From Software Business Community

Study of Finnish Software Product Business Development during 20002005

Eero Eloranta

Abstract

The software industry is one of the most rapidly growing industries in the world. The Finnish software industry is stated to be one of the national key industries, and it is believed to be a nationally remarkable industry in the future. The Finnish software industry share in the world market is around 0.5 % and it is expected to grow strongly over forthcoming years. Government has attempted to promote the Finnish software industry growth by different government programs since the end of the ‘90s. However, the Finnish software industry growth has been clearly slower as expected and has not reached its set goals.

The objective of this thesis is to examine the Finnish software industry development from the turn of the millennium focusing on years 20002005 from the point of view of essential industrial development areas. Research problem is to clarify which government initiated development actions have been conducted and how they have affected on the industrial growth.

In the literature review the recent economics theories of industrial research and especially their applications on a software industry development are explored. The actual research is conducted by analysing all significant prior studies on the Finnish software industry development over research period and comparing these with different statistical data available from the industry. Furthermore, the industrial experts’ opinions about the success of the industrial development were asked with a separate inquiry. As an outcome of this, five most significant development areas were identified for further examination: labour availability, international business, innovations, projects on key areas and venture capital funding.

Research results include that the government has conducted extensive development actions in all development areas and they have been mostly successful. The most remarkable finding of the research is that the actual development in the essential development areas has been either neutral or negative regardless of the successful government actions. As a descriptive research, this research does not try to offer an explanation of the undesirable development of the development areas but in the discussion part I both represent industrial experts’ opinions and also discuss what are a cultural environment and a recent industry structural transformation influence on the Finnish software product industry development.

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