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This document provides an evaluation of Tekes software related programmes from 2000-2010 in Finland. It describes the operational environment of the Finnish software industry during this period, including trends in politics/legislation, the economy/business, social aspects, and technology. It also evaluates the SPIN and VAMOS programmes, with the SPIN programme evaluated based on its long-term business impact and the VAMOS programme evaluated based on its results and services. Key recommendations are provided to strengthen R&D cooperation and innovation activities in the software sector.

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Software, mobile solutions and games industry Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér TekesProgrammeReport2/2012 EvaluationReport March 2012 ISSN 1797-7347 ISBN 978-952-457-541-6 Further information Pekka Pesonen Tekes pekka.pesonen@tekes.fi Tekes – Finnish Funding Agency for Technology and Innovation Tel. +358 10 191 480 Fax +358 9 694 9196 Kyllikinportti 2, P.O. Box 69 FI-00101 Helsinki, Finland E-mail: tekes@tekes.fi www.tekes.fi Evaluation of Tekes software related programmes
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3 Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér Software, mobile solutions and games industry Evaluation of Tekes software related programmes Evaluation Report Tekes Programme Report 2/2012 Helsinki 2012
4 Tekes, the Finnish Funding Agency for Technology and Innovation Tekes is the main public funding organisation for research and development (R&D) in Finland. Tekes funds industrial projects as well as projects in research organisations, and especially promotes innovative, risk-intensive projects. Tekes offers partners from abroad a gateway to the key technology players in Finland. Tekes programmes – Tekes´ choices for the greatest impact of R&D funding Tekes uses programmes to allocate its financing, networking and expert services to areas that are important for business and society. Programmes are launched in areas of application and technology that are in line with the focus areas in Tekes’strategy. Tekes programmes have been contributing to changes in the Finnish innovation environment for twenty years. Copyright Tekes 2012. All rights reserved. This publication includes materials protected under copyright law, the copyright for which is held by Tekes or a third party. The materials appearing in publications may not be used for commercial purposes. The contents of publications are the opinion of the writers and do not represent the official position of Tekes. Tekes bears no responsibility for any possible damages arising from their use. The original source must be mentioned when quoting from the materials. ISSN 1797-7347 ISBN 978-952-457-541-6 Cover image Kalleheikki Kannisto Page layout DTPage Oy
5 Foreword ICT and software have been in the focus of innovation policies all over the world, at inter- national, national and regional levels. Software has become a very important source of economic growth and it has had a key role in the transformation from natural resource based society towards knowledge based society. The development has been rapid and technologies and solutions are getting both cheaper and more advanced. Good examples can be found in mobile services, digital games industry and cloud computing. Tekes has had many programmes in the software sector to foster the capabilities and innovation activities. Three of them have now been evaluated. The oldest one, SPIN was carried out ten years ago and the long term view made it possible to analyse espe- cially business impact more closely. In the case of two recent programmes, VAMOS and Verso, the focus of the evaluation was more on the results and the programme services. Particularly, the experiences of novel approaches to support growth and internationali- zation were studied. Tekes likes to thank the evaluation team from Gaia Consulting, Virebit and FinnCon- cept for its analytical and innovative approach. Tekes also expresses its gratitude to the steering group, workshop participants and all those experts who were interviewed or otherwise participated in the evaluation project. The evaluation targeted at producing recommendations for Tekes and the innovation policy, strengthening funding co-opera- tion and developing the R&D&I activities of the software sector. The findings give a good ground for future actions, for example in planning a new programme in games sector. March 2012 Tekes The Finnish Funding Agency for Technology and Innovation
6 Contents Foreword.........................................................................................................................................................5 Tiivistelmä......................................................................................................................................................9 1 Introduction....................................................................................................................................19 2 Evaluation framework.............................................................................................................20 2.1 Evaluation questions............................................................................................................................20 2.2 Methodology............................................................................................................................................20 2.3 Assessment of validity.........................................................................................................................21 3 Description of the operational environment of the Finnish software industry 2000–2010...........................................................................................22 3.1 About software industry....................................................................................................................22 3.2 Politics and legislation.........................................................................................................................23 3.2.1 Legislation, EU, and international regulations........................................................23 3.2.2 Cybercrime and software piracy.....................................................................................24 3.2.3 Health policy...............................................................................................................................24 3.2.4 Educational policy...................................................................................................................24 3.2.5 ICT Infrastructure......................................................................................................................25 3.2.6 Changing political climate.................................................................................................26 3.3 Economy and business......................................................................................................................27 3.3.1 Trends and drivers....................................................................................................................27 3.3.2 Role of software in different value chains.................................................................28 3.3.3 Domestic trends........................................................................................................................29 3.3.4 Business models........................................................................................................................32 3.3.5 SWOT...............................................................................................................................................34 3.4 Social aspects...........................................................................................................................................34 3.4.1 Social values and interaction............................................................................................34 3.4.2 Changes in lifestyle and consumer behavior.........................................................35 3.4.3 Demographic changes.........................................................................................................35 3.4.4 Globalization...............................................................................................................................36 3.5 Technology................................................................................................................................................36 3.5.1 Changes in strategic technology priorities..............................................................36 3.5.2 Cloud and SaaS..........................................................................................................................38 3.5.3 Mobility and the battle of platforms............................................................................39
7 3.6 Development inside Tekes 2000–2010.....................................................................................40 3.6.1 Development of strategy....................................................................................................40 3.6.2 Development of organization..........................................................................................41 3.6.3 Development of funding....................................................................................................42 4 Evaluation of software programmes...........................................................................44 4.1 Post evaluation of SPIN programme..........................................................................................44 4.1.1 Background and objectives of SPIN programme.................................................44 4.1.2 Evaluation in 2003...................................................................................................................44 4.1.3 Evaluation in 2011...................................................................................................................45 4.1.4 Analysis of the growth and export of SPIN companies....................................45 4.2 Evaluation of VAMOS programme...............................................................................................49 4.2.1 VAMOS programme description.....................................................................................49 4.2.2 Programme coverage............................................................................................................50 4.2.3 Programme services...............................................................................................................51 4.2.4 Programme projects...............................................................................................................51 4.2.5 Programme relevance and achieving the objectives........................................52 4.3 Evaluation of Verso programme...................................................................................................53 4.3.1 Verso objectives and description...................................................................................53 4.3.2 Programme coverage............................................................................................................54 4.3.3 Programme services...............................................................................................................55 4.3.4 Programme projects...............................................................................................................55 4.3.5 Programme relevance and achieving the objectives........................................57 5 Micro cluster analysis...............................................................................................................59 5.1 Introduction..............................................................................................................................................59 5.2 Games cluster in Verso progamme.............................................................................................59 5.3 Born Global companies......................................................................................................................63 5.3.1 The concept of Born Global company........................................................................63 5.3.2 The role of Tekes and the applicability of programme services..................64 5.3.3 The results achieved with the support of the programmes & Tekes services.............................................................................................................................64 5.3.4 Development propositions from the born global point of view...............64 5.4 Supergrowing micro companies..................................................................................................65 5.4.1 The suitability of the programmes and their effect on rapid growth.....65 5.4.2 Wider reaching effects..........................................................................................................65 5.4.3 The role of Tekes.......................................................................................................................66 5.4.4 Development suggestions from the microenterprise point of view.......66 5.5 Role of demanding client.................................................................................................................66 5.5.1 Customer/user perspectives in VAMOS and Verso programmes...............67 5.5.2 Experiences from the selected projects.....................................................................67 5.5.3 The role of Tekes in supporting customer based interaction.......................69 5.6 General conclusions on micro clusters.....................................................................................69
8 6 Impacts of programmes.........................................................................................................72 6.1 Long term impacts of SPIN..............................................................................................................72 6.1.1 R&D of the industry.................................................................................................................72 6.1.2 Development of competences.......................................................................................72 6.1.3 Networking..................................................................................................................................73 6.1.4 Strategic and operative changes in the enterprises...........................................73 6.1.5 Growth and internationalization....................................................................................73 6.1.6 General impacts on industries and society..............................................................74 6.2 Short-term impacts of VAMOS and Verso...............................................................................76 6.2.1 Impact on participating companies and industries...........................................76 6.2.2 Impacts on society..................................................................................................................77 7 Summary and recommendations..................................................................................78 7.1 Summary.....................................................................................................................................................78 7.2 Recommendations................................................................................................................................79 7.2.1 General recommendations................................................................................................79 7.2.2 Programme instrument specific recommendations..........................................80 Appendices 1 List of interviewed persons..............................................................................................................82 2 Workshop participants.......................................................................................................................83 Tekes Programme Reports.............................................................................................................84
9 Tiivistelmä Johdanto Ohjelmistoalan markkinat olivat Euroo- passa vuonna 2009 kooltaan noin 231 miljardia euroa, mikä on noin kolman- nes koko maailman markkinoista. Suo- messa markkinoiden liikevaihto on noin 3–6 miljardia euroa lähteestä riippuen. Kansainvälisillä mittareilla suomalainen ICT- ja ohjelmistoteollisuus ovat pärjän- neet hyvin. Erityisesti ICT-sektorilla Suo- mi on ollut vahva, vaikkakin Nokian roo- li menestyksessä on ollut keskeinen.Toi- miala ei kuitenkaan kasva kansainväli- siin markkinoihin verrattuna erityisen nopeasti ja alan osuus Suomen BKT:stä on säilynyt 2–3 prosentissa. Ohjelmistoala ja ICT ovat olleet Suomen innovaatiopolitiikassa pitkä- aikaisia painopistealueita, joiden on toivottu kehittyvän yhdeksi suoma- laisen teollisuuden tukipilareista. Ta- voitetta on tuettu 2000-luvulla mer- kittävästi esimerkiksi Tekesin ohjel- missa. Tässä raportissa esitellään ar- vio kolmesta Tekesin ICT- ja ohjelmis- topainotteisesta ohjelmasta, jotka ovat SPIN (2000–2003), VAMOS (2005–2010) ja Verso (2006–2010). Arvioinnissa kes- kitytään ohjelmien tavoitteisiin, tulok- siin ja vaikutuksiin. Lisäksi arvioinnis- sa analysoitiin ohjelmistoalan toimin- taympäristön kehittymistä kansallises- ti ja kansainvälisesti viimeisen kymme- nen vuoden ajalta. Arvioinnin on tilannut Tekes ja se toteutettiin tiiviissä yhteistyössäTekesin asettaman ohjausryhmän kanssa. Oh- jausryhmän jäseniä olivat Pekka Peso- nen, Silja Leinonen, Risto Setälä, ja Mar- ko Heikkinen. Arvion suoritti Gaia Con- sultingin Oy:n johtama asiantuntijaryh- mä, johon kuuluivat Gaia Consulting Oy:stä Tuomas Raivio, Johan Lunabba ja Erkka Ryynänen, Virebit Oy:stä Juha- ni Timonen ja Markku Antikainen, sekä FinnConcept Oy:stä Santeri Lanér. Metodologia Arvioinnissa aineiston keruu sekä ana- lysointi toteutettiin käyttämällä seuraa- vassa kuvattuja menetelmiä. A. Kirjallisen materiaalin analysointi Arvioinnin aluksi analysoitiin tarkaste- lun kohteena olevien ohjelmien val- misteluraportteja, kokousmuistioita, loppuraportteja, arviointiraportteja se- kä rahoitushakemuksia. Arvion laatijoil- la oli lisäksi pääsy Tekesin asiakastieto- kantaan, joka sisälsi mm. tietoja projek- tien ja yritysten saamista taloudellisis- ta tuista. B. Taustahaastattelut Kirjallisen materiaalin täydentämisek- si ja analyysin tueksi suoritettiin noin10 taustahaastattelua. Niihin valittiin hen- kilöitä, jotka olivat perehtyneet ICT- ja ohjelmistoteollisuuteen Suomessa ja osallistuneet arvioitavien ohjelmien tai niiden puitteissa toteutettujen projek- tien suunnitteluun ja/tai toteuttami- seen. Valinta tehtiin yhdessä hankkeen ohjausryhmän kanssa. Haastattelut to- teutettiin strukturoituina arviointikysy- mysten rakennetta noudattaen. C. Sidosryhmähaastattelut Sidosryhmähaastattelujen avulla muo- dostettiin kokonaiskuva tarkasteltavien ohjelmien onnistumisesta ja vaikutuk- sista. Haastateltavat henkilöt valittiin yh- dessä hankkeen ohjausryhmän kanssa, jolloin varmistettiin, että haastattelujen avulla saadaan huomioitua riittävän laa- jasti relevantit näkökulmat. Kustakin oh- jelmasta haastateltiin noin 10 asiantunti- jaa. Myös sidosryhmähaastattelut toteu- tettiin strukturoituina arviointikysymyk- sissä asetettuja tavoitteita noudattaen. D. Työpaja Arviointityön lopussa järjestettiin työpa- ja, jonka tavoitteena oli validoida ja tar- kentaa arvioinnin tulokset. E. Mikroklusterianalyysit Neljästä erityisen tärkeästä arvioinnin aikana esiin nousseesta teema-aluees- ta toteutettiin syvällisempi mikrokluste- rianalyysi. Teemat valittiin yhdessä oh- jausryhmän kanssa. Teema-alueittain valittiin neljä temaattisesti yhtenäistä
10 tai muulla tavoin samankaltaista projek- tiryhmää eli mikroklusteria. Kunkin mik- roklusteriin valitun projektin vastuulli- sen henkilön kanssa tehtiin laaja haas- tattelu. Mikroklusterianalyysien puitteis- sa haastateltiin yhteensä 18 henkilöä. Mikroklusterianalyysissä pyrittiin luomaan syvällisempi läpileikkaus tar- kasteltavista ohjelmista kuin arvioimalla ja vertailemalla yksittäisten ohjelmissa rahoitettujen projektien tuloksia ja vai- kutuksia keskenään.Toisaalta ohjelmien sisällöllisestä vaihtelevuudesta johtuen tässä arvioinnissa esiintyvät mikroklus- terit ja niiden rakenne eroavat paikoitel- len merkittävästi toisistaan. Seuraavat teema-alueet valittiin mukaan klusterianalyysiin: •• Peliklusteri: Suomen peliklusterista on kasvanut kansainvälisesti me- nestyvä kansallisesti merkittävä teollisuuden ala. •• Born Global -yritykset, jotka perus- tetaan suuntaamaan suoraan glo- baaleille markkinoille. •• Nopeasti kasvavat mikroyritykset: Tekesin asiakaskannan perusteella tunnistettiin joukko nopeasti kas- vaneita mikroyrityksiä, joiden lii- kevaihdon vuosikasvu oli satoja tai tuhansia prosentteja. •• Vaativa asiakkuus:Tunnistettiin tuo­ tekehittäjä – potentiaalinen asiakas -yrityspareja. F. Internet-kysely Hankkeen puitteissa toteutettiin myös kaksi Internet-kyselyä VAMOS- ja Ver- so-ohjelmista. Valitettavasti vastaus- prosentti jäi hyvin alhaiseksi, jolloin tu- losten perusteella ei voitu tehdä suoria johtopäätöksiä. Verso-ohjelman osalta sovellettiin ohjelmassa suoritetun yri- tyskyselyn tuloksia. Arviointikysymykset Tekes-ohjelmien arvioinnin keskeiset tutkimuskysymykset voidaan jakaa seu- raavasti. Ohjelmien toimintaympäristön kehityksen kuvaus 1. Mitä merkittäviä muutoksia on ta- pahtunut ohjelmisto ja ICT-alan toi- mintaympäristössä 2000-luvulla? Ohjelmien tavoitteet, tulokset ja vaikutukset 2. Kuinka hyvin asetetut tavoitteet to- teutuivat ja tulokset saavutettiin? Mitä tuloksia ei olisi saavutettu ilman arvioitavia ohjelmia? Kuinka relevan- tit ja haastavat tavoitteet ohjelmalle oli asetettu? 3. Kuinka hyvin ohjelmat tavoittivat tärkeimmät sidosryhmät ja erityi- sesti pk-yritykset? Kuinka hyvin oh- jelmat ja niiden tarjoamat palve- lut vastasivat kohderyhmien tarpei- siin? Erityisesti pohdittiin, miten oh- jelmiin olennaisesti liittyvä kansain- välinen yhteistyö on vaikuttanut oh- jelmaan osallistuneisiin yrityksiin ja muihin toimijoihin? 4. Miten ohjelmien vaikutukset edisti- vätTekesin yhteiskunnallisen vaikut- tavuuden mallin tavoitteita? Miten merkittäviä nämä vaikutukset ovat olleet? Millainen vaikutus ohjelmil- la on ollut i. T&K&I investointeihin ohjelmis- tosektorilla ii. Tietotaidon kehittymiseen iii. Kansainvälisten ja kansallisten verkostojen muodostumiseen iv. Toimintamallien muutoksiin v. Innovaatioiden ja liiketoiminta- mahdollisuuksien syntymiseen vi. Tuottavuuteen vii. Yritysten kasvuun ja kansain- välistymiseen viii. Yritystoimintaan ja yhteiskun- taan laajemmin? 5. Miten nämä muuttujat ovat kehitty- neet indikaattorien ja esimerkkita- pausten valossa? Johtopäätöksen ja suositukset A. T&K&I-toiminnot ICT- ja ohjelmisto- sektorilla Miten T&K&I-toimintoja voitaisiin kehittää? Mikä on TIVIT:n ja mui- den SHOK:ien rooli tulevaisuudes- sa? Mitkä kansainväliset ohjelmat ja aloitteet ovat tärkeimpiä ja miten ne voitaisiin huomioida paremmin? B. Mitä konkreettisia ja onnistunei- ta toimintatapoja voidaan tunnis- taa, joiden pohjalta voidaan kehit- tää muiden ohjelmien toimintaa? C. Tutkimus- ja innovaatiopolitiikka Miten kansalliseen innovaatiopoli- tiikkaan liittyvät suositukset pitäisi huomioida? Mitä muita tutkimus- ja innovaatiopolitiikan kehittämistoi- menpiteitä tarvitaan Tekesin vaiku- tusten voimistamiseksi? ICT- ja ohjelmistoteollisuuden kehitys Suomessa ja kansain- välisesti 2000-luvulla Ohjelmistoalan määritelmä vaihtelee jonkin verran lähteestä riippuen. Taval- lisesti ohjelmistoteollisuudella viitataan kuitenkin liiketoimintaan, joka perustuu ohjelmistojen kehittämiseen tai ohjel- mistotuotteiden myyntiin lisensseinä tai palveluina sekä näihin kiinteästi liit- tyviin muihin palveluihin. ICT-teollisuu- dessa yhteinen nimittäjä on puolestaan tieto- ja viestintäteknologioiden hyö-
11 dyntäminen. Toimialat ovat siten osit- tain päällekkäisiä. Kansainväliset markkinat Kansainvälisesti ICT-investoinnit kas- voivat hyvin nopeasti vuosituhannen vaihteessa, jonka jälkeen kasvu on jon- kin verran tasaantunut. Toimialan mer- kitystä myös muille teollisuuden aloil- le kuvaa hyvin se, että viimeisen kym- menen vuoden aikana ICT-investointi- en osuus tuottavuuden kasvusta on ol- lut Euroopassa noin 40 % ja esimerkik- si Yhdysvalloissa ja Suomessa vielä tätä- kin suurempi. Toimialan keskeisiä kansainväli- siä muutosvoimia ovat olleet teknolo- ginen kehitys ja uusien liiketoiminta- alueiden syntyminen näiden teknologi- oiden ympärille; älypuhelimien kehitys ja niiden kasvava merkitys ohjelmisto- teollisuudelle; globalisaatio ja kasvavien talouksien kuten Intian ja Kiinan markki- na-asema; sekä pilviteknologioiden laa- jentuva hyödyntäminen. ICT- ja ohjel- mistoteollisuuden rooli kasvaa myös si- tä kautta, että ne linkittyvät yhä laajem- paan joukkoon tuotannon arvoketjuja. Esimerkiksi auto- ja lääketeollisuus sekä automaatio ja kuluttajaelektroniikka tar- vitsevat kasvavan määrän ohjelmistoja. Nopeasti kehittyvät teknologiat edellyt- tävät yrityksiltä jatkuvaa uudistumisky- kyä, osaamisen kehittämistä ja kompe- tenssien uudistamista. Uusia teknologioita kehitetään jat- kuvasti, jolloin ongelmaksi on muodos- tunut kiinnostavien ja potentiaalisten teknologioiden tunnistaminen. Uusien teknologioiden tuomat mahdollisuudet ovat tyypillisesti laajemmat kuin yritys- ten kyky hyödyntää niitä. Samanaikai- sesti pilvipalveluiden ja näitä tukevan infrastruktuurin kehittyminen on mah- dollistanut yhä laajemman sovellusken- tän syntymisen myös joukolle uusia lait- teita, kuten älypuhelimille ja tablettitie- tokoneille. ICT- ja ohjelmistoteknolo­ gioille onkin ominaista, että paras tekni- nen ratkaisu ei takaa menestystä mark- kinoilla. Toimialan kehitys ja markkinat Suomessa Ohjelmisto- ja ICT-sektori ovat kehit- tyneet Suomessa pääosin muuta Eu- rooppaa ja muuta suomalaista teolli- suutta nopeammin. Viimeisen 25 vuo- den aikana niiden työllistävä vaikutus samoin kuin tuotannon arvo ovat kol- minkertaistuneet. Suomi on ollut vah- va erityisesti ICT-sektorilla. Ohjelmisto- alan osalta Suomen ulkomaankauppa on sen sijaan ollut tuontipainoista. Täs- tä huolimatta myös ohjelmistoala on kasvanut melko tasaisesti viimeisen 10 vuoden ajan tuotannon likimain kak- sinkertaistuessa. ICT- ja ohjelmistoalaan on myös kohdistettu suuri osa Suomen T&K-investoineista ja niiden jalostusar- vo on säilynyt Suomessa erinomaisena. Suomi on pärjännyt nopeasti muuttu- vassa ympäristössä hyvin. Nokian roo- li suomalaisen ICT-teollisuuden ajurina on ollut kuitenkin keskeinen. ICT- ja ohjelmistoalan yrityskent- tä on Suomessa voimakkaasti polarisoi- tunut. Muutama suurin toimija vastaa yli 50 % toimialan tuotannosta. Samal- la Suomessa on kuitenkin runsaasti pie- niä ja keskisuuria yrityksiä. Ohjelmisto- alan vienti on kasvanut tasaisesti, mut- ta tästä huolimatta pk-yritysten toimin- ta kansainvälisillä markkinoilla on säily- nyt vähäisenä. Lisäksi toiminta on kes- kittynyt lähinnä muihin Pohjoismaihin tai Eurooppaan. Tässä valossa kansain- välistymisen tukeminen voisi auttaa kansainvälisen potentiaalin huomatta- vasti nykyistä laajamittaisempaan hyö- dyntämiseen. Suomessa ICT- ja ohjelmistoalaa on tuettu monin tavoin. Esimerkiksi yliopis- toissa ja muussa koulutuksen tarjonnas- sa ICT- ja ohjelmistopainotteisten kou- lutusohjelmien lukumäärä on kasvanut huomattavasti 2000-luvulla. ICT-sovel- luksia on alettu samanaikaisesti käyttää enenevissä määrin myös peruskouluis- sa ja lukioissa, mikä on parantanut op- pilaiden teknisiä valmiuksia. Ohjelmis- to- ja ICT-alojen merkitys on korostu- nut myös useissa kansallisissa tietoyh- teiskuntastrategioissa, joiden tarkoituk- sena on ollut taata Suomen asema tie- toyhteiskuntien tiennäyttäjänä. ICT- ja tietojärjestelmäinfrastruk- tuuri ovat Suomessa pitkälle kehittynei- tä ja menestyneet kansainvälisissä ver- tailuissa erinomaisesti. Tärkeimpiä me- nestyksen elementtejä ovat olleet no- pea laajakaista–Internet-yhteyksien ja kolmannen sukupolven (3G) matkapu- helinverkon leviäminen. Vuonna 2010 vähintään 1 Mbit/s yhteys oli saatavilla kaikkialla Suomessa. Myös nopeat opti- set Internet-yhteydet ovat levinneet no- peasti. Laadukkaat ja kehittyneet ICT- rakenteet tarjoavat yrityksille etuja esi- merkiksi matkapuhelinsovellusten ke- hittämisessä ja testaamisessa. Kuvassa 1 on esitelty Suomen ICT- ja ohjelmistoteollisuuden SWOT-analyy- si. Vahvuuksiksi nousevat hyvän koulu- tuksen ja kehittyneen infrastruktuurin ohella julkinen rahoitus ja Suomen hyvä imago. Lisäksi Suomessa on hyödynnet- ty uusimpia ICT- ja ohjelmistosovelluksia sangen laajasti muilla teollisuuden aloil- la. Heikkouksia ovat mm. pienet kotimai- set markkinat sekä verkostojen, mark- kinoinnin ja kansainvälistymisen puut- teellinen osaaminen. Tärkeimpiä mah- dollisuuksia tuovat kasvavat lähimark-
12 kinat, kehittyvät verkostot ja kaupallista- miseen liittyvä osaaminen sekä julkisen sektorin tuki kansainvälistymiseen. Uhkia muodostavat mm. rahoituksen pienene- minen, koveneva kansainvälinen kilpailu sekä osaavan työvoiman maastamuutto. Sosiaaliset vaikutukset 2000-luvun vaihde ja ensimmäinen vuosikymmen merkitsivät tietoyhteis- kunnan syntymistä. Informaation tuot- taminen, jakelu ja käsittely kytkeytyivät yhä tiiviimmin ihmisten päivittäisiin toi- miin. Töissä, opiskeluissa ja vapaa-ajalla tietoyhteiskunta muokkasi teknologioi- ta, toimintatapoja ja osaamistarpeita. Myös vaikuttamisen mekanismit muut- tuivat, sillä tietoyhteiskunnassa vaikut- taminen perustuu aiempaa enemmän tietoon, sen hallintaan ja hyödyntämi- seen. Samalla ICT- ja ohjelmistoteolli- suus ovat olleet globalisaation tärkeim- piin kuuluvia edistäjiä ja tätä kautta ne ovat lisänneet mm. kulttuurien välis- tä kommunikaatiota ja liiketoiminnan kansainvälistymistä. Tietoyhteiskunnalla on ollut useita merkittäviä sosiaalisia vaikutuksia. Esi- merkiksi monet vanhemmat ikäryhmät, jotka eivät ole tottuneita ATK-laitteiden käyttäjiä tai Internetin hyödyntäjiä, ovat joutuneet huonompaan asemaan työ- elämässä ja sivuun uusista sosiaalisis- ta palveluista. Vaikutusta on voimista- nut entisestään se, että monet perintei- set palvelut kuten pankkipalvelut ovat siirtyneet enenevissä määrin verkkoon. Useiden vaikutusten suhteen on kuiten- kin vaikea sanoa, onko teknologinen ke- hitys vaikuttanut elämäntapamuutok- siin, vai ovatko elämäntapamuutokset johtaneet uusien teknologioiden ja toi- mintatapojen kehittymiseen. Tärkeimpiin sosiaalisiin muutoksiin tietoyhteiskunnassa lukeutuvat sosiaali- sen median kehittyminen ja käytön rä- jähdysmäinen kasvu, käyttäjien tuotta- maan sisältöön (crowdsourcing) perus- tuvien palvelujen ja tuotteiden nopea lisääntyminen, sekä Internetin kasvava hyödyntäminen viestinnän ja kommu- nikoinnin kanavana. Lisäksi avoimeen lähdekoodiin perustuvien ohjelmien li- sääntyminen on johtanut uudenlaisten liiketoimintamallien kehittymiseen. Sa- mansuuntaisen kehityksen ennuste- taan jatkuvan myös tulevaisuudessa. Kuva 1. Suomen ICT- ja ohjelmistoteollisuuden SWOT-analyysi. Vahvuudet Heikkoudet •• Kehittynyt ICT-infrastruktuuri •• Korkea koulutustaso •• Julkisen sektorin rahoitus t&k-hankkeille •• Kansainvälinen maine tekonologiteollisuuden edelläkävijänä erityisesti matkapuhelinsektorilla •• Vaativat kotimaan markkinat antavat hyvät lähtö- kohdat kansainvälistymiseen •• Runsaasti kokemusta ICT- ja ohjelmistoratkaisuiden soveltamisesta useille muille toimialoille, kuten terveydenhuoltoon ja rahoitussektoreille •• Pankkien ja kaupankäynnin ICT-investoinnit •• Pienet kotimaiset markkinat •• Tukipalveluiden puutteellinen organisointi •• Kasvu- ja kansainvälistymishalukkuuden puuttuminen osalta yrityksistä •• Markkinoinnin ja kansainvälistymisen heikko osaaminen yhdistettynä osin puutteellisiin ja hajanaisiin kansainvälisiin verkostoihin •• Arvoketjun ja erikoistumisen puutteellinen ymmärrys Mahdollisuudet Uhat •• Kaupallistamisen kehittyminen •• Yhteistyön ja verkostojen kehittyminen •• EU:n sekä Venäjän ja Itä-Euroopan kasvavat markkinat •• Kansainvälinen kiinnostus suomalaisiin teknologia- yrityksiin •• Elektronisen liiketoiminnan kasvava merkitys vähentää kaukaisen sijainnin merkitystä •• Kasvukelpoisten pk-yritysten kasvava lukumäärä •• Julkisen sektorin t&k-investoinnit kansainvälistymiseen •• Rahoituksen pieneneminen sekä pitkän aikavälin vision puuttuminen riskirahoituksessa •• Puutteelliset investoinnit ja kansainvälistymiseen tarvittavan osaamisen puuttuminen •• Osaavan työvoiman saatavuus johtuen mahdollisesta maastamuutosta •• Globalisaation vaatimat valtavat investoinnit •• Kova kansainvälinen kilpailu ja uusien erityisesti ohjelmistoalan kilpailijoiden nousu •• Isot yritykset ostavat innovatiivisia pieniä yrityksiä
13 Ohjelmien esittely VAMOS Tekes käynnisti vuonna 2005 VAMOS – Liiketoiminnan mobiilit ratkaisut -ohjel- man, jonka tavoitteena oli vauhdittaa mobiilien ja langattomien teknologioi- den soveltamista laajasti useilla toimi- aloilla ja tukea näiden yritysten toimin- nan tehostamiseen suuntautuneiden ratkaisuiden kehittämistä. Erityisiksi pai- nopistealueiksi valittiin logistiikka ja lii- kenne, rakennus- ja kiinteistöala, valmis- tava teollisuus sekä yrityspalvelut. Lisäk- si projektien valinnassa pyrittiin suosi- maan pk-yrityksiä ja mikroyrityksiä. Ohjelman kokoaviksi tavoitteiksi asetettiin mobiileihin yritysratkaisuihin erikoistuneiden suomalaisten toimijoi- den kokoaminen klusteriksi siten, että •• mobiileja ratkaisuja kehitetään vas- taamaan niitä hyödyntävien alojen yritysten oleellisiin tarpeisiin •• ratkaisuja kehittävät yritykset saavat projektien myötä uusia liiketoimin­ tamahdollisuuksia •• teknologioita tutkivat organisaa­ tiot tarjoavat osaamistaan yrityksiä konkreettisesti hyödyttävissä tutki- mushankkeissa. Klusterin pohjaksi koottiin laaja moni- puolinen joukko yrityksiä, tutkimuslai- toksia, konsultteja, verkostoja ja julki- sia tahoja. Ohjelmaan osallistui n. 400 organi- saatiota viideltä eri toimialalta, jotka to- teuttivat 188 mobiilien ratkaisujen kehi- tys- ja tutkimusprojektia. Pk- ja mikroyri- tyksiin kohdistui 72 % (104 kpl) yritys- ten projekteista. Yhteensä 144 projek- tissa kehitettiin mobiiliratkaisuja, joista suurin osa keskittyi logistiikan ja liiken- teen sekä rakennusteollisuuden ja kiin- teistöhuollon ratkaisuihin. Ensimmäi- sen 4,5 vuoden aikana projektien koko- naisvolyymi oli 93 miljoonaa, jostaTeke- sin osuus oli 43 miljoonaa euroa ja yri- tysten ja tutkimuslaitosten panostus 50 miljoonaa euroa. Verso Tekesin vuonna 2006 käynnistämä Ver- so – Vertical Software Solutions -tekno- logiaohjelman tavoitteena oli edistää suomalaisten ohjelmistoyritysten kas- vua, kansainvälistymistä ja tuotekehitys- tä. Alkuperäiset teollisuuden kohdealat olivat rahoituspalvelut, kaupankäynti, rakennusteollisuus ja tietoliikennetek- niikka. Myöhemmin kohderyhmiin li- sättiin mm. peliteollisuus. Ohjelmassa korostettiin käytännönläheistä mento- reiden sparrausta ja ostajatilaisuuksien järjestämistä sekä Tekesin kontaktiver- kon hyödyntämistä pk-yrityksiä tukevi- en konsortioiden luomisessa. Verso-ohjelman tavoitteet sisälsi- vät seuraavia osa-alueita: •• Suomalaisten ohjelmistoyritysten kasvun ja kansainvälistymisen no- peuttaminen •• Kansainvälisille markkinoille täh­ täävien asiakas- ja markkinalähtöis­ ten ohjelmistotuotteiden ja -palve- luiden kehittäminen •• Kansainvälinen liiketoimintaosaa- minen ja verkostojen vahvistami- nen •• Kasvuun ja riskinottoon kannus- tavan yrityskulttuurin luominen ja vahvistaminen. Aiempiin Tekes-ohjelmiin nähden Verso- ohjelma oli poikkeuksellisen kaupallises- ti orientoitunut. Ohjelmassa tehtiin tietoi- nen päätös, jonka mukaan yritysfokus oli keskeinen ja tutkimusprojekteihin panos- tettiin vain, mikäli niissä pystyttiin tunnis- tamaan suora yhteys liiketoimintaan. SPIN SPIN-teknologiaohjelman tärkeimpiin tavoitteisiin kuului suomalaisen ohjel- mistotuoteteollisuuden kasvun ja kan- sainvälistymisen tukeminen. Teknolo- gianäkökulma oli ohjelmassa keskeinen, mutta sen lisäksi pyrittiin kehittämään ohjelmistotuoteyritysten toimintaym- päristön valmiuksia esimerkiksi mark- kinoinnin, rahoituksen ja kansainvälis- tymisen osalta sekä tutkimus- ja asian- tuntijapalveluiden tarjoamisessa. Kolmivuotinen SPIN-ohjelma käyn- nistyi vuonna 2000. Ohjelman tärkeim- mät painopistealueet olivat •• Internet-palveluinfrastruktuurin tuotteet •• Mobiiliympäristön ohjelmistotuot- teet ja -innovaatiot •• Uuden sukupolven yritys- ja toimi- alasovellukset. Muita painopistealueita olivat tieto- turva, viihdetuotteet ja niiden toimin- ta-alustat, uudet ohjelmistokehityk- sen tuotteet, uudet käyttöympäristö- alustat, uusiin ympäristöihin moderni- soidut ja integroidut ohjelmistotuot- teet, uusmedia-alueen ohjelmisto- tuotteet, komponenttiperustaiset oh- jelmistotuotteet ja ohjelmistokompo- nenttituotteet. Ohjelmassa oli yhteensä 110 yri- tys- ja 14 tutkimusprojektia. Niiden ko- konaisvolyymi oli noin 70 miljoonaa eu- roa, josta Tekesin rahoitusosuus oli 29,6 miljoonaa euroa. Käynnistyneille hank- keille asetettiin kunnianhimoisia tavoit- teita ja yhteenlaskettuna yritykset ta- voittelivat hankkeiden puitteissa pää- osin kansainvälisiltä markkinoilta lähes miljardin euron uutta liikevaihtoa.
14 Ohjelmaan osallistui 125 yritystä, joista suurin osa oli nuoria pk-yrityksiä. Ohjelman kokonaisvolyymi oli 125 mil- joonaa euroa, josta Tekesin rahoituksen osuus oli noin 60 miljoonaa. Ohjelman puitteissa rahoitettiin yhteensä 220 pro- jektia, joista vain noin 10 % keskittyi tut- kimukseen. Ohjelmien tulokset ja vaikutukset sa kehitetyt teknologiat jatkavat ilmei- sesti elämää muissa yrityksissä. SPIN-ohjelman vaikutuksia arvioi- tiin myös erillisen 38 yrityksen otoksen pohjalta, jossa mukana olevat yritykset toimivat yhä omalla nimellään. Tulokset osoittavat, että erityisesti pienet yrityk- set, joiden liikevaihto oli alle 2 miljoonaa euroa ohjelman alussa, näyttävät kasva- neen selvästi ohjelmistoalan vertailuin- deksiä nopeammin. Monet näistä yrityk- sistä ovat käyttäneet Tekes-rahoitusta myös SPIN-ohjelman jälkeen. Kansain- välistymisen ja viennin rooli kasvussa on jäänyt kuitenkin verraten vähäiseksi. SPIN-ohjelman käynnistyessä ICT- sektorilla elettiin voimakasta nousu- kautta, jolloin ohjelman osuus toimialan investoinneista oli vähäinen. IT-kuplan puhkeamisesta seurasi kuitenkin voima- kas laskukausi, jonka aikana SPIN-ohjel- man rahoitus oli monelle ICT- ja ohjel- mistoalan yritykselle selviytymisen ehto, joka mahdollisti liiketoiminnan jatkami- sen. Erityisen tärkeä rooli ohjelmalla oli tuolloin T&K-toiminnan rahoittamises- sa. Vaikka SPIN-ohjelman roolia vahvan ICT- ja ohjelmisto-osaamisen kehittymi- sessä ei voida helposti eritellä, on Teke- sin pitkäaikaisella tuella toimialoille ol- lut kokonaisuudessaan suuri vaikutus. SPIN-ohjelman rooli on tässä suhteessa merkityksellinen, sillä monille yrityksille Tekes-yhteistyö SPIN-ohjelmassa mer- kitsi pitkän yhteistyösuhteen alkamista. Huolimatta SPIN-ohjelman hyväs- tä kansallisesta ulottuvuudesta, ohjel- man kontribuutiota verkostojen ja toi- mialaklustereiden kehittymiseen on vai- kea vahvistaa. Jonkin verran yhteistyö- tä ohjelman puitteissa syntyi erityisesti yritysten välille, mutta useimmat SPIN- projekteissa mukana olleet muistavat ohjelman vain rahoituksesta. Useille yrityksille rahoituksella onkin ollut eri- tyisen suuri merkitys. Se on mahdol- listanut panostukset tuotekehitykseen ja yrityksen prosessien jalostamiseen. Projektien strategista merkitsevyyt- tä on kuitenkin vaikea arvioida. Myös- kään kansainvälistymiseen liittyvistä tu- loksista ohjelman puitteissa ei ole pal- joa evidenssiä ja vain muutamat SPIN- projekteissa kehitetyt tuotteet tai pal- velut ovat menestyneet kansainvälises- ti. Toisaalta runsaasti projekteissa kehi- tettyä ohjelmistoja on edelleen käytös- sä Suomessa. VAMOS VAMOS-ohjelman puitteissa järjestettiin perinteisten palveluiden lisäksi uusia palveluita kuten Mobile Enterprise Fac- tory (MEF) -tukiprosessi. Yritykset hyö- dynsivät melko vilkkaasti uusia ja pe- rinteisempiä palveluita, joskin yritysten välillä oli tässä suhteessa myös merkit- täviä eroja. Osa yrityksistä hyödynsi vain rahoitusta, kun toiset hyödynsivät oh- jelmapalveluita mahdollisimman laa- jasti. Kokonaisuudessaan ohjelman nähtiin kuitenkin vastaavan hyvin yri- tysten relevantteihin tarpeisiin ja ohjel- maan osallistuneet yritykset olivat pää- osin hyvin tyytyväisiä ohjelman tarjon- taan. Erityisesti projektikoordinaatto­ rien aktiiviseen toimintaan ja asiantun- temukseen oltiin erittäin tyytyväisiä.Yli- voimaisesti tärkein ohjelman palvelu oli kuitenkin rahoitus, jolla oli useimmissa projekteissa toteutuksen mahdollista- va rooli. Joitain haasteitakin palveluissa nähtiin. Niistä ei esimerkiksi tiedotettu kyllin hyvin hakuprosessin aikana, jol- loin osa yrityksistä ei ollut tietoisia laa- jasta palvelutarjonnasta. Toisaalta osa uusista palveluista kuten markkinointi- konsultointi koettiin jostain syystä tar- peettomiksi, sillä vain muutama yritys SPIN-jälkiarviointi SPIN-ohjelma arvioitiin vuonna 2003 yhdessä kahden muun Tekesin tekno- logiaohjelman kanssa. Arvion mukaan SPIN-ohjelma huomioi ansiokkaasti teollisuuden tarpeet ja ohjasi menes- tyksekkäästi ohjelmistoalan kehitystä kohti tuotelähtöistä ajattelutapaa. Oh- jelman myötä vahvistui tietämys ohjel- mistoalasta usean eri toimijan muodos- tamana klusterina. Toisaalta SPIN-ohjelman haastee- na nähtiin, että se oli hieman liian tek- nologiapainotteinen, väljästi määritelty ja perustui liian tiiviisti ohjelmaa edeltä- neisiin trendeihin, vaikka toimiala muut- tui merkittävästi ohjelman aikana. Toi- mintaympäristön muutokset eivät kui- tenkaan ratkaisevasti vaikuttaneet oh- jelmaan, vaan strategia ja tavoitteet säi- lyivät alan kannalta relevantteina. Tek- nologiapainotteisuuden seurauksena ohjelman vaikutukset olivat kuitenkin vähäiset asiakaslähtöiseen toimintata- poihin sekä vientiin ja kansainvälistymi- seen liittyen. Jälkiarvioinnissa käytiin läpi 101 yri- tystä, jotka olivat mukana SPIN-ohjel- massa. Näistä yrityksistä 56 on lakannut toimimasta, mikä vastaa toimialalla tyy- pillistä poistumaa. Ainakin 22 näistä yri- tyksistä on hävinnyt yritysoston tai fuu- sion seurauksena, joten SPIN-ohjelmas-
15 hyödynsi tätä palvelua. Myös ohjelman ohjausryhmän toiminnassa oli ongel- mia, jotka johtuivat ainakin osittain oh- jausryhmän epäselvästä roolista ja huo- nosti asetetuista tavoitteista. Palveluihin liittyvien haasteiden lisäksi myös kehi- tettyjä palveluja hyödyntävien yritysten taloudellinen tukeminen olisi ollut tar- peen, sillä monissa tapauksissa palve- lun hankintaan sisältyy myös merkittä- viä riskejä. Pk-yritysten osuus ohjelman pro- jekteista oli kaksi kolmannesta. Projek- tit keskittyivät pitkälti yritysten kompe- tenssialueille, olivat strategisesti merkit- tävässä roolissa sekä keskittyivät hank- keisiin, joiden toteuttamiseen sisäl- tyy merkittävä riski. Projektien keskei- siä hyötyjä olivat mm. teknisen osaami- sen ja uusien tuotteiden kehitys; yhteis- työn lisääntyminen asiakkaiden ja mui- den yritysten kanssa; sekä kansainvälis- tyminen. Toisaalta projektin tavoittei- ta olivat erityisesti asiakashyötyjen ym- märtäminen. Tässä mielessä projektien sisällöt eivät olleet aivan linjassa ohjel- man tavoitteiden kanssa, sillä suhteel- lisen suuri osuus projekteista keskittyi erityisesti teknologiseen kehittämiseen. Myöskään projektin keskeiset hyödyt ei- vät rakentuneet asiakkaiden tarpeiden ympärille. VAMOS-ohjelman tavoitteet kyt- keytyivät pitkälti mobiiliteknologioiden kehittämiseen ja parempaan hyödyntä- miseen, mikä vaikutti ohjelman alkaes- sa relevantilta nopeasti kehittyvältä toi- mikentältä. Myös Nokian menestyksellä lienee ollut vaikutusta ohjelman tavoit- teiden asettamisessa. Tästä huolimatta osassa projekteista sovellusten hyödyn- täjien kiinnostus tuotteita tai palveluita kohtaan oli vaimeaa ja tuotekehitykses- tä saatavat hyödyt jäivät sen vuoksi vä- häisiksi. Yleisesti ottaen VAMOS oli jossain määrin aikansa vanki. Suomella oli mer- kittävä mobiilialan teknologinen etu, mutta globaaleja kaupallisia voittajarat- kaisuja ei ollut vielä syntynyt. Mobiili­ ala nähtiin myös jälkeenpäin katsottu- na ehkä hiukan perusteettomasti oma- na kokonaisuutenaan; nykyään mobii- liratkaisut muodostaisivat todennäköi- sesti yhden kanavan muiden joukossa. Verso Myös Verso poikkesi aiemmista Tekes- ohjelmista merkittävästi palvelutarjon- tansa osalta, sillä tarjolla oli laaja vali- koima uusia palveluja. Erityisesti yritys- kohtaiset Tekesin tai ulkopuolisten eks- perttien liiketoiminnan kehittämiseen, markkinointiin ja kansainvälistymiseen liittyvät palvelut kuuluivat ohjelman fo- kukseen. Tällaisia yrityskohtaisia asian- tuntijapalveluita käytettiin erityisen pal- jon ja ne koettiin myös erittäin tarpeel- lisiksi. Toisaalta osa yrityksistä hyödyn- si jälleen vain rahoitusta, mikä näyttää olevan ominaista Tekesin teknologia­ ohjelmille. Vielä selvemmin Verso-ohjelman erilaisuus näkyi projektivalinnoissa. Ta- vallisesti Tekes-ohjelmien projektit ovat olleet varsin teknologiapainotteisia, mutta Versossa suurimpaan osaan pro- jekteja kuului myös liiketoiminnallisia ja kansainvälistymiseen liittyviä element- tejä. Myös teknologiapainotteisissa pro- jekteissa liiketoiminta ja asiakastarpeet olivat määräävässä asemassa. Versoa voidaan pitää tässä mielessä merkittä- vänä kehitysaskeleena Tekesin ohjel­ mien historiassa. VAMOS-ohjelman tavoin myösVer- sossa mukana olleista yrityksistä kak- si kolmannesta oli pk-yrityksiä. Versos- sa mukaan otettiin kuitenkin nimen- omaan sellaisia yrityksiä, joiden tuot- teen tai palvelun menestyksestä oli ai- nakin alustavia viitteitä. Verso poikkesi aiemmista Tekes-ohjelmista myös sen ulkoisen tunnettavuuden suhteen, joka oli seurausta ammattimaisesta ja sys- temaattisesta brändin rakentamisesta. Julkisuuden seurauksena tavallista suu- rempi joukko projekteja hakeutui ohjel- maan ja mukaan otettavien projektien valintaa voitiin suunnitella ja kohdentaa tavallista paremmin. Verso-projekteihin liittyen nousi esiin myös joitakin haasteita. Yritysten ja tutkimuslaitosten välinen yhteistyö osoittautui paikoin haasteelliseksi. Kaik- ki yritykset eivät myöskään olleet tietoi- sia Verson laajasta palvelutarjonnasta ja eivät sen vuoksi tulleet hyödyntäneek- si kaikkia mahdollisuuksia. Myöskään pienten yritysten pääsy kansainvälisil- le markkinoille suurten suomalaisyritys- ten kanssa verkottuen ei toiminut odo- tetulla tavalla. Verso-ohjelman projektit kytkeytyi- vät useimmissa tapauksissa tiiviisti yri- tyksen strategiaan sekä kartuttivat yri- tyksen osaamista liittyen yritysten pää- kompetenssialueisiin. Projekteihin liittyi useimmiten myös korkeita riskejä. Ra- hoituksella oli myös Verso-ohjelmassa keskeinen rooli hankkeiden mahdollis- tajana, mutta myös verkostoihin, kan- sainvälistymiseen ja projektien suun- nitteluun liittyvät palvelut olivat tär- keitä. Projektien tärkeimpiin hyötyihin lukeutuivat teknologiaan, liiketoimin- taan, asiakastarpeisiin ja markkinakent- tään liittyvän osaamisen kasvaminen ja uusien teknologioiden ja tuotteiden ke- hittäminen. Toteutuneiden projektien, ohjel- mapalvelujen ja saavutettujen tulos- ten valossa Verso-ohjelma näyttää saa- vuttaneen tavoitteensa poikkeukselli- sen hyvin.
