2017

Lehtoranta, Olavi; Naumanen, Mika; Bloch, Carter; Eklund, Carita; Huovari, Janne; Piekkola, Hannu; Simons, Magnus

Denmark and Finland are small open economies with about the same size of population. Companies respond to globalization and grand challenges by searching increasingly for specialized products. This publication gives a short excursion into some technological and non-technological innovations and their competence requirements that support this specialization. Also, we describe recent developments in national innovation strategies in both countries. In both countries, there is clearly an increasing focus on innovation through customer solutions. Close contact and cooperation with customers is a rule. Furthermore, combining services like maintenance, monitoring, and data management with products is a common trend. In general, service providers are willing to change their business more towards operating their client's businesses. The development requires an analysis of the practices that result in customer and stakeholder value. We can see that digitalization indeed affects the business ecosystems and business models. ICT understanding should be the basic competence in management. The need for digitization, for remote monitoring and collaborative supply chains (i.e. for process improvements) has been and still is a key driver for the renewal of manufacturing in Finland.In Denmark ICT has possibly less served as a driver for innovation but the situation is now about changing. Profitability effects are positive for process innovations although these do not increase productivity, at least if not combined with product innovations. This suggest that process innovations are important for improving efficiency, but this may be because of the improvement of cost efficiency rather than an increase in output. Digitalization is an important opportunity for renewing manufacturing. This opportunity is firmly rooted in technological advancement in the area of intelligent technologies, but it does not realize itself via technology push. Innovation locates in value networks. Digital transformation requires that innovation processes are agile and networked. Even the smallest companies are willing to reinforce their networking with other companies. On the other hand, large companies have started to implement lean start-up methodologies. In addition, recruitment and hiring has become one of the most critical competences in companies, being possibly even more important than the development of a new digital technology inside the company. Companies should have people who can handle the task of creating new innovative solutions. With the advent of IT start-ups and their new funding schemes, a new business culture is coming ashore and penetrating the markets. Companies that have adopted a new business culture, IT services companies in the forefront, are typically lower in hierarchy, more transparent in their internal communication and flexible and faster in their operations. They are more creative, problem solving and disruptive innovation is being built-in in their business models, which often are hyper scalable. In these companies, organizational capital and organizational competences are key for business development. They invest more in new designs and brands, in developing new business models and management systems, i.e. in non-technological innovations.