as I know it stops here.
The first salesman is the case of missing demand, even if the technology / product exists. It requires educating the market into creating the demand. This can often be lengthy and expensive, and as a result of that - risky.
While the risk may be acceptable to a large firm, for an SME, or a start-up it could be dangerous. The firm may spend its limited resources and die before the market is created, or may create the market just to have a larger firm exploit it.
In Israel where many of the start-ups are technology based, this is a very risky point. There are many firms starting with a wonderful technology, but with little market demand, and what is "obviously a great idea" to the technology people is often not so clear to the customers in the market. These are the great technologies that fail, not due to lack of ideas, or capabilities, but due to better understanding the technology than the market.
If one recalls the High-Tech crisis that occurred when the 3rd generation of communication failed to be accepted by customers, not because it was not good, or not impressive, it was just that the market was not used to such rapid technology changes. It was necessary to make people understand that they wanted / needed the new capabilities before they were ready to make the change.
Great technology is not all - a great market can be.