16 VAMOS- ja Verso-ohjelmien vaikutukset Molemmilla ohjelmilla oli tuntuva mer- kitys yritysten teknologiaan ja liiketoi- mintaan liittyvien osaamisten kehitty- misessä sekä kansainvälistymisessä. Tä- mä näkyy esimerkiksi siinä, että projek- teihin osallistuneiden yritysten liikevaih- to ja vienti kasvoivat merkittävästi pro- jektien kuluessa ja päätyttyä. Keskimää- räinen kansainvälinen liikevaihto Verso- ohjelmaan osallistuneilla yrityksillä kas- voi 26 prosentista 33 prosenttiin vuo- desta 2008 vuoteen 2010. Ohjelmien rooli on ollut merkittävä ICT- ja ohjelmistoalan yritysverkostojen ja -klusterien syntymisessä. Esimerkiksi peliklusterin syntymisessä Tekesin toi- minnalla on ollut merkittävä rooli. Ver- kostoitumista on lisännyt myös Teke- sin ohjelmien tiivis yhteistyö relevant- tien toimialajärjestöjen kanssa. Myös muiden päällekkäisten ohjelmien kans- sa pyrittiin yhteistyöhön, vaikkakin se jäi käytännössä vähäiseksi. Yritysten tuottavuuteen liittyvien vaikutusten tunnistaminen on lyhyellä aikavälillä huomattavasti haastavampaa ja yleisiä johtopäätöksiä on vaikea tehdä. Vaikuttaa siltä, ettei ohjelmilla ollut pro- jekteihinosallistuneidenyritystentuotta- vuuteen yksittäisiä tapauksia lukuun ot- tamatta merkittävää vaikutusta.Toisaalta projekteissa kehitetyt tuotteet ja palve- lut ovat saattaneet parantaa asiakastoi- mialojen tuottavuutta. Joka tapauksessa ohjelmat ovat vaikuttaneet merkittävästi liiketoiminnansuuntaamiseen,verkosto- jen syntyyn ja viennin kehitykseen. Mikroklusterianalyysit Mikroklusterianalyysit laadittiin neljästä teema-alueesta, jotka esitellään lyhyes- ti seuraavassa. Peliklusteri Nopea kasvu ja uudet liiketoiminta- mahdollisuudet tekevät peliteollisuu- desta hyvin houkuttelevan kohteen in- vestoinneille. Suomi on kuitenkin ol- lut 90-luvulla peliteollisuuden kehityk- sessä hieman kansainvälisiä markkinoi- ta jäljessä, minkä seurauksena peliteol- lisuuden kasvu on ollut verraten hidas- ta. 2000-luvulla Suomen pelisektori on kuitenkin alkanut kehittynyt nopeasti ja on nyt saavuttanut monilla osa-alueilla toimialan eturintaman. Tekes on tukenut pelisektorin kas- vua viimeisen 10 vuoden aikana SPIN-, Fenix- jaVerso-ohjelmissa, joilla voidaan arvella olevan ratkaiseva vaikutus vah- van suomalaisen peliklusterin syntymi- selle ja liiketoiminnan kehittymiselle. Laaja joukko suomalaisia pelialan yrityk- siä on saanut tukea Tekesiltä ja monien yritysten kohdalla tuki on ollut edellytys myös liiketoiminnan jatkumiselle ja me- nestystuotteen kehittymiselle. Julkinen tuki on auttanut laajan pelialan osaami- sen synnyttämisessä, joka muodostaa suomalaisen peliteollisuuden keskei- sen tukipilarin. Peliklusterin mikroklusterianalyy- sissä haastateltiin neljää Verso-ohjel- massa mukana ollutta kansainvälisesti menestynyttä yritystä, jotka edustavat erilaisia peliteollisuuden aloja. Haastat- telujen perusteella Verso-ohjelman tu- ki oli erityisen tärkeää pienille yrityksil- le sekä yrityksille, jotka olivat siirtymässä uusille markkinoille. Projektit mahdollis- tivat tyypillisesti täysipainoisen tuote- kehityksen jatkamisen ja keskittymisen omien ydinosaamisten kehittämiseen, mikä on ollut edellytys menestymiselle kovassa kansainvälisessä kilpailussa.Ver- so-ohjelman saavutukset liittyivät myös kansainvälistymiseen ja verkostoitumi- seen. Verso on ollut myös keskeisessä roolissa suomalaisen pelialan tutkimuk- sen syntymisessä. Peliklusteriin kuuluvat yritykset muodostavat enenevässä määrin he- terogeenisen ryhmän erikokoisia ja eri toimialoille keskittyneitä yrityksiä. Tämä näkyy myös yritysten tarpeissa, sillä osa yrityksistä hyödynsi ja koki tarpeellisek- si ainoastaan Verso-ohjelman rahoituk- sen, kun toisille muut ohjelman palvelut muodostivat hyvinkin tärkeän osan pro- jektia. Mahdollisissa tulevissa Tekes-oh- jelmissa peliteollisuus näyttääkin tarvit- sevan laajan yrityskohtaisesti joustavan palvelutarjonnan. Born Global -yritykset ICT- ja ohjelmistoalan kansalliset mark- kinat ovat pienet, joten monien yrityksi- en pitää suunnata liiketoimintansa suo- raan kansainvälisille markkinoille. Suora kansainvälistyminen on houkuttelevaa erityisesti sellaisten tuotteiden osalta, jotka ovat helposti kopioitavissa ja toi- mitettavissa Internetin välityksellä edul- lisesti. Esimerkiksi peliteollisuus on tyy- pillinen segmentti, jolla yritykset täh- täävät välittömään kansainväliseen kas- vuun. Mikroklusterianalyysissä valittiin haastateltavaksi pieni joukko globaa- liksi syntyneitä yrityksiä SPIN-, VAMOS- ja Verso-ohjelmista. Yritykset edustivat eri alitoimialoja. Näille yrityksille tyypil- listä oli, että ne hyödynsivät Tekesin oh- jelmapalveluista vain rahoitusta muiden palveluiden käytön ollessa minimaalis- ta.Tekesin ohjelmien rahoitukseen ja sii- hen liittyviin järjestelyihin oltiin kuiten- kin hyvin tyytyväisiä. Myös Tekesin il- meinen pyrkimys rahoittaa vain projek- teja, joihin liittyi kaupallisesti merkittä- vä potentiaali, nähtiin tärkeänä. Monille yrityksilleTekes-tuki mahdollisti riittävän huolellisen tuotekehityksen kansainväli-
17 sesti menestyvien tuotteiden tai palve- luiden kehittämiseksi. Nopeasti kansainvälistyvät yrityk- set luovat kansainväliset verkostonsa tyypillisesti itse ja näkevät sen vuoksi Tekesin roolin tärkeänä erityisesti T&K- hankkeiden rahoittamisessa, joihin liit- tyen Tekesillä muutenkin on vahvaa osaamista. Tätä tavoitetta silmällä pitä- en Tekes voisi panostaa nykyistä vah- vemman oman teknologia-alan asian- tuntemuksen kehittämiseen. Saman- aikaisesti myös projektien kaupallinen potentiaali pitää kuitenkin pystyä ar­ vioimaan. Nopeasti kasvavat mikroyritykset Tähän ryhmään valittiin haastateltavak- si pieni joukko mikroyrityksiä VAMOS- ja Verso-ohjelmista, jotka olivat ohjel- maan osallistumisen aikana tai pian sen jälkeen kasvattaneet myyntiä tuntuvas- ti. Mukaan ei kuitenkaan otettu startup- yrityksiä. Valinta tehtiin Tekesin asiakas- tietokannasta. Haastatellut yritykset hyödynsivät Tekes-tuesta lähinnä rahoitusta ja mui- den palveluiden käyttö jäi vähäiseksi. Tekes-koordinaattoreilta saatu tuki pro- jektien läpiviemisessä ja erityisesti ha- kemusvaiheessa koettiin kuitenkin tar- peelliseksi ja nykyisellään hyvin toimi- vaksi. Tekesin ohjelmien kautta syntyi myös tärkeitä verkostoja sekä kontak- teja asiakaskentälle. Projektisuunnitel- man laatiminen ja raportointi projektin kuluessa auttoivat kirkastamaan yrityk- sen visiota. Rahoituksen merkitys oli mik- royrityksille usein ratkaiseva ja edel- lytys myöhemmin tapahtuneelle kas- vulle. Nopeasti kasvaneet mikroyrityk- set käyttivät Tekesin rahoituksen taval- lisesti tuotekehitykseen, jonka tulokse- na saatiin kehitettyä markkinakelpoi- nen tuote tai palvelu. Tekesin rooli on erityisen tärkeä mikroyritysten rahoi- tuksessa, sillä pienten yritysten on vai- kea saada rahoitusta yksityisiltä mark- kinoilta. Mikroyritysten osalta erityisiä ke- hitystoiveisiin kuului Tekesin ohjelmi- en hakemusprosessin keventäminen ja parempi ohjeistaminen, sillä nykyises- sä muodossa ohjelmaan hakeminen oli resursseihin nähden raskas prosessi. Li- säksi valintaprosessi on mikroyritysten näkökulmasta haitallisen hidas. Erillis- ten hakemusten kirjoittaminen esimer- kiksi ELY-keskuksiin ja Tekesille nähtiin myös tarpeettomaksi rasitteeksi ja jul- kisille tukimekanismeille toivottiin yh- den luukun periaatetta. Verkostoitumi- seen liittyvien palveluiden kehittämi- nen nähtiin tarpeelliseksi, vaikka haas- tatellut mikroyritykset eivät olleet hyö- dyntäneet nykyisiäkään palveluita ko- vin tehokkaasti. Vaativat asiakkaat Ohjelma-arviointien yhteydessä nou- si esiin huoli siitä, onko kansallisilla markkinoilla riittävästi vaativia ja ak- tiivisia asiakkaita, jotta asiakaspalaut- teen pohjalta pystytään luomaan kan- sainvälisesti kilpailukykyisiä tuotteita ja palveluita. Sen vuoksi päätettiin pereh- tyä toteuttaja–käyttäjä-vuorovaikutuk- seen VAMOS- ja Verso-ohjelmien puit- teissa, joissa otettiin merkittävä kehi- tysaskel tällaiseen yhteistyömuodon kannustamisessa. Selvityksen taustal- le haastateltiin kolmeen projektiin liit- tyen sekä tuotekehityksestä vastaavaa toteuttajaa että tuotekehityksessä mu- kana ollutta asiakasta. VAMOS-ohjelmassa asiakkaan ja toteuttajan tuotekehitysyhteistyöhön kannustettiin erityisesti ohjelmaku- vauksessa mainitun Mobile Enterpri- se Factory (MEF) -tuotekehityspalve- lun kautta, jossa tuotekehittäjät, asiak- kaat ja mahdolliset teknologiatoimit- tajat tapasivat työpajoissa. Verso-oh- jelmassa toimittajan ja asiakkaan väli- nen yhteistyö oli keskeinen toiminta- tapa ja useissa projekteissa asiakkaan rooli innovaatiotoiminnan ohjaukses- sa oli tärkeä. Yhteistyöhön kannustamises- ta huolimatta yhteistyö sujui hieman kankeasti ja esimerkiksi tuotekehityk- sessä odotettiin tarpeettoman pitkään ennen kuin ensimmäinen prototyyppi annettiin asiakkaalle koekäyttöön. Toi- saalta asiakkailta puuttui tarpeellisia re- sursseja ja kiinnostusta olla tiiviisti mu- kana tuotekehitysprosessissa. Asiak- kaan roolin tuominen osaksi tuotekehi- tystä on tarpeellista nostaa esiin myös tulevissa Tekesin ohjelmissa, jonka li- säksi täytyy keksiä uusia toimintatapoja kannustaa asiakkaita osallistumaan ai- empaa tiiviimmin tuotekehitykseen ja palautteen antamiseen. Jatkuva ja laa- dukas asiakaspalaute voi olla myös te- hokas tapa vähentää projekteihin liitty- vää riskiä siitä, että tuotekehitys ei vas- taa asiakastarpeita. Johtopäätökset ja suositukset Tämän arvioinnin tavoitteena oli selvit- tää Tekesin SPIN-, VAMOS- ja Verso-oh- jelmien tulokset ja vaikutukset. VAMOS- ja Verso-ohjelmien osalta arvioitiin ly- hyen aikavälin vaikutuksia ja ohjelmi- en onnistumista, kun lähes 10 vuotta sitten päättyneen SPIN-ohjelman osal- ta voitiin arvioida myös pidemmän ai- kavälin vaikutuksia. Lisäksi erillisissä mik- roklusterianalyyseissä arvioitiin Tekesin ohjelmien vaikutusta tarkemmin raja- tuilla toimikentillä.
18 SPIN-ohjelman vaikutukset ovat edelleen selvästi nähtävillä. Vaikka oh- jelman projektit eivät johtaneet erityi- siin läpimurtoihin, joidenkin nyt me- nestyvien yritysten toiminta perus- tuu projektin aikana kehitettyihin toi- mintatapoihin, tuotteisiin tai palvelui- hin. Monet yritykset selvisivät vuosien 2001–2003 vaikean taloudellisen ajan yli SPIN-ohjelman kautta saadun rahoi- tuksen turvin. VAMOS-ohjelmassa tarjottiin laaja palveluvalikoima, joiden avulla kannus- tettiin mm. tiiviiseen tuotekehitysyh- teistyöhön asiakkaan kanssa. VAMOS- ohjelman näkökulma oli aiempaa mark- kinalähtöisempi ja sen vuoksi myös oh- jelman vaikutukset keskittyivät tavallis- ta enemmän liiketoiminnan kehittämi- seen. Samalla VAMOS-ohjelma osittain epäonnistui siinä, että se keskittyi tuo- tekehitykseen kasvumarkkinoilla, joil- la asiak­kaiden tarpeet eivät olleet vie- lä selkeästi määriteltyjä. Seurauksena osa tuotekehityksestä synnytti tuottei- ta, joilla ei ollut selvää tai riittävän laajaa markkinapotentiaalia. Verso-ohjelma loi poikkeuksellisen hyvän brändin, jonka myötä ohjelmaan tuli tavallista enemmän hakemuksia ja projektit voitiin valita aiempaa tarkem- min. Ohjelman projektipaletti tuki ohjel- man tavoitteita poikkeuksellisen hyvin. Verson fokus oli aiempiin Tekesin tek- nologiaohjelmiin verrattuna markkina- ja asiakaslähtöisempi ja ohjelmassa ko- rostettiin kansainvälistymistä ja tiivistä tuotekehitysyhteistyötä potentiaalisten käyttäjien kanssa. Miltei kaikissa projek- teissa oli kansainvälistymiseen ja kau- pallistamiseen liittyviä elementtejä. Oh- jelmallisuuden lisäarvon ja vaikutusten- sa mielessä Verso-ohjelmaa voidaan pi- tää yhtenä Tekesin onnistuneimmista ohjelmista. VAMOS- jaVerso-ohjelmien keskei- siä menestystekijöitä olivat seuraavat: •• Tekesin projektikoordinaattorien aktiivinen tuki aina hakemuksen laatimisesta varsinaisen projektin läpivientiin nähtiin arvokkaana •• Tekesin asiantuntemuksen ja ver- kostojen tehokas hyödyntäminen ohjelmien palveluissa •• Ulkopuolisten asiantuntijapalvelu- jen hyödyntäminen •• Palveluiden muokkaaminen vas- taamaan yritysten tarpeita •• Ohjelmien systemaattinen ja asian- tunteva brändääminen •• Tiivis yhteistyö toimialajärjestöjen kanssa uskottavuuden ja toimiala- osaamisen kasvattamiseksi •• Ohjelman sopeuttaminen uuden tiedon pohjalta myös ohjelman ai- kana •• Ohjelman toimintojen siirtäminen toimialajärjestöihin varsinaisen oh- jelman päätyttyä. Arvioinnin ja johtopäätösten pe- rusteella voidaan nostaa esiin seuraa- vat yleiset havainnot: •• Taloudellisen ja tuotekehitykseen liittyvän tuen ohella on tarpeellista tukea erityisesti pienempien yritys- ten kohdalla myös kaupallistamis- ta, kansainvälistymistä ja markki- nointia sekä verkostoitumista. •• Tekesin tulisi jatkossakin kohdistaa taloudellinen tuki erityisesti mikro- ja pk-yrityksille. Isommille yrityksille voitaisiin kuitenkin tarjota esimer- kiksi lainoja tai tukea yksityisen ra- hoituksen löytämiseen. •• Monille nyttemmin menestyville yrityksille Tekesin rahoitus oli rat- kaisevassa roolissa talouden lasku- suhdanteesta selviämiseksi. Teke- sin tuen merkitys korostuukin sil- loin, kun taloudellinen tilanne on heikko. •• Mikroklusterianalyysin perusteella nopeasti kansainvälistyvien ja/tai kasvavien yritysten tarpeet koske- vat lähinnä rahoitusta, kun muut yritykset ovat käyttäneet laajasti myös muita ohjelmapalveluita.Voi- si olla hyödyllistä selvittää tarkem- min, miten yritykset voitaisiin luoki- tella asianmukaisesti, jotta erilaisil- le yrityksille osattaisiin tarjota sopi- vampia palveluita. •• T&K&I-politiikan tulee tukea riski- investointeja erityisesti aloilla, joilla Suomi on perinteisesti ollut vahva. Kasvuyrittäjyyden ja nopeasti kas- vavien kansainvälistyvien yritysten tukemisen tulee olla T&K&I-politii- kassa keskeisessä asemassa. Ohjelmakohtaisista suosituksista tärkeimpiä ovat seuraavat: •• Ohjelmistopalvelut pitäisi muoka- ta aiempaa tarkemmin yritysten tarpeita vastaavaksi. •• Tekesin tulisi tarjota rahoituksen ja yleisten tiedotuspalveluiden ohella käytännönläheisiä asiantuntijapal- veluita liittyen esimerkiksi liiketoi- minnan kehittämiseen ja kansain- välistymiseen. •• Projektien valinnassa pitäisi huomi- oida myös hakijan halukkuus hyö- dyntää ohjelman palveluita moni- puolisesti. •• Kaikissa ohjelmissa, jotka suunna- taan kasvumarkkinoille, pitäisi va- rautua muuttamaan ohjelman ta- voitteita ja toimintatapoja kohde- markkinoiden kehityksen mukaan. •• Ohjelmien pitäisi tukea nykyistä tiiviimpää yhteistyötä potentiaa- listen asiakkaiden ja tuotekehittä- jän välillä.
19 1 Introduction Software industry usually refers to the development, maintenance and publi- cation of software with the side servic- es like consulting, documentation and training. Other perspectives include computing services industry combined with publishing industry. The software and software-based services market in EU27 area was about 231 billion Euros in 2009, which is about one third of the global market1 . Most dominant play- ers in the market come from the Unit- ed States, especially in the field of soft- ware products. In Finland, the market size is 3–6 billion €, depending on the source. This accounts for some 2–3% of the Finnish GDP being 173 Billion € in 2009. Finnish players are mostly SMEs with few large enterprises and one huge one. Soft- ware industry prospers in internation- al benchmarks but the growth rate is roughly the same as in other countries, and the industry stays small compared to other Finnish industries. One reason is that the home market is small and in- ternationalization only modest. In Finland, ICT and software have been in the focus of national innovation policy a long time, partly in the hope that software industry would develop as a cornerstone of the Finnish econo- my. Consequently, in the 2000’s, Tekes has carried out several ICT related pro- grammes. This evaluation takes a thor- ough perspective on three Tekes pro- grammes, SPIN, VAMOS and Verso, and their context in the 2000’s. SPIN – Software Products (2000– 2003) was a three year funding effort that aimed at developing applications for Internet service architecture, appli- cations for mobile communications, and new enterprise management soft- ware for companies in digital economy. The volume on SPIN was approximate- ly 75 M€. VAMOS programme (2005–2010) took special care of the mobility issues that had emerged in early 2000’s, part- ly in SPIN. The programme aimed espe- cially at enhancing business with mo- bile solutions. The volume of the pro- gramme was 93 M€. Verso (2006–2010) was aimed at software industry in gen- eral, especially industry specific vertical solutions. The programme volume was 125 M€. For SPIN, the evaluation here is an ex post, concentrating on the long term effects of the intervention. Evaluations of VAMOS and Verso are more immedi- ate, concentrating on the programme implementation and direct immediate impacts. The evaluation work has been contracted by Tekes and carried out by Gaia Consulting Oy in cooperation with Virebit Oy and Finnconcept Oy. Two ex- ternal experts in the evaluation have been Prof. Martti Mäntylä from Aalto University and Mr. Hannu Jyrkkä from Sasken Finland. The work has been supported by an advisory group set by Tekes. The members of the group were Mr. Pekka Pesonen, Ms. Silja Leinonen, Mr. Risto Setälä, and Mr. Marko Heikki- nen. The structure of the report is as fol- lows.Chapter2describestheimplemen- tationoftheevaluation;questions,mate- rials and methods. In Chapter 3, an over- viewofthedevelopmentofthesoftware industry in Finland is sketched. Chap- ter 4 offers the evaluations of the pro- grammes at hand. Chapter 5 contains the results of a special set of interviews concentrating in the role of Tekes in the Finnish games cluster formation, sup- port of Finnish born global companies, support of supergrowing micro compa- nies and in bringing the customer to the developer. Chapter 6 summarizes the es- timated impacts of the programmes in the light of the evaluations and the anal- ysisinchapter5.Concludingremarksand recommendations appear in Chapter 7. 1 Software Industry Survey 2010 and references therein
20 2.1 Evaluation questions The evaluation questions as per call for tenders were the following: Description of the development of operating environment 1. What significant changes have oc- curred on the operating environ- ment of software business in the 2000’s? Objectives, results and impacts of the programmes 2. How have the objectives been real- ized? What results that support the set objectives have been gained? Which results would not have been realized without the programmes? How relevant and challenging were the objectives? 3. How well did the programmes reach the most important client groups, especially SMEs? How well did the programmes, their servic- es and management respond to the needs of the participants? Es- pecially, how has the internation- al cooperation of the programmes affected the participants and cli- ents? 4. How have the impacts of the pro- grammes contributed to the Soci- etal Impact Model of Tekes? How broad, stable or important can these impacts be considered? How and to what extent have the programmes had an effect on i. R&D&I investment in software sector ii. Development of know-how iii. Formation of national and international networks iv. Changes in the operating procedures of enterprises v. Important innovations and business opportunities vi. Productivity vii. Enterprise growth and inter- nationalization? viii. Business and society in a broader view? 5. How have these targets developed in the light of indicators or case ex- amples? Conclusions and recommendations A. R&D&I activities within the software sector: How could the R&D&I activities be developed? What is the role of TIV- IT and other SHOKs in the future? Which international programmes and initiatives are the most impor- tant ones and how could they be in- fluenced more? B. To Tekes: What concrete and work- ing practices can be identified to develop programme services and activities and the account process? C. Research and innovation policy: How should the recommendations from the evaluation of the national innovation strategy and innovation environment be taken into consid- eration? What other measures are needed in the research and innova- tion policy to improve the impact of Tekes? 2.2 Methodology The evaluation data collection and anal- ysis were carried out using the methods described below: A. Document analysis The evaluation was started with the document analysis, where relevant programme documentations, espe- cially reports related to the preparation of the programmes, programme man- agement meeting minutes, project de- scriptions, final reports, evaluation re- ports, and funding applications were scanned. Questions to the documents were formed based on the evaluation questions. The evaluators also had ac- cess to Tekes’client database with con- fidential financing figures. B. Background interviews Besides the document analysis, back- ground interviews were carried out to form a baseline for the evaluation. The interviewees (altogether 10) had been involved in initiating, planning and/or running the programmes and/or soft- 2 Evaluation framework
21 ware business. The selection of inter- viewees was approved by the evaluation steering group and the interviews were carried out as structured face-to-face in- terviews. The interview structures fol- lowed the evaluation question settings. C. Programme interviews In order to get an overall perception on the Programmes, programme inter- views were carried out. The interview- ees were selected together with the evaluation steering group and ascer- tained that a range of viewpoints, such as political, scientific and technological, were covered. Ten specialists from each programme were interviewed. The in- terviews were carried out mainly as structured face-to-face or telephone in- terviews where the structure again fol- lowed the evaluation question settings relevant for the interviewees. D. Workshop A workshop was held with 15 partici- pants who had already been involved in the evaluation process through in- terviews or otherwise. The workshop aimed at validating and refining the in- itial evaluation results. E. Micro cluster analysis In-depth analysis of interesting themes rising during the evaluation was car- ried out through four micro clusters. In the analysis, developed by the evalua- tors in earlier studies, thematically co- herent or otherwise representative project samples from the programmes were selected, and in-depth interviews were carried out with the project man- agers. The interviews were structured to fit the evaluation questions. By car- rying out the interviews for each pro- ject in the sample, both a coherent view on the evaluation questions was obtained and individual project results were gathered. This method allows a broader per- spective of the specific programmes than would be possible through stud- ying results and impacts of single pro- jects funded by the programmes. How- ever, due to the varying nature of the programmes, the micro clusters and their composition in this evaluation vary from each other greatly. The micro cluster division and themes were decided by the evalua- tion steering group as follows: •• Games cluster – interviews of en- terprises and other stakeholders on the rise of the Finnish games cluster and the role of Tekes and its programmes in this process. •• Born global – interviews of new companies aiming directly to in- ternational growth and markets and the role of Tekes and its pro- grammes in supporting such en- terprises. •• Supergrowing micro SMEs – based on Tekes CRM data, supergrowing micro enterprises were identified, and the role of Tekes’programmes in supporting the supergrowth was interviewed. •• The role of demanding client – pairs of developer-user enterpris- es from VAMOS programme with exceptionally good results were identified, and again the role of the programme was interviewed. Altogether, 18 persons were contacted and interviewed within the micro clus- ter analysis. In addition, two e-surveys were sent to VAMOS and Verso project con- tact persons. Unfortunately the re- sponse rate of the surveys remained unacceptably small even after several reminders from Tekes and the consult- ants. Therefore, the results of the sur- veys were utilized with caution mainly to support other findings and are not presented separately. For Verso, the re- sults from a programme survey carried out in 2009 were partly utilized. 2.3 Assessment of validity The evaluators estimate that with giv- en resources, the methods and cover- age of data gathering and analysis offer a rather unbiased and valid view of the Finnish software business field and the role of the threeTekes programmes in it. The interviewees have been se- lected to represent all the views and perspectives that arise in this evalua- tion. Participatory methods like work- shops are targeted to seek consensus and to elaborate possible discrepan- cies and inconsistencies. It should be noted that micro clus- ter analysis outlined above is a qualita- tive method with a non-random sam- ple. This means that the direct generali- zation of the results of the analysis must be supported with other methods, as is done here. Qualitative analysis has been a conscious choice that has been taken to support the positive learning aspect taken in this evaluation. Furthermore, the evaluators’experience on quantita- tive methods in programme evaluation suggest that the response rates of dif- ferent questionnaires, for example, usu- ally remain too small to draw any bind- ing conclusions, either. The unfortunately low response rate of the e-surveys limits the interpre- tation of the results, which has been ac- knowledged in the analysis.
22 3.1 About software industry This chapter presents some views on the development of the operational environment of the Finnish software industry during 2000–2010. Especial- ly part 3.3 is largely based on Software Industry Survey 2011.2 Also, the devel- opment inside Tekes in relation to soft- ware industry is described. What is understood with the term ‘Software Industry’depends somewhat on how widely the service business re- lated to defining, producing, selling and maintaining computer software is included in the definition. Computers and their software are tools for infor- mation processing for some purpose, and as such always a part of some larg- er context. Figure 1 presents the classifi- cation of software according to the de- gree of standardization vs. uniqueness and according to the visibility of the software as an entity that can be sold separately from the host system, pro- cess of product. According to Software Industry Survey 20113 “Software business is busi- ness of selling software (including sys- tems software, application software, and games) either as licenses or as ser- vices and services related to develop- ment and deployment activities of this software. This definition does not in- clude operation of software produced by third parties (e.g. operating a serv- er farm), business and operations con- sulting related to software systems, and deployment projects of third-party soft- ware. Not all revenue of firms operating in the software industry is necessarily software business.” 3 Description of the operational environment of the Finnish software industry 2000–2010 Figure 1. Contexts for professional software development2 2 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011. 3 ibid.
23 The Standard Industrial Classifica- tion used by Statistics Finland has since 2008 included a class “Computer pro- gramming, consultancy and related ac- tivities” (TOL 2008 J62). This division in- cludes the following activities of provid- ing expertise in the field of information technologies: •• writing, modifying, testing and supporting software; •• on-site management and opera- tion of clients’ computer systems and/or data processing facilities; •• other professional and technical computer-related activities. This class includes not only software products but also related services, which the companies in the practice often re- port within same revenue figures.There- fore the distinction between replicable software products and related tailor- ing and other services is not clear. On the other hand, publishing of software (J582) is not included here, although some firms selling packaged software or computer games are classified under class 58“Publishing activities”and codes 5821 “Publishing of computer games” and 5829“Other software publishing. Earlier Standard Industrial Classifi- cation (TOL 2002) included the class 72: Computer and related activities, con- sisting of subclasses •• Hardware consultancy •• Software consultancy and supply •• Data processing •• Database activities •• Maintenance and repair of office, accounting and computing ma- chinery •• Other computer related activities. In this document, the classes 72 (TOL 2002, older data), and 62 (TOL 2008, newer data) are mostly used as proxy for software business figures. We think that these classes represent the rele- vant software industry trends accurate- ly enough, without a need to go to any deeper breakdown. Visible software business, which consists of revenues of companies sell- ing software or related services, on- ly represents a part of all software ac- tivities in the society and business. The invisible part consists of the work of IT departments and R&D teams of compa- nies in other branches. These develop in-house software for company’s own processes or embedded software that will be sold as part of host company’s products. 3.2 Politics and legislation 3.2.1 Legislation, EU, and international regulations Software patents are of paramount im- portance for the software industry but they are not generally allowed by the Finnish patent legislation. However, in 2003 the Finnish National Board of Pat- ents and Registration of Finland (PRH) changed its policy to meet the Euro- pean Patent Office’s more liberal view, even though the respective EU direc- tive was still under construction at that time. PRH began to grant patents for software that can be considered inno- vative. After years of debate, the direc- tive was, however, ultimately rejected by the EU Parliament in 2005. This left the future of software patents in the EU and in Finland as an open question. Although the patent laws did not change, the national copyright law did see some minor changes. In 2005, the Finnish parliament accepted a wide- ly debated law that prohibits the cop- ying of the DRM-protected products for personal or any other use. This law al- so prohibits the sale of programs and the provision of services aimed at hack- ing the DRM. However, the law exclud- ed the DRM-protected software prod- ucts, thus making it legal to copy them for personal use. An additional feature concern- ing software industry was brought in- to legislation in 2008 when an amend- ment to the Act on Data Protection of Electronic Communications was rati- fied by the Finnish Parliament. This so- called ‘Lex Nokia’ gave the employers a permission to investigate the log data of their employees’ emails if they have a reason to suspect an IPR leakage or communication network misuse. So far, the amendment is not known to have been applied. The Act on the Provision of Infor- mation Society Services, which came into effect in 2002, is another Finnish law that affects the software industry. This law follows the Electronic Com- merce Directive of the EU. Among oth- er things, it obliges the service provid- ers to remove any copyright infringing material from the network. The international regulations con- cerning the provision of international software services – e.g. SaaS – have de- veloped very slowly. Furthermore, the privacy legislation of countries where the servers are located can differ a lot. As cloud computing is getting more and more common, there is growing pressure, especially in the EU, to fur- ther harmonize the legislation. The EU is working on this within the Digital Agenda project, which is aimed at im- proving the EU’s overall internal e-com- merce market.
24 Global intelligence surveillance has also raised some privacy and se- curity issues. For example, in 2009, the Swedish military intelligence (FRA) be- gan eavesdropping on the Swedish network traffic to fight terrorism.This al- so threatened the privacy and informa- tion security of Finnish companies and citizens as a large portion of Finland’s international telecommunication goes through Sweden. 3.2.2 Cybercrime and software piracy Cybercrime has grown exponentially over the past ten years. According to some estimates, it is already economi- cally larger than the international drug trade4 .The most common forms of cy- ber crime are the viruses, malware, on- line scams, phishing mails, and the distributed denial-of-service attacks (DdoS). Smart phones have also provid- ed a new platform for cyber criminals. The growth of cybercrime creates a demand for more secure software products – and therefore it also pro- vides growth potential for security soft- ware companies. Thus, software pira- cy has a twofold impact on the indus- try: while some companies suffer heavy losses, some profit from software or ser- vices used for piracy (e.g. peer-to-peer software). During this decade, software pi- racy has increased significantly world- wide. In the developed markets, the (PC software) piracy has remained more or less the same. However, in the emerg- ing markets, the net losses due to piracy have nearly tripled in 2003–2010 (from c. $12 billion to $32 billion). The total losses have increased over the same period and reached $59 billion in 2010.5 In 2007, the Convention on Cyber- crime drawn up by the Council of Eu- rope entered into force in Finland. At the same time, the Penal Code was adapted to meet the EU’s 2005 Frame- work Decision on attacks against infor- mation systems.6 3.2.3 Health policy From the software industry’s viewpoint, one of the most essential and contro- versial health issues of the industry eco- system is the radiation effects of mobile devices.The new limit values for mobile devices were defined in 2002, based on the EU Council and ICNIRP recommen- dations. Although these limit values are considered safe, the Radiation and Nu- clear Safety Authority of Finland (STUK) made a statement in 2009 that chil- dren’s mobile phone use should be lim- ited.7 At the global level, there is a paral- lel shift towards slightly more conserv- ative recommendations, based on con- flicting research findings made in 2000– 2010. The WHO has previously been wary of taking a clear position. How- ever, in 2011, the WHO’s cancer agency (IARC) classified the cell phones as“pos- sibly carcinogenic”.8 OvertwothirdsoftheFinnishwork- force use computers in their everyday work. In the 1990s, the main health-re- lated concerns regarding computers re- volved around ergonomics and vision- related issues. In 1993, the Finnish gov- ernment created regulations for work- ing with visual display units (in compli- ance with an earlier EU directive).These regulations have been the latest gov- ernment statement on the subject. Ac- cording to a study made in 2008, these regulations are poorly known at work- places.The general interpretation is that computers have become so common- place that people do not pay any par- ticular attention to the health problems they cause, or they have learned to ac- cept them as inevitable.9 3.2.4 Educational policy There is no specific official educational policy for software industry. Instead the industry is usually treated as part of the whole ICT industry. However, the ICT does not seem to have a very strong position in the educational planning.10 The number of ICT-related education- al degrees has increased significantly in this decade. (See table 1.) The Finnish Confederation of Pro- fessionals (STTK) made a study in 2008 that criticized ICT education: “The lack of experts and skill shortage, resulting 4 http://www.symantec.com/fi/fi/about/news/release/article.jsp?prid=20110907_01 5 http://www.bsa.org/globalstudy 6 Järjestäytyneen rikollisuuden ja terrorismin torjunta. Sisäasiainministeriö, 2008. 7 http://www.stuk.fi/sateilytietoa/sateilyn_terveysvaikutukset/matkapuhelin_terveysvaikutus/fi_FI/stukin_matkapuhelinkannanotto/ 8 http://www.iarc.fr/en/media-centre/pr/2011/pdfs/pr208_E.pdf 9 Lehtelä & al. Näyttöpäätetyö - Valtioneuvoston päätöksen 1405/1993 soveltaminen ja vaikutukset työpaikoilla. Sosiaali- ja terveysministeriön julkaisuja, 2008:7 10 http://www.eduskunta.fi/faktatmp/utatmp/akxtmp/kk_1143_2010_p.shtml
25 from problems in the educational sys- tem were seen as a major obstacle to business growth. It was also considered to have a negative effect on interna- tionalization. Furthermore, the educa- tional institutions in the ICT-field do not seem to acquire enough students.”12 During the last ten years, various governmental and other public projects have increasingly introduced ICT solu- tions in the public school system. One of these is the ICT in the School’s Every- day Life project, launched by the Ubiqui- tous Information Society Advisory Board. These projects have improved the over- all ICT skills of Finnish students. 13 3.2.5 ICT Infrastructure The ICT infrastructure is naturally very important for software business. Soft- ware development, distribution (espe- cially SaaS), maintenance, and support services require efficient connections, especially when operating in the do- mestic market or on domestic servers. The Finnish ICT infrastructure is proven to be world class by numerous studies, as stated in the 2010 governmental re- port. For example, Finland ranks as the 6th in Nokia Siemens Networks Con- nectivity Scorecard 2010, and the 4th in IBM’s Digital Economy Rankings 2010. 14 The most important factors in in- frastructure development have been the fast penetration of wired (DSL) and mobile (3G) broadband technolo- gies (see tables 2, 3 and 4). On the oth- er hand, there is a vast difference in the broadband quality between rural and urban areas in Finland, and fast (over 5 Mbit/s) connections are relatively ra- re. Mobile broadband has rapidly in- creased its share and is already as com- mon as wired broadband (DSL). The third-generation (3G) mobile network coverage has grown rapidly. In Table 1. The ICT-related educational degrees in Finland in 2000–2009.11 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total Vocational college degree 1 961 2 538 3 276 2 643 3 050 3 049 3 064 3 041 3 696 3 502 29 820 Post-secondary level 552 220 73 14 6 0 0 0 0 1 866 Degree in applied sciences 1 241 1 939 2 257 2 588 2 933 3 124 3 089 2 789 2 755 2 445 25 160 Bachelor’s degree 35 51 59 69 80 105 182 342 1 276 625 2 824 Master’s degree 648 799 883 1 064 1 206 1 264 1 354 1 370 2 228 1 002 11 818 Licentiate 17 20 21 24 33 23 37 26 34 27 262 Doctor’s degree 61 58 71 58 84 95 106 113 99 126 871 Total 4 515 5 625 6 640 6 460 7 392 7 660 7 832 7 681 10 088 7 728 71 621 Table 2. The penetration of broadband connections in 2000–2006. 15 Turn of the 21st century Year 2006 Number of broadband connections 315 000 1 309 800 Broadband availability (% of population) 75,7 % (06/03) 95,8 % Households with broadband 15 % (spring/03/broadband) 29 % (spring/00/internet) 56, 5 % 11 ICT-alan koulutus ja koulutettujen liikkuvuus 2000-luvulla yhdeksässä maakunnassa. Raportti II. Keski-Suomen elinkeino-, liikenne- ja ympäristökeskus, 2011. 12 ICT-alan PK-yritysten kasvun ja kansainvälistymisen haasteista. STTK 2008. 13 http://www.arjentietoyhteiskunta.fi/index.phtml?s=31 14 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. 15 Uudistuva, ihmisläheinen ja kilpailukykyinen Suomi. Kansallinen tietoyhteiskuntastrategia 2007–2015. Valtioneuvoston kanslia, 2006.
26 2009, it was available for 90 percent of the Finnish population. The fourth gen- eration (4G) mobile network frequen- cies were granted in 2009.17 The high-speed fiber-optic net- work is already quite widely available, and it continues to expand. In 2008, the Finnish government set up a target that the high-speed broadband connec- tions (100 Mbit/s) should be available al- most everywhere in Finland by the end of 2015. Currently, already 43 percent of Finnishhouseholdscouldconnecttothe fiber-optic network, but only about one percent does.18 In 2010, to further im- prove the network coverage, Finland (as the first country in the world) defined the one-megabit (1Mbit/s) internet con- nection as a universal service for citizens and companies.19 Generally speaking, Finland’s ICT infrastructure is of good quality. How- ever, in some cases the poor availability of high-speed connections or their high costs may especially interfere with the success of companies located in geo- graphically unfavorable areas. The high coverage of a mobile broadband net- work offers advantages to companies that develop mobile applications be- cause it provides a good R&D test field in the domestic market. 3.2.6 Changing political climate The attitude of the Finnish government towards the software industry is per- haps best highlighted in the strategies of the National Information Society.The first strategy was published in 1995, fol- lowed by those in 1998 and 2006 and the latest in 2010 (named the Digital Agenda). The focal point of all these strat- egies has been to ensure that Finland remains a trailblazer in information so- ciety development. Attempts to reach this goal have included, for example, utilizing the ICT infrastructure resourc- es, promoting information society skills, Table 3. The penetration of broadband connections in 2007–2010. Table 4. Wired broadband connection speeds in 2007–2010. 16 Year 2007 2008 2009 2010 Time 31.12. 30.6. 31.12. 30.6. 31.12. 30.6. DSL 1 270 500 1 270 100 1 231 300 1 216 300 1 185 900 1 162 600 Building connection 114 000 104 600 134 900 104 700 106 600 117 500 Cable modem 209 600 212 900 214 800 215 500 222 700 229 600 Mobile broadband 143 100 307 100 479 700 664 300 908 000 1 152 200 Wireless broadband 15 300 19 600 26 100 31 600 31 800 30 100 FTTH 12 600 14 500 Other 7 700 9 000 9 800 11 500 6 000 800 Total 1 760 200 1 923 300 2 096 600 2 243 900 2 473 600 2 707 300 Year 2007 2008 2009 2010 Time 31.12. 30.6. 31.12. 30.6. 31.12. 30.6. Under 2 Mbit/s 70% 54% 40% 43% 39% 30% 2 Mbit/s – under 4 Mbit/s 26% 40% 50% 47% 26% 22% 4 Mbit/s – under 10 Mbit/s 19% 25% 10 Mbit/s – under 25 Mbit/s 4% 6% 9% 9% 14% 19% 25 Mbit/s – under 100 Mbit/s <1% 1% 100 Mbit/s and over 1% 1% 2% 3% 16 Markkinakatsaus 3/2010 - Puolivuosikatsaus 2010. Viestintävirasto, 2010. 17 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. 18 ibid. 19 ibid.
