Oulu, Finland: Young, Arctic, High-Tech and Some Growth Pain

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Nokia, Lars Levi Læstadius and cheap plots of land available. These are the key elements of success for Oulu city in Northern Finland.

“Oulu – Capital of Northern Scandinavia” – the big signs are visible to anyone who arrive in the city, a city with some 200,000 inhabitants following a municipal merger that brought Oulu from the 6^th to the 5^th position on the list of Finland’s largest cities.

Europe’s youngest

It is also a city proudly boasts the youngest population in Europe, with an average age of 38 years.

The University of Oulu and the Oulu University of Applied Sciences have a combined number of 25,000 students. However, that is not the (entire) explanation for its having a rather young population.

In Finland, like most other places, students do not necessarily change their officially registered address even if they move. However, Lars Levi Læstadius may have larger influence on the population composition in this area. We will get back to that in a minute.

Nokia’s home town

To the outside world, Oulu is best known as the home town of Nokia, one of the largest Finnish international industry successes. Nokia is still a savvy high-tech corporation – and in close cooperation with the university.

Cooperation, close collaboration, is a keyword for Oulu’s apparent success. Local authorities, business and education systems are closely and frequently connected, and share one common goal:

Make young people stay, make people settle in Oulu, and they strongly support innovators and entrepreneurs. Through that, they also go through some growing pains.

Estate prices are lower

One of the key strategic moves has been for the municipality, which owns most of the planned land in the area, has a conscious price policy.

- This has been a strategy for many years, Pauliina Pikkujämsä says to High North News. She is head of Marketing and Communications at BusinessOulu.

BusinessOulu is the business division of Oulu city, holding the responsibility for the municipality’s business politics and business development, as well as services towards the business sector.

- The city has really wanted to facilitate reasonably priced plots of land for construction of both residential homes as well as blocks of flats. We also rent out plots for a moderate price, so that home-builders do not need to buy expensive plots, Pikkujämsä says.

Given the pricing policy, housing costs in Oulu are far cheaper than in e.g. Helsinki, the capital.

Long before Nokia

Pauliina Pikkujämsä says this policy has existed for a long time already in Oulu, and it did not come about because of Nokia’s struggling some years ago.

- No, no. This happened long before Nokia mobile phone’s challenges and I would definitely argue that this is one of the most important factors when comparing Oulu with our capital region. In Oulu you can double your home space compared to the capital region with the same price. 

- But if this makes such a big difference and is a policy known also to other municipalities in Finland, why do they not try to copy it?

- That is also a political question, and I am not sure it is a policy that would fit in e.g. Helsinki. Besides, it is only a few years ago since we started highlighting this as a factor, around 2011, when we started seriously marketing Oulu as a place with high quality of life.

Young draws young

Deputy Rector Helka-Liisa Hentilä at Oulu University points to the city’s young population as an advantage, both for the university as well as for the city as such.

- I believe there are many reasons why this has happened. Urbanisation came later in Finland than in other Nordic countries and from the 1990s onwards through the early 2000s, there were many young people moving from other places in northern Finland to Oulu, chasing jobs and a student place. Also the birth rate is very high, and families tend to have more than one or two children.

Both universities and also other educational institutions are attractive to young people, not only from northern Finland. Study programs with a high application pressure, like architecture and medicine, also attract young people from other parts of the country.

An upward spiral

Deputy Rector Hentilä then points out a second reason why Oulu has such a young population:

- We have jobs to young people who have studied here. You can stay on upon graduation, if you so desire. However, says Hentilä, we also have unemployment among young people who do not have secondary education. The more education, the better job opportunities. That is the same in Oulu as anywhere else.

The University’s Deputy Rector also believes that the many entrepreneurial companies popping up on the fringes of the major technology companies constitute a positive force in and of themselves.

- They constitute an upward spiral; the many new innovations attract even more of the kind. It is a kind of mutual inspiration, Hentilä says.

Quality of life and price policy

She also points out the quality of life in Oulu as an important factor, including the opportunity to acquire housing within a reasonable price range, compared with other capital centres like Tampere or Helsinki.

- The city is a big land owner and thus have the tools required to offer reasonably priced plots. The city also rents out plots to home builders – not for maximum profit, but for acceptable rates.

