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Why Nokia Is Hiring for R&D in France

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Oct. 27 2017, Updated 6:34 a.m. ET

Nokia partnered with Alcatel-Lucent to counter Ericsson

According to a Reuters report citing French Junior Economy Minister Benjamin Griveaux, Nokia (NOK) plans to create hundreds of R&D (research and development) jobs in France. This hiring drive is tied to the commitment Nokia made to the country when it was allowed to acquire French company Alcatel-Lucent

When Nokia’s Europe-based (EFA) rival Ericsson (ERIC) joined forces with US-based (SPY) networking giant Cisco Systems (CSCO) to enhance their competition, Nokia sought to counter this arrangement. Nokia reached out to Alcatel-Lucent for a deal, partly to counter the threat that the Ericsson–Cisco collaboration posed.

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Nokia pledged 2,500 R&D jobs in France

When Nokia acquired Alcatel-Lucent in 2016, it pledged to maintain a minimum number of jobs in France. As part of this jobs pledge, Nokia was required to have 2,500 R&D staff in France before the end of 2018. The company plans to hire 500 workers for its French R&D unit to fulfill this pledge.

When Nokia announced that it was stopping further development of its high-end Ozo virtual reality camera, it noted that it planned to dedicate its efforts to creating digital health products. As shown in the chart above, Transparency Market Research noted that the global digital health market could be worth $536.6 billion by 2025, up from $196.3 billion in 2017.

Beyond fulfilling an employment pledge, the R&D hiring initiative could be viewed as part of Nokia’s efforts to step up digital health innovation, allowing it to bolster its competition in this lucrative market.

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