27 making public services available online, and increasing the business-related in- formation technology utilization rate. The Finnish government’s strong emphasis on developing the informa- tion society has had a significant impact on the software industry. For example, it has increased the demand for soft- ware products in both the public and the private sector.This has made the in- ternal market larger and given oppor- tunities for domestic software compa- nies to grow and develop. The nation- al innovation policy has also supported the industry by promoting the develop- ment of innovative business solutions and centers of expertise. 3.3 Economy and business 3.3.1 Trends and drivers After the corporate ICT spending boom during millennium change, the invest- ment of companies and organizations in ICT remained stable until the spec- tacular drop of 2009. Figure 2 shows the development of ICT investment budg- ets globally during the decade. Drivers of the development in the branch: •• Development of the technologies •• Maturing of the industry and crea- tion of new branches around new technologies •• Macroeconomic cyclicality •• Change in the role and market po- sition of Nokia •• Globalization with respect to mar- kets, R&D and production •• Change of generation and grow- ing appreciation of entrepreneur- ship among young professionals. •• Changes in value chains and for- mation of new value nets the val- ue capturing redistributed •• Consumers and media are driving many changes, with, e.g., content creation •• The number of services that are perceived as free of charge is in- creasing. Some trends in Market Dynamics were in 2009 listed as21 : •• Firms serving their verticals global- ly on the basis of functionality and faster time-to-market will have competitive advantage •• Information technology, electron- ics, electro technical elements, and machinery represent some 72% of total R&D expenditure in Finland •• Nokia’s mobile device business has been the main driver for the Finn- ish ICT sector’s growth, but, as mo- bile devices have become com- modities, added value will increas- ingly come from providing soft- ware and content for various de- vice types •• Mobile phones have evolved from communication devices to mo- bile computers, and this has cre- ated two new market areas: enter- tainment (games and media) and communication services •• Mobile devices are becoming the primary delivery vehicle for software and related services in emerging markets •• There has been a shift in market dynamics; in the past, users were looking for products and services that they needed, while now sup- pliers are increasingly looking for Figure 2. Changes in Chief Information Officer Budgets Over Previous Year, 1998 to 2010 (Worldwide and by %)20 1998 0 5 -5 -10 10 15 15,0 15,9 9,7 10,1 01,3 1,6 2,5 2,7 3,0 3,2 1,1-8,1 20 % 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20 Verso programme seminar Software 20/20 Nov. 16th 2010 : http://www.tekes.fi/fi/gateway/PTARGS_0_201_403_994_2095_43/http%3B/tekes- ali1%3B7087/publishedcontent/publish/programmes/verso/documents/software_2020/dan_sommer_for_software_2020_software_ trends.pdf 21 von Hertzen, M., Laine, J., Kangasharju, S., Timonen, J., and Santala, M. (2007). Drive for Future Software Leverage. The Role, Importance, and Future Challenges of Software Competences in Finland. Tekes Review 262/2009.
28 users and offering them a variety of products and services •• SaaS as a business model will con- tinue to gain ground •• ‘Free, but not free’ types of soft- ware and services will grow in the future •• In the future, there will be a high level of software- intensity outside the software industry Sectors that are not considered part of the ICT sector are among the largest soft- ware developers e.g., the automo- tive, aerospace, medical equip- ment, automation, and consumer electronics industries •• New innovations and technolo- gies are needed, but the invest- ments may become so big that on- ly a few companies or other organ- izations can afford them, potential- ly leading to a limited number of production sites and thus a high industry risk. 3.3.2 Role of software in different value chains Figure 3 illustrates the role of soft- ware business as part of different val- ue chains. The software-related activi- ties are depicted as the horizontal block going across different industries utiliz- ing software. As such, the software busi- ness is divided into five distinct areas: •• Software products includes all software that is sold and bought as a product in the market Figure 3. Software business as part of different value chains22 22 von Hertzen, M., Laine, J., Kangasharju, S., Timonen, J., and Santala, M. (2007). Drive for Future Software Leverage. The Role, Importance, and Future Challenges of Software Competences in Finland. Tekes Review 262/2009.
29 •• Embedded software in the elec- tronics industry refers to software that together with the hardware where it resides forms an electron- ic device or a component of a larg- er system whose main purpose is handling of information •• Software as a part of products or solutions in industrial products is software in products, systems, and processes whose purpose is to in- teract with and influence physical entities •• Software as a part of a service or process means software through which a service or process gains its value-adding functionality •• Software provided as a service, SaaS, is more of a business model utilizing one or more of the above mentioned software products or utilization types. 3.3.3 Domestic trends “In the last 25 years the Software and IT Services industry in Finland has grown more than in most of the other EU member states. Since 1985 the share on the total employment in private business tripled from 0.92% to 3.18% in 2007. Also the share on the total value added in private business nearly tripled from 0,.9% to 2.66%.1 This impressive growth, which was also stronger than in the most other Finnish industries, was one of the central pillars of the pos- itive development of the Finnish overall economy the same time. The market for IT services is rath- er concentrated with the four largest IT service providers capturing 50% of the market. While the Finnish companies are strong in the IT services sector, Fin- land is currently a net importer of soft- ware licenses: The current amount of spending on licenses has remained at approximately 1000 M€ and license rev- enue generated by the Finnish software firms is estimated to be in the 600–700 M€ range. 23 Overall, the challenges faced by the Finnish industry seem to be typical for most other European markets. First, the home market is relatively small if considered on a national level and too fragmented if considered on the Euro- pean level. Second, the mechanisms of industry consolidation do not favor the Finnish industry since it lacks large com- panies that could consolidate small- er ones through acquisitions. The ma- turing of the industry has been leaving fewer possibilities for growth for locally operating small software firms.The pro- cesses of globalization, IT outsourcing, and offshore software development have lately further dimmed the pros- pects of those companies, resulting in calls for Finnish companies to improve their capabilities in networking and partnering to cope with the situation.”23 In Finland, the share of software business in the GNP has been rising rap- idly. Table 5 shows the 2007–2009 vol- umes of the companies defined to be software business. Altogether, software industry is already bigger than financ- ing or food industry.23 InthetimesoftheSPINprogramme, the concept of Finnish software cluster was more meaningful than today. A dec- ade later the industry has grown, spread out to all branches of industry and so- ciety, and software companies are parts of numerous value chains, whose value creation logics and other characteristics are totally different from each other. Val- uechainscrossgeographicalboundaries and only fractions of real networks and clusters operate in Finland. Both the rapid development of technologies and dynamics of value networks set high requirements for the renewal of competences. Existing knowledge becomes obsolete and new competence base must be created con- tinuously. So far Finland has been very successful in this changing environ- ment. Software industry has had an im- portant role in the transformation from natural resource based society towards knowledge based society. As a whole, the Finnish software in- dustry has been growing quite steadily during the last 10 years. Figure 4 shows the volume index of software industry in Finland (TOL J62, blue curve) in com- parison to the volume of electrical and electronics industry (D26-27, red curve), showing that even in the periods 2001– 2003 and 2008–2009, during which the big parts of technology industry vol- umes disappeared, software industry showed almost no significant decline. There are no signs of ‘creative destruc- tion’, not to speak of‘industry shakeout’. This is by large explained by outsourc- ing: During hard times companies con- centrate in their core activities and the ‘invisible’software development moves from in-house teams to software com- panies and becomes visible to industry statistics. 23 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011
30 The green line in Figure 4 shows the development of Nokia R&D spend- ing in 2005–2011. The jump in 2007 is due to the merger with Siemens net- work business to form Nokia Siemens Networks. Although Nokia as the leader of its own ecosystem has had a central role in the development of Finnish soft- ware industry, the role of Nokia is not as dominant as often assumed. Figure 5 illustrates the renewal of the software industry by showing the number of new startup companies and companies that have ceased operating Table 5. Software industry companies in Finland24 Industry Year Number of firms Personnel Revenue (million e) Revenue/ personnel Share of GDP 582 Software publishing 2007 73 177 14.79 83.5 0.01 2008 80 181 18.27 100.7 0.01 2009 101 1696 411.842 242.8 0.24 5821 Publishing of computer games 2007 9 20 0.633 31 0.00 2008 10 24 0.549 22.7 0.00 2009 11 133 8.652 65.3 0.01 5829 Other software publishing 2007 64 157 14.158 90.4 0.01 2008 70 157 17.721 112.7 0.01 2009 90 1563 403.189 257.9 0.24 62 Computer programming, consultancy and related activities 2007 4534 39142 5658.519 144.6 3.15 2008 4783 40928 6093.841 148.9 3.30 2009 4857 39797 5682.274 142.8 3.32 6201 Computer programming activities 2007 2807 24113 3220.266 133.5 1.79 2008 3008 27122 3926.973 144.8 2.12 2009 3071 25211 3281.912 130.2 1.92 6202 Computer consultancy activities 2007 1454 5304 787.72 148.5 0.44 2008 1489 5614 875.275 155.9 0.47 2009 1480 6262 967.314 154.5 0.57 6203 Computer facilities management activities 2007 227 9448 1624.632 172 0.90 2008 229 7889 1261.288 159.9 0.68 2009 237 8093 1411.642 174.4 0.82 6209 Other information technology and computer service activities 2007 46 277 25.901 93.5 0.01 2008 57 302 30.305 100.3 0.02 2009 69 232 21.406 92.1 0.01 in each year 2001–2010. The change in the statistics classification causes a dis- continuation in the time series, but it can be seen that the rate of the birth of new enterprises has been quite steady, as has been the‘mortality’. Recession in 2008–2009 can be seen as a slowdown of the growth, but no net decline is vis- ible. Figure 6 shows the distribution of the total values of several statistics by the firm size class. “Overall the Finn- ish Software and IT services industry is shaped strongly by small and medi- um sized enterprises (SME). More than 99.4% of all firms have less than 250 Em- ployees, which marks the borderline for SME. However the remaining 0.5% of enterprises with more than 250 em- ployees play an important role regard- ing the number of employees (40.16%), revenues (43.7%) and value added (45.74%) of the industry.”24 Some studies indicate that in Fin- land the growth of a company from 0 to 50 employees often takes place rel- atively rapidly. After that, growth may stall for a long time. The reasons for 24 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011
31 Figure 5. Annual numbers of startup companies, companies in operation and companies that went out of business. The statistics for 2001–2004 include the class 72 ”Computer and related activities”of classification TOL 2002, for years 2005–2010 the class 62 ”Computer programming, consultancy and related activities”of classification TOL 2008 100 80 60 40 20 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 120 140 160 180 200 getting stuck in this ‘valley of death’ may be numerous; for example, growth potential in the domestic market may be exhausted or the entrepreneur is happy with the company and the in- come it generates and thus unwilling to take another leap of faith. Growth would require internationalization and new funding, which may not be read- ily available. Growing beyond 50 em- ployees would also mean a new oper- ational model and new functions in a company, and thus additional invest- ment and loss of control for the entre- preneur. There are various programmes for accelerating the growth of software companies after the initial expansion, but continued, efficient, and effective methods are needed to guide suitable small software companies with expan- sion potential over the period of stalled growth. Figure 4. Revenue index (2005=100) of software and E&E industries, and volume index of Nokia R&D spending. Absolute volumes 2009: SW industry 5.3 bn.€, E&E industry 19,3 bn.€, Nokia R&D 5,9 bn.€
32 3.3.4 Business models Value networks of ICT business are more global than in many traditional indus- tries, and the ‘merchandise’ of software business is easily distributed over Inter- net. It is no wonder that many of the ex- amples of ‘born global’ enterprises can be found among software companies. However, the findings of Software Indus- try Survey 2011 about international op- erations of Finnish software companies give a picture of an industry, where the share of international revenues is steadi- ly rising, but surprisingly much of the ap- parent potential is still not used. Figure 7 shows that less than half of the compa- nies that responded to the survey have any international revenues and only 21% in significant amount. One reason might be that the share of IT service and tailor- ing in the Finnish software business is high, and thus the customer proximity plays a more important role than in soft- ware product business. The same survey also examined the extent of international operations by recording the revenue share of inter- national operations of those firms that had any. About half of the companies had only round 20% or less of their reve- nue from abroad. In addition, there was a clear group of companies that collect- ed 80%–100% of their revenues by in- ternational operations. The survey did not indicate signif- icant group of really globally operat- ing companies, the vast majority of the companies operated only in one or two areas outside Finland. Nordic area and West Europe are clearly the main mar- kets. The survey gives an impression, that the Finnish software industry has still a lot of potential in exploiting the different business models that are shap- ing the ICT business globally, mainly en- abled by technological development. The variety of business models is pre- sented in Figure 8 below. The five busi- ness model categories presented in the figure, for a certain resource, are invest- Figure 6. Structure of the Finnish Software and IT Service industry in 2007 based on personnel size classes25 25 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011 Personnel class
33 ment-based, time-based, usage-based, exchange-based, and free of charge (which can be subsidized or co-opera- tively based). The picture does not indi- cate that the development goes from left to right but that the multitude of alternatives is increasing and that cer- tain cycles and patterns are common. Especially in the last years of the dec- ade the ‘free’ business model is gain- ing ground. The earning model is typ- ically such that a basic level service is free, but using additional capacity or ex- tra features is charged. One concept is to offer the service free with advertise- ment push, and offer an ad-free version against a charge. Another very interesting aspect of the landscape that changes the possi- bilities to provide and distribute value added mobile solutions is the ‘long tail’ concept introduced by Chris Anderson (inWired, 2004). Business has tried to fo- cus on customers and market segments where sales volume per unit is high. In the Internet-powered era, and with mo- bility capabilities added, it will be very interesting to address the‘long tail’from a business perspective also. The main Figure 7. Company distribution by international operations26 Graphical Presentation of Model: Name of Model: Example: Investment -based Time -based Exchange of resources Free of charge WikipediaCar insurance fee based on kilometres driven and places Annual car insurance fee No insurance- invest on new car if accident Exchange of usage rights of FonWLAN access Usage -based Figure 8. Development of business models27 26 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011 27 von Hertzen, M., Timonen, J., and Huuhka, P. (2007). Update of GIGA-VAMOS- Technology Roadmap. Technology Review 206/2007. Tekes
34 growing opportunities now may be in the long tail phase, but – not only that – it may mean also that the ‘body’ seg- ment, with less personalization and cus- tomization, may shrink. Obviously, wide geographical reach greatly improves the attractiveness of this kind of busi- ness model. 3.3.5 SWOT The SWOT analysis of The Finnish soft- ware industry can be summarized as in Table 6. 3.4 Social aspects working, studying, and relaxing. Servic- es are spreading to interactive portals, monitors, and touch screens to be used anytime and anywhere.”29 This development has significant- ly contributed to the social environ- ment, in which the software industry itself also operates. Network technolo- gies have enabled new ways of inter- action, which promotes openness, in- teraction, and communality. Over the past decade, we have seen new types of network sociality appear – phenome- Table 6. SWOT analysis of Finnish software industry28 3.4.1 Social values and interaction The first decade of the 21st century saw the breakthrough of the information society. During this period, the impor- tance and the methods of information processing have increased significant- ly. The Digital Agenda sums the devel- opment in the following way: “Our dai- ly lives are being digitalized amazingly fast when it comes to running errands, 28 TEM Toimialaraportti 1/2009. 29 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. Strengths Weaknesses •• ICT infrastructure •• Level of education •• Development financing of public sector •• Reputation as a fore runner in modern technology, especially on mobile sector •• Demanding domestic market creates a good base for internationalization •• Strong competence of applying branches (forest and telecommunication clusters, finance, social and health sector) •• ICT investments of banks and trade •• Limited resources of SME’s •• The size of domestic market •• Organisation of supporting services •• Growth not in focus for part of enterprises •• Competence in marketing and internationalization, lack of connections to distribution networks •• No understanding of value chains and specialisation Opportunities Threats •• Development of commercialisation •• Development of collaboration and networking •• The large internal market of the EU, growing markets of Russia and Eastern Europe •• Foreign interest in Finnish high tech enterprises •• Utilisation of strong and growing industries •• The growth of e-business reduces the significance of geographical distances •• The development of industry structure by increasing the number of small and growing the size of middle sized enterprises •• The R&D investment of public sector in internationalisation •• Decreasing of financing, lack of long term vision in risk financing •• Insufficient investment and lack of professionals in international sales and distribution •• Recruitment may be a problem when economic trend turns positive •• Investments required for globalization •• Hard competition, growth of software business faster elsewhere •• Emigration of knowledge and competent personnel •• Big companies take over small and innovative ones
35 non that was initially calledWeb 2.0 and later on social media. With these new types, the users and their interaction have a significant role in content cre- ation: “In this new way of thinking, the user is not just a customer for the ser- vice but also actively involved in creat- ing and developing it.”30 The open online communication also seems to spread inside organiza- tions. For example in 2007, Nokia re- freshed the company’s values ​​by using internal crowd sourcing. 31 Gartner32 predicted in 2010 that the growth trend of the social me- dia will continue within companies. Gartner forecasts that: •• By 2014, social networking servic- es will replace e-mail as the prima- ry vehicle for interpersonal com- munication for 20 percent of busi- ness users. •• By 2012, over 50 percent of enter- prises will use activity streams that include micro blogging. However, stand-alone enterprise micro blog- ging will have less than a 5 percent penetration. •• By the end of 2012, over 70 per- cent of IT-dominated social media initiatives will fail. •• Within five years, 70 percent of collaboration and communication applications designed on PCs will be modeled after the user expe- rience lessons from Smartphone collaboration applications. •• By the end of 2015, only 25 percent of enterprises will routinely utilize social network analysis to improve their performance and productiv- ity. Another current trend is the continuous growth of the Open Source movement. The values associated with the Open Source are quite similar to those of so- cial networking: cooperation, open- ness, and communality. One of the im- pacts of the Open Source thinking is the development of new business models that have shifted the emphasis away from software licenses to services. 3.4.2 Changes in lifestyle and consumer behavior From the software industry’s viewpoint, the most interesting lifestyle changes are those that influence how, where, and what kind of software or servic- es are used. Lifestyle changes are in- tertwined with technological develop- ments, and sometimes it is difficult to say which one is the catalyst. Lifestyle changes (or the desire to make them) create a demand for new technological solutions. On the other hand, techno- logical development enables new ways of life. One example of such a develop- ment is the fact that mobile technol- ogy has become increasingly prev- alent. One reason for this is the ad- vanced technology (including smart phones and tablets). However, it is al- so an answer to people’s lifestyle chang- es, in which the attitudes towards work and leisure time have changed. More and more often users want to use the software anywhere and anytime. At work they also handle personal affairs through social networks, and at leisure time they run business apps.This, for ex- ample, puts pressure on the developers to choose software platforms carefully, or to seek platform-independent solu- tions, such as SaaS. Other consumer behavior relat- ed changes can be seen e.g. in securi- ty related questions (in response to the growth in cyber crime), the rise of the global software market consciousness (services are available everywhere), the rise of virtual local markets (e.g., Face- book Apps, Google App Market), and price awareness (e.g. many basic ser- vices are expected to be free or cheap). 3.4.3 Demographic changes Over the past decade, relatively large natural changes have occurred in the user base of software products. The ten oldest – and often the less ICT-skilled – age groups have ceased to exist, and ten new – increasingly Internet-na- tive – age groups have replaced them. This affects e.g. the expectations of and the demands for software products as well as the ability to adapt to new tech- nologies. The software industry has al- so gone through employee changes, which has had similar effects within the industry. Regarding internal migration, there has been a continuing trend for software industry’s workplaces to be situated in growth centers. Separate 30 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. 31 http://www.talouselama.fi/uutiset/nettiaika+toi+nokiaan+uudet+arvot/a161543 32 Predicts 2010: Social Software Is an Enterprise Reality, Gartner 2010.
36 statistics of cross-border migration are not available for the software industry. 1.8 percent of the entire ICT industry’s workforce consisted of foreigners in 2002 and 1.9 percent in 2006.33,34 3.4.4 Globalization When it comes to globalization, the software industry’s relationship is some- what two-sided. On the one hand, the industry is subject to the effects of glo- balization; but on the other hand, the software industry together with the whole ICT industry is one of the main forces in the acceleration of globaliza- tion. The technological progress has, for example, made the digitalization of work and services possible. Throughout the 2000s, globaliza- tion of the software business has pro- gressed rapidly, and its effects can be seen in outsourcing, offshore software development, Global Software Devel- opment (GSD), and the rapid develop- ment of the international software busi- ness, in which international acquisitions have been almost everyday business. 35 From the social viewpoint, globali- zation has increased international cul- tural interaction and coordination, as English has become the everyday busi- ness language in many places and the global corporate culture has spread wider. 3.5 Technology 1995. The concept presents the pub- lic attention and expectations towards new technologies as a curve, where there is first a peak of ‘hype’because of novelty of concept, followed by a valley where the technology is no more news and not yet commonplace. Along with the wide deployment the technolo- gy becomes present in everyday life and business, and rises to the ‘plateau of profitability’. Gartner hype curves in 2005 (Figure 9) and 2010 (Figure 10) give a view about the expectations and development of emerging technolo- gies, of which a great deal are related to ICT and software. 33 Elinkeinoelämän keskusliiton selvitys, 2006. http://www.digitoday.fi/data/2007/05/31/ulkomaalainen-on--outo-lintu-it-alalla/200713364/66). 34 Maahanmuutto- ja innovaatiopolitiikat kansainvälisessä osaajakilpailussa. Opetusministeriön julkaisuja, 2008:19. 35 Predicts 2010: Social Software Is an Enterprise Reality, Gartner 2010 Globalisation Practices of Software companies from cultural perspective. Wesslin, 2010. http://dspace.cc.tut.fi/dpub/handle/123456789/6806. 36 Verso programme seminar Software 20/20 Nov. 16th 2010 http://www.tekes.fi/fi/gateway/PTARGS_0_201_403_994_2095_43/http%3B/tekes- ali1%3B7087/publishedcontent/publish/programmes/verso/documents/software_2020/dan_sommer_for_software_2020_software_trends.pdf 3.5.1 Changes in strategic technology priorities Consulting enterprise Gartner has reg- ularly surveyed the views and priori- ties of company Chief Information Of- ficers (CIO). Table 7 shows the devel- opment of strategic technology priori- ties of 1700 CIOs globally over the years 2007–2010. An illustrative way to present the breakthrough of technologies on the time axis is the ‘hype curve’ concept, originally introduced by Gartner in Table 7. StrategicTechnology Priorities of 1700 Chief Information Offices in 2007–201036 CIO technologies Ranking of technologies CIOs selected as one of their top 5 priorities in 2010 Ranking 2010 2009 2008 2007 Virtualisation 1 £ 3 3 5 Cloud computing 2 £ 16 * * Web 2.0 3 £ 15 15 * Networking, voice and data communications 4 £ 6 7 4 Business intelligence (BI) 5 Ô 1 1 1 Mobile technologies 6 £ 12 12 11 Data/document management and storage 7 £ 10 9 9 Service-oriented applications and architecture 8 £ 9 10 7 Security technologies 9 Ô 8 5 6 IT management 10 * * * Enterprise applications 11 Ô 2 2 2 * New question for that year
37 Some key trends in technology de- velopment relevant for software indus- try: •• The number of distinct technolo- gies existing and emerging is in- creasing •• Not even the largest companies have sufficient resources or will- ingness to invest in all technolo- gies: •• Horizontalization of technologies will occur, with different commer- cial technology platforms and plat- form layers emerging •• Moore’s law will continue to apply •• The technological possibilities are greater than the capabilities for business use – strong technolo- gy push •• Proliferation of computing devices: smart phones tablet computers, application enabled television sets •• Move of software functionality from the end-user terminal to the servers run by the software pro- vider •• Agile development methods are used increasingly. Figure 9. Gartner hype curve for emerging technologies 2005
38 3.5.2 Cloud and SaaS Improved telecommunication infra- structure is also a central enabler of Cloud Computing. Cloud Comput- ing is the name for a style of comput- ing, where massively scalable and elas- tic IT-enabled capabilities are provid- ed “as a service” to external custom- ers using Internet. Figure 11 shows the Gartner hype curve for Cloud Comput- ing in 2010. Cloud computing technology sup- ports the SaaS (Software as a Service) business model. Software as a service, Figure 10. Gartner hype curve for emerging technologies 201037 37 http://www.gartner.com/teleconferences/asset_129930_75.jspf SaaS, is a way to offer software applica- tion products and services to the cus- tomer. It is thus more a matter of busi- ness processes than one of technolo- gy. Application service providers (ASPs) offering business applications over the Web have been in business for many years and are increasingly used, espe- cially by SMEs, in order to avoid the costly development and maintenance of in-house systems. The characteristic business difference between ASP and SaaS is that in ASP the customer hires or leases an application, as SaaS fees are based on subscription, usage, or trans- actions. Saas model is oriented towards mass usage of standard software, whereas ASP providers run customer- specifically tailored copies of the appli- cations. This means that software de- velopment for SaaS environment sets high requirements for product devel- opment. The quality and of software are essential, and the gradual develop- ment path of small software companies from tailored projects towards produc- tized software is not possible.
39 3.5.3 Mobility and the battle of platforms Mobility is another topic where the de- velopment during 2000–2010 has been fast and hard to predict.The megatrend of increasing mobility and multitude of different wireless terminals to access In- ternet is clear, but struggle of telecom- munication standards and the compe- tence about mobile platform technolo- gy dominance have caused some sur- prises. In late 90s a lot of expectations were placed in WAP communication protocol, and startup companies invest- ed in early mobile internet applications, but the real performance of wireless in- fra did not meet the high expectations and only quite recently mobile inter- net usage via smartphones and tab- lets has really become commonplace. The breakthrough of mobility took final- ly place in the last years of the decade through consumer applications, which surprised some players who had been Figure 11. Hype Curve for Cloud Computing 2010 Gartner38 38 http://www.gartner.com/teleconferences/asset_129930_75.jsp relying on the vision where business ap- plications built around email would be the main driver. Mobile terminals are short-lived consumer products highly influenced by fashion and changing marketing messages. This causes e.g. the smart- phone platform software competition very dynamic. Apple was able to take over Nokia/Symbian position in the market, and Google/Android has risen practically in one year to challenge Ap- ple dominance.
40 Developing for mobile platforms in the Finnish software industry is grow- ing fast. According to Software Indus- try Survey 201139 , the most used mobile platform in 2010 was iOS specifically in iPhone development (8.5% of firms). Symbian was used by 7.9% of firms. By 2012, Android and Windows Phone are foreseen to be the most common plat- forms used by 24% of firms. Fast growth is also expected for the use of cloud and social media plat- forms, though they are clearly left be- hind by mobile platforms. The 2020 situation of common- alities between different platforms ac- cording is depicted in Figure 12. 3.6 Development inside Tekes 2000–2010 3.6.1 Development of strategy Besides legislation the strategy of Tekes has also followed the guidelines de- fined by the national Research and In- novation Council (before 2009 the Sci- ence and Technology Policy Council). During the first decade of the millenni- um some of the challenges set by the Council for the national innovation sys- tem including Tekes were •• identification of new growing in- dustries and the development and delivery of high quality inno- vation services and business com- petence (Science and Technology Policy Council 2001) •• the promotion of the creation and growth of new technology enter- prises; strengthening and integra- tion of internationalization and in- ternational technology collabora- tion (2003) •• improvement of the quality and targeting of research; promotion of the adaptation and commercial- ization of research results (2006) •• enhancing of demand and user orientation; internationalization of the service sector; increasing the number and R&D expenditure of innovative enterprises; consolidat- ing the utilization of knowledge and technology (2008). In its strategyTekes has taken the Coun- cil guidelines well into account. In 2000 the strategic objectives of Tekes were defined to be i.e. the development of national competence platform, the cre- ation of new technology enterprises, improvement of the volume and quality of R&D activities and the promotion of the commercialization of the results of R&D. In 2003 Tekes emphasized growth and internationalization with objectives like a strong national competence plat- form with high quality R&D, innovative growth enterprises and internationali- zation of innovative activities. The tar- geted impact is presented in Figure 13. The relevance of the strategy in re- lation to software industry is imminent. As a part of the strategy information and communication technology was defined as one of the key technologies of Tekes, a status that ICT has held ever since. Also, software industry – which at that time was taking its first steps as an industrial cluster – was chosen as one of the focus areas. The objectives remained very much the same until 2008 when the objectives were organized under are- as capabilities for innovation activities, productivity and renewal of industrial life and well-being. In 2011 Tekes of the fu- ture was added in the objectives. In capabilities for innovation activ- ities the emphasis was in the interna- tionalization of innovation activities and Figure 12. Commonalities in development platform choices inside firms in 2010 (depicted as network relationships between platforms)39 39 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011
41 strong networked competence centre, productivity and renewal of industrial life emphasizes young innovative enter- prises and growth enterprises and well- being sustainability, the quality of so- cial and health care service system and the services and platforms of informa- tion society. Strategy 2008 defined separate- ly the application based themes and cross sectional competences. The ap- plication based themes include intelli- gent systems and environments, service business and innovations and interactive communication. Information and communication, service competence and business com- petence (as a central competence area) were defined to be among the cross sectional competences. The means to implement the strat- egy have been practically all the time •• the activation of innovation by di- rect, continuous and confidential interaction with customers as the most important tool •• the technology programmes di- rected according to customer needs and Tekes’s strategy to tar- gets strategically important for Fin- land •• the selective project funding di- rected especially to projects creat- ing new kind of competence; be- sides significant expected results and possibilities these projects have also high commercial and technological risk level. In 2008 new means of implemen- tation, the Strategic Centres for Sci- ence, Technology and Innovation were launched. One of the centres is Tieto- ja viestintäteollisuuden tutkimus TIVIT Oy which is committed to ensuring rapid development of Finnish ICT know-how. The current strategic focus are- as guiding the selections in Tekes pro- grammes are41 •• Natural resources and sustainable economy •• Vitality of people •• Intelligent environments •• Business in global value networks •• Value creation based on service so- lutions and intangible assets •• Renewing services and production by digital means ICT and software industry have been one of the strategic key areas of Tekes for the last decade the focus shifting from technology to services and busi- ness towards the end of the decade. In the current strategy especially intelli- gent environments and renewal of ser- vices and production by digital means have a strong connection with ICT. Also service solutions offer remarkable pos- sibilities for the industry. 3.6.2 Development of organization From the beginning of current millen- nium ICT (and software technology as a part of it) had an own department under the Technology unit of Tekes. Be- sides minor changes the organization- al structure remained from the point of view of ICT and software industry unchanged until 2005. In 2005 a new structure was formed and the units In- dustrial Branches and Technology and Research Areas were created (see Fig- ure 14). Thus, software branch as an in- dustry, R&D area and business area has been well taken into account in the or- ganization of Tekes. The organizational visibility and weight of the branch has actually been strengthened from 2005 onwards. In the 2005 organization soft- ware branch was given its own depart- ments in both of the above mentioned Competitiveness profitability and growth Enterprises Projects and programmes international cooperation Boosting exports, broadening industrial and economic base, generating new jobs and improving well-being New businesses, start-ups Societal and environmental impacts Tekes provides expert services and R&D funding coordinates programmes G G Research institutes and universities Figure 13. Impact of Tekes as seen in 200340 40 Annual Review 2003, Tekes 2004 41 http://www.tekes.fi/en/community/Focus_areas/1125/Focus_areas/2417
42 units named Software and Digital Me- dia Industries and Software and Tele- communications respectively. The cur- rent organizational structure resem- bles the one in picture 3 with the ex- ception that Technology and Research Areas and International and Regional Networks units have been merged in- to a unit Competence Areas and Inter- national Network. 3.6.3 Development of funding The strategic focus on software indus- try has become concrete during the first decade of current millennium with among other things the three technol- ogy programmes this report is set to evaluate •• SPIN technology programme (2000–2003) participated by well over one hundred enterprises and R & D organizations and a total size of 76 M€. •• VAMOS – Mobile Business So- lutions technology programme (2005–2010) with a total size of about 100 M€ with a Tekes con- tribution of 45 M€. The amount of participating organizations was a record number of 400. •• Verso – Vertical Software Solutions Programme (2006–2010) where the total size of the was about 125 M€ with a Tekes contribution of 59 M€. Figure 14. Tekes organization 2005 and software branch inside it; current organization is basically similar with the exception that the Technology and Research Areas and International and Regional Networks units have been merged into a unit Competence Areas and International Network42 Core Processes Board see page 6 STRATEGIC MANAGEMENT Director General Debuty DrVeli-Pekka Saarnivaara Director General Dr Martti af Heurlin Management Support Functions Strategy Mr Hannu Kemppainen Executive Director Customerships Dr Jari Romanainen Executive Director Software and Telecommunications Dr Eero Silvennoinen, Director Software and Digital Media Industries Mr Risto Setälä, Director Industrial Branches and Support for Core Processes Mr Martti Äijälä, DirectorExecutive Finance and Administration Mr Harry Karlqvist, DirectorExecutive International and Regional Networks Dr Ari Ahonen, DirectorExecutive Technology and Research Areas Dr Riikka Heikinheimo, DirectorExecutive Programmes Dr Jussi Kivikoski Executive Director Funding Mr Hannu Järvinen Executive Director 42 Annual review 2005, Tekes 2006
43 Software has of course been need- ed as a competence area in many oth- er programmes inside ICT and other in- dustries as well.The funding of software branch has been rising almost contin- Figure 15. Tekes R&D funding by industry (left) and for services; software and data processing has been the biggest funding object within services from 2004 onwards43 uously from 2005. Towards the end of the decade software branch has be- come the biggest R&D funding object of Tekes as shown in Figure 15. 43 Annual review 2010, Tekes 2011 70 60 50 40 30 20 10 0 Million euros Million euros 03 04 05 06 07 08 09 10 Electronics and electrotechnical industry Machines and metals industry Chemical industry Forest industry Construction Foods Software and data processing R&D services Other services Management consulting Health care and social services Wholesale and retail trade 03 04 05 06 07 08 09 10 70 60 50 40 30 20 10 0 Architecture, engineering and technical services
44 4.1 Post evaluation of SPIN programme 4.1.1 Background and objectives of SPIN programme As described above, the growth of Finnish software business had been extremely rapid during late 1990s. The software industry was expected to de- velop into one of the most important pillars of the Finnish industry. Besides the traditional tailored ICT system de- velopment, product-oriented busi- ness was seen as an excellent means of accessing the rapidly growing glob- al market. Software products – SPIN 2000– 2003 was a three-year technology pro- gramme carried out by Tekes with the aim of supporting the product-orient- ed business of more than 100 small and medium-sized Finnish enterprises aim- ing for the global market. Core technology areas of SPIN in- cluded: •• Applications for the Internet ser- vice infrastructure •• Applications for mobile commu- nications •• New enterprise management soft- ware for companies operating in the digital economy. Other focus areas included com- puter security, entertainment software, systems and software development tools, software for mobile and other new platforms, modernization of exist- ing applications, new media technolo- gies, component-based software prod- ucts and software component prod- ucts. A total of 110 industrial and 14 ac- ademic R&D projects were accepted into the SPIN technology programme. The total volume of the industrial pro- jects was nearly 70 M€, of which Tekes financed 30 M€. 6 M€ was invested in academic R&D projects carried out by university research units in co-opera- tion with companies. Specific objectives of SPIN pro- gramme were: •• To support in core technology are- as development projects that aim at developing software products for international markets, •• To support research projects, which aim at developing methods and technologies needed for de- velopment of software products in core technology areas, •• To promote networking and coop- eration in software product busi- ness, •• To improve operating environ- ment and support services of soft- ware product enterprises, •• To promote growth of high level competences of software product business in Finland •• To launch both separate and joint initiatives that speed up interna- tionalization. 4.1.2 Evaluation in 2003 SPIN programme was evaluated in 2003 together with two other industry spe- cific technology and development pro- grammes of Tekes − the programme for the furniture sector DIVAN and the programme for stone industry STONE (1999–2002)44 . Each one of the three programmes aimed at developing the structures and competitiveness of an industry mostly consisting of SMEs. In addition to the assessment of the suc- cess of the programmes with respect to this target, the functionality and role of the industry specific programme con- cept in general was addressed. The evaluation stated that the needs of the industry were taken into account in SPIN programme objectives; the programme was relevant from in- dustry point of view. Product leadership was targeted and the focus largely was 4 Evaluation of software programmes 44 Tekes report 18/2003: Toimialoja kehittävien ohjelmien arvionti – DIVAN, KIVI, SPIN. Arviointiraportti. ISSN 1239-1336 ISBN 952-457-124-2
45 in the development of technological competences, support of specialization and networking, and strengthening re- gional centres of expertise. The focus of the programme was weaker in areas of special importance such as •• Understanding customer business and operating environment, •• Distribution and export expertise, •• Knowing international demand, and •• Improving international competi- tiveness. The evaluation concluded that SPIN had directed the software industry to- wards product-based business and up- graded the idea of software business sector as a cluster composed of ac- tors from various fields. Industry specif- ic programmes had improved industry knowledge as well as research and de- velopment activities. On the other hand, the programme had less concrete tools for and func- tioned improperly in the improvement of business expertise and understand- ing of customers’ business, especially international markets. These were seen as the greatest challenges of the indus- tries, and were later influencing the re- visions of Tekes strategy. In the evaluation survey of 2003 most respondents were of the opinion that the programme had a positive in- fluence for the business. Three of four responding enterprises considered that the projects had at least moderate posi- tive effect on revenues, export and prof- itability. The programme increased the in- terest of enterprises to R&D, productiza- tion was supported, the networks with- in the industry and clusters improved, and division of labor in the develop- ment of the industry was clarified. The evaluators note, however, that time span of the evaluation was too short for statistical evaluation of im- pacts. 4.1.3 Evaluation in 2011 The present evaluation, ten years af- ter the launching of the programme, is challenging but provides a fascinating opportunity to have a look at the real long term impacts. Revenue and export data of all 101 companies that originally participated in SPIN were studied for impact evalua- tion. In addition, a sample of 11 compa- nies was picked from those SPIN partici- pants that still were in business in 2011. The conclusions and overall evaluation of the impact is a combination of indi- vidual interviews and a statistical look at the whole ensemble of SPIN-partic- ipants. Since the emphasis of SPIN was in enterprises and their software prod- uct projects, research projects were not specifically addressed in the eval- uation. 4.1.4 Analysis of the growth and export of SPIN companies The final report of SPIN lists 101 enter- prises as enterprise project owners. By 2011, 56 of them have ceased operat- ing. This corresponds to the industry average rate. During the first decade of the millennium, according to industry statistics the half-time of software en- terprise population has been slightly over 7 years, i.e. in average ca. 9 % of the enterprises have disappeared yearly for one reason or another. This rate has been varying between 6,5 and 11 per cent over the first ten years of the 2000s. For 22 of the 56 vanished company names a merger or acquisition could be confirmed. It is likely that in some cas- es the products/technologies devel- oped in SPIN have continued their life in a new company. The birth and growth of micro en- terprises is one of the central objectives and performance indicators of innova- tion system. We call microenterpris- es such companies that have the total yearly turnover less than 2 million euro. In order to illustrate the development of the companies that participated SPIN, we have analyzed available data about three groups of enterprises: A: All companies that had at least one project in SPIN programme, and are still in business (data was available for 38 such companies). In addition to those companies that do not exist any- more, we excluded of the analysis two companies where data of a larger cor- poration was available only, and cor- porate restructurings during the dec- ade have big influence in the data se- ries. B: Starting micro enterprises:Those 26 companies in group A that had a yearly turnover of less than 2 M€ dur- ing their entrance in SPIN programme, i.e. in all of the years 1998–2002. C: Slow growth micro enterpris- es: Those 15 companies in group B that have stayed under 2 M€ of turnover. D: Growers:Those 11 companies in group B that have grown out of the mi- cro enterprise category, i.e. have had a business volume of over 2 M€ in any of the years 1998–2009.
