The business potential of utilising data has been recognised in the manufacturing sector for some time, but the SME sector is still in the early phases of realising this potential. It can be challenging for SMEs to develop data-based business alongside their daily operations.
Sitra took on the challenge faced by SMEs by implementing a data-based business training pilot project, the IHAN business programme in 2020 and 2021, as part of the IHAN project and aimed at building a model for a fair data economy and developing the associated tools for doing so. The objective was to help companies create new data-based products and services. The companies were given support to make a significant change and to implement it in their own organisation.
A total of 18 firms completed the two-month-long business programme. They were offered meetings with trainers, workshops on service design and data networks, and peer learning days, among other activities. They were also provided with assignments and tools to help advance their own thinking and development work.
The programme strengthened the companies’ competences and provided new tools
A team of researchers from the Turku School of Economics examined the impact of the IHAN business programme, including carrying out a survey that 16 of the participating companies responded to.
The firms that participated in the programme came from a variety of sectors and their results and experiences of the programme varied. At the end of the programme, the companies were all at different stages of development of their data-based innovation: some had progressed to the final stages covered by the programme, while others had not managed to keep up with the pace of the programme as a result of a lack of resources, among other reasons.
Several companies did not complete the development work and had not changed their business models by the end of the programme, but most (11, 69% of respondents) have continued to develop their data-based solutions. Some have offered data-based solutions to their customers. A few companies reported already generating revenue from the product or service they had developed. Some companies expect to start generating revenue during 2023.
“The new business model will be introduced alongside the old one to provide growth.” – Participating company
Most companies (11, 69% of respondents) continued to use the tools provided during the training after the programme had concluded. Tools on understanding customer needs were considered especially useful. It was also considered important that the programme forced the firms to stop and consider issues and that it introduced them to the Rulebook for a Fair Data Economy.
Although the financial impacts had not been seen by late autumn of 2022, the companies believed that sharing data would provide a competitive advantage in the future: just over half of the companies (9, 56%) reported that data exchange had already provided or was currently providing a competitive advantage. In addition, one in three (5, 31%) considered this to be a future possibility. Only two of the respondents did not believe that this would happen. These companies had stopped the development of the data-based product for the time being.
“During the programme we worked on an idea, which we continued to implement after the programme ended. The training programme provided resources for moving forward.” – Participating company
Originally, the impact study also intended to examine changes in personal competence, but most participants expressed during the programme that they felt the content of the training mostly concerned business development.
In the survey conducted in late 2022, this still applied: more than half of the respondents (10 out of 16) highlighted development of the company’s operations over competence building. Two respondents considered the participation to have involved personal learning and development of the company’s business equally and four respondents highlighted personal learning more.
“Overall, the IHAN programme has provided the companies with a structure and a systematic approach to support their own development work, which has also resulted in increased competence in the companies,” says Marikka Heikkilä, Research Director at the Turku School of Economics.
Participating companies view the future of the data economy in a positive light
“The new business models created with the IHAN business programme took the principles of a fair data economy more into consideration and companies’ attitudes towards the future of the data economy were more positive than those of Finnish companies on average (Ulander et al. 2021). However, it is possible that the programme attracted companies with a high level of trust in the data economy in the first place,” says Marika Heikkilä.
The survey showed that the participating companies were on average very aware of respecting privacy in the design of digital services and bolstering trust by acting in a transparent manner. In other words, companies that participated in the programme can be expected to continue operating in accordance with fair data economy principles in the future.
“A changing operating environment requires continuous development and adaptation. The impact of the Covid-19 pandemic was inevitably present in the results of the programme,” says Katri Korhonen, Specialist for Sitra. “Overall, we can consider the programme to have reached its objectives fairly well because two thirds of the participating companies have continued developing a data-based product or service, even though they might not have managed to fully complete it.”
The revised training programme will be continued
The concept of the business programme was developed based on the feedback received for the pilot project and it will continue under the name Growth from Data.
“We received positive feedback on the pilot project and adapted the programme to be even more concise and adaptable. The research results on impact align with our thoughts on the importance of the tools used for business development,” says Katri Korhonen. “In the future, the programme will continue to highlight peer learning, which was shown to be an important factor for the participants.”
The materials for the Growth from Data programme provide training organisations with the opportunity to carry out training independently. The comprehensive free-of-charge material (in Finnish) includes information and tools that support Finnish companies in the development of new services using data. The material is suitable for use in all industries and is intended particularly for business development according to fair data economy principles in the SME sector.
Tieke (Finnish Information Society Development Centre) implemented the first Growth from Data programme for companies in the travel and restaurant sector in 2022. Results and lessons learned from the programme will be published this week, so please follow the hashtag #datastakasvua. On Friday 20 January 2023, Tieke organised AamuAreena webinar (in Finnish), presenting the programme’s successes in more detail online.
The new Growth from Data training will start (in Finnish) in 2023. Keep your ear to the ground!