The result, Hentilä argues, is that accommodation costs in Oulu may be as much as half of those in Helsinki.

12-minute city

In addition to its pricing policy, the city has emphasized its appearing compact – it shall be easy to reach different destinations and activities. Getting from A to B should not take more than 12 minutes, whatever it is.

Facilitating the use of bicycles year around is key elements of the Oulu concept, says Deputy Rector Helka-Liisa Hentilä.

Infrastructure important

Living conditions matter the most – in Finland too, of course. And according to the Deputy Rector, this is what has been achieved in Oulu.

- If you have acquired a good education and an good job here, in a fairly big city which offers a lot – why should you want to move to e.g. Helsinki, where your housing costs would be twice as high without your salary increasing the same?

There are even good flight connections to and from Oulu, and just under an hour to fly to Helsinki. This is another factor that benefits Oulu, Helka-Liisa Hentilä believes.

Close and frequent cooperation

- Oulu Innovation Alliance is a key arena, platform and symbol of the city’s cooperation success, Hentilä stresses.

- We really cooperate with the public sector, private sector, other institutions – private or public. We plan together, for instance when Nokia had to restructure and had to shut down some operations here.

Many lost their jobs and we immediately set up a sort of “disaster committee” with all sectors involved. It quickly convened and discussed what it could and should do.

That lead to the decision about inviting to, promoting and supporting innovation, start-ups, entrepreneurial activities in and around existing communities with the many and very competent people who now became available. This cooperation works really well, the Deputy Rector emphasizes, and there are now more jobs in the ICT sector than before.

Jobs for both spouses

Returning to Pauliina Pikkujämsä of BusinessOulu, who of course is happy to stress the qualities of the area.

- The fact that there are jobs for both, also the spouse here, the fact that we have great natural surroundings, the fact that we have a young and tech-oriented population, abundant leisure activity offers and opportunities, as well as a vibrant cultural sector – all this makes people reluctant to leave.

Growth pains

There are, however, also negative indications in Oulu’s optimism. Unemployment, for instance, is seen as one of the city’s growth pains.

- There is currently a lack of balance between offer and demand in the labor market. In many contexts, there is a lack of highly qualified expertise in specific sectors in all of Finland, and we have a shortage of people in some focused key tech industries.

In Oulu, we also have a challenge when it comes to unemployment of young people. This is a complex issue, and one of the reasons behind it is that some of the young not having sufficient education and miss match of supply and demand in skillset.

Tight labor market, but shortage of specific talent – soon

 This may also include young people who move here from other and smaller communities in the north and get an education, but who cannot find a job upon graduation. And as there are no jobs in their home towns either, they remain in Oulu, seeking for job opportunities, comments Pikkujämsä.

On top of it all, Oulu creates its own growing pains through its technological success. It is a stated fact that in the future Finland needs thousands of high-qualified technological brains, and about 2,000 of these are needed in Oulu, to meet the city’s and the industry’s expansion plans.

More open borders – for special imports

- Where should these come from? Finland’s border are not exactly wide open to people from other parts of the world?

- Our immigration policies appear to change now, slowly but steadfastly, which is good, since we need people to move to Finland. Our population numbers are not growing fast enough.

What happens is that we target special areas, such as e.g. South America, and try to attract talents from there to these specific areas of technology, says Pauliina Pikkujämsä.


Lars Levi Læstadius

And this is where we return to Lars Levi Læstadius, the Swedish-Norwegian revival preacher who operated in particular among the Sami and the Kven peoples in the mid-1800’s.

Læstadians, as his followers are known as today, are a.o. well known for their large families. While the Finnish birth rate is approximately 1.75, it is 2.4 in Oulu – according to Juha Ala-Mursula, Director of Business Oulu.

This helps reduce the average age of the population.

High-tech and traditional industry

34 percent of Oulu’s population has a university degree and the city is distinctly high-tech characterized – 18,500 jobs are considered part of this industry. That equals almost ten percent of its population.

During the past three years (2014-2016), more than 500 new business have been registered in various tech industries.

In addition, or even prior to high-tech, the Oulu region and the area around it has been characterized by large industrial corporations. Stora Ensa (paper), Kemira (chemical), Outokumpu (steel), Metsä (forest), SSAB (steel) and Fennovoima (nuclear) are still represented among its major and significant employers.