46 Fig 16 shows the development of domestic and export turnover of the companies of group A (total SPIN sample) during the decade. The green line indicates the funding that these companies have received from Tekes in each year. This includes all Tekes funding, not only SPIN programme related. For comparison, the volume index trend of total software services industry (Class 62, TOL 2008) is marked with the black dotted line. The trend has been adjusted to start from the same point as the turnover money value. In order to eliminate the effect of inflation, all yearly sums, including the industry volume index, have been ad- justed to the price level of the year 2010 by using the Harmonized Index of Con- sumer Prices (HICP, YKHI). Cumulative unadjusted amounts for the ten years in question are: •• Turnover Finland 1.241 M€ •• Export turnover 251 M€ •• Tekes funding 33 M€ Figure 16 shows that the group of SPIN participants, where failed, merged, and acquired enterprises have been elim- inated, has been growing roughly as fast as in the industry generally. It is also very obvious, that the growth has been based on domestic market alone. Ex- port has not contributed to the growth of the business volume of SPIN partic- ipants. A look at group B companies, i.e. enterprises that were micro sized (un- der 2 M€) when joining SPIN, provides an entirely different picture. Figure 17 shows the development of domestic and export business volume of those 26 micro companies in SPIN that are still in business with the same name. The black line represents the same in- dustry volume index as in the previous picture.The growth has been very rapid throughout the decade. Also the con- tribution of export has been significant, although not dominant. During the first nine years 2000–2008, the growth speeds were as follows: Inflation-adjusted CAGR •• Turnover from Finland 27 % •• Export turnover 33 % •• Volume index of S/W industry 6,2 % Figure 16. Total turnover and Tekes funding of enterprises that participated SPIN and were still in business in 2010 (n=38)
47 The slowdown of the global busi- ness activity in 2009 caused a drop in exports. When the year 2009 is includ- ed, the growth rates for the whole dec- ade 2000–2009 are: Inflation-adjusted CAGR •• Turnover from Finland 24 % •• Export turnover 23 % •• Volume index of S/W industry 5,2 % The total cumulative sums without in- flation adjustments for the decade 2000–2009 are: •• Turnover Finland 325M€ •• Export turnover 86 M€ •• Tekes funding 24 M€ The green line in Figure 17 shows, that this group of enterprises has been using Tekes funding also after the SPIN programme. As a matter of fact, Tekes funding for this group of companies has been increasing in real terms over the years. Next, we divide the micro enter- prises of SPIN into two groups: Those, who are still micro sized (Group C) and those that have grown out of the mi- cro category. Figure 18 shows that even the moderate growth group of SPIN enter- prises has been able to grow faster than the industry in general. Export has not played a significant role in the growth. The relationship with Tekes and use of Tekes funding continue, but have clear- ly been declining after the end of SPIN programme. The fast growth of the micro enter- prises of SPIN is due to a group of 11 companies that have left behind the micro phase and are today SMEs with turnover of 2–20 M€. As Fig. 19 shows, also in this group (Group D) the growth is mainly due to domestic business, al- though the growth of export has been faster. It is also obvious, that these growth companies have known how to use Tekes services and funding. After the SPIN programme, the yearly Tekes fund- ing has steadily been increasing. Only in the year 2009, when the new recession already was squeezing the exports, there was a decline also in Tekes funding. Figure 17. The turnover export and total Tekes funding of SPIN enterprises that were smaller than 2M€ in 1998–2002, and were still in business in 2010 (n=26)
48 Figure 18. Turnover, export and Tekes funding of SPIN enterprises that stayed smaller than 2M€ (n=15) Figure 19. Turnover, export and Tekes funding of SPIN enterprises that have grown out of micro category (n=11)
49 Growth numbers for group D for the‘good’years 2000–2008 are: Inflation-adjusted CAGR •• Turnover from Finland 34 % •• Export turnover 45 % •• Tekes funding 46 % And for the whole decade 2000–2009: Inflation-adjusted CAGR •• Turnover from Finland 30 % •• Export turnover 34 % •• Tekes funding 36 % The total cumulative sums without in- flation adjustments for the decade 2000–2009 are: •• Turnover Finland 256M€ •• Export turnover 73 M€ •• Tekes funding 18 M€. As a summary, the micro enterprise group within SPIN participants seems to have grown faster than the indus- try in general. This applies also to the modest growth segment, where the companies are still now in micro class, but there is also a distinctive group of fast growers. Export has played a much smaller role in the growth than proba- bly expected during the programme. The findings of SPIN data are in line with the finding cited in Chapter 4 of this report: Even in the year 2011 less than half of the Finnish software com- panies that responded to an indus- try-wide survey had any international revenues and only 21% in significant amount. Furthermore, it would be very in- teresting to study also the group of SPIN companies that have ceased operation or changed identity. This would, however, be a subject for a separate dedicated study, since the data about nonexistent companies is not available for similar analyses as de- scribed above. 4.2 Evaluation of VAMOS programme 4.2.1 VAMOS programme description Tekes launched the VAMOS – Mobile solutions for business – programme in 2005 in order to enhance the applica- tion of mobile and wireless technolo- gies in companies. It had been recog- nized that the productivity of opera- tions in companies could be improved significantly through existing mobile technologies and therefore the main fo- cus of the programme was not devel- oping new technologies, but develop- ing new applications. The objectives of the programme were: •• To increase the speed of uptake of mobile solutions widely in differ- ent industries •• To support the development of so- lutions for improving the produc- tivity of company operations •• To bring together different parties involved in the development of mobile solutions in the form of an industry cluster. The key questions that the programme sought to answer were: how to recog- nize the development needs of a com- pany’s processes and how to respond to the identified needs using existing technologies. Improvements in produc- tivity through mobile solutions were sought in several different industries with a special emphasis on the follow- ing four, which were considered “utiliz- ing industries”: •• Transport and logistics •• Construction and facilities management •• Manufacturing •• Company services. The aim was to increase both the va- riety and breadth of mobile solutions use; actors in the abovementioned uti- lizing industries participated in the VA- MOS programme right from its incep- tion. The four and a half years of the programme was funded by Tekes with a contribution of 43 million Euros, and by companies and research institutions for an additional 50 million Euros, sum- ming up to 93 million Euros altogether. Approximately 400 different or- ganizations from five different indus- tries participated in the programme to identify solution development needs and to share experiences of the devel- oped solutions. This community gener- ated 188 different research and devel- opment projects related to mobile so- lutions. In order to support the devel- opment of mobile solutions, the pro- gramme targeted SMEs with services to diversify their services offering and to improve their knowledge of the needs of their customers. SMEs were very ac- tive to seek VAMOS funding in order to develop their businesses. Over half of the projects carried out focused on so- lutions for the transport and logistics in- dustry and the construction and facil- ities management industry. Over 70 % of the 144 company projects support- ed micro-, small- and medium-sized companies in creating new business
50 and growth. The number of research projects was 43. At the beginning of the programme concerns were raised about the significance of mobile solu- tions in the overall software market, but during the programme it became clear, that SMEs wanted to invest significantly in developing new business opportuni- ties based on mobility. Meeting the objective to form a cluster around mobile enterprise solu- tions required that a broad spectrum of different types of actors were involved: companies, research institutions, con- sultants, networks and public entities. The importance of this involvement was heavily emphasized from the be- ginning of the programme. Four exter- nal consultants employed by the pro- gramme were charged with the task of encouraging both the industries devel- oping and those utilizing mobile solu- tions to participate in the programme’s activities.To support this task, a system- atic work method was developed for managing contacts made during the programme. Programme services The objective of the programme ser- vices was to bring clear benefits to the participants and so the projects initiat- ed focused on identifying the needs of the utilizing industries and on finding solutions to meet these specific needs. In addition, the projects aimed at dis- solving suspicions towards new tech- nologies and bringing different actors together to activate networking. During the programme, various different traditional services were of- fered to enhance the application of mo- bile and wireless technologies. These included seminars, reports and stud- ies that clarified the field and general- ly networked people. The programme initiated altogether 130 workshops and events with over 5000 participants. In addition to traditional servic- es, new services were implemented. Key challenges for the utilizing indus- tries were the lack of resources, expe- rience in developing mobility based business strategies and consequently the inability to define the solution and its benefits. To tackle these issues, a ser- vice called Mobile Enterprise Factory (MEF) was initiated.The service was im- plemented by the state research cen- tre VTT. In the core of the activity was a workshop process, where companies developed their solutions with the help of VTT. The workshop process was de- fined in the form of checklists whose purpose was to support the prepara- tion process. The checklists were later organized into a handbook. Different utilizing industries participated in the process as follows: •• Transport and logistics: 48 companies •• Construction and facilities management: 28 companies •• Manufacturing: 20 companies •• Company services: 18 companies. Altogether 47 actual development pro- cesses were initiated. In addition to MEF, the four activators offered tailored com- pany services, and the programme or- ganized match making sessions be- tween utilizing industries and mobile industry. 4.2.2 Programme coverage Programme coverage can be measured on several levels. Starting from the in- side we have the programme enthu- siasts who actively participate in the programme services and common ef- forts. Programmemembers attend some of the activities and use some services while funding users do not care about anything else than funding. Outside the programme we have the industry or an- other target group that can be classified e.g. by the company size. Here, an addi- tional relevant categorization is the uti- lizing industries. Based on the interviews and the fragments of the survey it can be con- cluded that the programme internal coverage was on a good average Tekes programme level. Many companies participated in the programme servic- es, but there was also a portion of com- panies that only took the funding. One reason for this is that Tekes appends many projects to programmes with- out them having applied for the pro- gramme. As a result of this rather unco- ordinated procedure, the project partic- ipants are not necessarily even aware of the possibilities of the programme. Ser- vices are not used by the participants and the added value of the programme suffers. One might also argue that such a procedure gives a biased view on pro- gramme success if reported in funding figures only. One reason for good internal cov- erage is that the services are tailored to the specific need of the company. It may well be that standard services that suit for some companies do not suit others. A good example of tailoring in VAMOS was the widely used company advisory services. Another example of mass customization is the MEF activity and the procedure related to that. In outside coverage the key issue is visibility and marketing via different channels. For marketing, VAMOS em- ployed a professional marketing compa- ny, and over 40 articles on VAMOS were
51 published. According to the interviews, the programme was rather well known in the mobility developing industry, but the utilizing industries did not recognize the programme that well. The activators had to do long days in spreading the word in the utilizing industries. Mobility was perhaps a new issue, and selling the idea of mobility utilization to companies was even more challenging: Develop- ment was known to take resources, the outcome and the benefits were uncer- tain and the system should have been taken into use in the organization, which is known to be very hard. 4.2.3 Programme services The programme services were widely thanked by the participants. Especial- ly the company sparring and advisory services were appreciated. Here, the key factor was the hands on experience the coordinators had and were able to dis- tribute. Also the MEF activity was widely thanked, although it was also heard that VTT was not the correct service provid- er; instead, more business oriented and experienced provider was hoped for. Anyway, the MEF activity was able to af- fect companies’ ways of operating and even their strategies. There were also some difficulties in the services. First, it turned out that funding of utilizing companies was al- so needed but this was impossible with the instrument repertoire in use at that time. One consequence of this was that the programme R&D&I support ex- penditure did not reach the budget. Of course, one might ask why companies that gain direct benefit from the pro- ject should be funded, but on the other hand there was a clear need for resourc- es from these companies, and uncer- tainties in the outcomes, which means that also risks of the utilizing companies should have been reduced by funding. This was also the case with service busi- ness funding45 . Second, some new offered ser- vices did not work as planned. For ex- ample, individual tailored marketing and sales argument clarification servic- es were offered to companies, but the service was not utilized by many com- panies. Reasons for this might have been that the services were new and offered without a thorough and suffi- cient internal sales and marketing pro- cess. It may also be that such services were not within the responsibilities of the project contact persons in the com- panies. Third, for SMEs and micro com- panies, reserving the necessary human resources for the service use is not nec- essarily possible. The programme coordinators were widely thanked for the experience and attitude they had. However, according to the interviews, the role of the steering group and the expectations for steering group members were slightly blurred. There were steering group members that never attended the meetings, and it was not crystal clear what the attend- ing members were supposed to do. As usual, the steering group was not au- thorized to select the company projects that were appended to the programme. As a result, the steering group members changed many times. Perhaps a clear- er target setting for the steering group might have helped here. 4.2.4 Programme projects TherewasaclearemphasisonSMEsand micro enterprises in the programme, as 2/3 of the projects were carried out by these groups. Among the big players was, .e.g., Nokia. It seems that the project contents of the programme were not complete- ly in line with the programme objec- tives. A relatively large portion of pro- jects were rather technical develop- ment projects, which does not totally support programme structure and tar- geting and the aim of programme ser- vices. VAMOS might have been a tran- sition programme where the business development view was raised for the first time but the project entry process and the project application alignment outside the programme were not af- fected much. In Verso (see 5.2.4), the project content was – possibly due to more coordinated programme entry – very aligned with the project goals. From the scarce number of an- swers of the survey one may estimate that the projects inVAMOS programme were strategically significant to their owners, technologically demanding, very close to the core competence of the companies, closely linked to other projects in the company, and had quite high risk levels. Clearly the most significant ena- bling factor in the programme was the funding received from Tekes. The add- ed value of the programme to the pro- jects in it were •• increased cooperation with ICT companies •• increased cooperation with utiliz- ing companies 45 Nowadays Tekes has instruments like IJH (Innovative Public Procurement) that partially solve this problem
52 •• programme roadmap work •• increased client contacts •• internationalization help. It is interesting to note that issues like information sharing, new solution con- cepts and models, or new partners were of less importance to the projects. It may well be that focusing on a par- ticular solution with a given team make such issues less important for at least some companies. When looking at the benefits the programme provided for the partici- pating companies, following items rise above others: •• Increased cooperation and knowl- edge on potential collaborators •• Increased knowledge on clients and customer industries •• Business (re)alignment •• Increase in technological expertise •• Increase in business expertise •• Increased knowledge on procure- ments and contracting •• Increased knowledge on techno- logical possibilities. Knowledge on customer needs – which was more or less in the core of the pro- gramme – was not highlighted in the answers. No concluding remarks can be made due to the low response rate – it may well be that MEF participants are underrepresented in the sample. Overall, the projects have benefit- ed from the programme, and the pro- gramme has been able to produce in- teresting individual results in its pro- jects. However, the original idea of turn- ing the individual project outcomes in- to software products or easily tailorable service product seems to have been more difficult than expected. 4.2.5 Programme relevance and achieving the objectives As told earlier, in the early 2000’s, Fin- land was among the top leading coun- tries of mobility. Nevertheless, mobil- ity technologies and the positioning of mobility in the ICT/software sec- tor and especially its applications had not been defined yet. Mobility per se was seen as a value. Against this back- ground, the preparation of VAMOS was very adequate and its goals were very understandable. Today, mobility is of- ten seen as one channel among others, and it might be that if reinitiated, VA- MOS would be part of something else. However, one must bear in mind that what is obvious in mobility in 2012 cer- tainly was not that ten years ago. To this end, the objectives of the programme were well set and challeng- ing. Also the programme services sup- port the objectives well. However, there were some technical and administrative difficulties, like the inability to fund uti- lizing companies, the confidentiality is- sues related the use of Tekes CRM sys- tem data in matchmaking, to mention some. One might ask why the nation- al advantage in mobility mentioned above seems to have faded away. The main reason for this is most likely com- mercial. Global commercial selections Case M2M Platform Emtele is a service operator assisting customers to gather vital information avail- able for operations and business purposes. From 2006 to 2008 Emtele studied and developed Machine-to-Machine (M2M) services, technologies and related service processes in engineering, energy and health care sectors in a Tekes project called M2M Platform. M2M platform was carried out in close cooperation with customers and Comptel. Tekes financial support played important role as an enabler of the project but Emtele also attended a number of networking meetings, seminars and other events in Vamos programme that were an important source of networks, information and ideas. According to Mr. Erkki Viitala, Development Director at Emtele, these new networks with other companies and potential customers served as a creative in- novation environment for the project and a crucial stepping stone for the new in- novative solutions that emerged as a result of the project. During the M2M Platform project emerging fast growing M2M business areas were identified and new service concepts and related technologies were devel- oped. Nowadays, Emtele operates successfully in for example electricity distribu- tion networks offering field communication outsourcing services to distribution network operators. Emtele M2M services have also gained interest abroad and Emtele has already taken the first steps towards international growth. According to Mr. Viitala, “Tekes project had a decisive role in development of Emtele’s current innovative product and service offering.” n
53 had not taken shape yet in the be- ginning of VAMOS. In the lack of clear market that was only to develop, the technological edge was more or less doomed useless. In the customer mar- ket, Internet mobility finally took over, making much of the telecom based de- velopment futile. To this end, an interesting ques- tion is what was the role – intended or unintended – of Nokia in the selec- tion of Finnish focus areas. Nokia, being a worldwide mobility player, has had a significant role in the development of the Finnish ICT sector. Nevertheless, Nokia’s main emphasis was on telecom mobility. Did the shadow of Nokia affect the development in Finland? Of course, there are many other fields of mobility where Internet mobility is not the so- lution, but this particular section is of great importance. In any case, in the evaluation work- shop it was pointed out that there has been only some mobility systems in the world that have been able to form a large or global breakthrough, like Ap- ple iPhone and Blackberry, but a com- mon factor for all three has been that they are proprietary systems. It is very unlikely that any technological edge would have made it possible to form a Finland-based global proprietary solu- tion in the given market situation. To conclude, the VAMOS pro- gramme was a well implemented pro- gramme but a prisoner of its era. In ret- rospect, there was an opportunity but no realistic possibilities to utilize the technological edge on the Finnish na- tional level. VAMOS, though, has made a good effort on this. 4.3 Evaluation of Verso programme 4.3.1 Verso objectives and description Like in Vamos, the key intention of the Verso programme was to bring the end user industries and the software industry together. Originally the client industries selected for the programme were finance, trade, construction, op- erator based telecom, and other in- dustries. The added value of the Verso pro- gramme was seen to be in •• market-based software services products and services •• the creation of integrated solu- tions to help companies compete internationally •• creating industry specific software business growth and in strength- ening the industry specific soft- ware clusters •• enhancing cooperation between software companies and applying industries and combining client in- dustry, business and software ex- cellence in new ways. There were synergy plans with other programmes such as Liito and Serve. Altogether, in the preparation phase there were seven public semi- nars, three external preparation man- agement team meetings, numerous Tekes’ internal meetings and many background reports. Also recommen- dations from earlier programme evalu- ations were taken into account in the preparation. The objectives of the programme were: •• To accelerate the growth and inter- nationalization of Finnish software companies •• To enhance the business know- how of companies and especially know-how related to internation- alization and customers •• To strengthen the role of the soft- ware industry as a key pillar sup- porting Finland’s economy. Tekes funded the programme with over 60 million Euros out of the total pro- gramme funding, which was 125 mil- lion Euros. Verso programme funded alto- gether 220 projects, out of which some 10% were research projects. There was a conscious decision to keep the num- ber of research projects down, and to select only research projects that would directly benefit the business focus of the programme. Programme services The programme services of Verso were something else than usually was carried out in programmes. Besides traditional project activation, events, theme sem- inars and workshops that were seem- ingly successful, there were significant new openings in the programme ser- vices. Perhaps the most important new service was the company-tailored ex- pert sparring service. Like in VAMOS, renowned experts from Tekes but al- so from outside Tekes provided tailored services for business development, business strategies, internationalization,
54 funding, sales and marketing. Help was provided by personal consultation but also via telephone and email for smaller issues. The services were very popular and seemingly also helpful also in terms of turnover and exports development. Other sparring services included advisory services in private and public funding and project advising, from the successful formulation of applications to services regarding business devel- opment funding advice. Other significant services were dif- ferent ways in incorporate potential customers. The ways varied from differ- ent forums to funding of participation in the commercial networking events. Growth and internationalization programmes in Verso included •• Open source business programme with trips, seminars and company specific consultations •• Growth and internationalization clinique with company specific expert mentoring, MBA student made business planning, and com- mon seminars •• (together with VAMOS pro- gramme) coaching programme for joining the market offered by US federal government. •• Market information gathering and specific market entry programmes to Russia, India and China with re- ports, seminars, trips and company specific internationalization paths. Also a number of internationalization models were produced in the pro- gramme. Models included internation- alization paths (Gaselli USA and Russia), Internationalization path for Retail and Finance, and the Reality Check model to enhance customer understanding. The programme also produced a set of guides including •• PR Academy Communications guide for software companies •• Pitch Book pilot where an inform- ative brochure for a company to help in internationalization was produced with marketing profes- sionals and market experts •• Collection of templates to en- hance business planning, funding application preparation etc. In addition, Verso brought together science and academia with compa- nies in three Research Bazars where research units introduced their servic- es and project ideas to companies and vice versa. 4.3.2 Programme coverage Both the internal and external cover- age of the Verso programme are quite exceptional in the Tekes programme context. For a long time, the strategies of Tekes have pinpointed the impor- tance of applications, business knowl- edge and impacts. Still, even today it is very customary to see Tekes pro- grammes where the project content is full of technology oriented devel- opment projects with an unclear cus- tomer view. In this context, the pro- ject content of Verso is miraculous. Great majority of the projects con- tains a business case or an applica- tion that in many cases has some- thing to do with internationalization. Of course also technology oriented horizontal projects are present, but the development also in these pro- jects seems to focus on customer and business needs. This is clearly a milestone in Tekes programme histo- ry: the project content very clearly re- flects the spirit and goals of the pro- gramme that are very suitable for the needs of the industry. SMEs and micro enterprises were well presented among the participants. According to the Verso internal survey, two thirds of the participating compa- nies were SMEs. The idea of Verso was to concentrate more on SMEs that had a some kind of proof of concept history behind them than on startups. Conse- quently, most of the SMEs had already years with a reasonable turnover be- hind them. Within the programme, the pro- gramme services were widely used, and finally the companies receiving e.g. personal sparring had to be select- ed from among a big group of candi- dates. Again, some companies concen- trated only on spending the funding, but it seems that the usage of the pro- gramme services overall was on a very high level. One key reason for the project selection and also the success of the programme services was the exter- nal coverage. The programme was able to create an enormous and to- tally exceptional publicity through its systematic and professional brand- ing where professional expertise was utilized. More than 100 media stories were created, and Verso gained popu- larity over the whole Finnish industry. Also the programme content gained a hands-on reputation where success in practical company specific results was achieved. The reputation seems to have cre- ated an excess supply of projects, and in the end phase of the programme it was possible to select the most suita-
55 ble projects to the programme and to its sparring services. Such a coordinat- ed project entry is by no means com- mon in Tekes programmes. Since get- ting in was controlled, it was estimat- ed that a remarkable proportion of the programme participants participated somehow in the programme services and benefited from them. 4.3.3 Programme services Overall, the programme services in Ver- so were overwhelming and very dif- ferent from any previous Tekes pro- gramme in terms of their tailoring and practicality. Judging from the reputa- tion Verso received and the effects the services seem to have had, theVerso in- ternal survey and the response to the evaluation survey, the services have served the programme goals well and produced tangible results in companies and also in the software industry. Also some difficulties existed. It was stated that the cooperation be- tween companies and research facili- ties was difficult. Taking into account the size and the development phase of the companies this is not surpris- ing. Also the more or less traditional model of internationalization, where a leading big enterprise is expected to take Finnish SMEs abroad as its part- ners, was explicitly found not working. This is an important finding, since this model has been one cornerstone of in- ternationalization in Tekes context for a long time. It should be noted, however, that also in this programme there were sev- eral companies that did not use pro- gramme services. Either the companies did not need the services or did not know about them.This seems to be un- avoidable in any programme. 4.3.4 Programme projects The programme focused on develop- ing individual companies and compa- ny groups, and on steering funding to- ward development of business know- how, the improvement of commercial- ization prerequisites and R&D. In prac- tice, this meant creating software prod- ucts and replicable, complete software solutions targeted at specific industries or specific functions. Verso sought to attract software companies that had a strong drive to grow and internation- alize and that also had an innovative product or service with the potential to realize the growth objectives. In addi- tion,Verso aimed to involve some of the bigger players in the industry in order to support smaller companies in their in- ternationalization efforts through pro- viding examples and contacts. As men- tioned earlier, the programme project portfolio supported these lines excep- tionally well. From the answers of the survey re- sults it is possible to conclude that the projects in the Verso programme, as in VAMOS, •• were strategically significant to their owners •• were technologically demanding •• were very close to the core compe- tence of the companies •• were closely linked to other pro- jects in the company •• had quite high risk levels. As in VAMOS, the most significant enabling factor in the programme was the funding received from Tekes. Oth- er form of added value to the projects were •• increased cooperation with utiliz- ing companies •• programme roadmap work •• increased client contacts •• internationalization help. When looking at the benefits the pro- gramme provided for the participating companies, following items rise above others: •• Increased cooperation and knowl- edge on potential collaborators •• Increased knowledge on clients and customer industries •• Business (re)alignment (accentu- ated) •• Increase in technological expertise and IPR •• Increase in business expertise •• Increased knowledge on techno- logical possibilities •• Knowledge on client needs. Overall, as inVAMOS, the projects in the projects have benefited from the pro- gramme, and the programme has been able to produce interesting project spe- cific results.
56 From 2004 to 2006 Neoxen Systems worked closely in PRO346 EUREKA-project which led to development of product series based on new information and knowledge management tech- nology47 . After PRO3-project in 2007, Neoxen launched AEC Pro Customer Tekes project in which new market options were studied, evaluated and piloted and their products were fur- ther improved. The product development took place in close collaboration with potential customers that occurred during number of pilots. The piloting and marketing efforts focused on energy sector in Canada. Tekes had a very important role as an enabler of the thorough market research and piloting as well as the related product development. Financial support was crucial for Ne- oxen Technologies and allowed the company to use local experts to bring in profound tailored understanding of the potential markets. According to CEO of Neoxen Systems, Mr. Esa Tervo,“Cooperation with Tekes helped to make it through the first contact to the first meeting but in the negotiation process, the presence of Tekes, gave the small company that crucial extra bit of credibility needed to convince the cus- tomers to start a pilot project”. Also Verso programme per- sonnel receive warm thanks from CEO, who says that“despite the obvious lack of resources, Verso contact persons were very competent and up-to-date, making the successful co- operation possible.” AEC Pro Customer unfortunately ended right when the 2008-2009 financial crisis hit. Therefore, the entry to Canadian market had to be postponed. Despite the drawback, the pro- jectprovidedNeoxenSystemswithveryclear,carefullyplanned processes for evaluating new market potential, estimating en- try costs and actual launching. “Before the actual project our understanding of the market entry and related costs were far from realistic”, explains Mr. Tervo. He also believes that this kind of market testing and product piloting would be very benefi- cial for other companies in the same position too. “It certainly would take down the number of very expensive unsuccessful entries that Finnish companies do,”he continues. In addition to project development and market entry, pro- ject expanded the contact network and improved the coop- eration with current partners like Microsoft. The project also led to improvement in R&D-processes as well as quality and customer contact management practices. Through a number of small changes, AEC Pro Customer had a massive but largely uncategorized strategic impact on the Neoxen System, claims Mr. Tervo.“Had the project no taken place, it would be hard to imagine where Neoxen Systems would stand today.”n In 2006, IT service and solution provider, Tieto Finland Oy, launched in cooperation with Aalto University a five stage Tekes funded program called Real-Time Economy (RTE). The multi-year program, which is currently in the beginning of the last stage, has been participated by a large group of pub- lic and private sector actors. The objective of the program is to develop, automate and harmonize information flows be- tween business partners, authorities and banks. This makes it possible to move towards electronic B2B transactions and improved automation of the administrative processes in all sizes of organizations. The benefits for society at large are enormous – both in terms of productivity, information qual- ity and environment. Tekes has played a critical role in the RTE program as the funding from Tekes has had an enabling role. “For a multi-year program like RTE having long term targets, it would be next to impossible to use normal operative investment practices”, says Mr. Jyrki Poteri, the Head of Global Offering Manage- ment at Tieto Finland who is company’s responsible director of the program. Compared with internal investment initiatives in companies, Tekes funded projects include by definition a strong collaboration between different actors, forming a quite neutral platform suitable for public actors also to participate. In addition to funding, Poteri especially acknowledges the im- portance of the Tekes enabled collaboration, which has had a crucial role in catalyzing the wide successful cooperation with both private and public actors. Case AEC Pro Customer Real-Time Economy 46 For more information, see www.eurekanetwork.org 47 Neoxen QX Technology „„
57 4.3.5 Programme relevance and achieving the objectives Strengthening Finnish software clus- ter has been in the core of Finnish in- novation policy for some time.The goal was to broaden the success of Nokia to other software industries as well and to make software industry one base pillar of the Finnish economy. The preparation report of the Ver- so Programme concludes that in 2004 there were 1100 Finnish software com- panies out of which only one half had some kind of internationalization in- tentions. At the same time, large grow- ing international demand for software products and services for different in- dustries was recognized. The growth of Finnish companies happened main- ly in the Finnish market. Internation- al networks and client industry specif- ic software miniclusters were practically nonexistent. A clear and important find- ing was that technological innovations were not enough for internationaliza- tion – core problems were on the busi- ness and internationalization capability of the companies. It is easy to conclude that the prep- aration of the programme was thor- ough and responded well to the needs of the software industry itself, Finnish innovation policy as well as Tekes’strat- egy. Also according to the interviews the programme was very relevant for the field. The timing, the objectives and the implementation of the Verso pro- gramme were almost ideal. From the policy learning perspective it should be noted, however, that the programme drifted a bit away from the original idea of software verticals but still ended in a perfectly good spot. Furthermore, also VAMOS had difficulties in bringing the utilizing industries to the mobility table. It may well be that verticals (or connect- ing utilizing parties and implementing parties) are a good idea but hard to im- plement in practice. Both programmes did succeed well but the effort was big. The taken effort is of utmost impor- tance, however, since user interaction with technology implementers is very important. This interaction and its chal- lenges are discussed in the micro clus- ter analysis under the Demanding client micro cluster in Section 5.4. The goals of the programme are given in the previous subsection. It is easy to see that they reflect the prep- aration material and the identified key challenges adequately. Given also the Finnish business climate and some- what technology oriented mindset it is also seen that the goals are very chal- lenging. Further evidence on the ad- equacy of the objectives and the pro- gramme services is given in Figure 20 that presents the central challenges of Verso participating companies in 2009. Besides funding, help hoped fromTekes included e.g. •• International sales, sales training •• Marketing •• Organizatorial changes •• Sparring of experienced consult- ants, concrete help •• Knowledge on markets •• Networking, client meetings, and match making. The results of the RTE program have already been also in- ternationally remarkable as the program has for example had the leading role in the development of the ISO20022 stand- ard for electronic invoicing. The active role of Aalto University and academic research have been key success factors in the program, which served as the stepping stone for the founda- tion of the Real-Time Economy Competence Center at Aalto University. In addition, the program has contributed to the role of Finland as the forerunner in the area of electronic busi- ness solutions. Based on the research and development in the program, new service concepts and services are being built to enable electrifying the value chains in Finland. These ser- vices have great potential to be turned into successful export products later on. In Tieto the program has contributed in de- velopment of Business Information eXchange cloud services, where Tieto is by volumes one of the biggest service providers in Europe and received recently two international innovation awards. The fifth and last stage of the RTE program is currently launching. It concentrates on productizing the concepts and technologies developed in earlier stages. “If the cooperation with Tekes and other collaborators continues equally successful, breakthrough of new services can be expected as a result of the RTE program during the coming years”, believes Mr. Poteri. n
58 However, in the light of the eval- uation data, Verso’s goals are aligned with the company and industry needs, and the programme seems to have achieved the goals exceptionally well. Figure 20. Central business challenges of Verso participants in 2009 (Source: programme survey) The selection of programme services supported the goals; the project con- tents suited ideally with the targets and the programme internal and external coverage were excellent. Central business challenges
59 5.1 Introduction In this section we present the results of the micro cluster analysis described in chapter 2. The themes of the micro clusters were decided by the evaluation steering group, and individual contents of the clusters were negotiated with programme managers and responsi- ble people. The themes of the microclusters were 1. Finnish games industry and the role of Tekes in its development. 2. Born global companies: also in the Finnish software industry there are companies that aim directly at in- ternational markets.The intention of the analysis is to find out how Tekes can support these companies. 3. Super growing micro companies. Analysis ofTekes’client data showed that in there are micro companies in VAMOS and Verso with astonishing growth figures. Supporting these companies is very important but they may require different means of support than the other compa- nies. The objective is to see how the programmes services have served these companies. 4. Demanding client is a fundamen- tal element in user-oriented design and operations. On the other hand, demanding clients are fading away from the national market. Both in VAMOS and Verso demanding cli- ents were in a key role. In this mi- crocluster, the role of the demand- ing client is investigated in more de- tail. For each micro cluster, project selec- tion criteria, the analyzed projects, and main findings are reported. The report- ing structure varies slightly according to the micro cluster target, as some adap- tations in the methodology were need- ed. Two clusters are presented without explicit company names, for two other clusters case companies are presented. 5.2 Games cluster in Verso progamme During the last decade, games indus- try48 has been the most rapidly growing business area in the entertainment sec- tor, with turnover around 50 billion in 2008.49 The industry has been constant- ly evolving as new areas like mobile and social games have opened completely new markets. Partly the growth origi- nates also from increasing number of new age and other customer groups attracted by more sophisticated games and new innovative gaming solutions like dance video games. Although many areas in games industry like con- sole and PC games have largely reached the maturity stage, the new business ar- eas are still at growth stage providing opportunities to fast success.The future growth potential makes the games in- dustry rather attractive for investments. In early 2000’s, there were only a handful of game companies in Finland and the industry was largely under- developed compared to internation- al markets. The early steps of games in- dustry funding were taken by Tekes in the SPIN programme and later in Fe- nix programme. It should also be not- ed that Nokia was heavily involved in games industry funding in early 2000’s due to its N-Gage game phone experi­ ment. The Finnish games industry has developed dramatically during the last decade, growing from 20 to 70 com- panies. At the same time, the turno- ver has multiplied from 40 million in 2004 to 165 million on 2010.50 The fu- 5 Micro cluster analysis 48 The games industry is defined here to consist of companies that manufacture game hardware, develop games or publish and retail game products. 49 KooPee Hiltunen et al. 2010. Suomen pelitoimialan strategia 2010-2015 - Visio 2020. Suomen pelinkehittäjät ry & Neogames 50 Neogames 2011. The Finnish Games Industry 2010 – 2011
60 ture looks also promising as new com- panies are being founded in increasing number and the annual growth in the coming years is expected to be as high as 50 %.51 There has been success in several areas including mobile, PC and console games as well as social gaming and game franchising. Among the most successful companies have been Rem- edy Entertainment with its Max Payne and more recent Alan Wake franchise and Rovio Entertainment with the puz- zle game Angry Birds franchise.The fact that Finnish games industry has created remarkable success stories and some game companies have been acquired by large international companies sug- gests that the Finnish games industry has, despite rather late start, reached the forefront of the field. Although game business has tra- ditionally been strongly privately driv- en, continuous support from the pub- lic sector and especially Tekes since 2000 might be one of the crucial fac- tors behind the quick advancement of the industry. Many Finnish game com- panies including Rovio and Reme- dy Entertainment have been strongly supported by Tekes. For example, Ver- so programme has supported 26 differ- ent game companies52 . Entertainment industry including games took its first steps among “the other focus areas” in the SPIN technology programme in 2000–2003.53 Tekes Fenix programme in 2003–2007, had a major role in the birth of the Finnish games cluster as it led to foundation of a national game centre Neogames. Nowadays, Finnish games industry forms a horizontal rather sepa- rate cluster in which larger internation- ally successful companies buy services from smaller ones.54 In games cluster,Verso programme has continued the Tekes support when Fenix programme finished in 2007. This section evaluates the influence of Ver- so on games cluster and, on the other hand, brings forth ideas to develop the program through four case companies. The companies also serve as touch- stones to illustrate the variety of pro- jects supported, services used and im- pacts of the support. Each company re- ceived Tekes support for two different projects under Verso programme. The companies and the projects are •• Remedy Entertainment: The flex- ible development methods of games (2007–2008) and Remedy’s new business model (2009) •• Advant Games: Game Design- er Release1 (2006–2008) and Mul- tiplayer modeling, analysis and game execution (2008–2009) •• RedLynx: Multichannel communi- ty (2007–2008) and User-Generat- ed Content in Cross-Media Game Communities (2009–2010) •• Sulake: Habbo’s Competitiveness Through Development (2007– 2008) and User-Generated Web of Virtual Worlds (2008–2010) They represent different areas of the in- dustry as Remedy Entertainment has focused on PC and console games and franchising; Advant Games is on tech- nology consultancy sector for lotter- ies, gaming operators and technology vendors; RedLynx develops and pub- lishes games in various platforms; and Sulake defines itself as social entertain- ment company with focus on social games and communities. The compa- nies are presented in company profile boxes below. 51 Neogames 2011. http://www.neogames.fi/fingames/ 52 KooPee Hiltunen 2012. Interveiw with KooPee Hiltunen 20.01.2012. Neogames 53 Lankinen ym. Ohjelmistotuotteet SPIN 2000-2003 –teknologiaohjelma, Ohjelmistotuotteilla kansainväliseen menestykseen - loppuraportti. Tekes. Teknologiaohjelmaraportti 15/2003. Helsinki 2003 54 Syrjänen ym. 2007. Tietoyhteiskunnan uudet toimintatavat mahdollisuutena ja haasteena – Fenix Teknologiaohjelman arviointi, Teknologiaohjelmaraportti 9/2007
61 Remedy Entertainment is a developer of action games, game franchises and 3D game technology. The first Verso project focused on game development and enabled Remedy to test new technologies and software. The second project aimed to develop Remedy’s business from game developer towards an entertainment media company building overall franchises in- stead of games. Despite Remedy was successful well established company already before Verso programme, the Verso projects had an important influence on the company. The first project played a crucial role in enabling the company to test the latest tech- nologies and solutions and maintaining its forerunner position in the swiftly evolving game business.The project had consider- able contribution to the core competences of the company and improved the overall product development process.The second project had especially strong strategic dimension, building up a completely new franchising business around the games. For example, Remedy’s recent story-driven action game Alan Wake has been franchised out into book, clothes etc. Remedy did not use any other services in Verso pro- gramme but funding. As a larger internationally integrated company, services like market research, consultancy and net- working were found largely unnecessary. However, Remedy could have used some kind of match-making with Finnish small and start-up companies. Currently Remedy uses a num- ber of foreign subcontractors that could be this way perhaps replaced with Finnish providers. This would also contribute to the creation of strong Finnish games cluster. n Advant Games Advant Games was founded as a university spin-off in 2006 providing gaming so- lution testing platform and tools for Finnish lottery Veikkaus. At that time, all their products were practically suitable only forVeikkaus. In the first project, the company concentrated on completing their product development and productizing it. In the latter, a new multiplayer gaming testing platform was developed. As a result of the projects, Advant Games was able to develop new independent products and ser- vices, which the company has now been selling successfully also abroad. For Advant Games, clearly the most important part of Tekes support was fund- ing, which was considered very important as their product development was large- ly based on it. Tekes projects were also closely connected to the key competences of the company, contributing to the core R&D and key technological expertise. This way, Tekes contributed to the development of the company’s key products and the business of the company in general. In addition to funding, the company also participated some networking events that Tekes arranged and used Tekes expert support. These services were, however, not found very useful. In general, Advant Games remained largely unaware of other services in Verso programme and, for example, the networks of the company were not expanded through Verso. On the other hand, Advant games did not seek to utilize other Tekes services actively as they were primarily focused on their R&D. Also their area of business is rather limited and they knew already quite well their potential customers and partners. n RedLynx RedLynx is a multiplatform game de- veloper and publisher. The company was originally concentrating on television games but, as these mar- kets began to wither in 2005, Red- Lynx faced a remarkable challenge of moving to new markets. In 2006 began company’s first Verso project which focused on developing new technologies related to multichan- nel community services. The second project aimed to expand the knowl- edge as well as the commercial and technical components related to new business areas. The projects were carried out in cooperation with other international private compa- nies and they served as a stepping stone to new multiplatform game markets. Redlynx was recently ac- quired by international video games publisher Ubisoft. Remedy Entertainment „„
62 The role of Tekes and Verso support for games cluster Tekes has been practically the on- ly public and the single largest funder and supporter of Finnish games indus- try. According to the interviews, Tekes and Verso programme have had a de- cisive role in the development of Finn- ish games industry. Although large part of support and funding has con- centrated on R&D&I, the influence has been, in fact, much broader. Even the projects that were not very successful have generated information and know- how that has often shown to be useful in other applications. As the coopera- tion between companies has improved and the professionals have moved be- tween the game companies, the knowl- edge generated in Tekes projects has spread efficiently. This accumulated knowledge now forms one of the cor- nerstones of Finnish games cluster. The influence of Verso programme varied very much from project to pro- ject. The largest benefits were very like- ly related to R&D and product develop- ment which were in the core of most of the projects. However, the projects had many other important impacts as well. Here are some of them: •• For companies that had not yet achieved a competitive position in the markets and companies that were for some reason moving to new markets, Tekes was often al- most the only source of funding in the death valley before first suc- cessful product. For these compa- nies Tekes had guaranteed steady income flow and in some cases even saved the company from go- ing bankrupt. Sulake Corporation Oy Sulake Corporation is as social entertainment company focused on social games and communities. The first Verso project concentrated on development of more efficient R&D processes and the latter on user generated information management. The first project had a crucial impact on the development of new services. It largely renewed the company’s approach to service development and led to both savings and better products. The second project resulted in a new product and advanced some of the main technological competences of the company. It also created new information and expertise in the core areas of company’s business. The product, however, did not become very successful. Both projects were closely connected to the key business areas of Sulake and had some degree of strategic relevance. However, most of the benefits will be realized in long term. In addition to funding, Sulake did not use other Tekes programme services. The company was not properly aware of other services in the Verso programme but, on the other hand, did not actively seek or really need other service options. For Sulake, more information regarding, for example, current and forthcoming Tekes programmes would be useful. Regular meetings with Tekes personnel, also when there is no common project running, could be an appropriate way of delivering this information. n Tekes support played significant role in the difficult transition phase from televi- sion to multiplatform game developer. It had significant contribution to building new core expertise, technologies and products. The support also enabled strong networking and internationalization efforts which led to RedLynx’s current desir- able international position. The projects had a major strategic influence on RedLynx and they were closely connected to the core competences and business areas of the company. RedLynx planned and carried out the projects in close cooperation with Tekes. Especially in the beginning of the projects, collaboration led to important improve- ments in the project plans and execution. Tekes experts brought, for example, very much needed understanding of new game business areas to the company.The net- working services of Tekes were also valuable for the company as it needed to build new contact networks in the new markets. Altogether, Verso provided an excellent and resourceful support platform for the company. n
63 •• Even the largest Finnish game companies are very small interna- tionally and, therefore, they strug- gle to keep up with the technolo- gy and software development and innovations. With Tekes support these companies were able to test new technologies, produce dem- onstrations, invest on R&D, and develop their processes. This way, Tekes had often an important role in maintaining their position in the forefront of the games industry. •• Mostly the Verso projects have fo- cused on the core competence and business areas of the inter- viewed companies. In many cas- es, strengthening these areas has given important competitive edge compared to competitors. Even the projects that have not been very successful, have still ad- vanced the expertise of the com- pany in the right areas. •• Many Verso projects focused on development of a new product or service or improvement of an old one. Despite the clear focus, Tekes support usually enabled the com- panies to consider their product development, R&D and other rele- vant processes during the project. This way, many projects led also to improvement of these processes. •• Many projects included elements which required cooperation with other companies. This led to im- proved contact networks and con- tributed to the development of the Finnish games cluster. •• Verso programme had a strong in- ternational dimension and for ex- ample a number of delegations and trips to technology trade fairs were arranged with support ofVer- so.These were important channels to build international contacts for many especially smaller compa- nies. •• Verso has contributed to the first reviews of Finnish games industry published by Neogames. Verso services and ideas for improvement Inadditiontofunding,Versoprogramme provided support in many other forms including various types of consulting; market research and testing; events and seminars; and customer contacts and networking. However, the funding was clearly the most important form of support. Many projects did not actual- ly include any other support elements. This was the case especially with larger companies that had already a well es- tablished position and advanced con- tact networks in the market. On the other hand, for smaller companies also the other services were often very use- ful. For example, in games industry the domestic markets are very small and companies have to aim to internation- al markets from the beginning. There- fore, Tekes support in forms of market research, customer meetings and inter- national contact network was very val- uable for small companies looking for channels to internationalize. In general, the game companies were highly satisfied withTekes support in Verso programme. The new more business minded approach inVerso was considered as a big step to right direc- tion. Tekes contact persons were very competent and useful especially in the beginning of the project when the pro- ject was planned. Although the funding required certain amount of bureaucra- cy this was not considered problematic by the companies. Some room for improvement could be found, however. Many com- panies were also not properly aware of the other services in the programme. Therefore, the communication and advertisement of Tekes programmes should be improved. One possible so- lution might be also regular meetings between game companies and Tekes programme advisers also when there is no common ongoing project. Com- munication after the project could be useful forTekes as well because this way it could collect feedback from old pro- grammes and projects and get ideas for new ones. Many companies were also won- dering how the valuable pieces of in- formation that were produced in the project are delivered to the next Tekes programmes. It seems thatTekes lacks a system to collect for example best prac- tices in successful projects. It is unfortu- nate that these experiences cannot be utilized in other projects and coming Tekes programmes. 5.3 Born Global companies 5.3.1 The concept of Born Global company Globalization of commerce and man- ufacturing, and especially the devel- opment of telecommunications have created in early 2000s a new concept of business internationalization. Tradi- tionally companies started their export operations after establishing a com- petitive position in their home market. Nowadays some enterprises can suc-
64 cessfully pursue global or international customer base from the beginning. In software business this is often an espe- cially attractive approach due to econ- omies of scale and the possibilities pro- vided by Internet in marketing and de- livery of products and services. We picked for interviews from the participants of SPIN, Verso and VAMOS a group of startup companies that from the beginning had a strategy to go for international customer base. Games in- dustry is very typically a segment where Born Global approach is quite natu- ral, and among the participants of the three programmes the Born Global- microcluster largely overlaps with the games cluster. For the interviews we, however, picked intentionally compa- nies that represented a variety of differ- ent applications from games to reserva- tion service and system components. In spite of different products and different customer base they shared some com- mon characteristics that may helpTekes to develop services for this type of com- panies. One very essential feature is that a company that wants to serve interna- tional customer base efficiently cannot rely on labor intensive customization of software. The products and tools need to be solid and the business requires big product development effort, mak- ing it a natural customer for traditional Tekes services. 5.3.2 The role of Tekes and the applicability of programme services The interviewed Born Global enterpris- es had been utilizing Tekes funding within programmes and outside them. From the company point of view, the in- dividual projects (and hence the financ- ing services) were far more important than the entity of programme; the in- terviewees were not always even aware of whether the project had been part of a programme or not. Funding of R&D projects was the essential contribution of Tekes; the participation in the pro- gramme seminars and networking has been minimal. Tekes was seen as dedicated fi- nancier of technology development. In general the interviewees were satisfied with Tekes contribution and to some extent the contribution had been cru- cial to the very existence of the com- pany, especially during economy crises. The applicability of Tekes financing ser- vices and the expertise of Tekes in rela- tion to the enterprise needs was evalu- ated to be very good. Tekes was given credit as the on- ly Finnish financier working for tech- nology SME’s, the money available else- where was not considered ”intelligent” in the same way. Tekes strives to ana- lyze the projects seriously; other public organizations were seen to have some- what less interest in the problems of SME’s. Tekes has also been smart in tak- ing the necessary risk. 5.3.3 The results achieved with the support of the programmes & Tekes services The interviewees mostly identify the support and results obtained with Tekes cooperation in general and indi- vidual projects rather than with a pro- gramme. The opinions presented here must be understood to address the results achieved by Tekes services in general rather than by specified pro- grammes. Quite unanimously the compa- nies see that Tekes financing has ena- bled sufficient investment in R&D and thus been essential for competitive- ness. Tekes support has contributed especially in the development of solid technological platforms and tools that have made possible efficient develop- ment of further products. In most cases Tekes financing was considered essential for the speed, scope and quality of the development, and even for the existence of the com- pany. The technological change sup- ported by Tekes financing had made it possible to open business with signifi- cant international customers. 5.3.4 Development propositions from the born global point of view Since Tekes is – according to the inter- viewees – the best financing organiza- tion for technology SMEs, it is vital that Tekes keeps its focus tight.The technol- ogy competence of Tekes is really pro- fessional. HenceTekes should use its re- sources in the analysis and support of Born Global Enterprises, the interna- tionalization and necessary network- ing should be left to the enterprises themselves. More Tekes financing for business development could be useful, if this goes together with product develop- ment. However, the place of Tekes is in R&D. Good experiences were report- ed from having both Tekes money and venture capital, although all interview- ees did not see venture capital being of much help. Tekes can influence business de- velopment competences of interna- tionalizing SMEs best by providing money for R&D so that company has free resources for business develop- ment. Tekes is an enabler – the R&D project model of Tekes helps the enter- prise to focus.
65 Thefocushastobesettightlytoen- able the success of Finnish enterprises. More hard core technology experts are needed inside Tekes. The commercial success potential of the projects has to be understood; business competence is necessary to the analysis of commercial success potential. The seeking of external help is not the task of Tekes, the basic will to net- working has to be inside the enterprise. 5.4 Supergrowing micro companies For this analysis, we interviewed anony- mously five microenterprises55 that had participated in the VAMOS and Verso programmes and had a few years af- ter their participation experienced rap- id growth in their net sales. The group was selected using Tekes’ CRM data and contained companies that had al- ready some turnover and that expe- rienced a hundred or thousand per- cent annual growth figure. Pure start- ups were left out. 5.4.1 The suitability of the programmes and their effect on rapid growth Rapidly-grown microenterprises had primarily used the financial services of these programmes but had made a rather limited use of the other servic- es. The interviewees felt that the finan- cial services were very suitable for their purposes. Most interviewees said that there would not have been any growth without the programmes. Funding had been a concrete way to boost growth by allocating resources, e.g. for recruit- ing in addition to product develop- ment. However, the application stage was considered somewhat heavy on their resources, especially when it was the company’s first application. For ex- ample, small companies sometimes wasted their limited resources on poor- ly directed applications. As far as the interviewees knew, programme management and their practices were considered flexible, functional, and properly sized. Further- more, the representatives of Tekes pro- vided enough support and guidance during the projects, especially in the application phase. Utilizing the pro- gramme services was considered prob- lematic, since due to their limited re- sources, small companies had to con- centrate on, e.g. operative actions in- stead of participating in the servic- es. The services, however, promoted growth by increasing e.g. networking. The microenterprises we inter- viewed had been able to bring their current main products to the market and acquire notable expertise with the help of these programs. For some of the companies, new contacts with e.g. international operators within the field, subcontractor networks, and pilot customers established during the pro- grammes were also very important. VAMOS and Verso programmes were thought to have significant- ly helped the companies develop and guide their operations. Planning their development project and reporting their progress forced the companies to think about their strategy and work meticulously throughout the develop- ment project. The programmes also made it sig- nificantly easier to recruit more people into small companies and to improve the know-how of their personnel. This way, the companies acquired expertise that they have been able to commer- cialize later. The majority of the company rep- resentatives felt that without these pro- grams they either would not have been able to grow at all or the growth would have been significantly slower. They al- so felt that having Tekes participate in their product development had brought credibilitythathadmadethediscussions with private financiers easier. 5.4.2 Wider reaching effects According to the interviewees, VAMOS andVerso have had a clear effect on the development of the software industry ecosystem.The programmes were con- sidered to have a significant effect on the research, development, and inno- vation investments in the microenter- prises. Without them, the investments would be significantly smaller. Busi- ness generated through the develop- ment project had also made it possi- ble to continue the development with company’s own money. The expertise was considered to have improved sig- nificantly, mainly through technolog- ical knowledge accumulation but al- so in business aspects: the programs in their part helped increase the exper- tise to the current internationally-com- petent level. Some companies felt that e.g. new contacts with subcontractors 55 According to Statistics Finland, a microenterprise is a company that employs less than 10 people and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million and, which fulfills the definition of an independent enterprise.
