Finnish government rolls out digital projects to support SMEs

Finland is moving ahead with an ambitious plan to create a nationwide network of digital innovation hubs in partnership with the European Union (EU).

There will be up to five hubs, which are intended to bolster the domestic and international business competitiveness of Finland’s small and medium-sized enterprises (SMEs).

The Ministry of Economic Affairs and Employment (MEAE) is working from a national digital innovation hub (NDIH) roadmap created by the state-funded VTT Technical Research Centre of Finland (VTT).

The roadmap outlines a long-term strategy to provide added-value technology support to enable SMEs to exploit enhanced digital competence in a bid to drive business renewal and scale-up growth prospects.

The VTT’s NDIH action plan proposes the establishment of a network of regional hubs, based on coordinated set national objectives, that will function as centres of excellence for digital technologies.

The hubs, which will be part-modeled on the EU’s European Digital Innovation Hubs (EDIH) network, will support private and public sector enterprises, said Pirjo Kutinlahti, a senior ministerial adviser in the MEAE.

“Hubs that make effective use of the opportunities of digitisation have the potential to produce stronger bonds between companies and research organisations. A primary objective here is to support business renewal,” Kutinlahti said.

The long-term vision for EDIHs is that they will operate as an EU-wide network providing expert-based specialised technology support and digitsation domain project implementation services to enterprises in the public and private sectors.

The EDIHs are tasked with assisting enterprises to build competence in both utilising and deploying digital solutions that complement their capacity to adopt and apply new technologies

Finland’s plan aims to use the EDIH-model to strengthen the digital capabilities of companies across the country. The central strategy is based on helping Finnish SME enterprises to easily access, exploit and profit from the more extensive use of business impacting technologies such as artificial intelligence (AI), robotics and high-performance computing.

The design constriction of the Finnish NDIH plan means it can link directly in to the EU’s EDIH knowledge base and network. The prospective Finnish hubs will have the built-in ability to accelerate the digital transformation not just in Finland but also on a wider EU level. 

Earlier this year, the Finnish government rolled-out an open survey scheme to measure interest from the country’s technology sector in these network projects. The survey was designed to help determine which Finnish tech actors may be qualified to join the hubs.

The results from the information survey will amplify the Finnish government ministry’s ability to develop a national framework. Moreover, it will allow it to organise and complete an application round for Finland’s candidates to the Eurpean-wide hub by year-end 2020.

Although Finland has performed well in recent surveys that assess and rate digitisation, notable shortcomings persist in areas such as digital business renewal and value creation, said Petri Räsänen, the Finnish Ministry of Economic affairs’ director in charge of promoting enterprise digitisation.  

“Digital innovation hubs are much needed to both accelerate economic renewal and improve the competitiveness of companies, especially in the wake of the coronavirus epidemic,” Räsänen said.

A number of prominent digital hubs with a solid SME-focus already exist in Finland. Many, including OuluHealth, have been formed through partnerships with venture capital firms, universities and state investment agencies. 

The OuluHealth ecosystem offers a digital hub platform for incubator companies and tech enterprises with market-ready products and services. Subsidiaries include the DigiHealth Knowledge Hub, which helps companies build joint national networks for digital health research and innovation, as well as enabling them to fast-track the adoption of digital innovation. 

The NDIH project forms part of a larger and more ambitious Finnish government plan to stimulate and support sustainable SME growth in the national economy.

Government schemes have aimed at increasing the value contribution of SMEs in the domestic economy through targeted technology-led state investments. The strategy aims to improve the SME sector’s access to advanced cost-efficient business models, innovation solutions and technologies to foster commercial growth.  

The general scope of the SME-focused plan was expanded in June when Sitra (Suomen Itsenäisyyden Juhlarahasto), the Finnish government-run innovation fund, launched its IHAN (Ihmislähtöinen Datatalous) human-driven data economy pilot project to encourage SMEs to develop new business models through data-sharing opportunities.

The IHAN pilot-project, which sets out to build impartial data markets, will comprise an initial group of 22 Finnish tech companies. The project’s mission is to develop a data markets system that permits enterprises to use data responsibly and fairly to successfully build new business from data while reaping the benefits from smart services that share data transparently and in a fair way under common rules.

The companies taking part in the IHAN project come from a range of different industries, including health technology, ecological design, sustainable development, recruitment, building systems and the hospitality sector.

“The data economy and ecosystems need new kinds of business models to allow data to be used to create new services that can make day-to-day lives easier,” said Anna Wäyrynen, a senior project leader at Sitra.

“In this environment, new business and value is generated in line with the principles of a fair data economy. This applies to the entire data-related network of the participating company, its customers and partners.”

The IHAN pilot-project will provide a testbed and toolbox to appraise services for the fair data-economy. Moreover, the programme will develop data-based business models in collaboration with the participating companies and implementation partners. Ultimately, knowledge gained from the project will be filtered and recast as a fully fledged commercial product offered to markets in Finland and across Europe.

The IHAN-project is framed with international markets in mind, Wäyrynen said. The value of the EU’s data market economy alone is forecast to exceed €1bn by 2025, according to a European Commission appraisal conducted in 2019.

Despite positive projections, 46% of Finnish SMEs still retain reservations over the scope for potential business opportunities in a developing data economy, said Jyrki Katainen, Sitra’s CEO.

“The Finnish SMEs that remain doubters point to a lack of expertise as an obstacle to utilising data. The reality is data has become the most valuable raw material on the planet,” Katainen said.

“We want Finnish SMEs to recognise the embedded value in the international IHAN project. It can help them adapt to the changed operating environment. It can also help them evolve into trailblazers of innovations that use data in a fair and ethical way.”