66 and partners had boosted the creation of domestic and international networks. The programmes were considered to have an effect on company policies through the adaptation of the systemat- ic and goal-directed approach required by the funding. Additionally, a possible negative effect was brought up; The de- velopment projects could instruct the companies to concentrate too much on development work at the expense of marketing.This is notable: even in highly business oriented programmes like VA- MOS and Verso, it is possible to concen- trate too much on technological devel- opment, especially among companies that only utilize funding. The programmes also have had an effect on productivity, e.g. through increased orderliness, but these have been rather minor compared to oth- er effects. On the other hand, the inter- viewees felt that relying too much on funding can also hamper company’s productivity. The effect on the companies’ growth and internationalization was considered essential. Apart from a very small number of business angels, Tekes was seen as the only place where a new software company can acquire funding for growth.Tekes also had a major effect on the internationalization of those mi- croenterprises that were trying to enter the international market. 5.4.3 The role of Tekes The interviewees considered Tekes to be important for growth enterprises. In general, software companies consid- ered the Tekes’ programmes to be reli- able and useful for their development. Two specific reasons were mentioned. First, Tekes may be the only channel for microenterprises to acquire nota- ble financial support for their develop- ment work and growth – especially if the company wants to maintain its in- dependence. By participating in these programmes, the microenterprises can find concrete development areas and new angles that will increase growth. Second, the role of Tekes as a network- ing agent and door opener was very important to some of the companies. Without it, it may be very difficult for small companies to get in contact with global enterprises. The programmes were considered very important for the rapid growth of microenterprises. 5.4.4 Development suggestions from the microenterprise point of view In the following we present some quotes from the interviews of the mi- crocluster companies. •• Better monitored application pro- cess. Small growth enterprises would benefit significantly from a better monitored and guid- ed application process. This way, the company’s meager resources would be directed correctly from the first steps. •• Improved networking opportuni- ties. The programme could even better support the need for the microenterprises to network with e.g. customers, partners, financiers, and sales and marketing profes- sionals. On the other hand, it was felt that it would require strong- er incentives or even mandatory attendance to make the growth enterprises to utilize the services more intensively. •• ”One-stop service”. Due to limited resources, it was considered some- what frustrating to seek funding from several different public sourc- es to be able to cover both prod- uct development and marketing (e.g. separate applications through Tekes and ELY Centres). Also fast- er application handling process- es would be important because speed can be critical for a small company. In general, it would be good to have separate services for start-up companies, which would better take into account their spe- cial characteristics. •• Research facility spin-offs. The cre- ation of research facility spin-offs could be supported through a sep- arate programme. 5.5 Role of demanding client In user oriented R&D&I and business it is vital to actively communicate and receive feedback from the po- tential and actual customers in order to improve and develop the products and services. The concern on the lack of demanding customers in the na- tional market was raised during the programme evaluation workshop. Among the workshop participants, there was a concern that the absence of demanding customers and proper user feedback within the Finnish ICT industry is compromising the prop- er development of the products and services. This particular case study focuses on describing the user/customer in- teractions induced in the VAMOS and Verso programmes and lessons learnt through three projects where there
67 were utilizing companies and imple- menting companies present in each56 : •• MOMA project (funded through VAMOS programme) •• Ilmatar project (funded through VAMOS programme) •• Solar project (funded through VERSO programme). The objective was to examine how these projects incorporated the cus- tomer perspective and what kind of measures Tekes could take in enhanc- ing the developer and user/customer interaction. 5.5.1 Customer/user perspectives in VAMOS and Verso programmes In the VAMOS programme developer- customer relations were mainly pro- moted and established through a pro- gramme support service Mobile Enter- prise Factory (MEF). One of the key ob- jectives in MEF was to generate a high- er service level by developing more ef- ficient work processes. In the MEF con- cept the availability of real-time infor- mation did not merely affect a compa- ny’s internal functionality, but also en- hanced the quality of service experi- enced by the company’s customers. Put into practice the service was based on workshops held together with develop- ers, technology suppliers and custom- ers and thereby building a networking platform for bringing up wishes and expectations that were considered and utilized in further product or service de- velopment.57 InVerso programme user/customer perspective was more of a requirement than an additional programme service. The bearing philosophy was that users/ customer needs will guide the innova- tion- and product development pro- cesses. This meant that most of the Ver- so funded projects were implemented in conjunction with end users and po- tential customers. Even though the user/ customer perspective was built in to the project, the Verso programme provided several opportunities to further widen the user/customer networks mostly in marketing related events. One example was the customer driven “technology meetings” where the customer compa- ny could express their technology needs to service providers. 5.5.2 Experiences from the selected projects MOMA-Mobile technology to support maintenance efficiency- project The MOMA project examined the role of mobile technology in strengthening maintenance operations by identify- ing the maintenance operations where mobile solutions can provide significant benefits. Furthermore, the project stud- ied methods of measuring the benefits of mobile solutions. The project was mainly done by VTT with joint funding from Tekes, VTT and partnering compa- nies; Helsingin Energia, Maintpartner Group Oy, Rautaruukki Oyj and Solteq Oyj.58 The main objective in the pro- ject was to find practical and func- tional mobile solutions for the mainte- nance sector. The research done with- in the project was useful in the sense that the partnering companies provid- ed information on general and specif- ic needs for mobile technology within the maintenance service sector. In re- turn, user companies received informa- tion about key issues related to incor- porating mobile technology into var- ious work processes as well as gained insight into what kind of processes the mobile technology is most beneficial. The project also provided companies with a way to benchmark and compare various mobile solutions as well as mo- bile devices. According to the interviews, the user/customer needs were prioritized from the beginning. End user expe- riences were gathered during joint workshops and interpersonal discus- sions with the users. It is known that users from the manufacturing industry are demanding; “they know what they need and they demand it”. Based on viewpoints of the part- nering companies there is an obvious need for developing mobile solutions for the maintenance sector. Firstly the technology contributes the daily rou- tines with up to date information and this by itself can improve work efficien- cy as it gets easier to e.g. prioritize tasks. Secondly accurate and up to date infor- mation can and should be used in en- hancing work safety aspects. Thirdly it 56 Projects were suggested by the programme management 57 http://www.mef.fi/index.php?option=com_content&task=view&id=14&Itemid=31 58 http://www.vtt.fi/sites/moma/?lang=en
68 is important modernize the tools set to attract the best possible work force to the industry.59 The result of the project was a solu- tion concept for maintenance compa- nies on how to develop, maintain and further develop mobile solutions for various work processes. The concept will be utilized by the partnering com- panies when planning new software solution and choosing the appropriate mobile technology platforms.60 Ilmatar – real time weather service for maintenance companies SOL together with Foreca and VTT de- veloped a software solution for provid- ing real-time weather information for maintenance companies and profes- sionals for accurate and better timing of certain work processes e.g. clearing of snow from roofs or roads. According to the interviews, the VAMOS programme and especially the Mobile Enterprise Factory provided ex- cellent platform for exchange of ideas. Actually the idea of a weather software tailored for maintenance professionals originated from a meeting within the MEF concept. SOL had identified the need for real time weather software but need- ed partners with the technological and meteorological expertise to develop a functional product. The VAMOS pro- gramme provided an opportunity to develop the software with a leading meteorological information service pro- vider (Foreca) and a major research in- stitute (VTT). In addition, a small soft- ware company was hired to implement the software. With a large company, such as SOL, it was possible to test and pilot the soft- ware together with maintenance pro- fessionals from the company: “In a way we were the developer and the cus- tomer of the software at the same time. This gave us great insight in product de- velopment from a customer perspec- tive. User experience and feedback was continuously gathered, evaluated and used as a basis for further development of the software”. It is often challenging for service users to understand technological in- novations and the new opportunities that they can provide. Furthermore, it is challenging to choose optimal techno- logical solution and the best technolo- gy platform. The Ilmatar project provid- ed opportunities to co-operate with or- ganizations and persons with the valu- able technological knowledge and ex- perience of ICT product development: “Without VAMOS programme the Il- matar software would never have seen daylight”. The Ilmatar software has now been productized and software licens- es can be bought from the Internet61 . The software is vastly used within SOL and the user experiences have main- ly been positive. However, the sales of the Ilmatar have not been as success- ful as expected. The main reason is that other maintenance companies are very careful of investing in technology de- veloped by a competitor company. An- other reason for poor sales is that the rapid development of mobile technol- ogy resulted in a variety of rather use- ful weather software applications for mobile devices that have appeared on the market. Even though these applica- tions are not nor tailored for the needs of maintenance companies, they are of- ten provide free of charge or at a very low price, which is a strong disadvan- tage for the Ilmatar software. Solar The Solar project was initiated by Solteq Oy in conjunction with Microsoft, with the purpose to develop management and supervision software mainly for maintenance companies. The main driver for developing a new kind of soft- ware was to create an internationally compatible management and supervi- sion driven software to replace outdat- ed and inefficient procedures. The soft- ware was built on Microsoft Dynamics ERP platform. Solteq has been in the mainte- nance business for more than 20 years and they had a good understanding of the main requirements and features of the new software. The main partner, Microsoft, also provided a wide range of expertise from user experience per- spectives. Although both Solteq and Micro- soft had a rather clear understanding of the user needs, the Solar project guar- anteed that end users were actively in- volved in the development of the soft- ware. According to the interviews, the development process was very prag- matic and the interaction between de- 59 www.promaint.net/downloader.asp?id=3786&type=1 60 www.promaint.net/downloader.asp?id=3786&type=1 61 https://www.solilmatar.fi/index.php?p=Tarjouspyynto
69 velopers and users was active through- out the project. Interaction with users was often informal by nature which opened the development process for active and inventive discussions. Dur- ing the project an interaction platform named “software development part- ners” was formed with the intention of engaging both developers and users to the project. Within the “software devel- opment partners”framework three two- day workshops were held as well as sev- eral user/customer meetings. The cooperation with Microsoft was successful and evolved during the project. In addition to the software de- velopment know-how, the project was able to tap into the broad customer and marketing networks of Microsoft. It was emphasized many times in the interview that it is of outmost impor- tance to develop software in close co- operation with users to get an under- standing of what is working and what still needs further development. If the users are dissatisfied they will not buy your product. The Solar product resulted in a software solution which helps com- panies e.g. to predict the maintenance needs of production lines and moni- tor and analyze the failure history and manage the maintenance material needs. With the software it is easier to optimize the timing of maintenance operations. This will lead to improved efficiency and reliability of the ma- chines and equipment. The Solar soft- ware will help to shift the maintenance perspective from reaction to response. The software has already attracted cus- tomers and the interest in it has been very positive. The Verso approach that empha- sized the close cooperation with the end user/customer organization gen- erates a win-win outcome. The devel- oper gets useful feedback from the us- ers and even potential customers. The users/customers are able to influence the end product to better fit the com- pany needs. 5.5.3 The role of Tekes in supporting customer based interaction Both VAMOS and Verso programmes underlined the importance of software development based on user experience and customer needs.The joint develop- ment process is a way for software de- velopers to enhance potential custom- er relationships. For users or customers the joint development provides ways to tailor the product to better need own need. The close cooperation between developers and users/customers in software development endeavors is al- ready a norm for the most successful ICT companies in the world. For many domestic software developers this type of user/customer interaction still feels somewhat strange and unnatu- ral. However, this was also a key finding in the case interviews in this thematic analysis. Several interviews indicated that the developers tend to wait rath- er long for launching the software for user/customer testing compared e.g. to the already standardized practice that most of the top ICT companies’ com- ply; launch the beta version as soon as possible. In this respect, the instruments and services in the programmes have been filling in an obvious gap in the Finnish mobility and software industry. Engaging developers and users togeth- er by facilitating interaction through in- novative ways and to look for opportu- nities hopefully changes the culture of co-operation from formal to more infor- mal interaction. It seems that user orientation is still not self evident in many compa- nies. There might be a need to take this into account in all the phases of project life cycle inTekes; in project selection, in implementation, and in evaluation. Re- ceiving critics and feedback and inte- grating it in the development process at all stages could even be considered as a risk reduction routine to ensure that developed software has realistic busi- ness potential and at least satisfactory customer base. Practices in VAMOS and Verso present good examples on how the implementation phase can be cov- ered. In a broader sense, Tekes can play an important role also as a match-mak- er between developers and users es- pecially because Tekes is often seen as trustworthy and neutral actor. 5.6 General conclusions on micro clusters Games cluster During the last decade Finnish games industry has risen from student demo scenes into a lively cluster that is highly internationalized and networked. Tekes has had a fundamental role in this pro- cess. Early signs of the game develop- ment were seen in SPIN (and Fenix) programmes, but at that time games as a source of income were largely sus-
70 pected. One step in the development was the funding from Nokia to Finnish games industry in connection with its N-Gage game phone. Final develop- ment took place during the Verso pro- gramme, where the game sector was actively present. Nowadays the game sector can be regarded as a flourishing standalone networked industry. Whereas the chal- lenges of the industry in the beginning of the Verso programme were typical for a young unstructured set of compa- nies, the next challenges will be much more heterogeneous. To see this, note that many of the companies in this mi- crocluster have not taken actively part in the programme services.This is either due to missing information or the fact that the services as such were not need- ed. The microcluster consists of large and rather established companies, and most likely small and young companies will still need services similar to Verso. This poses a great challenge to the planned games industry programme. On one hand, one should be able to serve young companies with network- ing and business directing challenges, while at the same time part of the in- dustry will face the problems of early saturation, like productivity issues and even enterprise mergers. Hence, a tai- lored, broad spectrum of services will be needed. Born Global companies Some startup enterprises can success- fully pursue global or international cus- tomer base right from the beginning, without establishing first a presence in the home market. Economies of scale and the possibilities provided by Inter- net make this approach especially at- tractive in software product business. Among the participants of the evaluat- ed programmes the Born Global micro- cluster largely overlaps with the games cluster, but there are also some Born Global companies with different prod- ucts and different customer base. Born Global companies are natural customers for traditional Tekes support due to the substantial effort needed for product or service platform development. Funding of R&D projects was the essential contri- bution of Tekes; the companies had not been using programme services. The in- tervieweeshardlyremembered,inwhich programme their project had been. Tekes was seen as a dedicated fi- nancier of technology development. The applicability of Tekes financing ser- vices and expertise was evaluated to be very good.Tekes was given credit as the only Finnish financier working for tech- nology SME’s, the money available else- where was not considered”intelligent” in the same way. Tekes has also been smart in taking the necessary risk.Tekes financing was considered essential for the speed, scope and quality of the de- velopment, and even for the existence of the company. The technology base created with the support of Tekes fi- nancing had made it possible to open business with significant international customers. According to the interview- ees the place of Tekes is in R&D. Tekes can best influence business develop- ment competences of a SME by provid- ing money for R&D, so that the compa- ny has free resources for business de- velopment. Supergrowing micro companies The extremely fast-growing software companies represent various sectors – from games to industrial solutions. Out of the companies that participated in the Tekes programmes, we interviewed a group of growth enterprises that grew rapidly during the program or immedi- ately after it. The growth in annual net sales was typically from tens of thou- sands to millions of Euros. The compa- nies were selected usingTekes’custom- er database. A challenge for microenterprises with growth potential is to fill the gap between visible possibilities and con- crete growth. Innovative ideas require significant development investments, for which small companies do not of- ten have sufficient resources. The mi- croenterprises saw Tekes as almost the only possibility for investing in the initial development work. In Finland, the pri- vate investment sector has still not de- veloped very far in this respect. The microenterprises do not uti- lize the various services within these programmes very often because of, e.g. insufficient personnel resources. The growth enterprises would benefit es- pecially from tailored services, includ- ing, e.g. closer guidance and various in- centives to participate in networking activities. The Tekes programmes are usual- ly seen as enablers of growth for micro- enterprises – “good gardeners who en- sure that the soil is fertile”. The growth that started after the initial stage has sustained itself, and the ecosystem of the software microenterprises has be- come stronger.
71 Role of demanding client TraditionallyTekes has brought custom- ers close to service providers mainly in research projects, where companies participate in the specification and di- recting of research projects. In a broad- er sense, the user orientation of busi- ness products and services has been taken more or less for granted. VAMOS and Verso took a big leap in inducing user orientation by explicitly bringing the utilizing companies and software verticals into programmes62 . The cases presented here and in the final report of VAMOS programme reflect the liveli- hood of the interaction and the bene- fits gained from interaction. Being a demanding client is not straightforward. Development requires resources also from the user side, and the outcome is uncertain. Furthermore, de- velopment process decisions are often very difficult to make. Therefore also the involved customers need suitable incen- tives – in many cases a vague promise of increased profitability is not enough. In general, globalization means that more selections for a given need are available. This in turn means that ready to use solutions are more likely found, which may mean that the need for joint development projects decreas- es. Since user feedback is a key issue in market understanding and steering or R&DR&I activities, this development has a negative effect on user orientation. Therefore it is justified and even impor- tant to support the user-developer in- teraction in Tekes programmes. The good support attempts in VA- MOS suffered from the lack of suitable instruments to fund the utilizing com- panies. In the future, suitable means and instruments to support the inter- action are needed. 62 One reason for game developer and born global clusters not using the programme services was simply that their clients are all over the world and hardly reachable for programme purposes even by Tekes.
72 6.1 Long term impacts of SPIN 6.1.1 R&D of the industry During the preparation and starting phase of SPIN the boom of ICT mar- ket was going on, the whole volume of SPIN funding was tiny in comparison with risk financing available for software industry. Later during the programme the risk investment disappeared, and for many small companies SPIN fund- ing was essential for survival, because it allowed the continuing of develop- ment and enabled keeping the com- petent core personnel in the company over the period of consolidation. According to the interviews, Tekes funding was essential for the R&D of the enterprises. The development without Tekes support would have been slower, if not impossible. In some cases Tekes support was seen as vital for the survival of the company, whereas in some cases the same product would have been de- veloped also without Tekes. The state- ments about the importance vary, but also in these cases, where the devel- opment would have taken place even withoutTekes, the support enabled suf- ficient scope of the development pro- ject, which was considered critical for market breakthrough. The individual cases differ e.g. with respect to the size of Tekes con- tribution in comparison to the total development project budget. In some successful cases even a small Tekes contribution had been essential, be- cause it encouraged the use of sub- contracting and thus improved scala- bility of the operations and helped to build useful networks. In a corporate environment, where all budget spend- ing is formally strictly controlled,‘exter- nal’ Tekes money can enable flexible use of external competences that may bring the needed fresh thinking to a development project. It is safe to assume thatTekes fund- ing, both grants and loans, have sub- stantially increased the total technol- ogy development volume of the in- dustry, and also operational quality of R&D effort. Many interviewees point- ed out, however, that the bottlenecks and challenges more often are in mar- keting side, as well in the knowledge of customer needs as in the competences and resources needed for bringing the products into the markets. This is a well known handicap, and Tekes has tried to address it in more recent revisions of its strategy. VAMOS and Verso are both good examples on the implementation of this strategy change. 6.1.2 Development of competences SPIN reached well its main target group, small and medium software compa- nies. The impact on competence devel- opment came into effect mainly in the technology development in projects funded by SPIN. Projects were aimed at concrete products and had concrete tar- get settings creating the necessary pres- sure to increase competence. Although fast change in technologies continuous- ly makes technological knowledge ob- solete, it can be concluded that SPIN has contributed significantly on the growth of technological competences in Finnish software SMEs. In the beginning of SPIN, Finn- ish SMEs in general were known to be quite weak in the skills of developing international business, and during the programme itself no dramatic improve- ment was seen. For many small enterprises SPIN created a relationship with Tekes and was the beginning of long cooperation with Tekes in subsequent projects and programmes. Over the years Tekes sup- port has indirectly helped in develop- ing the competences and competitive- ness in international markets. Some in- terviewees saw the continuum of Tekes projects as an enabler of the company’s transition to the global class. 6 Impacts of programmes
73 6.1.3 Networking One of the underlying ideas behind the preparation of SPIN was to reinforce the networks within the domestic software industry. Networking may refer both to real value networks between compa- nies through customer relationships, and more informal professional net- works between people. Informal networks certainly have been built in the seminars and other joint activities in the programme, al- though the interviewees after the years typically remembered SPIN programme for the funding only. It seems that oth- er programme services have not been used much, or at least not remembered. Here one must bear in mind that the or- igins of acquaintances and networks are often hard to memorize. The Finn- ish Software Entrepreneur Association was an important stakeholder group in the programme. The organization of SPIN pro- gramme was regionally decentralized. The programme had good coverage and communication countrywide and managed to avoid the usual controver- sy between Helsinki area and the rest of the country. In several cases it was reported that the programme encouraged and enabled the companies to use subcon- tracting in their R&D work. This had en- abled faster and bigger development projects, and was seen mostly posi- tive by the companies that used the subcontractors. The importance of the programme from R&D subcontractors’ point of view was not specifically ex- amined. In the interviews, very little refer- ence was made towards cooperation with universities and research institu- tions. SPIN was very directly aiming at creation of concrete software products and the linkages of enterprise projects to academic world seemed to be most- ly related to recruitment of new per- sonnel. 6.1.4 Strategic and operative changes in the enterprises Generally Tekes was seen to contribute very positively in the ways the compa- nies do business. Attitude of Tekes to- wards the SMEs has been mainly good, and help available. Some complaints about overly bureaucracy were voiced, but in general the outside help was seen necessary for renewal – it ena- bles taking distance from the grey eve- ryday routine struggle of a small en- terprise. Very educating was even the mere preparation of a project applica- tion for development of an entire prod- uct concept. Even when the financial contribu- tion of Tekes has been a small part of the total project scope, Tekes has giv- en valuable external insight and help in formulating and validating the pro- ject, and driven a more systematic way of operating. SMEs could use more active sup- port in the development of business it- self. Limitation might be the availabil- ity of high quality small enterprise ex- perience. It is impossible to understand the problems of entrepreneurship with- out having faced similar challenges per- sonally. As Tekes focused less on business development at the era of SPIN than it did at the times of VAMOS and Verso, it is natural to assume that more strategic and operative changes appear in these programmes, which is indeed true as can be seen in Section 6.2. 6.1.5 Growth and internationalization There is not much evidence about strong export driven growth due to SPIN programme. The companies seem to have grown mainly in domestic mar- ket, and unlike in VAMOS and especial- ly Verso, there are not many examples of ‘born global’ companies among the participants of SPIN. Born globals of VA- MOS and Verso are elaborated in the microcluster analysis in Section 5.2. Some companies that during the ICT boom had a strategic focus in glob- al market, survived by shifting their focus to serving domestic customers. Also op- positeexamplesexist,however;somein- terviewed companies see the products developed during SPIN as the basis of their success in international markets. Only few of the products devel- oped in SPIN projects did reach interna- tional market success as such, accord- ing to the findings of the interviews. The reasons varied, e.g., as follows: •• A product was developed with the support from SPIN. Product was technically OK, but in the market- ing phase it turned out, that it was not sellable as a separate module. Now that functionality is a part of the offering of big global platform providers. (Note the lack of cus- tomer needs!) •• The project in SPIN developed a new product that did not find a market, but the technology devel- oped then is now in use in other products that sell well.
74 •• A problem is that the investment in a new product is not technolo- gy only. It would be good if some of the funding could be used for finding markets for the products. •• The services based on the product developed in SPIN were never de- veloped and commercialized, be- cause the recession came and all investor money disappeared. •• The recession stopped everything, and when the market finally start- ed to recover, the technology had already become obsolete. •• It turned out that the capacity of telecom infra was insufficient for the envisioned services and vol- umes. •• Development project was success- ful, and the software is still in use, although the benefit has been in smaller scale than originally ex- pected. Above, the lack of customer interac- tion and understanding is obvious. However, there are also direct success cases among the interviewed compa- nies: •• The core software developed in SPIN is still in use, new software has been built on top of it. •• A couple of really huge orders were won because of SPIN devel- opment. •• Turnover has tripled to 10M€ in nine years, due to Tekes project. •• Software still in use; Company and the society have got back ‘thou- sandfold’the money invested. The statistics presented in chapter 4.1.2. indicate that especially a group of the microenterprises that participated SPIN have been able to generate fast growth and also modestly growing share of ex- port business. Participation in a programme is in many cases only one phase in a long- er relationship between a company and Tekes. It is clear that the impact of any single programme or even a long coop- eration with Tekes on the growth and success of a company can seldom be verified reliably. One illustrative story: “The significance of our first Tekes- project was in that there was somebody who believed in the potential of an en- trepreneur starting alone. Our second project was in SPIN. We were searching a direction to go. The timing of this risk financing was really excellent.The prod- uct itself did not advance to the mar- ket, but the technology that was de- veloped is now used in other products. The third Tekes project, after SPIN, re- sulted in an architecture that is clearly more modern than the competition. It has brought big international custom- ers.” A lot of software developed in SPIN is still in use. Even though the front end applications, such as mobile devices have undergone repeated generation changes and also the platforms for In- ternet applications have changed, there is a lot of less visible backend software that is used year after year. This is gen- erally true in larger software systems, and sometimes attributed e.g. to the conservatism of financial executives, in whose responsibility the corporate ICT often belongs. It may also be that back- end software has longer lifetime just because it is less exposed to the pres- sure from end user needs and fashions that force faster renewal of front end applications. 6.1.6 General impacts on industries and society The impacts of programmes to socie- ty have been demonstrated in the mi- crocluster analysis through the societal impact model developed by Tekes and its different impact areas. In this model, R&D&I activity and its flow to impacts to society is modeled as inputs, activ- ities, outputs and impacts to different impact areas that are Economy and economic renewal, Environment, Well- being, and Skills and culture (see fig- ure 21). The former two areas are rath- er well defined, whereas the latter two still search their form. The descriptions of the different impact areas are based on a recent report by Tekes.63 The impact area for the econo- my and economic renewal observes the effects that research and innova- tion activities have, or should have, on the development and regeneration of the economy and the opportunities and challenges arising from this, such as the economic downturn. The phe- nomena having particular significance for the economy and economic renew- al impact area are national prosperity, productivity of the economy, job crea- tion, high growth enterprises and for- eign direct investments. 63 Päivi Luoma, Tuomas Raivio, Paula Tommila, Johan Lunabba, Kimmo Halme, Kimmo Viljamaa and Henri Lahtinen Better results, more value A framework for analysing the societal impact of Research and Innovation Tekes Review 288/2011, Helsinki 2011
75 Although SPIN preceded this mod- el and its guidance, the central objec- tive of SPIN, developing software prod- ucts for international markets, direct- ly contributes to national prosperity and creation of high growth enterpris- es. Generally, the companies that used SPIN funding and services have grown at least as well as industry average, and a group of high growth micro enter- prises could be identified. What is the contribution of SPIN-supported devel- opments in this, is not easy to say. Any- way, the interviews revealed several in- dividual cases, where a company sur- vived the slump of 2001–2003 largely thanks to SPIN funding, and has since then been able to return to the path of profitable growth. The target for SPIN was to create international business for Finnish soft- ware product companies. SPIN was, co- herently with Tekes mandate and strat- egy at that time, focusing in the tech- nology development. Although that part was handled well, many compo- nents of Finnish business infrastruc- ture that were essential for internation- al business creation were weak or miss- ing. Tekes had neither mandate nor means to address e.g. lack of financing for marketing and distribution, legal ex- pertise, etc. The area of environment covers the impacts that research and innova- tion have or should have on the envi- ronment such as climate change, sus- tainable consumption of natural re- sources, energy consumption, biodi- versity and the well-being of the eco- system among others. SPIN programme included very few directly environment related de- velopment subjects. Use of ICT, in gen- eral, has positive effects to environment through dematerialization, when con- sumption of material and energy is re- placed by processing information and more accurate and timely physical op- erations. The area of well-being covers the impacts that research and innovation have or should have on the health and quality of life, well-being at work, and healthy and safe living environment as well as the opportunities and chal- lenges arising from these. SPIN pro- gramme included only a couple of pro- jects, where the application being de- veloped was directly addressing issues of health, safety and well-being. The in- direct impacts of useful software prod- ucts are not very easy to track, although can be imagined. Likewise difficult to quantify is the impact of a single technology pro- gramme in the Skills and culture im- pact area. It is obvious that a pro- gramme supporting innovation and development of technological compe- tences contributes to skills and culture. Knowledge and education form the es- sence of science, technology and inno- vation capabilities that create the basic conditions for the realization of other impacts. Phenomena and effects most directly related to research and devel- opment activities like SPIN, include the amount of information increased, skilled labor, method of knowledge, ex- pert networks, technological problem- solving ability, etc. When the knowledge and learn- ing perspective is expanded to cover a more comprehensive culture and civili- zation-related view, where education is defined as the ability of the individual to function successfully in a society, this impact area covers not only the com- petences of individuals and teams, but also the information and communica- tion infrastructure that shapes the iden- Figure 21. The impact areas of research and innovation. Well-beingEnvironmentEconomy and economic renewal Impacts Outputs Activities Inputs Skills and culture
76 tity and activities of a human in socie- ty. In this interpretation the media, tel- ecommunication tools and information retrieval services based on multitude of constantly evolving software products are an essential factor. 6.2 Short-term impacts of VAMOS and Verso 6.2.1 Impact on participating companies and industries Both programmes have had consider- able impacts on the development of technological and business expertise. Technological competence accumula- tion is more or less self evident in the projects funded by the programmes, but true increase in business exper- tise is new. The effects are true in the sense that in the survey increased busi- ness expertise was pointed out, in the interviews this was pointed out, and the investigation of Tekes’ CRM data shows considerable increase of turno- ver and exports in selected companies. The relationship between Tekes activ- ities and the increase is of course not self evident, but at least signs of corre- lation exist. Compared to the era of SPIN, the strategy, mandate and goals of Tekes were changing towards a more holis- tic business development. Both pro- grammes seem to have implemented this change well, andVerso exceptional- ly well. In addition,Verso services includ- ed deep and persistent internationaliza- tion services that seem to have flourish- ing results. Share of international turno- ver among Verso companies rose from 26% in 2008 to 33% in 2010. In 2009, 17 companies had more than 70% of turn- over coming from outside Finland. 11 of them were game enterprises. Most fa- vorite target markets were Europe, USA and the Nordic Countries. In both programmes the achieve- ments are largely due to the tailored services aimed aggressively and deci- sively for business development. Two general approaches can be distin- guished: •• Large scale quick results: Custom- izable handbook type approach (MEF in VAMOS), with which it is easy to incorporate large amounts of utilizers and service providers •• Small scale deep results: Company specific sparring by experienced long-term business experts (both programmes). Especially among the programme par- ticipants, the true, proven and deep business experience the coordinators and the advisory service providers rep- resented were much appreciated. Furthermore, both programmes had a profound effect on the formation and revival of networks in the industry. One of the goals of both programmes was to formulate and strengthen the in- dustry clusters, and both programmes succeeded well. Collaboration of the VAMOS pro- gramme with industry associations of both ICT and utilizing industries, pi- loting organizations, professional net- working organizations and research fo- rums was lively. Verso carried out very close cooperation with industry associ- ations like Neogames, Finnish game de- velopers’ association, The Finnish Soft- ware Entrepreneurs Association, the Finnish Centre for Open Source Solu- tions, and the Technology Industry as- sociation. The cooperation has been very intense in games business, where nearly all activities were implemented in close cooperation with associations. In Verso, the close cooperation with in- dustry players made it possible to trans- fer the activities to these players in a co- ordinated manner as the programme ended. However, in VAMOS, all coor- dinated activities more or less ceased once the programme ended. In principle, VAMOS and Verso had collaboration with other programmes like Liito, Ubicom, Giga, Tila, Sote, and Serve programmes, but according to the interviews, the connections in prac- tice were rather thin. This is a structur- al problem in Tekes that is still encoun- tered frequently. Especially for vertical programmes likeVAMOS andVerso, this issue is a futile hindrance that should be removed by all means. In a broader con- text this relates to the renewal of the programme instrument that has been discussed in Tekes. To productivity, the programmes had mostly indirect effects. The appli- cations developed in VAMOS and Verso most likely improved the productivity in the companies utilizing them. In the evaluators’ understanding, the original idea of generalizing the individual mo- bile applications into products did not proceed. Therefore, also the indirect ef- fects to productivity remain marginal. It should be noted that the productivity of software production or productivity in general were not in the scope of the programme. It is clear that the programmes, es- pecially Verso, have had a profound ef-
77 fect on the growth and internationaliza- tion of companies. Verso shows that ef- fective results are achieved with a. Selected committed companies that are willing to internationalize instead of masses of uncoordinated companies with unclear goals b. Hard tailored work by distinguished experts in addition to general infor- mation gathering and sharing c. Many year development perspec- tive. In addition, a remarkable benefit is if the required immaterial investments to sales channels are small; this is the case in e.g. software B2C business like games where the Internet serves as the main distribution, information, sales and pay- ment channel and the funding is based on micro financing. The downside of tailored work is its efficiency; it does not scale well. How- ever, if one considers that an interna- tional breakthrough in one company is more important than gathering in- formation and capabilities of multiple companies that do not internationalize, then a tailored approach is preferred. 6.2.2 Impacts on society In a larger perspective, any programme has direct impacts only to their target companies and industries. The impacts to society are indirect, resulting from the direct impacts. These impacts also appear and evolve over time. For VA- MOS and Verso programmes it is ear- ly to say anything about the impacts to society. Some preliminary remarks can be made. Impacts of ICT and software pro- grammes are mainly economic. It can be concluded that this component in the programmes here is heavily accen- tuated: both programmes have had a fundamental role in the building and support of Finnish mobile and software industry and their clustering. Especially the work of games industry that started in the Fenix and SPIN programmes, and finally clusterized and internationalized in the Verso programme, has produced truly internationalized companies and a vital cluster. Bearing in mind the impact model presented in the previous sec- tion, the programmes have had effects also to the impact areas of well-being, and skills and culture, too. Impacts to environment mainly arise through pro- ductivity and efficiency rise, but these impacts are most likely marginal.
78 7.1 Summary In this work we have evaluated three Tekes funded ICT and software indus- try related programmes: SPIN, VAMOS and Verso. For SPIN, the evaluation per- spective was retrospective: the aim was to identify long term impacts and the ef- fect the programme had to the partici- pants and the industry. For VAMOS and Verso, the evaluation was a typical post programme evaluation where the focus is in the programme success and short term impacts.To support the evaluation, the development of Finnish software in- dustry during the 2000’s was described. The methods of the evaluation in- cluded document analysis, background interviews, programme interviews, two surveys, and a short analysis of the eco- nomic figures of the programme par- ticipants. The results of the survey were not published because of exceptional- ly low response rate. Some careful in- dicative judgments were made. ForVer- so, the questionnaire taken by the pro- gramme itself, was used. The analysis was finally deepened by case examples and a microcluster analysis, a semi-qual- itative methodology to analyze interest- ing topics further. In this work, the mi- crocluster themes were Game business, Born Global companies, supergrowing micro companies and the role of the demanding client. Many of the effects of the SPIN programme were still recognizable. Although many developed products never made a market breakthrough, some successful businesses are based on technology originating in projects of SPIN. Several software companies did survive the recession in 2001–2003 thanks to SPIN support, and have later been steadily growing. VAMOS and Verso were initiated at about the same time. VAMOS con- centrated on developing mobility so- lutions in close cooperation with the customer, whereas Verso concentrat- ed on developing software solutions on vertically aligned business areas. Both programmes offered similar ser- vices and succeeded quite well over- all. However, there were some remark- able differences in the programmes. For some reasons, Verso was able to brand itself exceptionally well. As a result, the project flow to the pro- gramme raised and unlike in many previous programmes it was possible to select the participants. It should be noted that the reason for the success in branding remains unclear, as both programmes used almost similar com- munications services. The programme services in both programmes, especially in Verso, were partly new, and very successful. Main points explaining the success of the programme can be summarized as fol- lows: •• Utilization of true expertise and hands-on business experience from within Tekes but also outside Tekes; the main role of the pro- gramme management being to enable expertise •• Patient customization and tailor- ing of services for individual com- pany needs. •• Excited programme management •• Systematic and professional branding of the programme which resulted, among other things, ex- ceptional coverage and oversup- ply of projects •• Oversupply of projects made pro- ject selection and coordinated project entry possible •• Close cooperation (and partial re- vival) with industry associations to gain trust and reputation and to see the essential challenges •• Ability to adapt the programme based on new information; •• Transfer of the activities of the programme to the industry asso- ciations after the end of the pro- gramme. One may well conclude that Verso is among the most succeeded Tekes pro- grammes ever. 7 Summary and recommendations
79 7.2 Recommendations Some companies have gone bankrupt, others have been merged, and others sold. Since there is no tangible data on these companies, we can only hypoth- esize the destiny of the innovations and IPR in these companies. An interesting topic for future research would be to explicate the pathways of innovations among this group. There were several examples of companies that survived recession thanks to Tekes support, and were lat- er able to create profitable growth. It would not be a bad idea to speed up the activity at times when the market goes bad. In the Verso programme it was ex- plicitly found that the model of interna- tionalization where a leading big com- pany is supposed to take Finnish SMEs abroad does not work. Big companies always choose the best subcontrac- tors and often it is beneficial to have the subcontractors from the local mar- ket. Unless a Finnish SME is exceptional- ly good in its field of expertise it is unre- alistic to assume that in can internation- alize in such a network. This finding has a larger significance as this model is one of the traditional cornerstones of inter- nationalization in the innovation poli- cy. Therefore, this model should be re- evaluated and reassessed e.g. in a form of a small retrospective study. In the microlusters, the born glob- al companies and the supergrowing mi- cro companies seemed very different from e.g. SMEs in terms of their needs and capabilities. These companies have been using clearly less programme ser- vices than the rest of the participants of, e.g., Verso. As a separate research topic it wouldbebeneficialto understandwhat the distinctive characteristics of these companiesare,andhowtheserelateto need and use of programme services. Relevant recommendations from the evaluation of Finnish innovation system to ICT and software business and Tekes can be summarized as fol- lows64 : •• When the national productivity is close to international productivity, R&D&I policy must support exper- iments and risk taking. One must also accept the chance of failure. •• One must strongly support the re- newal of the traditional strengths of Finland and product innova- tions •• Growth entrepreneurship must become central in Finnish R&D&I policy •• Finland must support fast growing internationalizing companies. From the industry and Tekes point of view these recommendations have largely been taken into account al- ready in the VAMOS and Verso pro- grammes and their instruments. To fur- ther support the development of these issues, the same line should continue. In this respect the preparation of the new games industry programme is an excel- lent step. To further implement these recommendations, the programme ser- vices should continue on the line set up by Verso and VAMOS: tailored top lev- el expert services offered to a select- ed group of companies that have the ability and the willingness to grow. Fur- thermore, the microcluster analysis on games industry suggests that diversi- 7.2.1 General recommendations Since the beginning of the decade, the constraints and strategy of Tekes have changed so much that it is not easy to conclude from the evaluation of SPIN alone good advice for the Tekes of to- day. The ideas and recommendations presented here are largely based on the interviews. The interviewees re- flected on the role ofTekes against their own background and present situation. Many of them had been working with Tekes not only during SPIN, but contin- uously also after it. Looking backwards to SPIN, it is clear, that R&D is not enough and that small technology companies need fi- nancial support for productizing and market entry. Hence, Tekes is on the right track when not only the product, but also development of marketing channels, training, and sales process- es are supported. On the other hand, Tekes is a competent partner especial- ly on technology development projects and should not go too far from the do- main of its core competence. Generally Tekes support should be directed to small starting enterprises that have some history behind. When the companies grow, they should find other ways of financing. Maybe Tekes could support consulting effort need- ed to get financing from outside. Tekes money, e.g. risk loan, could also be used for taking care of the patents of SMEs. Applying and managing patents is a heavy burden for SMEs. About half of the enterprises that participated in SPIN have disappeared. 64 see www.evaluation.fi
80 fication in games industry will contin- ue, and consequently very tailored pro- gramme services will be needed. As mentioned in section 3, SHOKs (Strategic Centres for Science, Tech- nology and Innovation) are an innova- tion system effort, peculiar to Finland, to support the R&D&I on different in- dustries. SHOKs were initiated in 2008– 2009, and currently there are 6 SHOKs operating, and the TIVIT SHOK65 oper- ates on software industry. SHOKs op- erate as companies owned by industry companies, VTT and universities, and are financed by the owners and Tekes. Despite the fact that the pro- grammes networked with SHOKs, in the evaluation interviews it was consistent- ly concluded that either the companies or the projects had virtually no connec- tions to TIVIT or other SHOKs. Of course, the programmes were already running when TIVIT was founded. When SHOKs were founded, SMEs, (two thirds of theVerso andVAMOS pro- gramme participants) were seen as one focus group in their motivation. Now it seems also in the greater perspective that throughout the SHOKs this view is largely disappeared; SHOKs are regard- ed as operators serving mainly their owners and large companies. In the interviews of the evaluation, the possible added value from the co- operation of programmes and SHOKs was found unclear, mainly due to the nonexistent cooperation. Therefore, giving any conclusions or recommen- dations on the role of SHOKs regarding Tekes ICT programmes is rather awk- ward. Most likely important general an- swers will be received from the forth- coming evaluation of SHOKs. In this evaluation we have delib- erately not taken any stance on the in- ternational initiatives and programmes that should be affected by Finnish ac- tors. The field is very big and versatile and rapidly changing. The description in Section 3 gives some directions, but a comprehensive analysis would re- quire a separate project. In such a pro- ject, one should gather and classify the information from the Finnish associa- tions and other actors and rank it. 7.2.2 Programme instrument specific recommendations The experiences on programme servic- es inVAMOS andVerso, especially inVer- so, have been very good. In the follow- ing we give recommendations, specif- ic to programme instrument, derived from these experiences. Programme services should be customized and tailored to compa- ny needs more carefully. VAMOS and Verso have clearly shown the value of customized services that are adapt- ed to specific company needs – very good company specific results can be achieved. Naturally the drawback is the amount of resources needed for tailor- ing, but most likely tailoring pays off. One should also accept that there are always a certain number of companies that will not use the services. Tekes should offer also hands on experience and other activities along- side with funding and general knowl- edge dissemination for programme participants. Especially young com- panies in immature industries benefit from credible business oriented experi- enced hands on help from experienced and renowned substance experts in business planning and internationali- zation. Also the use of external services in networking and marketing worked very well. In these programmes the ap- proach was quite new. The experiences encourage us to suggest to further de- veloping especially the expert services. Programme project portfo- lio contents should be coordinated more on the basis of programme ser- vice needs. At present, projects are ap- pended to programmes on the basis of the project scope and the applicant’s willingness to participate in some pro- gramme. Especially in the programmes developing immature industries the programme access should be coordi- nated also on the basis of the appli- cant’s willingness to participate in the programmes services and the estimat- ed capability of the applicant to uti- lize the services. Nevertheless, as stated above, one must also accept that not all companies need the services. All the programmes that aim at developing an immature industry should have an exit strategy. When a programme ends, the activities in the programme end, too. In VAMOS, pro- gramme services were ceased at the programme end, whereas in Verso many activities related to strengthening of the cluster and industry were moved to industry organizations. It is clear that if the activities keep on running, the im- pacts of the programme become deep- er. Also one should be able to brief the 65 See http://www.tivit.fi/en/
81 target group on post programme ac- tions in good time. To prevent abrupt programme endings, the exit phase should perhaps be planned more care- fully so that the services are transfer- rable and there are organizations to which the transfer can be done. User interaction should be more strongly supported by Tekes pro- gramme instruments. If there is any doubt on the adequacy of the market orientation of programme participants, instruments supporting user interac- tion should be employed. The instru- ments should be such that also small companies can afford using them. In addition to these, we also re- peat the earlier recommendations on programme cooperation deepening and at least partial implementation of evaluation during the programme (e.g. evaluation data gathering from projects upon ending with a standard- ized questionnaire with questions de- rived from the standardized evaluation questions).
82 Appendix 1. List of interviewed persons Petteri Alahuhta VTT Pauli Berg Tekes Keith Bonnici Finnvera Venture Capital (formerly atTekes) Karri Hautanen Technopolis Ventures Oy Juha Heiskanen Basware Oyj Heli Helaakoski VTT Kaleva Helin Solteq Mika Huhtamäki Aspida Oy Lauri Hölttä Liaison Technologies Oy Janne Jansson Modultek Oy Hannu Jyrkkä Sasken Finland Jouko Järvinen BookIT Oy Matti Jääskeläinen Tofuture Oy Jarmo Kalliola Profict Partners Oy Jani Kaskinen Hotelzon International Oy Juha Kela FinWe Oy Kimmo Kouhia Opus Capita Ilari Kuittinen Housemarque Oy Nils Lagerström Novowave Oy Irmeli Lamberg Tommi Lehtonen Whitevector Oy Jouko Lintunen Spinverse Oy Otso Mäkinen Umbra Software Oy Martti Mäntylä Aalto University Seppo Nikkilä Innovative Ideas Oy Asmo Oinaanoja Digia Oyj Jyrki Penttonen Viola Systems Oy Ari Pihlajavesi Predisys Laura Rantanen Basware Oyj Heikki Roikonen Nixu Oy Pekka Roine Seppo Ruotsalainen Profict Partners Oy Kari Ryynänen Tekes Jukka Salovaara Modultek Oy Jarmo Sarantila Vineyard Oy Matti Sihto Tekes Marco Sivonen SOL Taneli Tuurnala Fastrax Oy Appendix1
83 Appendix 2. Workshop participants Markku Antikainen Pauli Berg Keith Bonnici Marko Heikkinen Hannu Jyrkkä Jarmo Kalliola Nils Lagerström Irmeli Lamberg Santeri Laner Johan Lunabba Martti Mäntylä Tuomas Raivio Seppo Ruotsalainen Matti Sihto Marit Tuominen Appendix2
84 Tekes’Programme Reports in English 2/2012 Software, mobile solutions and games industry – Evaluation of Tekes software related programmes. Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér. Evaluation Report. 83 p. 6/2011 Co-operation to Create Converging and Future Networks – Evaluation of Five Telecommunications Programmes. Annu Kotiranta, Olli Oosi, Mia Toivanen, Jaakko Valkonen and Mikko Wennberg. Evaluation Report. 69 p. 4/2011 GIGA – Converging Networks programme 2005–2010. Final Report. 217 p. 1/2011 FinNano Technology Programme. Final Report. 6/2010 From Spearheads to Hunting – Evaluation of Nano Programmes in Finland. Tuomas Raivio, Piia Pessala, Jatta Aho, Tiina Pursula, Alina Pathan, Jukka Teräs and Kaarle Hämeri. Evaluation Report. 67 p. 3/2010 MASI Programme 2005–2009. Niina Holviala (ed.). Final Report. 137 p. 4/2009 ClimBus – Business Opportunities in the Mitigation of Climate Change 2004–2008. Final Report. 564 p. 6/2008 Finnish participation in the EU 6th Framework Programme – Evaluation of Participation and Networks. Soile Kuitunen, Katri Haila, Ilpo Kauppinen, Mikko Syrjänen, Juha Vanhanen, Paavo-Petri Ahonen, Ilkka Tuomi, Pekka Kettunen & Teemu Paavola. Evaluation Report. 91 p. 2/2008 Impact Evaluation of the Wood Material Science and Engineering Research Programme. Evaluation Report. Kimmo Halme, Sami Kanninen, Kimmo Viljamaa, Erik Arnold, Tomas Åström and Tommy Jansson. 79 p. 11/2007 DENSY – Distributed Energy Systems 2003–2007. Final Report. 155 p. 2/2007 FENIX – Interactive Computing 2003–2007. Final Report. 136 p. 1/2007 FUSION Technology Programme Report 2003–2006. Final Report. 184 p. Seppo Karttunen and Karin Rantamäki (eds). 17/2006 PINTA – Clean Surfaces 2002–2006. Final and Evaluation Report. 228 p. 13/2006 Finnish National Evaluation of EUREKA and COST. Evaluation Report. 95 p. Sami Kanninen, Pirjo Kutinlahti, Terttu Luukkonen, Juha Oksanen and Tarmo Lemola. 11/2006 Competitiveness through Integration in Process Industry Communities. Evaluation of Technology Programme“Process Integration 2000–2004”. Evaluation Report. 17 p. 8/2006 AVALI – Business Opportunities from Space Technology 2002–2005. Final Report. 79 p. 6/2006 New Knowledge and Competence for Technology and Innovation Policies – ProACT Research Programme 2001–2005. Final Report. 137 p. Edited by Pekka Pesonen. 3/2006 ELMO – Miniaturising Electronics 2002–2005. Final Report. 238 p. Subscriptions: www.tekes.fi/english/publications
Software, mobile solutions and games industry Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér TekesProgrammeReport2/2012 EvaluationReport March 2012 ISSN 1797-7347 ISBN 978-952-457-541-6 Further information Pekka Pesonen Tekes pekka.pesonen@tekes.fi Tekes – Finnish Funding Agency for Technology and Innovation Tel. +358 10 191 480 Fax +358 9 694 9196 Kyllikinportti 2, P.O. Box 69 FI-00101 Helsinki, Finland E-mail: tekes@tekes.fi www.tekes.fi Evaluation of Tekes software related programmes

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software_mobile_solutions

  • 1.
    Software, mobile solutions andgames industry Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér TekesProgrammeReport2/2012 EvaluationReport March 2012 ISSN 1797-7347 ISBN 978-952-457-541-6 Further information Pekka Pesonen Tekes pekka.pesonen@tekes.fi Tekes – Finnish Funding Agency for Technology and Innovation Tel. +358 10 191 480 Fax +358 9 694 9196 Kyllikinportti 2, P.O. Box 69 FI-00101 Helsinki, Finland E-mail: tekes@tekes.fi www.tekes.fi Evaluation of Tekes software related programmes
  • 2.
  • 3.
    3 Tuomas Raivio, JohanLunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér Software, mobile solutions and games industry Evaluation of Tekes software related programmes Evaluation Report Tekes Programme Report 2/2012 Helsinki 2012
  • 4.
    4 Tekes, the FinnishFunding Agency for Technology and Innovation Tekes is the main public funding organisation for research and development (R&D) in Finland. Tekes funds industrial projects as well as projects in research organisations, and especially promotes innovative, risk-intensive projects. Tekes offers partners from abroad a gateway to the key technology players in Finland. Tekes programmes – Tekes´ choices for the greatest impact of R&D funding Tekes uses programmes to allocate its financing, networking and expert services to areas that are important for business and society. Programmes are launched in areas of application and technology that are in line with the focus areas in Tekes’strategy. Tekes programmes have been contributing to changes in the Finnish innovation environment for twenty years. Copyright Tekes 2012. All rights reserved. This publication includes materials protected under copyright law, the copyright for which is held by Tekes or a third party. The materials appearing in publications may not be used for commercial purposes. The contents of publications are the opinion of the writers and do not represent the official position of Tekes. Tekes bears no responsibility for any possible damages arising from their use. The original source must be mentioned when quoting from the materials. ISSN 1797-7347 ISBN 978-952-457-541-6 Cover image Kalleheikki Kannisto Page layout DTPage Oy
  • 5.
    5 Foreword ICT and softwarehave been in the focus of innovation policies all over the world, at inter- national, national and regional levels. Software has become a very important source of economic growth and it has had a key role in the transformation from natural resource based society towards knowledge based society. The development has been rapid and technologies and solutions are getting both cheaper and more advanced. Good examples can be found in mobile services, digital games industry and cloud computing. Tekes has had many programmes in the software sector to foster the capabilities and innovation activities. Three of them have now been evaluated. The oldest one, SPIN was carried out ten years ago and the long term view made it possible to analyse espe- cially business impact more closely. In the case of two recent programmes, VAMOS and Verso, the focus of the evaluation was more on the results and the programme services. Particularly, the experiences of novel approaches to support growth and internationali- zation were studied. Tekes likes to thank the evaluation team from Gaia Consulting, Virebit and FinnCon- cept for its analytical and innovative approach. Tekes also expresses its gratitude to the steering group, workshop participants and all those experts who were interviewed or otherwise participated in the evaluation project. The evaluation targeted at producing recommendations for Tekes and the innovation policy, strengthening funding co-opera- tion and developing the R&D&I activities of the software sector. The findings give a good ground for future actions, for example in planning a new programme in games sector. March 2012 Tekes The Finnish Funding Agency for Technology and Innovation
  • 6.
    6 Contents Foreword.........................................................................................................................................................5 Tiivistelmä......................................................................................................................................................9 1 Introduction....................................................................................................................................19 2 Evaluation framework.............................................................................................................20 2.1 Evaluation questions............................................................................................................................20 2.2 Methodology............................................................................................................................................20 2.3 Assessment of validity.........................................................................................................................21 3 Description of the operational environment of the Finnish software industry 2000–2010...........................................................................................22 3.1 About software industry....................................................................................................................22 3.2 Politics and legislation.........................................................................................................................23 3.2.1 Legislation, EU, and international regulations........................................................23 3.2.2 Cybercrime and software piracy.....................................................................................24 3.2.3 Health policy...............................................................................................................................24 3.2.4 Educational policy...................................................................................................................24 3.2.5 ICT Infrastructure......................................................................................................................25 3.2.6 Changing political climate.................................................................................................26 3.3 Economy and business......................................................................................................................27 3.3.1 Trends and drivers....................................................................................................................27 3.3.2 Role of software in different value chains.................................................................28 3.3.3 Domestic trends........................................................................................................................29 3.3.4 Business models........................................................................................................................32 3.3.5 SWOT...............................................................................................................................................34 3.4 Social aspects...........................................................................................................................................34 3.4.1 Social values and interaction............................................................................................34 3.4.2 Changes in lifestyle and consumer behavior.........................................................35 3.4.3 Demographic changes.........................................................................................................35 3.4.4 Globalization...............................................................................................................................36 3.5 Technology................................................................................................................................................36 3.5.1 Changes in strategic technology priorities..............................................................36 3.5.2 Cloud and SaaS..........................................................................................................................38 3.5.3 Mobility and the battle of platforms............................................................................39
  • 7.
    7 3.6 Development insideTekes 2000–2010.....................................................................................40 3.6.1 Development of strategy....................................................................................................40 3.6.2 Development of organization..........................................................................................41 3.6.3 Development of funding....................................................................................................42 4 Evaluation of software programmes...........................................................................44 4.1 Post evaluation of SPIN programme..........................................................................................44 4.1.1 Background and objectives of SPIN programme.................................................44 4.1.2 Evaluation in 2003...................................................................................................................44 4.1.3 Evaluation in 2011...................................................................................................................45 4.1.4 Analysis of the growth and export of SPIN companies....................................45 4.2 Evaluation of VAMOS programme...............................................................................................49 4.2.1 VAMOS programme description.....................................................................................49 4.2.2 Programme coverage............................................................................................................50 4.2.3 Programme services...............................................................................................................51 4.2.4 Programme projects...............................................................................................................51 4.2.5 Programme relevance and achieving the objectives........................................52 4.3 Evaluation of Verso programme...................................................................................................53 4.3.1 Verso objectives and description...................................................................................53 4.3.2 Programme coverage............................................................................................................54 4.3.3 Programme services...............................................................................................................55 4.3.4 Programme projects...............................................................................................................55 4.3.5 Programme relevance and achieving the objectives........................................57 5 Micro cluster analysis...............................................................................................................59 5.1 Introduction..............................................................................................................................................59 5.2 Games cluster in Verso progamme.............................................................................................59 5.3 Born Global companies......................................................................................................................63 5.3.1 The concept of Born Global company........................................................................63 5.3.2 The role of Tekes and the applicability of programme services..................64 5.3.3 The results achieved with the support of the programmes & Tekes services.............................................................................................................................64 5.3.4 Development propositions from the born global point of view...............64 5.4 Supergrowing micro companies..................................................................................................65 5.4.1 The suitability of the programmes and their effect on rapid growth.....65 5.4.2 Wider reaching effects..........................................................................................................65 5.4.3 The role of Tekes.......................................................................................................................66 5.4.4 Development suggestions from the microenterprise point of view.......66 5.5 Role of demanding client.................................................................................................................66 5.5.1 Customer/user perspectives in VAMOS and Verso programmes...............67 5.5.2 Experiences from the selected projects.....................................................................67 5.5.3 The role of Tekes in supporting customer based interaction.......................69 5.6 General conclusions on micro clusters.....................................................................................69
  • 8.
    8 6 Impacts ofprogrammes.........................................................................................................72 6.1 Long term impacts of SPIN..............................................................................................................72 6.1.1 R&D of the industry.................................................................................................................72 6.1.2 Development of competences.......................................................................................72 6.1.3 Networking..................................................................................................................................73 6.1.4 Strategic and operative changes in the enterprises...........................................73 6.1.5 Growth and internationalization....................................................................................73 6.1.6 General impacts on industries and society..............................................................74 6.2 Short-term impacts of VAMOS and Verso...............................................................................76 6.2.1 Impact on participating companies and industries...........................................76 6.2.2 Impacts on society..................................................................................................................77 7 Summary and recommendations..................................................................................78 7.1 Summary.....................................................................................................................................................78 7.2 Recommendations................................................................................................................................79 7.2.1 General recommendations................................................................................................79 7.2.2 Programme instrument specific recommendations..........................................80 Appendices 1 List of interviewed persons..............................................................................................................82 2 Workshop participants.......................................................................................................................83 Tekes Programme Reports.............................................................................................................84
  • 9.
    9 Tiivistelmä Johdanto Ohjelmistoalan markkinat olivatEuroo- passa vuonna 2009 kooltaan noin 231 miljardia euroa, mikä on noin kolman- nes koko maailman markkinoista. Suo- messa markkinoiden liikevaihto on noin 3–6 miljardia euroa lähteestä riippuen. Kansainvälisillä mittareilla suomalainen ICT- ja ohjelmistoteollisuus ovat pärjän- neet hyvin. Erityisesti ICT-sektorilla Suo- mi on ollut vahva, vaikkakin Nokian roo- li menestyksessä on ollut keskeinen.Toi- miala ei kuitenkaan kasva kansainväli- siin markkinoihin verrattuna erityisen nopeasti ja alan osuus Suomen BKT:stä on säilynyt 2–3 prosentissa. Ohjelmistoala ja ICT ovat olleet Suomen innovaatiopolitiikassa pitkä- aikaisia painopistealueita, joiden on toivottu kehittyvän yhdeksi suoma- laisen teollisuuden tukipilareista. Ta- voitetta on tuettu 2000-luvulla mer- kittävästi esimerkiksi Tekesin ohjel- missa. Tässä raportissa esitellään ar- vio kolmesta Tekesin ICT- ja ohjelmis- topainotteisesta ohjelmasta, jotka ovat SPIN (2000–2003), VAMOS (2005–2010) ja Verso (2006–2010). Arvioinnissa kes- kitytään ohjelmien tavoitteisiin, tulok- siin ja vaikutuksiin. Lisäksi arvioinnis- sa analysoitiin ohjelmistoalan toimin- taympäristön kehittymistä kansallises- ti ja kansainvälisesti viimeisen kymme- nen vuoden ajalta. Arvioinnin on tilannut Tekes ja se toteutettiin tiiviissä yhteistyössäTekesin asettaman ohjausryhmän kanssa. Oh- jausryhmän jäseniä olivat Pekka Peso- nen, Silja Leinonen, Risto Setälä, ja Mar- ko Heikkinen. Arvion suoritti Gaia Con- sultingin Oy:n johtama asiantuntijaryh- mä, johon kuuluivat Gaia Consulting Oy:stä Tuomas Raivio, Johan Lunabba ja Erkka Ryynänen, Virebit Oy:stä Juha- ni Timonen ja Markku Antikainen, sekä FinnConcept Oy:stä Santeri Lanér. Metodologia Arvioinnissa aineiston keruu sekä ana- lysointi toteutettiin käyttämällä seuraa- vassa kuvattuja menetelmiä. A. Kirjallisen materiaalin analysointi Arvioinnin aluksi analysoitiin tarkaste- lun kohteena olevien ohjelmien val- misteluraportteja, kokousmuistioita, loppuraportteja, arviointiraportteja se- kä rahoitushakemuksia. Arvion laatijoil- la oli lisäksi pääsy Tekesin asiakastieto- kantaan, joka sisälsi mm. tietoja projek- tien ja yritysten saamista taloudellisis- ta tuista. B. Taustahaastattelut Kirjallisen materiaalin täydentämisek- si ja analyysin tueksi suoritettiin noin10 taustahaastattelua. Niihin valittiin hen- kilöitä, jotka olivat perehtyneet ICT- ja ohjelmistoteollisuuteen Suomessa ja osallistuneet arvioitavien ohjelmien tai niiden puitteissa toteutettujen projek- tien suunnitteluun ja/tai toteuttami- seen. Valinta tehtiin yhdessä hankkeen ohjausryhmän kanssa. Haastattelut to- teutettiin strukturoituina arviointikysy- mysten rakennetta noudattaen. C. Sidosryhmähaastattelut Sidosryhmähaastattelujen avulla muo- dostettiin kokonaiskuva tarkasteltavien ohjelmien onnistumisesta ja vaikutuk- sista. Haastateltavat henkilöt valittiin yh- dessä hankkeen ohjausryhmän kanssa, jolloin varmistettiin, että haastattelujen avulla saadaan huomioitua riittävän laa- jasti relevantit näkökulmat. Kustakin oh- jelmasta haastateltiin noin 10 asiantunti- jaa. Myös sidosryhmähaastattelut toteu- tettiin strukturoituina arviointikysymyk- sissä asetettuja tavoitteita noudattaen. D. Työpaja Arviointityön lopussa järjestettiin työpa- ja, jonka tavoitteena oli validoida ja tar- kentaa arvioinnin tulokset. E. Mikroklusterianalyysit Neljästä erityisen tärkeästä arvioinnin aikana esiin nousseesta teema-aluees- ta toteutettiin syvällisempi mikrokluste- rianalyysi. Teemat valittiin yhdessä oh- jausryhmän kanssa. Teema-alueittain valittiin neljä temaattisesti yhtenäistä
  • 10.
    10 tai muulla tavoinsamankaltaista projek- tiryhmää eli mikroklusteria. Kunkin mik- roklusteriin valitun projektin vastuulli- sen henkilön kanssa tehtiin laaja haas- tattelu. Mikroklusterianalyysien puitteis- sa haastateltiin yhteensä 18 henkilöä. Mikroklusterianalyysissä pyrittiin luomaan syvällisempi läpileikkaus tar- kasteltavista ohjelmista kuin arvioimalla ja vertailemalla yksittäisten ohjelmissa rahoitettujen projektien tuloksia ja vai- kutuksia keskenään.Toisaalta ohjelmien sisällöllisestä vaihtelevuudesta johtuen tässä arvioinnissa esiintyvät mikroklus- terit ja niiden rakenne eroavat paikoitel- len merkittävästi toisistaan. Seuraavat teema-alueet valittiin mukaan klusterianalyysiin: •• Peliklusteri: Suomen peliklusterista on kasvanut kansainvälisesti me- nestyvä kansallisesti merkittävä teollisuuden ala. •• Born Global -yritykset, jotka perus- tetaan suuntaamaan suoraan glo- baaleille markkinoille. •• Nopeasti kasvavat mikroyritykset: Tekesin asiakaskannan perusteella tunnistettiin joukko nopeasti kas- vaneita mikroyrityksiä, joiden lii- kevaihdon vuosikasvu oli satoja tai tuhansia prosentteja. •• Vaativa asiakkuus:Tunnistettiin tuo­ tekehittäjä – potentiaalinen asiakas -yrityspareja. F. Internet-kysely Hankkeen puitteissa toteutettiin myös kaksi Internet-kyselyä VAMOS- ja Ver- so-ohjelmista. Valitettavasti vastaus- prosentti jäi hyvin alhaiseksi, jolloin tu- losten perusteella ei voitu tehdä suoria johtopäätöksiä. Verso-ohjelman osalta sovellettiin ohjelmassa suoritetun yri- tyskyselyn tuloksia. Arviointikysymykset Tekes-ohjelmien arvioinnin keskeiset tutkimuskysymykset voidaan jakaa seu- raavasti. Ohjelmien toimintaympäristön kehityksen kuvaus 1. Mitä merkittäviä muutoksia on ta- pahtunut ohjelmisto ja ICT-alan toi- mintaympäristössä 2000-luvulla? Ohjelmien tavoitteet, tulokset ja vaikutukset 2. Kuinka hyvin asetetut tavoitteet to- teutuivat ja tulokset saavutettiin? Mitä tuloksia ei olisi saavutettu ilman arvioitavia ohjelmia? Kuinka relevan- tit ja haastavat tavoitteet ohjelmalle oli asetettu? 3. Kuinka hyvin ohjelmat tavoittivat tärkeimmät sidosryhmät ja erityi- sesti pk-yritykset? Kuinka hyvin oh- jelmat ja niiden tarjoamat palve- lut vastasivat kohderyhmien tarpei- siin? Erityisesti pohdittiin, miten oh- jelmiin olennaisesti liittyvä kansain- välinen yhteistyö on vaikuttanut oh- jelmaan osallistuneisiin yrityksiin ja muihin toimijoihin? 4. Miten ohjelmien vaikutukset edisti- vätTekesin yhteiskunnallisen vaikut- tavuuden mallin tavoitteita? Miten merkittäviä nämä vaikutukset ovat olleet? Millainen vaikutus ohjelmil- la on ollut i. T&K&I investointeihin ohjelmis- tosektorilla ii. Tietotaidon kehittymiseen iii. Kansainvälisten ja kansallisten verkostojen muodostumiseen iv. Toimintamallien muutoksiin v. Innovaatioiden ja liiketoiminta- mahdollisuuksien syntymiseen vi. Tuottavuuteen vii. Yritysten kasvuun ja kansain- välistymiseen viii. Yritystoimintaan ja yhteiskun- taan laajemmin? 5. Miten nämä muuttujat ovat kehitty- neet indikaattorien ja esimerkkita- pausten valossa? Johtopäätöksen ja suositukset A. T&K&I-toiminnot ICT- ja ohjelmisto- sektorilla Miten T&K&I-toimintoja voitaisiin kehittää? Mikä on TIVIT:n ja mui- den SHOK:ien rooli tulevaisuudes- sa? Mitkä kansainväliset ohjelmat ja aloitteet ovat tärkeimpiä ja miten ne voitaisiin huomioida paremmin? B. Mitä konkreettisia ja onnistunei- ta toimintatapoja voidaan tunnis- taa, joiden pohjalta voidaan kehit- tää muiden ohjelmien toimintaa? C. Tutkimus- ja innovaatiopolitiikka Miten kansalliseen innovaatiopoli- tiikkaan liittyvät suositukset pitäisi huomioida? Mitä muita tutkimus- ja innovaatiopolitiikan kehittämistoi- menpiteitä tarvitaan Tekesin vaiku- tusten voimistamiseksi? ICT- ja ohjelmistoteollisuuden kehitys Suomessa ja kansain- välisesti 2000-luvulla Ohjelmistoalan määritelmä vaihtelee jonkin verran lähteestä riippuen. Taval- lisesti ohjelmistoteollisuudella viitataan kuitenkin liiketoimintaan, joka perustuu ohjelmistojen kehittämiseen tai ohjel- mistotuotteiden myyntiin lisensseinä tai palveluina sekä näihin kiinteästi liit- tyviin muihin palveluihin. ICT-teollisuu- dessa yhteinen nimittäjä on puolestaan tieto- ja viestintäteknologioiden hyö-
  • 11.
    11 dyntäminen. Toimialat ovatsiten osit- tain päällekkäisiä. Kansainväliset markkinat Kansainvälisesti ICT-investoinnit kas- voivat hyvin nopeasti vuosituhannen vaihteessa, jonka jälkeen kasvu on jon- kin verran tasaantunut. Toimialan mer- kitystä myös muille teollisuuden aloil- le kuvaa hyvin se, että viimeisen kym- menen vuoden aikana ICT-investointi- en osuus tuottavuuden kasvusta on ol- lut Euroopassa noin 40 % ja esimerkik- si Yhdysvalloissa ja Suomessa vielä tätä- kin suurempi. Toimialan keskeisiä kansainväli- siä muutosvoimia ovat olleet teknolo- ginen kehitys ja uusien liiketoiminta- alueiden syntyminen näiden teknologi- oiden ympärille; älypuhelimien kehitys ja niiden kasvava merkitys ohjelmisto- teollisuudelle; globalisaatio ja kasvavien talouksien kuten Intian ja Kiinan markki- na-asema; sekä pilviteknologioiden laa- jentuva hyödyntäminen. ICT- ja ohjel- mistoteollisuuden rooli kasvaa myös si- tä kautta, että ne linkittyvät yhä laajem- paan joukkoon tuotannon arvoketjuja. Esimerkiksi auto- ja lääketeollisuus sekä automaatio ja kuluttajaelektroniikka tar- vitsevat kasvavan määrän ohjelmistoja. Nopeasti kehittyvät teknologiat edellyt- tävät yrityksiltä jatkuvaa uudistumisky- kyä, osaamisen kehittämistä ja kompe- tenssien uudistamista. Uusia teknologioita kehitetään jat- kuvasti, jolloin ongelmaksi on muodos- tunut kiinnostavien ja potentiaalisten teknologioiden tunnistaminen. Uusien teknologioiden tuomat mahdollisuudet ovat tyypillisesti laajemmat kuin yritys- ten kyky hyödyntää niitä. Samanaikai- sesti pilvipalveluiden ja näitä tukevan infrastruktuurin kehittyminen on mah- dollistanut yhä laajemman sovellusken- tän syntymisen myös joukolle uusia lait- teita, kuten älypuhelimille ja tablettitie- tokoneille. ICT- ja ohjelmistoteknolo­ gioille onkin ominaista, että paras tekni- nen ratkaisu ei takaa menestystä mark- kinoilla. Toimialan kehitys ja markkinat Suomessa Ohjelmisto- ja ICT-sektori ovat kehit- tyneet Suomessa pääosin muuta Eu- rooppaa ja muuta suomalaista teolli- suutta nopeammin. Viimeisen 25 vuo- den aikana niiden työllistävä vaikutus samoin kuin tuotannon arvo ovat kol- minkertaistuneet. Suomi on ollut vah- va erityisesti ICT-sektorilla. Ohjelmisto- alan osalta Suomen ulkomaankauppa on sen sijaan ollut tuontipainoista. Täs- tä huolimatta myös ohjelmistoala on kasvanut melko tasaisesti viimeisen 10 vuoden ajan tuotannon likimain kak- sinkertaistuessa. ICT- ja ohjelmistoalaan on myös kohdistettu suuri osa Suomen T&K-investoineista ja niiden jalostusar- vo on säilynyt Suomessa erinomaisena. Suomi on pärjännyt nopeasti muuttu- vassa ympäristössä hyvin. Nokian roo- li suomalaisen ICT-teollisuuden ajurina on ollut kuitenkin keskeinen. ICT- ja ohjelmistoalan yrityskent- tä on Suomessa voimakkaasti polarisoi- tunut. Muutama suurin toimija vastaa yli 50 % toimialan tuotannosta. Samal- la Suomessa on kuitenkin runsaasti pie- niä ja keskisuuria yrityksiä. Ohjelmisto- alan vienti on kasvanut tasaisesti, mut- ta tästä huolimatta pk-yritysten toimin- ta kansainvälisillä markkinoilla on säily- nyt vähäisenä. Lisäksi toiminta on kes- kittynyt lähinnä muihin Pohjoismaihin tai Eurooppaan. Tässä valossa kansain- välistymisen tukeminen voisi auttaa kansainvälisen potentiaalin huomatta- vasti nykyistä laajamittaisempaan hyö- dyntämiseen. Suomessa ICT- ja ohjelmistoalaa on tuettu monin tavoin. Esimerkiksi yliopis- toissa ja muussa koulutuksen tarjonnas- sa ICT- ja ohjelmistopainotteisten kou- lutusohjelmien lukumäärä on kasvanut huomattavasti 2000-luvulla. ICT-sovel- luksia on alettu samanaikaisesti käyttää enenevissä määrin myös peruskouluis- sa ja lukioissa, mikä on parantanut op- pilaiden teknisiä valmiuksia. Ohjelmis- to- ja ICT-alojen merkitys on korostu- nut myös useissa kansallisissa tietoyh- teiskuntastrategioissa, joiden tarkoituk- sena on ollut taata Suomen asema tie- toyhteiskuntien tiennäyttäjänä. ICT- ja tietojärjestelmäinfrastruk- tuuri ovat Suomessa pitkälle kehittynei- tä ja menestyneet kansainvälisissä ver- tailuissa erinomaisesti. Tärkeimpiä me- nestyksen elementtejä ovat olleet no- pea laajakaista–Internet-yhteyksien ja kolmannen sukupolven (3G) matkapu- helinverkon leviäminen. Vuonna 2010 vähintään 1 Mbit/s yhteys oli saatavilla kaikkialla Suomessa. Myös nopeat opti- set Internet-yhteydet ovat levinneet no- peasti. Laadukkaat ja kehittyneet ICT- rakenteet tarjoavat yrityksille etuja esi- merkiksi matkapuhelinsovellusten ke- hittämisessä ja testaamisessa. Kuvassa 1 on esitelty Suomen ICT- ja ohjelmistoteollisuuden SWOT-analyy- si. Vahvuuksiksi nousevat hyvän koulu- tuksen ja kehittyneen infrastruktuurin ohella julkinen rahoitus ja Suomen hyvä imago. Lisäksi Suomessa on hyödynnet- ty uusimpia ICT- ja ohjelmistosovelluksia sangen laajasti muilla teollisuuden aloil- la. Heikkouksia ovat mm. pienet kotimai- set markkinat sekä verkostojen, mark- kinoinnin ja kansainvälistymisen puut- teellinen osaaminen. Tärkeimpiä mah- dollisuuksia tuovat kasvavat lähimark-
  • 12.
    12 kinat, kehittyvät verkostotja kaupallista- miseen liittyvä osaaminen sekä julkisen sektorin tuki kansainvälistymiseen. Uhkia muodostavat mm. rahoituksen pienene- minen, koveneva kansainvälinen kilpailu sekä osaavan työvoiman maastamuutto. Sosiaaliset vaikutukset 2000-luvun vaihde ja ensimmäinen vuosikymmen merkitsivät tietoyhteis- kunnan syntymistä. Informaation tuot- taminen, jakelu ja käsittely kytkeytyivät yhä tiiviimmin ihmisten päivittäisiin toi- miin. Töissä, opiskeluissa ja vapaa-ajalla tietoyhteiskunta muokkasi teknologioi- ta, toimintatapoja ja osaamistarpeita. Myös vaikuttamisen mekanismit muut- tuivat, sillä tietoyhteiskunnassa vaikut- taminen perustuu aiempaa enemmän tietoon, sen hallintaan ja hyödyntämi- seen. Samalla ICT- ja ohjelmistoteolli- suus ovat olleet globalisaation tärkeim- piin kuuluvia edistäjiä ja tätä kautta ne ovat lisänneet mm. kulttuurien välis- tä kommunikaatiota ja liiketoiminnan kansainvälistymistä. Tietoyhteiskunnalla on ollut useita merkittäviä sosiaalisia vaikutuksia. Esi- merkiksi monet vanhemmat ikäryhmät, jotka eivät ole tottuneita ATK-laitteiden käyttäjiä tai Internetin hyödyntäjiä, ovat joutuneet huonompaan asemaan työ- elämässä ja sivuun uusista sosiaalisis- ta palveluista. Vaikutusta on voimista- nut entisestään se, että monet perintei- set palvelut kuten pankkipalvelut ovat siirtyneet enenevissä määrin verkkoon. Useiden vaikutusten suhteen on kuiten- kin vaikea sanoa, onko teknologinen ke- hitys vaikuttanut elämäntapamuutok- siin, vai ovatko elämäntapamuutokset johtaneet uusien teknologioiden ja toi- mintatapojen kehittymiseen. Tärkeimpiin sosiaalisiin muutoksiin tietoyhteiskunnassa lukeutuvat sosiaali- sen median kehittyminen ja käytön rä- jähdysmäinen kasvu, käyttäjien tuotta- maan sisältöön (crowdsourcing) perus- tuvien palvelujen ja tuotteiden nopea lisääntyminen, sekä Internetin kasvava hyödyntäminen viestinnän ja kommu- nikoinnin kanavana. Lisäksi avoimeen lähdekoodiin perustuvien ohjelmien li- sääntyminen on johtanut uudenlaisten liiketoimintamallien kehittymiseen. Sa- mansuuntaisen kehityksen ennuste- taan jatkuvan myös tulevaisuudessa. Kuva 1. Suomen ICT- ja ohjelmistoteollisuuden SWOT-analyysi. Vahvuudet Heikkoudet •• Kehittynyt ICT-infrastruktuuri •• Korkea koulutustaso •• Julkisen sektorin rahoitus t&k-hankkeille •• Kansainvälinen maine tekonologiteollisuuden edelläkävijänä erityisesti matkapuhelinsektorilla •• Vaativat kotimaan markkinat antavat hyvät lähtö- kohdat kansainvälistymiseen •• Runsaasti kokemusta ICT- ja ohjelmistoratkaisuiden soveltamisesta useille muille toimialoille, kuten terveydenhuoltoon ja rahoitussektoreille •• Pankkien ja kaupankäynnin ICT-investoinnit •• Pienet kotimaiset markkinat •• Tukipalveluiden puutteellinen organisointi •• Kasvu- ja kansainvälistymishalukkuuden puuttuminen osalta yrityksistä •• Markkinoinnin ja kansainvälistymisen heikko osaaminen yhdistettynä osin puutteellisiin ja hajanaisiin kansainvälisiin verkostoihin •• Arvoketjun ja erikoistumisen puutteellinen ymmärrys Mahdollisuudet Uhat •• Kaupallistamisen kehittyminen •• Yhteistyön ja verkostojen kehittyminen •• EU:n sekä Venäjän ja Itä-Euroopan kasvavat markkinat •• Kansainvälinen kiinnostus suomalaisiin teknologia- yrityksiin •• Elektronisen liiketoiminnan kasvava merkitys vähentää kaukaisen sijainnin merkitystä •• Kasvukelpoisten pk-yritysten kasvava lukumäärä •• Julkisen sektorin t&k-investoinnit kansainvälistymiseen •• Rahoituksen pieneneminen sekä pitkän aikavälin vision puuttuminen riskirahoituksessa •• Puutteelliset investoinnit ja kansainvälistymiseen tarvittavan osaamisen puuttuminen •• Osaavan työvoiman saatavuus johtuen mahdollisesta maastamuutosta •• Globalisaation vaatimat valtavat investoinnit •• Kova kansainvälinen kilpailu ja uusien erityisesti ohjelmistoalan kilpailijoiden nousu •• Isot yritykset ostavat innovatiivisia pieniä yrityksiä
  • 13.
    13 Ohjelmien esittely VAMOS Tekes käynnistivuonna 2005 VAMOS – Liiketoiminnan mobiilit ratkaisut -ohjel- man, jonka tavoitteena oli vauhdittaa mobiilien ja langattomien teknologioi- den soveltamista laajasti useilla toimi- aloilla ja tukea näiden yritysten toimin- nan tehostamiseen suuntautuneiden ratkaisuiden kehittämistä. Erityisiksi pai- nopistealueiksi valittiin logistiikka ja lii- kenne, rakennus- ja kiinteistöala, valmis- tava teollisuus sekä yrityspalvelut. Lisäk- si projektien valinnassa pyrittiin suosi- maan pk-yrityksiä ja mikroyrityksiä. Ohjelman kokoaviksi tavoitteiksi asetettiin mobiileihin yritysratkaisuihin erikoistuneiden suomalaisten toimijoi- den kokoaminen klusteriksi siten, että •• mobiileja ratkaisuja kehitetään vas- taamaan niitä hyödyntävien alojen yritysten oleellisiin tarpeisiin •• ratkaisuja kehittävät yritykset saavat projektien myötä uusia liiketoimin­ tamahdollisuuksia •• teknologioita tutkivat organisaa­ tiot tarjoavat osaamistaan yrityksiä konkreettisesti hyödyttävissä tutki- mushankkeissa. Klusterin pohjaksi koottiin laaja moni- puolinen joukko yrityksiä, tutkimuslai- toksia, konsultteja, verkostoja ja julki- sia tahoja. Ohjelmaan osallistui n. 400 organi- saatiota viideltä eri toimialalta, jotka to- teuttivat 188 mobiilien ratkaisujen kehi- tys- ja tutkimusprojektia. Pk- ja mikroyri- tyksiin kohdistui 72 % (104 kpl) yritys- ten projekteista. Yhteensä 144 projek- tissa kehitettiin mobiiliratkaisuja, joista suurin osa keskittyi logistiikan ja liiken- teen sekä rakennusteollisuuden ja kiin- teistöhuollon ratkaisuihin. Ensimmäi- sen 4,5 vuoden aikana projektien koko- naisvolyymi oli 93 miljoonaa, jostaTeke- sin osuus oli 43 miljoonaa euroa ja yri- tysten ja tutkimuslaitosten panostus 50 miljoonaa euroa. Verso Tekesin vuonna 2006 käynnistämä Ver- so – Vertical Software Solutions -tekno- logiaohjelman tavoitteena oli edistää suomalaisten ohjelmistoyritysten kas- vua, kansainvälistymistä ja tuotekehitys- tä. Alkuperäiset teollisuuden kohdealat olivat rahoituspalvelut, kaupankäynti, rakennusteollisuus ja tietoliikennetek- niikka. Myöhemmin kohderyhmiin li- sättiin mm. peliteollisuus. Ohjelmassa korostettiin käytännönläheistä mento- reiden sparrausta ja ostajatilaisuuksien järjestämistä sekä Tekesin kontaktiver- kon hyödyntämistä pk-yrityksiä tukevi- en konsortioiden luomisessa. Verso-ohjelman tavoitteet sisälsi- vät seuraavia osa-alueita: •• Suomalaisten ohjelmistoyritysten kasvun ja kansainvälistymisen no- peuttaminen •• Kansainvälisille markkinoille täh­ täävien asiakas- ja markkinalähtöis­ ten ohjelmistotuotteiden ja -palve- luiden kehittäminen •• Kansainvälinen liiketoimintaosaa- minen ja verkostojen vahvistami- nen •• Kasvuun ja riskinottoon kannus- tavan yrityskulttuurin luominen ja vahvistaminen. Aiempiin Tekes-ohjelmiin nähden Verso- ohjelma oli poikkeuksellisen kaupallises- ti orientoitunut. Ohjelmassa tehtiin tietoi- nen päätös, jonka mukaan yritysfokus oli keskeinen ja tutkimusprojekteihin panos- tettiin vain, mikäli niissä pystyttiin tunnis- tamaan suora yhteys liiketoimintaan. SPIN SPIN-teknologiaohjelman tärkeimpiin tavoitteisiin kuului suomalaisen ohjel- mistotuoteteollisuuden kasvun ja kan- sainvälistymisen tukeminen. Teknolo- gianäkökulma oli ohjelmassa keskeinen, mutta sen lisäksi pyrittiin kehittämään ohjelmistotuoteyritysten toimintaym- päristön valmiuksia esimerkiksi mark- kinoinnin, rahoituksen ja kansainvälis- tymisen osalta sekä tutkimus- ja asian- tuntijapalveluiden tarjoamisessa. Kolmivuotinen SPIN-ohjelma käyn- nistyi vuonna 2000. Ohjelman tärkeim- mät painopistealueet olivat •• Internet-palveluinfrastruktuurin tuotteet •• Mobiiliympäristön ohjelmistotuot- teet ja -innovaatiot •• Uuden sukupolven yritys- ja toimi- alasovellukset. Muita painopistealueita olivat tieto- turva, viihdetuotteet ja niiden toimin- ta-alustat, uudet ohjelmistokehityk- sen tuotteet, uudet käyttöympäristö- alustat, uusiin ympäristöihin moderni- soidut ja integroidut ohjelmistotuot- teet, uusmedia-alueen ohjelmisto- tuotteet, komponenttiperustaiset oh- jelmistotuotteet ja ohjelmistokompo- nenttituotteet. Ohjelmassa oli yhteensä 110 yri- tys- ja 14 tutkimusprojektia. Niiden ko- konaisvolyymi oli noin 70 miljoonaa eu- roa, josta Tekesin rahoitusosuus oli 29,6 miljoonaa euroa. Käynnistyneille hank- keille asetettiin kunnianhimoisia tavoit- teita ja yhteenlaskettuna yritykset ta- voittelivat hankkeiden puitteissa pää- osin kansainvälisiltä markkinoilta lähes miljardin euron uutta liikevaihtoa.
  • 14.
    14 Ohjelmaan osallistui 125yritystä, joista suurin osa oli nuoria pk-yrityksiä. Ohjelman kokonaisvolyymi oli 125 mil- joonaa euroa, josta Tekesin rahoituksen osuus oli noin 60 miljoonaa. Ohjelman puitteissa rahoitettiin yhteensä 220 pro- jektia, joista vain noin 10 % keskittyi tut- kimukseen. Ohjelmien tulokset ja vaikutukset sa kehitetyt teknologiat jatkavat ilmei- sesti elämää muissa yrityksissä. SPIN-ohjelman vaikutuksia arvioi- tiin myös erillisen 38 yrityksen otoksen pohjalta, jossa mukana olevat yritykset toimivat yhä omalla nimellään. Tulokset osoittavat, että erityisesti pienet yrityk- set, joiden liikevaihto oli alle 2 miljoonaa euroa ohjelman alussa, näyttävät kasva- neen selvästi ohjelmistoalan vertailuin- deksiä nopeammin. Monet näistä yrityk- sistä ovat käyttäneet Tekes-rahoitusta myös SPIN-ohjelman jälkeen. Kansain- välistymisen ja viennin rooli kasvussa on jäänyt kuitenkin verraten vähäiseksi. SPIN-ohjelman käynnistyessä ICT- sektorilla elettiin voimakasta nousu- kautta, jolloin ohjelman osuus toimialan investoinneista oli vähäinen. IT-kuplan puhkeamisesta seurasi kuitenkin voima- kas laskukausi, jonka aikana SPIN-ohjel- man rahoitus oli monelle ICT- ja ohjel- mistoalan yritykselle selviytymisen ehto, joka mahdollisti liiketoiminnan jatkami- sen. Erityisen tärkeä rooli ohjelmalla oli tuolloin T&K-toiminnan rahoittamises- sa. Vaikka SPIN-ohjelman roolia vahvan ICT- ja ohjelmisto-osaamisen kehittymi- sessä ei voida helposti eritellä, on Teke- sin pitkäaikaisella tuella toimialoille ol- lut kokonaisuudessaan suuri vaikutus. SPIN-ohjelman rooli on tässä suhteessa merkityksellinen, sillä monille yrityksille Tekes-yhteistyö SPIN-ohjelmassa mer- kitsi pitkän yhteistyösuhteen alkamista. Huolimatta SPIN-ohjelman hyväs- tä kansallisesta ulottuvuudesta, ohjel- man kontribuutiota verkostojen ja toi- mialaklustereiden kehittymiseen on vai- kea vahvistaa. Jonkin verran yhteistyö- tä ohjelman puitteissa syntyi erityisesti yritysten välille, mutta useimmat SPIN- projekteissa mukana olleet muistavat ohjelman vain rahoituksesta. Useille yrityksille rahoituksella onkin ollut eri- tyisen suuri merkitys. Se on mahdol- listanut panostukset tuotekehitykseen ja yrityksen prosessien jalostamiseen. Projektien strategista merkitsevyyt- tä on kuitenkin vaikea arvioida. Myös- kään kansainvälistymiseen liittyvistä tu- loksista ohjelman puitteissa ei ole pal- joa evidenssiä ja vain muutamat SPIN- projekteissa kehitetyt tuotteet tai pal- velut ovat menestyneet kansainvälises- ti. Toisaalta runsaasti projekteissa kehi- tettyä ohjelmistoja on edelleen käytös- sä Suomessa. VAMOS VAMOS-ohjelman puitteissa järjestettiin perinteisten palveluiden lisäksi uusia palveluita kuten Mobile Enterprise Fac- tory (MEF) -tukiprosessi. Yritykset hyö- dynsivät melko vilkkaasti uusia ja pe- rinteisempiä palveluita, joskin yritysten välillä oli tässä suhteessa myös merkit- täviä eroja. Osa yrityksistä hyödynsi vain rahoitusta, kun toiset hyödynsivät oh- jelmapalveluita mahdollisimman laa- jasti. Kokonaisuudessaan ohjelman nähtiin kuitenkin vastaavan hyvin yri- tysten relevantteihin tarpeisiin ja ohjel- maan osallistuneet yritykset olivat pää- osin hyvin tyytyväisiä ohjelman tarjon- taan. Erityisesti projektikoordinaatto­ rien aktiiviseen toimintaan ja asiantun- temukseen oltiin erittäin tyytyväisiä.Yli- voimaisesti tärkein ohjelman palvelu oli kuitenkin rahoitus, jolla oli useimmissa projekteissa toteutuksen mahdollista- va rooli. Joitain haasteitakin palveluissa nähtiin. Niistä ei esimerkiksi tiedotettu kyllin hyvin hakuprosessin aikana, jol- loin osa yrityksistä ei ollut tietoisia laa- jasta palvelutarjonnasta. Toisaalta osa uusista palveluista kuten markkinointi- konsultointi koettiin jostain syystä tar- peettomiksi, sillä vain muutama yritys SPIN-jälkiarviointi SPIN-ohjelma arvioitiin vuonna 2003 yhdessä kahden muun Tekesin tekno- logiaohjelman kanssa. Arvion mukaan SPIN-ohjelma huomioi ansiokkaasti teollisuuden tarpeet ja ohjasi menes- tyksekkäästi ohjelmistoalan kehitystä kohti tuotelähtöistä ajattelutapaa. Oh- jelman myötä vahvistui tietämys ohjel- mistoalasta usean eri toimijan muodos- tamana klusterina. Toisaalta SPIN-ohjelman haastee- na nähtiin, että se oli hieman liian tek- nologiapainotteinen, väljästi määritelty ja perustui liian tiiviisti ohjelmaa edeltä- neisiin trendeihin, vaikka toimiala muut- tui merkittävästi ohjelman aikana. Toi- mintaympäristön muutokset eivät kui- tenkaan ratkaisevasti vaikuttaneet oh- jelmaan, vaan strategia ja tavoitteet säi- lyivät alan kannalta relevantteina. Tek- nologiapainotteisuuden seurauksena ohjelman vaikutukset olivat kuitenkin vähäiset asiakaslähtöiseen toimintata- poihin sekä vientiin ja kansainvälistymi- seen liittyen. Jälkiarvioinnissa käytiin läpi 101 yri- tystä, jotka olivat mukana SPIN-ohjel- massa. Näistä yrityksistä 56 on lakannut toimimasta, mikä vastaa toimialalla tyy- pillistä poistumaa. Ainakin 22 näistä yri- tyksistä on hävinnyt yritysoston tai fuu- sion seurauksena, joten SPIN-ohjelmas-
  • 15.
    15 hyödynsi tätä palvelua.Myös ohjelman ohjausryhmän toiminnassa oli ongel- mia, jotka johtuivat ainakin osittain oh- jausryhmän epäselvästä roolista ja huo- nosti asetetuista tavoitteista. Palveluihin liittyvien haasteiden lisäksi myös kehi- tettyjä palveluja hyödyntävien yritysten taloudellinen tukeminen olisi ollut tar- peen, sillä monissa tapauksissa palve- lun hankintaan sisältyy myös merkittä- viä riskejä. Pk-yritysten osuus ohjelman pro- jekteista oli kaksi kolmannesta. Projek- tit keskittyivät pitkälti yritysten kompe- tenssialueille, olivat strategisesti merkit- tävässä roolissa sekä keskittyivät hank- keisiin, joiden toteuttamiseen sisäl- tyy merkittävä riski. Projektien keskei- siä hyötyjä olivat mm. teknisen osaami- sen ja uusien tuotteiden kehitys; yhteis- työn lisääntyminen asiakkaiden ja mui- den yritysten kanssa; sekä kansainvälis- tyminen. Toisaalta projektin tavoittei- ta olivat erityisesti asiakashyötyjen ym- märtäminen. Tässä mielessä projektien sisällöt eivät olleet aivan linjassa ohjel- man tavoitteiden kanssa, sillä suhteel- lisen suuri osuus projekteista keskittyi erityisesti teknologiseen kehittämiseen. Myöskään projektin keskeiset hyödyt ei- vät rakentuneet asiakkaiden tarpeiden ympärille. VAMOS-ohjelman tavoitteet kyt- keytyivät pitkälti mobiiliteknologioiden kehittämiseen ja parempaan hyödyntä- miseen, mikä vaikutti ohjelman alkaes- sa relevantilta nopeasti kehittyvältä toi- mikentältä. Myös Nokian menestyksellä lienee ollut vaikutusta ohjelman tavoit- teiden asettamisessa. Tästä huolimatta osassa projekteista sovellusten hyödyn- täjien kiinnostus tuotteita tai palveluita kohtaan oli vaimeaa ja tuotekehitykses- tä saatavat hyödyt jäivät sen vuoksi vä- häisiksi. Yleisesti ottaen VAMOS oli jossain määrin aikansa vanki. Suomella oli mer- kittävä mobiilialan teknologinen etu, mutta globaaleja kaupallisia voittajarat- kaisuja ei ollut vielä syntynyt. Mobiili­ ala nähtiin myös jälkeenpäin katsottu- na ehkä hiukan perusteettomasti oma- na kokonaisuutenaan; nykyään mobii- liratkaisut muodostaisivat todennäköi- sesti yhden kanavan muiden joukossa. Verso Myös Verso poikkesi aiemmista Tekes- ohjelmista merkittävästi palvelutarjon- tansa osalta, sillä tarjolla oli laaja vali- koima uusia palveluja. Erityisesti yritys- kohtaiset Tekesin tai ulkopuolisten eks- perttien liiketoiminnan kehittämiseen, markkinointiin ja kansainvälistymiseen liittyvät palvelut kuuluivat ohjelman fo- kukseen. Tällaisia yrityskohtaisia asian- tuntijapalveluita käytettiin erityisen pal- jon ja ne koettiin myös erittäin tarpeel- lisiksi. Toisaalta osa yrityksistä hyödyn- si jälleen vain rahoitusta, mikä näyttää olevan ominaista Tekesin teknologia­ ohjelmille. Vielä selvemmin Verso-ohjelman erilaisuus näkyi projektivalinnoissa. Ta- vallisesti Tekes-ohjelmien projektit ovat olleet varsin teknologiapainotteisia, mutta Versossa suurimpaan osaan pro- jekteja kuului myös liiketoiminnallisia ja kansainvälistymiseen liittyviä element- tejä. Myös teknologiapainotteisissa pro- jekteissa liiketoiminta ja asiakastarpeet olivat määräävässä asemassa. Versoa voidaan pitää tässä mielessä merkittä- vänä kehitysaskeleena Tekesin ohjel­ mien historiassa. VAMOS-ohjelman tavoin myösVer- sossa mukana olleista yrityksistä kak- si kolmannesta oli pk-yrityksiä. Versos- sa mukaan otettiin kuitenkin nimen- omaan sellaisia yrityksiä, joiden tuot- teen tai palvelun menestyksestä oli ai- nakin alustavia viitteitä. Verso poikkesi aiemmista Tekes-ohjelmista myös sen ulkoisen tunnettavuuden suhteen, joka oli seurausta ammattimaisesta ja sys- temaattisesta brändin rakentamisesta. Julkisuuden seurauksena tavallista suu- rempi joukko projekteja hakeutui ohjel- maan ja mukaan otettavien projektien valintaa voitiin suunnitella ja kohdentaa tavallista paremmin. Verso-projekteihin liittyen nousi esiin myös joitakin haasteita. Yritysten ja tutkimuslaitosten välinen yhteistyö osoittautui paikoin haasteelliseksi. Kaik- ki yritykset eivät myöskään olleet tietoi- sia Verson laajasta palvelutarjonnasta ja eivät sen vuoksi tulleet hyödyntäneek- si kaikkia mahdollisuuksia. Myöskään pienten yritysten pääsy kansainvälisil- le markkinoille suurten suomalaisyritys- ten kanssa verkottuen ei toiminut odo- tetulla tavalla. Verso-ohjelman projektit kytkeytyi- vät useimmissa tapauksissa tiiviisti yri- tyksen strategiaan sekä kartuttivat yri- tyksen osaamista liittyen yritysten pää- kompetenssialueisiin. Projekteihin liittyi useimmiten myös korkeita riskejä. Ra- hoituksella oli myös Verso-ohjelmassa keskeinen rooli hankkeiden mahdollis- tajana, mutta myös verkostoihin, kan- sainvälistymiseen ja projektien suun- nitteluun liittyvät palvelut olivat tär- keitä. Projektien tärkeimpiin hyötyihin lukeutuivat teknologiaan, liiketoimin- taan, asiakastarpeisiin ja markkinakent- tään liittyvän osaamisen kasvaminen ja uusien teknologioiden ja tuotteiden ke- hittäminen. Toteutuneiden projektien, ohjel- mapalvelujen ja saavutettujen tulos- ten valossa Verso-ohjelma näyttää saa- vuttaneen tavoitteensa poikkeukselli- sen hyvin.
  • 16.
    16 VAMOS- ja Verso-ohjelmien vaikutukset Molemmillaohjelmilla oli tuntuva mer- kitys yritysten teknologiaan ja liiketoi- mintaan liittyvien osaamisten kehitty- misessä sekä kansainvälistymisessä. Tä- mä näkyy esimerkiksi siinä, että projek- teihin osallistuneiden yritysten liikevaih- to ja vienti kasvoivat merkittävästi pro- jektien kuluessa ja päätyttyä. Keskimää- räinen kansainvälinen liikevaihto Verso- ohjelmaan osallistuneilla yrityksillä kas- voi 26 prosentista 33 prosenttiin vuo- desta 2008 vuoteen 2010. Ohjelmien rooli on ollut merkittävä ICT- ja ohjelmistoalan yritysverkostojen ja -klusterien syntymisessä. Esimerkiksi peliklusterin syntymisessä Tekesin toi- minnalla on ollut merkittävä rooli. Ver- kostoitumista on lisännyt myös Teke- sin ohjelmien tiivis yhteistyö relevant- tien toimialajärjestöjen kanssa. Myös muiden päällekkäisten ohjelmien kans- sa pyrittiin yhteistyöhön, vaikkakin se jäi käytännössä vähäiseksi. Yritysten tuottavuuteen liittyvien vaikutusten tunnistaminen on lyhyellä aikavälillä huomattavasti haastavampaa ja yleisiä johtopäätöksiä on vaikea tehdä. Vaikuttaa siltä, ettei ohjelmilla ollut pro- jekteihinosallistuneidenyritystentuotta- vuuteen yksittäisiä tapauksia lukuun ot- tamatta merkittävää vaikutusta.Toisaalta projekteissa kehitetyt tuotteet ja palve- lut ovat saattaneet parantaa asiakastoi- mialojen tuottavuutta. Joka tapauksessa ohjelmat ovat vaikuttaneet merkittävästi liiketoiminnansuuntaamiseen,verkosto- jen syntyyn ja viennin kehitykseen. Mikroklusterianalyysit Mikroklusterianalyysit laadittiin neljästä teema-alueesta, jotka esitellään lyhyes- ti seuraavassa. Peliklusteri Nopea kasvu ja uudet liiketoiminta- mahdollisuudet tekevät peliteollisuu- desta hyvin houkuttelevan kohteen in- vestoinneille. Suomi on kuitenkin ol- lut 90-luvulla peliteollisuuden kehityk- sessä hieman kansainvälisiä markkinoi- ta jäljessä, minkä seurauksena peliteol- lisuuden kasvu on ollut verraten hidas- ta. 2000-luvulla Suomen pelisektori on kuitenkin alkanut kehittynyt nopeasti ja on nyt saavuttanut monilla osa-alueilla toimialan eturintaman. Tekes on tukenut pelisektorin kas- vua viimeisen 10 vuoden aikana SPIN-, Fenix- jaVerso-ohjelmissa, joilla voidaan arvella olevan ratkaiseva vaikutus vah- van suomalaisen peliklusterin syntymi- selle ja liiketoiminnan kehittymiselle. Laaja joukko suomalaisia pelialan yrityk- siä on saanut tukea Tekesiltä ja monien yritysten kohdalla tuki on ollut edellytys myös liiketoiminnan jatkumiselle ja me- nestystuotteen kehittymiselle. Julkinen tuki on auttanut laajan pelialan osaami- sen synnyttämisessä, joka muodostaa suomalaisen peliteollisuuden keskei- sen tukipilarin. Peliklusterin mikroklusterianalyy- sissä haastateltiin neljää Verso-ohjel- massa mukana ollutta kansainvälisesti menestynyttä yritystä, jotka edustavat erilaisia peliteollisuuden aloja. Haastat- telujen perusteella Verso-ohjelman tu- ki oli erityisen tärkeää pienille yrityksil- le sekä yrityksille, jotka olivat siirtymässä uusille markkinoille. Projektit mahdollis- tivat tyypillisesti täysipainoisen tuote- kehityksen jatkamisen ja keskittymisen omien ydinosaamisten kehittämiseen, mikä on ollut edellytys menestymiselle kovassa kansainvälisessä kilpailussa.Ver- so-ohjelman saavutukset liittyivät myös kansainvälistymiseen ja verkostoitumi- seen. Verso on ollut myös keskeisessä roolissa suomalaisen pelialan tutkimuk- sen syntymisessä. Peliklusteriin kuuluvat yritykset muodostavat enenevässä määrin he- terogeenisen ryhmän erikokoisia ja eri toimialoille keskittyneitä yrityksiä. Tämä näkyy myös yritysten tarpeissa, sillä osa yrityksistä hyödynsi ja koki tarpeellisek- si ainoastaan Verso-ohjelman rahoituk- sen, kun toisille muut ohjelman palvelut muodostivat hyvinkin tärkeän osan pro- jektia. Mahdollisissa tulevissa Tekes-oh- jelmissa peliteollisuus näyttääkin tarvit- sevan laajan yrityskohtaisesti joustavan palvelutarjonnan. Born Global -yritykset ICT- ja ohjelmistoalan kansalliset mark- kinat ovat pienet, joten monien yrityksi- en pitää suunnata liiketoimintansa suo- raan kansainvälisille markkinoille. Suora kansainvälistyminen on houkuttelevaa erityisesti sellaisten tuotteiden osalta, jotka ovat helposti kopioitavissa ja toi- mitettavissa Internetin välityksellä edul- lisesti. Esimerkiksi peliteollisuus on tyy- pillinen segmentti, jolla yritykset täh- täävät välittömään kansainväliseen kas- vuun. Mikroklusterianalyysissä valittiin haastateltavaksi pieni joukko globaa- liksi syntyneitä yrityksiä SPIN-, VAMOS- ja Verso-ohjelmista. Yritykset edustivat eri alitoimialoja. Näille yrityksille tyypil- listä oli, että ne hyödynsivät Tekesin oh- jelmapalveluista vain rahoitusta muiden palveluiden käytön ollessa minimaalis- ta.Tekesin ohjelmien rahoitukseen ja sii- hen liittyviin järjestelyihin oltiin kuiten- kin hyvin tyytyväisiä. Myös Tekesin il- meinen pyrkimys rahoittaa vain projek- teja, joihin liittyi kaupallisesti merkittä- vä potentiaali, nähtiin tärkeänä. Monille yrityksilleTekes-tuki mahdollisti riittävän huolellisen tuotekehityksen kansainväli-
  • 17.
    17 sesti menestyvien tuotteidentai palve- luiden kehittämiseksi. Nopeasti kansainvälistyvät yrityk- set luovat kansainväliset verkostonsa tyypillisesti itse ja näkevät sen vuoksi Tekesin roolin tärkeänä erityisesti T&K- hankkeiden rahoittamisessa, joihin liit- tyen Tekesillä muutenkin on vahvaa osaamista. Tätä tavoitetta silmällä pitä- en Tekes voisi panostaa nykyistä vah- vemman oman teknologia-alan asian- tuntemuksen kehittämiseen. Saman- aikaisesti myös projektien kaupallinen potentiaali pitää kuitenkin pystyä ar­ vioimaan. Nopeasti kasvavat mikroyritykset Tähän ryhmään valittiin haastateltavak- si pieni joukko mikroyrityksiä VAMOS- ja Verso-ohjelmista, jotka olivat ohjel- maan osallistumisen aikana tai pian sen jälkeen kasvattaneet myyntiä tuntuvas- ti. Mukaan ei kuitenkaan otettu startup- yrityksiä. Valinta tehtiin Tekesin asiakas- tietokannasta. Haastatellut yritykset hyödynsivät Tekes-tuesta lähinnä rahoitusta ja mui- den palveluiden käyttö jäi vähäiseksi. Tekes-koordinaattoreilta saatu tuki pro- jektien läpiviemisessä ja erityisesti ha- kemusvaiheessa koettiin kuitenkin tar- peelliseksi ja nykyisellään hyvin toimi- vaksi. Tekesin ohjelmien kautta syntyi myös tärkeitä verkostoja sekä kontak- teja asiakaskentälle. Projektisuunnitel- man laatiminen ja raportointi projektin kuluessa auttoivat kirkastamaan yrityk- sen visiota. Rahoituksen merkitys oli mik- royrityksille usein ratkaiseva ja edel- lytys myöhemmin tapahtuneelle kas- vulle. Nopeasti kasvaneet mikroyrityk- set käyttivät Tekesin rahoituksen taval- lisesti tuotekehitykseen, jonka tulokse- na saatiin kehitettyä markkinakelpoi- nen tuote tai palvelu. Tekesin rooli on erityisen tärkeä mikroyritysten rahoi- tuksessa, sillä pienten yritysten on vai- kea saada rahoitusta yksityisiltä mark- kinoilta. Mikroyritysten osalta erityisiä ke- hitystoiveisiin kuului Tekesin ohjelmi- en hakemusprosessin keventäminen ja parempi ohjeistaminen, sillä nykyises- sä muodossa ohjelmaan hakeminen oli resursseihin nähden raskas prosessi. Li- säksi valintaprosessi on mikroyritysten näkökulmasta haitallisen hidas. Erillis- ten hakemusten kirjoittaminen esimer- kiksi ELY-keskuksiin ja Tekesille nähtiin myös tarpeettomaksi rasitteeksi ja jul- kisille tukimekanismeille toivottiin yh- den luukun periaatetta. Verkostoitumi- seen liittyvien palveluiden kehittämi- nen nähtiin tarpeelliseksi, vaikka haas- tatellut mikroyritykset eivät olleet hyö- dyntäneet nykyisiäkään palveluita ko- vin tehokkaasti. Vaativat asiakkaat Ohjelma-arviointien yhteydessä nou- si esiin huoli siitä, onko kansallisilla markkinoilla riittävästi vaativia ja ak- tiivisia asiakkaita, jotta asiakaspalaut- teen pohjalta pystytään luomaan kan- sainvälisesti kilpailukykyisiä tuotteita ja palveluita. Sen vuoksi päätettiin pereh- tyä toteuttaja–käyttäjä-vuorovaikutuk- seen VAMOS- ja Verso-ohjelmien puit- teissa, joissa otettiin merkittävä kehi- tysaskel tällaiseen yhteistyömuodon kannustamisessa. Selvityksen taustal- le haastateltiin kolmeen projektiin liit- tyen sekä tuotekehityksestä vastaavaa toteuttajaa että tuotekehityksessä mu- kana ollutta asiakasta. VAMOS-ohjelmassa asiakkaan ja toteuttajan tuotekehitysyhteistyöhön kannustettiin erityisesti ohjelmaku- vauksessa mainitun Mobile Enterpri- se Factory (MEF) -tuotekehityspalve- lun kautta, jossa tuotekehittäjät, asiak- kaat ja mahdolliset teknologiatoimit- tajat tapasivat työpajoissa. Verso-oh- jelmassa toimittajan ja asiakkaan väli- nen yhteistyö oli keskeinen toiminta- tapa ja useissa projekteissa asiakkaan rooli innovaatiotoiminnan ohjaukses- sa oli tärkeä. Yhteistyöhön kannustamises- ta huolimatta yhteistyö sujui hieman kankeasti ja esimerkiksi tuotekehityk- sessä odotettiin tarpeettoman pitkään ennen kuin ensimmäinen prototyyppi annettiin asiakkaalle koekäyttöön. Toi- saalta asiakkailta puuttui tarpeellisia re- sursseja ja kiinnostusta olla tiiviisti mu- kana tuotekehitysprosessissa. Asiak- kaan roolin tuominen osaksi tuotekehi- tystä on tarpeellista nostaa esiin myös tulevissa Tekesin ohjelmissa, jonka li- säksi täytyy keksiä uusia toimintatapoja kannustaa asiakkaita osallistumaan ai- empaa tiiviimmin tuotekehitykseen ja palautteen antamiseen. Jatkuva ja laa- dukas asiakaspalaute voi olla myös te- hokas tapa vähentää projekteihin liitty- vää riskiä siitä, että tuotekehitys ei vas- taa asiakastarpeita. Johtopäätökset ja suositukset Tämän arvioinnin tavoitteena oli selvit- tää Tekesin SPIN-, VAMOS- ja Verso-oh- jelmien tulokset ja vaikutukset. VAMOS- ja Verso-ohjelmien osalta arvioitiin ly- hyen aikavälin vaikutuksia ja ohjelmi- en onnistumista, kun lähes 10 vuotta sitten päättyneen SPIN-ohjelman osal- ta voitiin arvioida myös pidemmän ai- kavälin vaikutuksia. Lisäksi erillisissä mik- roklusterianalyyseissä arvioitiin Tekesin ohjelmien vaikutusta tarkemmin raja- tuilla toimikentillä.
  • 18.
    18 SPIN-ohjelman vaikutukset ovat edelleenselvästi nähtävillä. Vaikka oh- jelman projektit eivät johtaneet erityi- siin läpimurtoihin, joidenkin nyt me- nestyvien yritysten toiminta perus- tuu projektin aikana kehitettyihin toi- mintatapoihin, tuotteisiin tai palvelui- hin. Monet yritykset selvisivät vuosien 2001–2003 vaikean taloudellisen ajan yli SPIN-ohjelman kautta saadun rahoi- tuksen turvin. VAMOS-ohjelmassa tarjottiin laaja palveluvalikoima, joiden avulla kannus- tettiin mm. tiiviiseen tuotekehitysyh- teistyöhön asiakkaan kanssa. VAMOS- ohjelman näkökulma oli aiempaa mark- kinalähtöisempi ja sen vuoksi myös oh- jelman vaikutukset keskittyivät tavallis- ta enemmän liiketoiminnan kehittämi- seen. Samalla VAMOS-ohjelma osittain epäonnistui siinä, että se keskittyi tuo- tekehitykseen kasvumarkkinoilla, joil- la asiak­kaiden tarpeet eivät olleet vie- lä selkeästi määriteltyjä. Seurauksena osa tuotekehityksestä synnytti tuottei- ta, joilla ei ollut selvää tai riittävän laajaa markkinapotentiaalia. Verso-ohjelma loi poikkeuksellisen hyvän brändin, jonka myötä ohjelmaan tuli tavallista enemmän hakemuksia ja projektit voitiin valita aiempaa tarkem- min. Ohjelman projektipaletti tuki ohjel- man tavoitteita poikkeuksellisen hyvin. Verson fokus oli aiempiin Tekesin tek- nologiaohjelmiin verrattuna markkina- ja asiakaslähtöisempi ja ohjelmassa ko- rostettiin kansainvälistymistä ja tiivistä tuotekehitysyhteistyötä potentiaalisten käyttäjien kanssa. Miltei kaikissa projek- teissa oli kansainvälistymiseen ja kau- pallistamiseen liittyviä elementtejä. Oh- jelmallisuuden lisäarvon ja vaikutusten- sa mielessä Verso-ohjelmaa voidaan pi- tää yhtenä Tekesin onnistuneimmista ohjelmista. VAMOS- jaVerso-ohjelmien keskei- siä menestystekijöitä olivat seuraavat: •• Tekesin projektikoordinaattorien aktiivinen tuki aina hakemuksen laatimisesta varsinaisen projektin läpivientiin nähtiin arvokkaana •• Tekesin asiantuntemuksen ja ver- kostojen tehokas hyödyntäminen ohjelmien palveluissa •• Ulkopuolisten asiantuntijapalvelu- jen hyödyntäminen •• Palveluiden muokkaaminen vas- taamaan yritysten tarpeita •• Ohjelmien systemaattinen ja asian- tunteva brändääminen •• Tiivis yhteistyö toimialajärjestöjen kanssa uskottavuuden ja toimiala- osaamisen kasvattamiseksi •• Ohjelman sopeuttaminen uuden tiedon pohjalta myös ohjelman ai- kana •• Ohjelman toimintojen siirtäminen toimialajärjestöihin varsinaisen oh- jelman päätyttyä. Arvioinnin ja johtopäätösten pe- rusteella voidaan nostaa esiin seuraa- vat yleiset havainnot: •• Taloudellisen ja tuotekehitykseen liittyvän tuen ohella on tarpeellista tukea erityisesti pienempien yritys- ten kohdalla myös kaupallistamis- ta, kansainvälistymistä ja markki- nointia sekä verkostoitumista. •• Tekesin tulisi jatkossakin kohdistaa taloudellinen tuki erityisesti mikro- ja pk-yrityksille. Isommille yrityksille voitaisiin kuitenkin tarjota esimer- kiksi lainoja tai tukea yksityisen ra- hoituksen löytämiseen. •• Monille nyttemmin menestyville yrityksille Tekesin rahoitus oli rat- kaisevassa roolissa talouden lasku- suhdanteesta selviämiseksi. Teke- sin tuen merkitys korostuukin sil- loin, kun taloudellinen tilanne on heikko. •• Mikroklusterianalyysin perusteella nopeasti kansainvälistyvien ja/tai kasvavien yritysten tarpeet koske- vat lähinnä rahoitusta, kun muut yritykset ovat käyttäneet laajasti myös muita ohjelmapalveluita.Voi- si olla hyödyllistä selvittää tarkem- min, miten yritykset voitaisiin luoki- tella asianmukaisesti, jotta erilaisil- le yrityksille osattaisiin tarjota sopi- vampia palveluita. •• T&K&I-politiikan tulee tukea riski- investointeja erityisesti aloilla, joilla Suomi on perinteisesti ollut vahva. Kasvuyrittäjyyden ja nopeasti kas- vavien kansainvälistyvien yritysten tukemisen tulee olla T&K&I-politii- kassa keskeisessä asemassa. Ohjelmakohtaisista suosituksista tärkeimpiä ovat seuraavat: •• Ohjelmistopalvelut pitäisi muoka- ta aiempaa tarkemmin yritysten tarpeita vastaavaksi. •• Tekesin tulisi tarjota rahoituksen ja yleisten tiedotuspalveluiden ohella käytännönläheisiä asiantuntijapal- veluita liittyen esimerkiksi liiketoi- minnan kehittämiseen ja kansain- välistymiseen. •• Projektien valinnassa pitäisi huomi- oida myös hakijan halukkuus hyö- dyntää ohjelman palveluita moni- puolisesti. •• Kaikissa ohjelmissa, jotka suunna- taan kasvumarkkinoille, pitäisi va- rautua muuttamaan ohjelman ta- voitteita ja toimintatapoja kohde- markkinoiden kehityksen mukaan. •• Ohjelmien pitäisi tukea nykyistä tiiviimpää yhteistyötä potentiaa- listen asiakkaiden ja tuotekehittä- jän välillä.
  • 19.
    19 1 Introduction Software industry usuallyrefers to the development, maintenance and publi- cation of software with the side servic- es like consulting, documentation and training. Other perspectives include computing services industry combined with publishing industry. The software and software-based services market in EU27 area was about 231 billion Euros in 2009, which is about one third of the global market1 . Most dominant play- ers in the market come from the Unit- ed States, especially in the field of soft- ware products. In Finland, the market size is 3–6 billion €, depending on the source. This accounts for some 2–3% of the Finnish GDP being 173 Billion € in 2009. Finnish players are mostly SMEs with few large enterprises and one huge one. Soft- ware industry prospers in internation- al benchmarks but the growth rate is roughly the same as in other countries, and the industry stays small compared to other Finnish industries. One reason is that the home market is small and in- ternationalization only modest. In Finland, ICT and software have been in the focus of national innovation policy a long time, partly in the hope that software industry would develop as a cornerstone of the Finnish econo- my. Consequently, in the 2000’s, Tekes has carried out several ICT related pro- grammes. This evaluation takes a thor- ough perspective on three Tekes pro- grammes, SPIN, VAMOS and Verso, and their context in the 2000’s. SPIN – Software Products (2000– 2003) was a three year funding effort that aimed at developing applications for Internet service architecture, appli- cations for mobile communications, and new enterprise management soft- ware for companies in digital economy. The volume on SPIN was approximate- ly 75 M€. VAMOS programme (2005–2010) took special care of the mobility issues that had emerged in early 2000’s, part- ly in SPIN. The programme aimed espe- cially at enhancing business with mo- bile solutions. The volume of the pro- gramme was 93 M€. Verso (2006–2010) was aimed at software industry in gen- eral, especially industry specific vertical solutions. The programme volume was 125 M€. For SPIN, the evaluation here is an ex post, concentrating on the long term effects of the intervention. Evaluations of VAMOS and Verso are more immedi- ate, concentrating on the programme implementation and direct immediate impacts. The evaluation work has been contracted by Tekes and carried out by Gaia Consulting Oy in cooperation with Virebit Oy and Finnconcept Oy. Two ex- ternal experts in the evaluation have been Prof. Martti Mäntylä from Aalto University and Mr. Hannu Jyrkkä from Sasken Finland. The work has been supported by an advisory group set by Tekes. The members of the group were Mr. Pekka Pesonen, Ms. Silja Leinonen, Mr. Risto Setälä, and Mr. Marko Heikki- nen. The structure of the report is as fol- lows.Chapter2describestheimplemen- tationoftheevaluation;questions,mate- rials and methods. In Chapter 3, an over- viewofthedevelopmentofthesoftware industry in Finland is sketched. Chap- ter 4 offers the evaluations of the pro- grammes at hand. Chapter 5 contains the results of a special set of interviews concentrating in the role of Tekes in the Finnish games cluster formation, sup- port of Finnish born global companies, support of supergrowing micro compa- nies and in bringing the customer to the developer. Chapter 6 summarizes the es- timated impacts of the programmes in the light of the evaluations and the anal- ysisinchapter5.Concludingremarksand recommendations appear in Chapter 7. 1 Software Industry Survey 2010 and references therein
  • 20.
    20 2.1 Evaluation questions Theevaluation questions as per call for tenders were the following: Description of the development of operating environment 1. What significant changes have oc- curred on the operating environ- ment of software business in the 2000’s? Objectives, results and impacts of the programmes 2. How have the objectives been real- ized? What results that support the set objectives have been gained? Which results would not have been realized without the programmes? How relevant and challenging were the objectives? 3. How well did the programmes reach the most important client groups, especially SMEs? How well did the programmes, their servic- es and management respond to the needs of the participants? Es- pecially, how has the internation- al cooperation of the programmes affected the participants and cli- ents? 4. How have the impacts of the pro- grammes contributed to the Soci- etal Impact Model of Tekes? How broad, stable or important can these impacts be considered? How and to what extent have the programmes had an effect on i. R&D&I investment in software sector ii. Development of know-how iii. Formation of national and international networks iv. Changes in the operating procedures of enterprises v. Important innovations and business opportunities vi. Productivity vii. Enterprise growth and inter- nationalization? viii. Business and society in a broader view? 5. How have these targets developed in the light of indicators or case ex- amples? Conclusions and recommendations A. R&D&I activities within the software sector: How could the R&D&I activities be developed? What is the role of TIV- IT and other SHOKs in the future? Which international programmes and initiatives are the most impor- tant ones and how could they be in- fluenced more? B. To Tekes: What concrete and work- ing practices can be identified to develop programme services and activities and the account process? C. Research and innovation policy: How should the recommendations from the evaluation of the national innovation strategy and innovation environment be taken into consid- eration? What other measures are needed in the research and innova- tion policy to improve the impact of Tekes? 2.2 Methodology The evaluation data collection and anal- ysis were carried out using the methods described below: A. Document analysis The evaluation was started with the document analysis, where relevant programme documentations, espe- cially reports related to the preparation of the programmes, programme man- agement meeting minutes, project de- scriptions, final reports, evaluation re- ports, and funding applications were scanned. Questions to the documents were formed based on the evaluation questions. The evaluators also had ac- cess to Tekes’client database with con- fidential financing figures. B. Background interviews Besides the document analysis, back- ground interviews were carried out to form a baseline for the evaluation. The interviewees (altogether 10) had been involved in initiating, planning and/or running the programmes and/or soft- 2 Evaluation framework
  • 21.
    21 ware business. Theselection of inter- viewees was approved by the evaluation steering group and the interviews were carried out as structured face-to-face in- terviews. The interview structures fol- lowed the evaluation question settings. C. Programme interviews In order to get an overall perception on the Programmes, programme inter- views were carried out. The interview- ees were selected together with the evaluation steering group and ascer- tained that a range of viewpoints, such as political, scientific and technological, were covered. Ten specialists from each programme were interviewed. The in- terviews were carried out mainly as structured face-to-face or telephone in- terviews where the structure again fol- lowed the evaluation question settings relevant for the interviewees. D. Workshop A workshop was held with 15 partici- pants who had already been involved in the evaluation process through in- terviews or otherwise. The workshop aimed at validating and refining the in- itial evaluation results. E. Micro cluster analysis In-depth analysis of interesting themes rising during the evaluation was car- ried out through four micro clusters. In the analysis, developed by the evalua- tors in earlier studies, thematically co- herent or otherwise representative project samples from the programmes were selected, and in-depth interviews were carried out with the project man- agers. The interviews were structured to fit the evaluation questions. By car- rying out the interviews for each pro- ject in the sample, both a coherent view on the evaluation questions was obtained and individual project results were gathered. This method allows a broader per- spective of the specific programmes than would be possible through stud- ying results and impacts of single pro- jects funded by the programmes. How- ever, due to the varying nature of the programmes, the micro clusters and their composition in this evaluation vary from each other greatly. The micro cluster division and themes were decided by the evalua- tion steering group as follows: •• Games cluster – interviews of en- terprises and other stakeholders on the rise of the Finnish games cluster and the role of Tekes and its programmes in this process. •• Born global – interviews of new companies aiming directly to in- ternational growth and markets and the role of Tekes and its pro- grammes in supporting such en- terprises. •• Supergrowing micro SMEs – based on Tekes CRM data, supergrowing micro enterprises were identified, and the role of Tekes’programmes in supporting the supergrowth was interviewed. •• The role of demanding client – pairs of developer-user enterpris- es from VAMOS programme with exceptionally good results were identified, and again the role of the programme was interviewed. Altogether, 18 persons were contacted and interviewed within the micro clus- ter analysis. In addition, two e-surveys were sent to VAMOS and Verso project con- tact persons. Unfortunately the re- sponse rate of the surveys remained unacceptably small even after several reminders from Tekes and the consult- ants. Therefore, the results of the sur- veys were utilized with caution mainly to support other findings and are not presented separately. For Verso, the re- sults from a programme survey carried out in 2009 were partly utilized. 2.3 Assessment of validity The evaluators estimate that with giv- en resources, the methods and cover- age of data gathering and analysis offer a rather unbiased and valid view of the Finnish software business field and the role of the threeTekes programmes in it. The interviewees have been se- lected to represent all the views and perspectives that arise in this evalua- tion. Participatory methods like work- shops are targeted to seek consensus and to elaborate possible discrepan- cies and inconsistencies. It should be noted that micro clus- ter analysis outlined above is a qualita- tive method with a non-random sam- ple. This means that the direct generali- zation of the results of the analysis must be supported with other methods, as is done here. Qualitative analysis has been a conscious choice that has been taken to support the positive learning aspect taken in this evaluation. Furthermore, the evaluators’experience on quantita- tive methods in programme evaluation suggest that the response rates of dif- ferent questionnaires, for example, usu- ally remain too small to draw any bind- ing conclusions, either. The unfortunately low response rate of the e-surveys limits the interpre- tation of the results, which has been ac- knowledged in the analysis.
  • 22.
    22 3.1 About softwareindustry This chapter presents some views on the development of the operational environment of the Finnish software industry during 2000–2010. Especial- ly part 3.3 is largely based on Software Industry Survey 2011.2 Also, the devel- opment inside Tekes in relation to soft- ware industry is described. What is understood with the term ‘Software Industry’depends somewhat on how widely the service business re- lated to defining, producing, selling and maintaining computer software is included in the definition. Computers and their software are tools for infor- mation processing for some purpose, and as such always a part of some larg- er context. Figure 1 presents the classifi- cation of software according to the de- gree of standardization vs. uniqueness and according to the visibility of the software as an entity that can be sold separately from the host system, pro- cess of product. According to Software Industry Survey 20113 “Software business is busi- ness of selling software (including sys- tems software, application software, and games) either as licenses or as ser- vices and services related to develop- ment and deployment activities of this software. This definition does not in- clude operation of software produced by third parties (e.g. operating a serv- er farm), business and operations con- sulting related to software systems, and deployment projects of third-party soft- ware. Not all revenue of firms operating in the software industry is necessarily software business.” 3 Description of the operational environment of the Finnish software industry 2000–2010 Figure 1. Contexts for professional software development2 2 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011. 3 ibid.
  • 23.
    23 The Standard IndustrialClassifica- tion used by Statistics Finland has since 2008 included a class “Computer pro- gramming, consultancy and related ac- tivities” (TOL 2008 J62). This division in- cludes the following activities of provid- ing expertise in the field of information technologies: •• writing, modifying, testing and supporting software; •• on-site management and opera- tion of clients’ computer systems and/or data processing facilities; •• other professional and technical computer-related activities. This class includes not only software products but also related services, which the companies in the practice often re- port within same revenue figures.There- fore the distinction between replicable software products and related tailor- ing and other services is not clear. On the other hand, publishing of software (J582) is not included here, although some firms selling packaged software or computer games are classified under class 58“Publishing activities”and codes 5821 “Publishing of computer games” and 5829“Other software publishing. Earlier Standard Industrial Classifi- cation (TOL 2002) included the class 72: Computer and related activities, con- sisting of subclasses •• Hardware consultancy •• Software consultancy and supply •• Data processing •• Database activities •• Maintenance and repair of office, accounting and computing ma- chinery •• Other computer related activities. In this document, the classes 72 (TOL 2002, older data), and 62 (TOL 2008, newer data) are mostly used as proxy for software business figures. We think that these classes represent the rele- vant software industry trends accurate- ly enough, without a need to go to any deeper breakdown. Visible software business, which consists of revenues of companies sell- ing software or related services, on- ly represents a part of all software ac- tivities in the society and business. The invisible part consists of the work of IT departments and R&D teams of compa- nies in other branches. These develop in-house software for company’s own processes or embedded software that will be sold as part of host company’s products. 3.2 Politics and legislation 3.2.1 Legislation, EU, and international regulations Software patents are of paramount im- portance for the software industry but they are not generally allowed by the Finnish patent legislation. However, in 2003 the Finnish National Board of Pat- ents and Registration of Finland (PRH) changed its policy to meet the Euro- pean Patent Office’s more liberal view, even though the respective EU direc- tive was still under construction at that time. PRH began to grant patents for software that can be considered inno- vative. After years of debate, the direc- tive was, however, ultimately rejected by the EU Parliament in 2005. This left the future of software patents in the EU and in Finland as an open question. Although the patent laws did not change, the national copyright law did see some minor changes. In 2005, the Finnish parliament accepted a wide- ly debated law that prohibits the cop- ying of the DRM-protected products for personal or any other use. This law al- so prohibits the sale of programs and the provision of services aimed at hack- ing the DRM. However, the law exclud- ed the DRM-protected software prod- ucts, thus making it legal to copy them for personal use. An additional feature concern- ing software industry was brought in- to legislation in 2008 when an amend- ment to the Act on Data Protection of Electronic Communications was rati- fied by the Finnish Parliament. This so- called ‘Lex Nokia’ gave the employers a permission to investigate the log data of their employees’ emails if they have a reason to suspect an IPR leakage or communication network misuse. So far, the amendment is not known to have been applied. The Act on the Provision of Infor- mation Society Services, which came into effect in 2002, is another Finnish law that affects the software industry. This law follows the Electronic Com- merce Directive of the EU. Among oth- er things, it obliges the service provid- ers to remove any copyright infringing material from the network. The international regulations con- cerning the provision of international software services – e.g. SaaS – have de- veloped very slowly. Furthermore, the privacy legislation of countries where the servers are located can differ a lot. As cloud computing is getting more and more common, there is growing pressure, especially in the EU, to fur- ther harmonize the legislation. The EU is working on this within the Digital Agenda project, which is aimed at im- proving the EU’s overall internal e-com- merce market.
  • 24.
    24 Global intelligence surveillance hasalso raised some privacy and se- curity issues. For example, in 2009, the Swedish military intelligence (FRA) be- gan eavesdropping on the Swedish network traffic to fight terrorism.This al- so threatened the privacy and informa- tion security of Finnish companies and citizens as a large portion of Finland’s international telecommunication goes through Sweden. 3.2.2 Cybercrime and software piracy Cybercrime has grown exponentially over the past ten years. According to some estimates, it is already economi- cally larger than the international drug trade4 .The most common forms of cy- ber crime are the viruses, malware, on- line scams, phishing mails, and the distributed denial-of-service attacks (DdoS). Smart phones have also provid- ed a new platform for cyber criminals. The growth of cybercrime creates a demand for more secure software products – and therefore it also pro- vides growth potential for security soft- ware companies. Thus, software pira- cy has a twofold impact on the indus- try: while some companies suffer heavy losses, some profit from software or ser- vices used for piracy (e.g. peer-to-peer software). During this decade, software pi- racy has increased significantly world- wide. In the developed markets, the (PC software) piracy has remained more or less the same. However, in the emerg- ing markets, the net losses due to piracy have nearly tripled in 2003–2010 (from c. $12 billion to $32 billion). The total losses have increased over the same period and reached $59 billion in 2010.5 In 2007, the Convention on Cyber- crime drawn up by the Council of Eu- rope entered into force in Finland. At the same time, the Penal Code was adapted to meet the EU’s 2005 Frame- work Decision on attacks against infor- mation systems.6 3.2.3 Health policy From the software industry’s viewpoint, one of the most essential and contro- versial health issues of the industry eco- system is the radiation effects of mobile devices.The new limit values for mobile devices were defined in 2002, based on the EU Council and ICNIRP recommen- dations. Although these limit values are considered safe, the Radiation and Nu- clear Safety Authority of Finland (STUK) made a statement in 2009 that chil- dren’s mobile phone use should be lim- ited.7 At the global level, there is a paral- lel shift towards slightly more conserv- ative recommendations, based on con- flicting research findings made in 2000– 2010. The WHO has previously been wary of taking a clear position. How- ever, in 2011, the WHO’s cancer agency (IARC) classified the cell phones as“pos- sibly carcinogenic”.8 OvertwothirdsoftheFinnishwork- force use computers in their everyday work. In the 1990s, the main health-re- lated concerns regarding computers re- volved around ergonomics and vision- related issues. In 1993, the Finnish gov- ernment created regulations for work- ing with visual display units (in compli- ance with an earlier EU directive).These regulations have been the latest gov- ernment statement on the subject. Ac- cording to a study made in 2008, these regulations are poorly known at work- places.The general interpretation is that computers have become so common- place that people do not pay any par- ticular attention to the health problems they cause, or they have learned to ac- cept them as inevitable.9 3.2.4 Educational policy There is no specific official educational policy for software industry. Instead the industry is usually treated as part of the whole ICT industry. However, the ICT does not seem to have a very strong position in the educational planning.10 The number of ICT-related education- al degrees has increased significantly in this decade. (See table 1.) The Finnish Confederation of Pro- fessionals (STTK) made a study in 2008 that criticized ICT education: “The lack of experts and skill shortage, resulting 4 http://www.symantec.com/fi/fi/about/news/release/article.jsp?prid=20110907_01 5 http://www.bsa.org/globalstudy 6 Järjestäytyneen rikollisuuden ja terrorismin torjunta. Sisäasiainministeriö, 2008. 7 http://www.stuk.fi/sateilytietoa/sateilyn_terveysvaikutukset/matkapuhelin_terveysvaikutus/fi_FI/stukin_matkapuhelinkannanotto/ 8 http://www.iarc.fr/en/media-centre/pr/2011/pdfs/pr208_E.pdf 9 Lehtelä & al. Näyttöpäätetyö - Valtioneuvoston päätöksen 1405/1993 soveltaminen ja vaikutukset työpaikoilla. Sosiaali- ja terveysministeriön julkaisuja, 2008:7 10 http://www.eduskunta.fi/faktatmp/utatmp/akxtmp/kk_1143_2010_p.shtml
  • 25.
    25 from problems inthe educational sys- tem were seen as a major obstacle to business growth. It was also considered to have a negative effect on interna- tionalization. Furthermore, the educa- tional institutions in the ICT-field do not seem to acquire enough students.”12 During the last ten years, various governmental and other public projects have increasingly introduced ICT solu- tions in the public school system. One of these is the ICT in the School’s Every- day Life project, launched by the Ubiqui- tous Information Society Advisory Board. These projects have improved the over- all ICT skills of Finnish students. 13 3.2.5 ICT Infrastructure The ICT infrastructure is naturally very important for software business. Soft- ware development, distribution (espe- cially SaaS), maintenance, and support services require efficient connections, especially when operating in the do- mestic market or on domestic servers. The Finnish ICT infrastructure is proven to be world class by numerous studies, as stated in the 2010 governmental re- port. For example, Finland ranks as the 6th in Nokia Siemens Networks Con- nectivity Scorecard 2010, and the 4th in IBM’s Digital Economy Rankings 2010. 14 The most important factors in in- frastructure development have been the fast penetration of wired (DSL) and mobile (3G) broadband technolo- gies (see tables 2, 3 and 4). On the oth- er hand, there is a vast difference in the broadband quality between rural and urban areas in Finland, and fast (over 5 Mbit/s) connections are relatively ra- re. Mobile broadband has rapidly in- creased its share and is already as com- mon as wired broadband (DSL). The third-generation (3G) mobile network coverage has grown rapidly. In Table 1. The ICT-related educational degrees in Finland in 2000–2009.11 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total Vocational college degree 1 961 2 538 3 276 2 643 3 050 3 049 3 064 3 041 3 696 3 502 29 820 Post-secondary level 552 220 73 14 6 0 0 0 0 1 866 Degree in applied sciences 1 241 1 939 2 257 2 588 2 933 3 124 3 089 2 789 2 755 2 445 25 160 Bachelor’s degree 35 51 59 69 80 105 182 342 1 276 625 2 824 Master’s degree 648 799 883 1 064 1 206 1 264 1 354 1 370 2 228 1 002 11 818 Licentiate 17 20 21 24 33 23 37 26 34 27 262 Doctor’s degree 61 58 71 58 84 95 106 113 99 126 871 Total 4 515 5 625 6 640 6 460 7 392 7 660 7 832 7 681 10 088 7 728 71 621 Table 2. The penetration of broadband connections in 2000–2006. 15 Turn of the 21st century Year 2006 Number of broadband connections 315 000 1 309 800 Broadband availability (% of population) 75,7 % (06/03) 95,8 % Households with broadband 15 % (spring/03/broadband) 29 % (spring/00/internet) 56, 5 % 11 ICT-alan koulutus ja koulutettujen liikkuvuus 2000-luvulla yhdeksässä maakunnassa. Raportti II. Keski-Suomen elinkeino-, liikenne- ja ympäristökeskus, 2011. 12 ICT-alan PK-yritysten kasvun ja kansainvälistymisen haasteista. STTK 2008. 13 http://www.arjentietoyhteiskunta.fi/index.phtml?s=31 14 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. 15 Uudistuva, ihmisläheinen ja kilpailukykyinen Suomi. Kansallinen tietoyhteiskuntastrategia 2007–2015. Valtioneuvoston kanslia, 2006.
  • 26.
    26 2009, it wasavailable for 90 percent of the Finnish population. The fourth gen- eration (4G) mobile network frequen- cies were granted in 2009.17 The high-speed fiber-optic net- work is already quite widely available, and it continues to expand. In 2008, the Finnish government set up a target that the high-speed broadband connec- tions (100 Mbit/s) should be available al- most everywhere in Finland by the end of 2015. Currently, already 43 percent of Finnishhouseholdscouldconnecttothe fiber-optic network, but only about one percent does.18 In 2010, to further im- prove the network coverage, Finland (as the first country in the world) defined the one-megabit (1Mbit/s) internet con- nection as a universal service for citizens and companies.19 Generally speaking, Finland’s ICT infrastructure is of good quality. How- ever, in some cases the poor availability of high-speed connections or their high costs may especially interfere with the success of companies located in geo- graphically unfavorable areas. The high coverage of a mobile broadband net- work offers advantages to companies that develop mobile applications be- cause it provides a good R&D test field in the domestic market. 3.2.6 Changing political climate The attitude of the Finnish government towards the software industry is per- haps best highlighted in the strategies of the National Information Society.The first strategy was published in 1995, fol- lowed by those in 1998 and 2006 and the latest in 2010 (named the Digital Agenda). The focal point of all these strat- egies has been to ensure that Finland remains a trailblazer in information so- ciety development. Attempts to reach this goal have included, for example, utilizing the ICT infrastructure resourc- es, promoting information society skills, Table 3. The penetration of broadband connections in 2007–2010. Table 4. Wired broadband connection speeds in 2007–2010. 16 Year 2007 2008 2009 2010 Time 31.12. 30.6. 31.12. 30.6. 31.12. 30.6. DSL 1 270 500 1 270 100 1 231 300 1 216 300 1 185 900 1 162 600 Building connection 114 000 104 600 134 900 104 700 106 600 117 500 Cable modem 209 600 212 900 214 800 215 500 222 700 229 600 Mobile broadband 143 100 307 100 479 700 664 300 908 000 1 152 200 Wireless broadband 15 300 19 600 26 100 31 600 31 800 30 100 FTTH 12 600 14 500 Other 7 700 9 000 9 800 11 500 6 000 800 Total 1 760 200 1 923 300 2 096 600 2 243 900 2 473 600 2 707 300 Year 2007 2008 2009 2010 Time 31.12. 30.6. 31.12. 30.6. 31.12. 30.6. Under 2 Mbit/s 70% 54% 40% 43% 39% 30% 2 Mbit/s – under 4 Mbit/s 26% 40% 50% 47% 26% 22% 4 Mbit/s – under 10 Mbit/s 19% 25% 10 Mbit/s – under 25 Mbit/s 4% 6% 9% 9% 14% 19% 25 Mbit/s – under 100 Mbit/s <1% 1% 100 Mbit/s and over 1% 1% 2% 3% 16 Markkinakatsaus 3/2010 - Puolivuosikatsaus 2010. Viestintävirasto, 2010. 17 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. 18 ibid. 19 ibid.
  • 27.
    27 making public servicesavailable online, and increasing the business-related in- formation technology utilization rate. The Finnish government’s strong emphasis on developing the informa- tion society has had a significant impact on the software industry. For example, it has increased the demand for soft- ware products in both the public and the private sector.This has made the in- ternal market larger and given oppor- tunities for domestic software compa- nies to grow and develop. The nation- al innovation policy has also supported the industry by promoting the develop- ment of innovative business solutions and centers of expertise. 3.3 Economy and business 3.3.1 Trends and drivers After the corporate ICT spending boom during millennium change, the invest- ment of companies and organizations in ICT remained stable until the spec- tacular drop of 2009. Figure 2 shows the development of ICT investment budg- ets globally during the decade. Drivers of the development in the branch: •• Development of the technologies •• Maturing of the industry and crea- tion of new branches around new technologies •• Macroeconomic cyclicality •• Change in the role and market po- sition of Nokia •• Globalization with respect to mar- kets, R&D and production •• Change of generation and grow- ing appreciation of entrepreneur- ship among young professionals. •• Changes in value chains and for- mation of new value nets the val- ue capturing redistributed •• Consumers and media are driving many changes, with, e.g., content creation •• The number of services that are perceived as free of charge is in- creasing. Some trends in Market Dynamics were in 2009 listed as21 : •• Firms serving their verticals global- ly on the basis of functionality and faster time-to-market will have competitive advantage •• Information technology, electron- ics, electro technical elements, and machinery represent some 72% of total R&D expenditure in Finland •• Nokia’s mobile device business has been the main driver for the Finn- ish ICT sector’s growth, but, as mo- bile devices have become com- modities, added value will increas- ingly come from providing soft- ware and content for various de- vice types •• Mobile phones have evolved from communication devices to mo- bile computers, and this has cre- ated two new market areas: enter- tainment (games and media) and communication services •• Mobile devices are becoming the primary delivery vehicle for software and related services in emerging markets •• There has been a shift in market dynamics; in the past, users were looking for products and services that they needed, while now sup- pliers are increasingly looking for Figure 2. Changes in Chief Information Officer Budgets Over Previous Year, 1998 to 2010 (Worldwide and by %)20 1998 0 5 -5 -10 10 15 15,0 15,9 9,7 10,1 01,3 1,6 2,5 2,7 3,0 3,2 1,1-8,1 20 % 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20 Verso programme seminar Software 20/20 Nov. 16th 2010 : http://www.tekes.fi/fi/gateway/PTARGS_0_201_403_994_2095_43/http%3B/tekes- ali1%3B7087/publishedcontent/publish/programmes/verso/documents/software_2020/dan_sommer_for_software_2020_software_ trends.pdf 21 von Hertzen, M., Laine, J., Kangasharju, S., Timonen, J., and Santala, M. (2007). Drive for Future Software Leverage. The Role, Importance, and Future Challenges of Software Competences in Finland. Tekes Review 262/2009.
  • 28.
    28 users and offeringthem a variety of products and services •• SaaS as a business model will con- tinue to gain ground •• ‘Free, but not free’ types of soft- ware and services will grow in the future •• In the future, there will be a high level of software- intensity outside the software industry Sectors that are not considered part of the ICT sector are among the largest soft- ware developers e.g., the automo- tive, aerospace, medical equip- ment, automation, and consumer electronics industries •• New innovations and technolo- gies are needed, but the invest- ments may become so big that on- ly a few companies or other organ- izations can afford them, potential- ly leading to a limited number of production sites and thus a high industry risk. 3.3.2 Role of software in different value chains Figure 3 illustrates the role of soft- ware business as part of different val- ue chains. The software-related activi- ties are depicted as the horizontal block going across different industries utiliz- ing software. As such, the software busi- ness is divided into five distinct areas: •• Software products includes all software that is sold and bought as a product in the market Figure 3. Software business as part of different value chains22 22 von Hertzen, M., Laine, J., Kangasharju, S., Timonen, J., and Santala, M. (2007). Drive for Future Software Leverage. The Role, Importance, and Future Challenges of Software Competences in Finland. Tekes Review 262/2009.
  • 29.
    29 •• Embedded softwarein the elec- tronics industry refers to software that together with the hardware where it resides forms an electron- ic device or a component of a larg- er system whose main purpose is handling of information •• Software as a part of products or solutions in industrial products is software in products, systems, and processes whose purpose is to in- teract with and influence physical entities •• Software as a part of a service or process means software through which a service or process gains its value-adding functionality •• Software provided as a service, SaaS, is more of a business model utilizing one or more of the above mentioned software products or utilization types. 3.3.3 Domestic trends “In the last 25 years the Software and IT Services industry in Finland has grown more than in most of the other EU member states. Since 1985 the share on the total employment in private business tripled from 0.92% to 3.18% in 2007. Also the share on the total value added in private business nearly tripled from 0,.9% to 2.66%.1 This impressive growth, which was also stronger than in the most other Finnish industries, was one of the central pillars of the pos- itive development of the Finnish overall economy the same time. The market for IT services is rath- er concentrated with the four largest IT service providers capturing 50% of the market. While the Finnish companies are strong in the IT services sector, Fin- land is currently a net importer of soft- ware licenses: The current amount of spending on licenses has remained at approximately 1000 M€ and license rev- enue generated by the Finnish software firms is estimated to be in the 600–700 M€ range. 23 Overall, the challenges faced by the Finnish industry seem to be typical for most other European markets. First, the home market is relatively small if considered on a national level and too fragmented if considered on the Euro- pean level. Second, the mechanisms of industry consolidation do not favor the Finnish industry since it lacks large com- panies that could consolidate small- er ones through acquisitions. The ma- turing of the industry has been leaving fewer possibilities for growth for locally operating small software firms.The pro- cesses of globalization, IT outsourcing, and offshore software development have lately further dimmed the pros- pects of those companies, resulting in calls for Finnish companies to improve their capabilities in networking and partnering to cope with the situation.”23 In Finland, the share of software business in the GNP has been rising rap- idly. Table 5 shows the 2007–2009 vol- umes of the companies defined to be software business. Altogether, software industry is already bigger than financ- ing or food industry.23 InthetimesoftheSPINprogramme, the concept of Finnish software cluster was more meaningful than today. A dec- ade later the industry has grown, spread out to all branches of industry and so- ciety, and software companies are parts of numerous value chains, whose value creation logics and other characteristics are totally different from each other. Val- uechainscrossgeographicalboundaries and only fractions of real networks and clusters operate in Finland. Both the rapid development of technologies and dynamics of value networks set high requirements for the renewal of competences. Existing knowledge becomes obsolete and new competence base must be created con- tinuously. So far Finland has been very successful in this changing environ- ment. Software industry has had an im- portant role in the transformation from natural resource based society towards knowledge based society. As a whole, the Finnish software in- dustry has been growing quite steadily during the last 10 years. Figure 4 shows the volume index of software industry in Finland (TOL J62, blue curve) in com- parison to the volume of electrical and electronics industry (D26-27, red curve), showing that even in the periods 2001– 2003 and 2008–2009, during which the big parts of technology industry vol- umes disappeared, software industry showed almost no significant decline. There are no signs of ‘creative destruc- tion’, not to speak of‘industry shakeout’. This is by large explained by outsourc- ing: During hard times companies con- centrate in their core activities and the ‘invisible’software development moves from in-house teams to software com- panies and becomes visible to industry statistics. 23 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011
  • 30.
    30 The green linein Figure 4 shows the development of Nokia R&D spend- ing in 2005–2011. The jump in 2007 is due to the merger with Siemens net- work business to form Nokia Siemens Networks. Although Nokia as the leader of its own ecosystem has had a central role in the development of Finnish soft- ware industry, the role of Nokia is not as dominant as often assumed. Figure 5 illustrates the renewal of the software industry by showing the number of new startup companies and companies that have ceased operating Table 5. Software industry companies in Finland24 Industry Year Number of firms Personnel Revenue (million e) Revenue/ personnel Share of GDP 582 Software publishing 2007 73 177 14.79 83.5 0.01 2008 80 181 18.27 100.7 0.01 2009 101 1696 411.842 242.8 0.24 5821 Publishing of computer games 2007 9 20 0.633 31 0.00 2008 10 24 0.549 22.7 0.00 2009 11 133 8.652 65.3 0.01 5829 Other software publishing 2007 64 157 14.158 90.4 0.01 2008 70 157 17.721 112.7 0.01 2009 90 1563 403.189 257.9 0.24 62 Computer programming, consultancy and related activities 2007 4534 39142 5658.519 144.6 3.15 2008 4783 40928 6093.841 148.9 3.30 2009 4857 39797 5682.274 142.8 3.32 6201 Computer programming activities 2007 2807 24113 3220.266 133.5 1.79 2008 3008 27122 3926.973 144.8 2.12 2009 3071 25211 3281.912 130.2 1.92 6202 Computer consultancy activities 2007 1454 5304 787.72 148.5 0.44 2008 1489 5614 875.275 155.9 0.47 2009 1480 6262 967.314 154.5 0.57 6203 Computer facilities management activities 2007 227 9448 1624.632 172 0.90 2008 229 7889 1261.288 159.9 0.68 2009 237 8093 1411.642 174.4 0.82 6209 Other information technology and computer service activities 2007 46 277 25.901 93.5 0.01 2008 57 302 30.305 100.3 0.02 2009 69 232 21.406 92.1 0.01 in each year 2001–2010. The change in the statistics classification causes a dis- continuation in the time series, but it can be seen that the rate of the birth of new enterprises has been quite steady, as has been the‘mortality’. Recession in 2008–2009 can be seen as a slowdown of the growth, but no net decline is vis- ible. Figure 6 shows the distribution of the total values of several statistics by the firm size class. “Overall the Finn- ish Software and IT services industry is shaped strongly by small and medi- um sized enterprises (SME). More than 99.4% of all firms have less than 250 Em- ployees, which marks the borderline for SME. However the remaining 0.5% of enterprises with more than 250 em- ployees play an important role regard- ing the number of employees (40.16%), revenues (43.7%) and value added (45.74%) of the industry.”24 Some studies indicate that in Fin- land the growth of a company from 0 to 50 employees often takes place rel- atively rapidly. After that, growth may stall for a long time. The reasons for 24 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011
  • 31.
    31 Figure 5. Annualnumbers of startup companies, companies in operation and companies that went out of business. The statistics for 2001–2004 include the class 72 ”Computer and related activities”of classification TOL 2002, for years 2005–2010 the class 62 ”Computer programming, consultancy and related activities”of classification TOL 2008 100 80 60 40 20 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 120 140 160 180 200 getting stuck in this ‘valley of death’ may be numerous; for example, growth potential in the domestic market may be exhausted or the entrepreneur is happy with the company and the in- come it generates and thus unwilling to take another leap of faith. Growth would require internationalization and new funding, which may not be read- ily available. Growing beyond 50 em- ployees would also mean a new oper- ational model and new functions in a company, and thus additional invest- ment and loss of control for the entre- preneur. There are various programmes for accelerating the growth of software companies after the initial expansion, but continued, efficient, and effective methods are needed to guide suitable small software companies with expan- sion potential over the period of stalled growth. Figure 4. Revenue index (2005=100) of software and E&E industries, and volume index of Nokia R&D spending. Absolute volumes 2009: SW industry 5.3 bn.€, E&E industry 19,3 bn.€, Nokia R&D 5,9 bn.€
  • 32.
    32 3.3.4 Business models Valuenetworks of ICT business are more global than in many traditional indus- tries, and the ‘merchandise’ of software business is easily distributed over Inter- net. It is no wonder that many of the ex- amples of ‘born global’ enterprises can be found among software companies. However, the findings of Software Indus- try Survey 2011 about international op- erations of Finnish software companies give a picture of an industry, where the share of international revenues is steadi- ly rising, but surprisingly much of the ap- parent potential is still not used. Figure 7 shows that less than half of the compa- nies that responded to the survey have any international revenues and only 21% in significant amount. One reason might be that the share of IT service and tailor- ing in the Finnish software business is high, and thus the customer proximity plays a more important role than in soft- ware product business. The same survey also examined the extent of international operations by recording the revenue share of inter- national operations of those firms that had any. About half of the companies had only round 20% or less of their reve- nue from abroad. In addition, there was a clear group of companies that collect- ed 80%–100% of their revenues by in- ternational operations. The survey did not indicate signif- icant group of really globally operat- ing companies, the vast majority of the companies operated only in one or two areas outside Finland. Nordic area and West Europe are clearly the main mar- kets. The survey gives an impression, that the Finnish software industry has still a lot of potential in exploiting the different business models that are shap- ing the ICT business globally, mainly en- abled by technological development. The variety of business models is pre- sented in Figure 8 below. The five busi- ness model categories presented in the figure, for a certain resource, are invest- Figure 6. Structure of the Finnish Software and IT Service industry in 2007 based on personnel size classes25 25 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011 Personnel class
  • 33.
    33 ment-based, time-based, usage-based, exchange-based,and free of charge (which can be subsidized or co-opera- tively based). The picture does not indi- cate that the development goes from left to right but that the multitude of alternatives is increasing and that cer- tain cycles and patterns are common. Especially in the last years of the dec- ade the ‘free’ business model is gain- ing ground. The earning model is typ- ically such that a basic level service is free, but using additional capacity or ex- tra features is charged. One concept is to offer the service free with advertise- ment push, and offer an ad-free version against a charge. Another very interesting aspect of the landscape that changes the possi- bilities to provide and distribute value added mobile solutions is the ‘long tail’ concept introduced by Chris Anderson (inWired, 2004). Business has tried to fo- cus on customers and market segments where sales volume per unit is high. In the Internet-powered era, and with mo- bility capabilities added, it will be very interesting to address the‘long tail’from a business perspective also. The main Figure 7. Company distribution by international operations26 Graphical Presentation of Model: Name of Model: Example: Investment -based Time -based Exchange of resources Free of charge WikipediaCar insurance fee based on kilometres driven and places Annual car insurance fee No insurance- invest on new car if accident Exchange of usage rights of FonWLAN access Usage -based Figure 8. Development of business models27 26 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011 27 von Hertzen, M., Timonen, J., and Huuhka, P. (2007). Update of GIGA-VAMOS- Technology Roadmap. Technology Review 206/2007. Tekes
  • 34.
    34 growing opportunities nowmay be in the long tail phase, but – not only that – it may mean also that the ‘body’ seg- ment, with less personalization and cus- tomization, may shrink. Obviously, wide geographical reach greatly improves the attractiveness of this kind of busi- ness model. 3.3.5 SWOT The SWOT analysis of The Finnish soft- ware industry can be summarized as in Table 6. 3.4 Social aspects working, studying, and relaxing. Servic- es are spreading to interactive portals, monitors, and touch screens to be used anytime and anywhere.”29 This development has significant- ly contributed to the social environ- ment, in which the software industry itself also operates. Network technolo- gies have enabled new ways of inter- action, which promotes openness, in- teraction, and communality. Over the past decade, we have seen new types of network sociality appear – phenome- Table 6. SWOT analysis of Finnish software industry28 3.4.1 Social values and interaction The first decade of the 21st century saw the breakthrough of the information society. During this period, the impor- tance and the methods of information processing have increased significant- ly. The Digital Agenda sums the devel- opment in the following way: “Our dai- ly lives are being digitalized amazingly fast when it comes to running errands, 28 TEM Toimialaraportti 1/2009. 29 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. Strengths Weaknesses •• ICT infrastructure •• Level of education •• Development financing of public sector •• Reputation as a fore runner in modern technology, especially on mobile sector •• Demanding domestic market creates a good base for internationalization •• Strong competence of applying branches (forest and telecommunication clusters, finance, social and health sector) •• ICT investments of banks and trade •• Limited resources of SME’s •• The size of domestic market •• Organisation of supporting services •• Growth not in focus for part of enterprises •• Competence in marketing and internationalization, lack of connections to distribution networks •• No understanding of value chains and specialisation Opportunities Threats •• Development of commercialisation •• Development of collaboration and networking •• The large internal market of the EU, growing markets of Russia and Eastern Europe •• Foreign interest in Finnish high tech enterprises •• Utilisation of strong and growing industries •• The growth of e-business reduces the significance of geographical distances •• The development of industry structure by increasing the number of small and growing the size of middle sized enterprises •• The R&D investment of public sector in internationalisation •• Decreasing of financing, lack of long term vision in risk financing •• Insufficient investment and lack of professionals in international sales and distribution •• Recruitment may be a problem when economic trend turns positive •• Investments required for globalization •• Hard competition, growth of software business faster elsewhere •• Emigration of knowledge and competent personnel •• Big companies take over small and innovative ones
  • 35.
    35 non that wasinitially calledWeb 2.0 and later on social media. With these new types, the users and their interaction have a significant role in content cre- ation: “In this new way of thinking, the user is not just a customer for the ser- vice but also actively involved in creat- ing and developing it.”30 The open online communication also seems to spread inside organiza- tions. For example in 2007, Nokia re- freshed the company’s values ​​by using internal crowd sourcing. 31 Gartner32 predicted in 2010 that the growth trend of the social me- dia will continue within companies. Gartner forecasts that: •• By 2014, social networking servic- es will replace e-mail as the prima- ry vehicle for interpersonal com- munication for 20 percent of busi- ness users. •• By 2012, over 50 percent of enter- prises will use activity streams that include micro blogging. However, stand-alone enterprise micro blog- ging will have less than a 5 percent penetration. •• By the end of 2012, over 70 per- cent of IT-dominated social media initiatives will fail. •• Within five years, 70 percent of collaboration and communication applications designed on PCs will be modeled after the user expe- rience lessons from Smartphone collaboration applications. •• By the end of 2015, only 25 percent of enterprises will routinely utilize social network analysis to improve their performance and productiv- ity. Another current trend is the continuous growth of the Open Source movement. The values associated with the Open Source are quite similar to those of so- cial networking: cooperation, open- ness, and communality. One of the im- pacts of the Open Source thinking is the development of new business models that have shifted the emphasis away from software licenses to services. 3.4.2 Changes in lifestyle and consumer behavior From the software industry’s viewpoint, the most interesting lifestyle changes are those that influence how, where, and what kind of software or servic- es are used. Lifestyle changes are in- tertwined with technological develop- ments, and sometimes it is difficult to say which one is the catalyst. Lifestyle changes (or the desire to make them) create a demand for new technological solutions. On the other hand, techno- logical development enables new ways of life. One example of such a develop- ment is the fact that mobile technol- ogy has become increasingly prev- alent. One reason for this is the ad- vanced technology (including smart phones and tablets). However, it is al- so an answer to people’s lifestyle chang- es, in which the attitudes towards work and leisure time have changed. More and more often users want to use the software anywhere and anytime. At work they also handle personal affairs through social networks, and at leisure time they run business apps.This, for ex- ample, puts pressure on the developers to choose software platforms carefully, or to seek platform-independent solu- tions, such as SaaS. Other consumer behavior relat- ed changes can be seen e.g. in securi- ty related questions (in response to the growth in cyber crime), the rise of the global software market consciousness (services are available everywhere), the rise of virtual local markets (e.g., Face- book Apps, Google App Market), and price awareness (e.g. many basic ser- vices are expected to be free or cheap). 3.4.3 Demographic changes Over the past decade, relatively large natural changes have occurred in the user base of software products. The ten oldest – and often the less ICT-skilled – age groups have ceased to exist, and ten new – increasingly Internet-na- tive – age groups have replaced them. This affects e.g. the expectations of and the demands for software products as well as the ability to adapt to new tech- nologies. The software industry has al- so gone through employee changes, which has had similar effects within the industry. Regarding internal migration, there has been a continuing trend for software industry’s workplaces to be situated in growth centers. Separate 30 Tuottava ja uudistuva Suomi – Digitaalinen agenda vuosille 2011–2020. Valtioneuvoston selonteko eduskunnalle, 2010. 31 http://www.talouselama.fi/uutiset/nettiaika+toi+nokiaan+uudet+arvot/a161543 32 Predicts 2010: Social Software Is an Enterprise Reality, Gartner 2010.
  • 36.
    36 statistics of cross-bordermigration are not available for the software industry. 1.8 percent of the entire ICT industry’s workforce consisted of foreigners in 2002 and 1.9 percent in 2006.33,34 3.4.4 Globalization When it comes to globalization, the software industry’s relationship is some- what two-sided. On the one hand, the industry is subject to the effects of glo- balization; but on the other hand, the software industry together with the whole ICT industry is one of the main forces in the acceleration of globaliza- tion. The technological progress has, for example, made the digitalization of work and services possible. Throughout the 2000s, globaliza- tion of the software business has pro- gressed rapidly, and its effects can be seen in outsourcing, offshore software development, Global Software Devel- opment (GSD), and the rapid develop- ment of the international software busi- ness, in which international acquisitions have been almost everyday business. 35 From the social viewpoint, globali- zation has increased international cul- tural interaction and coordination, as English has become the everyday busi- ness language in many places and the global corporate culture has spread wider. 3.5 Technology 1995. The concept presents the pub- lic attention and expectations towards new technologies as a curve, where there is first a peak of ‘hype’because of novelty of concept, followed by a valley where the technology is no more news and not yet commonplace. Along with the wide deployment the technolo- gy becomes present in everyday life and business, and rises to the ‘plateau of profitability’. Gartner hype curves in 2005 (Figure 9) and 2010 (Figure 10) give a view about the expectations and development of emerging technolo- gies, of which a great deal are related to ICT and software. 33 Elinkeinoelämän keskusliiton selvitys, 2006. http://www.digitoday.fi/data/2007/05/31/ulkomaalainen-on--outo-lintu-it-alalla/200713364/66). 34 Maahanmuutto- ja innovaatiopolitiikat kansainvälisessä osaajakilpailussa. Opetusministeriön julkaisuja, 2008:19. 35 Predicts 2010: Social Software Is an Enterprise Reality, Gartner 2010 Globalisation Practices of Software companies from cultural perspective. Wesslin, 2010. http://dspace.cc.tut.fi/dpub/handle/123456789/6806. 36 Verso programme seminar Software 20/20 Nov. 16th 2010 http://www.tekes.fi/fi/gateway/PTARGS_0_201_403_994_2095_43/http%3B/tekes- ali1%3B7087/publishedcontent/publish/programmes/verso/documents/software_2020/dan_sommer_for_software_2020_software_trends.pdf 3.5.1 Changes in strategic technology priorities Consulting enterprise Gartner has reg- ularly surveyed the views and priori- ties of company Chief Information Of- ficers (CIO). Table 7 shows the devel- opment of strategic technology priori- ties of 1700 CIOs globally over the years 2007–2010. An illustrative way to present the breakthrough of technologies on the time axis is the ‘hype curve’ concept, originally introduced by Gartner in Table 7. StrategicTechnology Priorities of 1700 Chief Information Offices in 2007–201036 CIO technologies Ranking of technologies CIOs selected as one of their top 5 priorities in 2010 Ranking 2010 2009 2008 2007 Virtualisation 1 £ 3 3 5 Cloud computing 2 £ 16 * * Web 2.0 3 £ 15 15 * Networking, voice and data communications 4 £ 6 7 4 Business intelligence (BI) 5 Ô 1 1 1 Mobile technologies 6 £ 12 12 11 Data/document management and storage 7 £ 10 9 9 Service-oriented applications and architecture 8 £ 9 10 7 Security technologies 9 Ô 8 5 6 IT management 10 * * * Enterprise applications 11 Ô 2 2 2 * New question for that year
  • 37.
    37 Some key trendsin technology de- velopment relevant for software indus- try: •• The number of distinct technolo- gies existing and emerging is in- creasing •• Not even the largest companies have sufficient resources or will- ingness to invest in all technolo- gies: •• Horizontalization of technologies will occur, with different commer- cial technology platforms and plat- form layers emerging •• Moore’s law will continue to apply •• The technological possibilities are greater than the capabilities for business use – strong technolo- gy push •• Proliferation of computing devices: smart phones tablet computers, application enabled television sets •• Move of software functionality from the end-user terminal to the servers run by the software pro- vider •• Agile development methods are used increasingly. Figure 9. Gartner hype curve for emerging technologies 2005
  • 38.
    38 3.5.2 Cloud andSaaS Improved telecommunication infra- structure is also a central enabler of Cloud Computing. Cloud Comput- ing is the name for a style of comput- ing, where massively scalable and elas- tic IT-enabled capabilities are provid- ed “as a service” to external custom- ers using Internet. Figure 11 shows the Gartner hype curve for Cloud Comput- ing in 2010. Cloud computing technology sup- ports the SaaS (Software as a Service) business model. Software as a service, Figure 10. Gartner hype curve for emerging technologies 201037 37 http://www.gartner.com/teleconferences/asset_129930_75.jspf SaaS, is a way to offer software applica- tion products and services to the cus- tomer. It is thus more a matter of busi- ness processes than one of technolo- gy. Application service providers (ASPs) offering business applications over the Web have been in business for many years and are increasingly used, espe- cially by SMEs, in order to avoid the costly development and maintenance of in-house systems. The characteristic business difference between ASP and SaaS is that in ASP the customer hires or leases an application, as SaaS fees are based on subscription, usage, or trans- actions. Saas model is oriented towards mass usage of standard software, whereas ASP providers run customer- specifically tailored copies of the appli- cations. This means that software de- velopment for SaaS environment sets high requirements for product devel- opment. The quality and of software are essential, and the gradual develop- ment path of small software companies from tailored projects towards produc- tized software is not possible.
  • 39.
    39 3.5.3 Mobility andthe battle of platforms Mobility is another topic where the de- velopment during 2000–2010 has been fast and hard to predict.The megatrend of increasing mobility and multitude of different wireless terminals to access In- ternet is clear, but struggle of telecom- munication standards and the compe- tence about mobile platform technolo- gy dominance have caused some sur- prises. In late 90s a lot of expectations were placed in WAP communication protocol, and startup companies invest- ed in early mobile internet applications, but the real performance of wireless in- fra did not meet the high expectations and only quite recently mobile inter- net usage via smartphones and tab- lets has really become commonplace. The breakthrough of mobility took final- ly place in the last years of the decade through consumer applications, which surprised some players who had been Figure 11. Hype Curve for Cloud Computing 2010 Gartner38 38 http://www.gartner.com/teleconferences/asset_129930_75.jsp relying on the vision where business ap- plications built around email would be the main driver. Mobile terminals are short-lived consumer products highly influenced by fashion and changing marketing messages. This causes e.g. the smart- phone platform software competition very dynamic. Apple was able to take over Nokia/Symbian position in the market, and Google/Android has risen practically in one year to challenge Ap- ple dominance.
  • 40.
    40 Developing for mobileplatforms in the Finnish software industry is grow- ing fast. According to Software Indus- try Survey 201139 , the most used mobile platform in 2010 was iOS specifically in iPhone development (8.5% of firms). Symbian was used by 7.9% of firms. By 2012, Android and Windows Phone are foreseen to be the most common plat- forms used by 24% of firms. Fast growth is also expected for the use of cloud and social media plat- forms, though they are clearly left be- hind by mobile platforms. The 2020 situation of common- alities between different platforms ac- cording is depicted in Figure 12. 3.6 Development inside Tekes 2000–2010 3.6.1 Development of strategy Besides legislation the strategy of Tekes has also followed the guidelines de- fined by the national Research and In- novation Council (before 2009 the Sci- ence and Technology Policy Council). During the first decade of the millenni- um some of the challenges set by the Council for the national innovation sys- tem including Tekes were •• identification of new growing in- dustries and the development and delivery of high quality inno- vation services and business com- petence (Science and Technology Policy Council 2001) •• the promotion of the creation and growth of new technology enter- prises; strengthening and integra- tion of internationalization and in- ternational technology collabora- tion (2003) •• improvement of the quality and targeting of research; promotion of the adaptation and commercial- ization of research results (2006) •• enhancing of demand and user orientation; internationalization of the service sector; increasing the number and R&D expenditure of innovative enterprises; consolidat- ing the utilization of knowledge and technology (2008). In its strategyTekes has taken the Coun- cil guidelines well into account. In 2000 the strategic objectives of Tekes were defined to be i.e. the development of national competence platform, the cre- ation of new technology enterprises, improvement of the volume and quality of R&D activities and the promotion of the commercialization of the results of R&D. In 2003 Tekes emphasized growth and internationalization with objectives like a strong national competence plat- form with high quality R&D, innovative growth enterprises and internationali- zation of innovative activities. The tar- geted impact is presented in Figure 13. The relevance of the strategy in re- lation to software industry is imminent. As a part of the strategy information and communication technology was defined as one of the key technologies of Tekes, a status that ICT has held ever since. Also, software industry – which at that time was taking its first steps as an industrial cluster – was chosen as one of the focus areas. The objectives remained very much the same until 2008 when the objectives were organized under are- as capabilities for innovation activities, productivity and renewal of industrial life and well-being. In 2011 Tekes of the fu- ture was added in the objectives. In capabilities for innovation activ- ities the emphasis was in the interna- tionalization of innovation activities and Figure 12. Commonalities in development platform choices inside firms in 2010 (depicted as network relationships between platforms)39 39 Rönkkö, M., Peltonen, J., Pärnänen, D. Software Industry Survey 2011. Aalto University 2011
  • 41.
    41 strong networked competencecentre, productivity and renewal of industrial life emphasizes young innovative enter- prises and growth enterprises and well- being sustainability, the quality of so- cial and health care service system and the services and platforms of informa- tion society. Strategy 2008 defined separate- ly the application based themes and cross sectional competences. The ap- plication based themes include intelli- gent systems and environments, service business and innovations and interactive communication. Information and communication, service competence and business com- petence (as a central competence area) were defined to be among the cross sectional competences. The means to implement the strat- egy have been practically all the time •• the activation of innovation by di- rect, continuous and confidential interaction with customers as the most important tool •• the technology programmes di- rected according to customer needs and Tekes’s strategy to tar- gets strategically important for Fin- land •• the selective project funding di- rected especially to projects creat- ing new kind of competence; be- sides significant expected results and possibilities these projects have also high commercial and technological risk level. In 2008 new means of implemen- tation, the Strategic Centres for Sci- ence, Technology and Innovation were launched. One of the centres is Tieto- ja viestintäteollisuuden tutkimus TIVIT Oy which is committed to ensuring rapid development of Finnish ICT know-how. The current strategic focus are- as guiding the selections in Tekes pro- grammes are41 •• Natural resources and sustainable economy •• Vitality of people •• Intelligent environments •• Business in global value networks •• Value creation based on service so- lutions and intangible assets •• Renewing services and production by digital means ICT and software industry have been one of the strategic key areas of Tekes for the last decade the focus shifting from technology to services and busi- ness towards the end of the decade. In the current strategy especially intelli- gent environments and renewal of ser- vices and production by digital means have a strong connection with ICT. Also service solutions offer remarkable pos- sibilities for the industry. 3.6.2 Development of organization From the beginning of current millen- nium ICT (and software technology as a part of it) had an own department under the Technology unit of Tekes. Be- sides minor changes the organization- al structure remained from the point of view of ICT and software industry unchanged until 2005. In 2005 a new structure was formed and the units In- dustrial Branches and Technology and Research Areas were created (see Fig- ure 14). Thus, software branch as an in- dustry, R&D area and business area has been well taken into account in the or- ganization of Tekes. The organizational visibility and weight of the branch has actually been strengthened from 2005 onwards. In the 2005 organization soft- ware branch was given its own depart- ments in both of the above mentioned Competitiveness profitability and growth Enterprises Projects and programmes international cooperation Boosting exports, broadening industrial and economic base, generating new jobs and improving well-being New businesses, start-ups Societal and environmental impacts Tekes provides expert services and R&D funding coordinates programmes G G Research institutes and universities Figure 13. Impact of Tekes as seen in 200340 40 Annual Review 2003, Tekes 2004 41 http://www.tekes.fi/en/community/Focus_areas/1125/Focus_areas/2417
  • 42.
    42 units named Softwareand Digital Me- dia Industries and Software and Tele- communications respectively. The cur- rent organizational structure resem- bles the one in picture 3 with the ex- ception that Technology and Research Areas and International and Regional Networks units have been merged in- to a unit Competence Areas and Inter- national Network. 3.6.3 Development of funding The strategic focus on software indus- try has become concrete during the first decade of current millennium with among other things the three technol- ogy programmes this report is set to evaluate •• SPIN technology programme (2000–2003) participated by well over one hundred enterprises and R & D organizations and a total size of 76 M€. •• VAMOS – Mobile Business So- lutions technology programme (2005–2010) with a total size of about 100 M€ with a Tekes con- tribution of 45 M€. The amount of participating organizations was a record number of 400. •• Verso – Vertical Software Solutions Programme (2006–2010) where the total size of the was about 125 M€ with a Tekes contribution of 59 M€. Figure 14. Tekes organization 2005 and software branch inside it; current organization is basically similar with the exception that the Technology and Research Areas and International and Regional Networks units have been merged into a unit Competence Areas and International Network42 Core Processes Board see page 6 STRATEGIC MANAGEMENT Director General Debuty DrVeli-Pekka Saarnivaara Director General Dr Martti af Heurlin Management Support Functions Strategy Mr Hannu Kemppainen Executive Director Customerships Dr Jari Romanainen Executive Director Software and Telecommunications Dr Eero Silvennoinen, Director Software and Digital Media Industries Mr Risto Setälä, Director Industrial Branches and Support for Core Processes Mr Martti Äijälä, DirectorExecutive Finance and Administration Mr Harry Karlqvist, DirectorExecutive International and Regional Networks Dr Ari Ahonen, DirectorExecutive Technology and Research Areas Dr Riikka Heikinheimo, DirectorExecutive Programmes Dr Jussi Kivikoski Executive Director Funding Mr Hannu Järvinen Executive Director 42 Annual review 2005, Tekes 2006
  • 43.
    43 Software has ofcourse been need- ed as a competence area in many oth- er programmes inside ICT and other in- dustries as well.The funding of software branch has been rising almost contin- Figure 15. Tekes R&D funding by industry (left) and for services; software and data processing has been the biggest funding object within services from 2004 onwards43 uously from 2005. Towards the end of the decade software branch has be- come the biggest R&D funding object of Tekes as shown in Figure 15. 43 Annual review 2010, Tekes 2011 70 60 50 40 30 20 10 0 Million euros Million euros 03 04 05 06 07 08 09 10 Electronics and electrotechnical industry Machines and metals industry Chemical industry Forest industry Construction Foods Software and data processing R&D services Other services Management consulting Health care and social services Wholesale and retail trade 03 04 05 06 07 08 09 10 70 60 50 40 30 20 10 0 Architecture, engineering and technical services
  • 44.
    44 4.1 Post evaluationof SPIN programme 4.1.1 Background and objectives of SPIN programme As described above, the growth of Finnish software business had been extremely rapid during late 1990s. The software industry was expected to de- velop into one of the most important pillars of the Finnish industry. Besides the traditional tailored ICT system de- velopment, product-oriented busi- ness was seen as an excellent means of accessing the rapidly growing glob- al market. Software products – SPIN 2000– 2003 was a three-year technology pro- gramme carried out by Tekes with the aim of supporting the product-orient- ed business of more than 100 small and medium-sized Finnish enterprises aim- ing for the global market. Core technology areas of SPIN in- cluded: •• Applications for the Internet ser- vice infrastructure •• Applications for mobile commu- nications •• New enterprise management soft- ware for companies operating in the digital economy. Other focus areas included com- puter security, entertainment software, systems and software development tools, software for mobile and other new platforms, modernization of exist- ing applications, new media technolo- gies, component-based software prod- ucts and software component prod- ucts. A total of 110 industrial and 14 ac- ademic R&D projects were accepted into the SPIN technology programme. The total volume of the industrial pro- jects was nearly 70 M€, of which Tekes financed 30 M€. 6 M€ was invested in academic R&D projects carried out by university research units in co-opera- tion with companies. Specific objectives of SPIN pro- gramme were: •• To support in core technology are- as development projects that aim at developing software products for international markets, •• To support research projects, which aim at developing methods and technologies needed for de- velopment of software products in core technology areas, •• To promote networking and coop- eration in software product busi- ness, •• To improve operating environ- ment and support services of soft- ware product enterprises, •• To promote growth of high level competences of software product business in Finland •• To launch both separate and joint initiatives that speed up interna- tionalization. 4.1.2 Evaluation in 2003 SPIN programme was evaluated in 2003 together with two other industry spe- cific technology and development pro- grammes of Tekes − the programme for the furniture sector DIVAN and the programme for stone industry STONE (1999–2002)44 . Each one of the three programmes aimed at developing the structures and competitiveness of an industry mostly consisting of SMEs. In addition to the assessment of the suc- cess of the programmes with respect to this target, the functionality and role of the industry specific programme con- cept in general was addressed. The evaluation stated that the needs of the industry were taken into account in SPIN programme objectives; the programme was relevant from in- dustry point of view. Product leadership was targeted and the focus largely was 4 Evaluation of software programmes 44 Tekes report 18/2003: Toimialoja kehittävien ohjelmien arvionti – DIVAN, KIVI, SPIN. Arviointiraportti. ISSN 1239-1336 ISBN 952-457-124-2
  • 45.
    45 in the developmentof technological competences, support of specialization and networking, and strengthening re- gional centres of expertise. The focus of the programme was weaker in areas of special importance such as •• Understanding customer business and operating environment, •• Distribution and export expertise, •• Knowing international demand, and •• Improving international competi- tiveness. The evaluation concluded that SPIN had directed the software industry to- wards product-based business and up- graded the idea of software business sector as a cluster composed of ac- tors from various fields. Industry specif- ic programmes had improved industry knowledge as well as research and de- velopment activities. On the other hand, the programme had less concrete tools for and func- tioned improperly in the improvement of business expertise and understand- ing of customers’ business, especially international markets. These were seen as the greatest challenges of the indus- tries, and were later influencing the re- visions of Tekes strategy. In the evaluation survey of 2003 most respondents were of the opinion that the programme had a positive in- fluence for the business. Three of four responding enterprises considered that the projects had at least moderate posi- tive effect on revenues, export and prof- itability. The programme increased the in- terest of enterprises to R&D, productiza- tion was supported, the networks with- in the industry and clusters improved, and division of labor in the develop- ment of the industry was clarified. The evaluators note, however, that time span of the evaluation was too short for statistical evaluation of im- pacts. 4.1.3 Evaluation in 2011 The present evaluation, ten years af- ter the launching of the programme, is challenging but provides a fascinating opportunity to have a look at the real long term impacts. Revenue and export data of all 101 companies that originally participated in SPIN were studied for impact evalua- tion. In addition, a sample of 11 compa- nies was picked from those SPIN partici- pants that still were in business in 2011. The conclusions and overall evaluation of the impact is a combination of indi- vidual interviews and a statistical look at the whole ensemble of SPIN-partic- ipants. Since the emphasis of SPIN was in enterprises and their software prod- uct projects, research projects were not specifically addressed in the eval- uation. 4.1.4 Analysis of the growth and export of SPIN companies The final report of SPIN lists 101 enter- prises as enterprise project owners. By 2011, 56 of them have ceased operat- ing. This corresponds to the industry average rate. During the first decade of the millennium, according to industry statistics the half-time of software en- terprise population has been slightly over 7 years, i.e. in average ca. 9 % of the enterprises have disappeared yearly for one reason or another. This rate has been varying between 6,5 and 11 per cent over the first ten years of the 2000s. For 22 of the 56 vanished company names a merger or acquisition could be confirmed. It is likely that in some cas- es the products/technologies devel- oped in SPIN have continued their life in a new company. The birth and growth of micro en- terprises is one of the central objectives and performance indicators of innova- tion system. We call microenterpris- es such companies that have the total yearly turnover less than 2 million euro. In order to illustrate the development of the companies that participated SPIN, we have analyzed available data about three groups of enterprises: A: All companies that had at least one project in SPIN programme, and are still in business (data was available for 38 such companies). In addition to those companies that do not exist any- more, we excluded of the analysis two companies where data of a larger cor- poration was available only, and cor- porate restructurings during the dec- ade have big influence in the data se- ries. B: Starting micro enterprises:Those 26 companies in group A that had a yearly turnover of less than 2 M€ dur- ing their entrance in SPIN programme, i.e. in all of the years 1998–2002. C: Slow growth micro enterpris- es: Those 15 companies in group B that have stayed under 2 M€ of turnover. D: Growers:Those 11 companies in group B that have grown out of the mi- cro enterprise category, i.e. have had a business volume of over 2 M€ in any of the years 1998–2009.
  • 46.
    46 Fig 16 showsthe development of domestic and export turnover of the companies of group A (total SPIN sample) during the decade. The green line indicates the funding that these companies have received from Tekes in each year. This includes all Tekes funding, not only SPIN programme related. For comparison, the volume index trend of total software services industry (Class 62, TOL 2008) is marked with the black dotted line. The trend has been adjusted to start from the same point as the turnover money value. In order to eliminate the effect of inflation, all yearly sums, including the industry volume index, have been ad- justed to the price level of the year 2010 by using the Harmonized Index of Con- sumer Prices (HICP, YKHI). Cumulative unadjusted amounts for the ten years in question are: •• Turnover Finland 1.241 M€ •• Export turnover 251 M€ •• Tekes funding 33 M€ Figure 16 shows that the group of SPIN participants, where failed, merged, and acquired enterprises have been elim- inated, has been growing roughly as fast as in the industry generally. It is also very obvious, that the growth has been based on domestic market alone. Ex- port has not contributed to the growth of the business volume of SPIN partic- ipants. A look at group B companies, i.e. enterprises that were micro sized (un- der 2 M€) when joining SPIN, provides an entirely different picture. Figure 17 shows the development of domestic and export business volume of those 26 micro companies in SPIN that are still in business with the same name. The black line represents the same in- dustry volume index as in the previous picture.The growth has been very rapid throughout the decade. Also the con- tribution of export has been significant, although not dominant. During the first nine years 2000–2008, the growth speeds were as follows: Inflation-adjusted CAGR •• Turnover from Finland 27 % •• Export turnover 33 % •• Volume index of S/W industry 6,2 % Figure 16. Total turnover and Tekes funding of enterprises that participated SPIN and were still in business in 2010 (n=38)
  • 47.
    47 The slowdown ofthe global busi- ness activity in 2009 caused a drop in exports. When the year 2009 is includ- ed, the growth rates for the whole dec- ade 2000–2009 are: Inflation-adjusted CAGR •• Turnover from Finland 24 % •• Export turnover 23 % •• Volume index of S/W industry 5,2 % The total cumulative sums without in- flation adjustments for the decade 2000–2009 are: •• Turnover Finland 325M€ •• Export turnover 86 M€ •• Tekes funding 24 M€ The green line in Figure 17 shows, that this group of enterprises has been using Tekes funding also after the SPIN programme. As a matter of fact, Tekes funding for this group of companies has been increasing in real terms over the years. Next, we divide the micro enter- prises of SPIN into two groups: Those, who are still micro sized (Group C) and those that have grown out of the mi- cro category. Figure 18 shows that even the moderate growth group of SPIN enter- prises has been able to grow faster than the industry in general. Export has not played a significant role in the growth. The relationship with Tekes and use of Tekes funding continue, but have clear- ly been declining after the end of SPIN programme. The fast growth of the micro enter- prises of SPIN is due to a group of 11 companies that have left behind the micro phase and are today SMEs with turnover of 2–20 M€. As Fig. 19 shows, also in this group (Group D) the growth is mainly due to domestic business, al- though the growth of export has been faster. It is also obvious, that these growth companies have known how to use Tekes services and funding. After the SPIN programme, the yearly Tekes fund- ing has steadily been increasing. Only in the year 2009, when the new recession already was squeezing the exports, there was a decline also in Tekes funding. Figure 17. The turnover export and total Tekes funding of SPIN enterprises that were smaller than 2M€ in 1998–2002, and were still in business in 2010 (n=26)
  • 48.
    48 Figure 18. Turnover,export and Tekes funding of SPIN enterprises that stayed smaller than 2M€ (n=15) Figure 19. Turnover, export and Tekes funding of SPIN enterprises that have grown out of micro category (n=11)
  • 49.
    49 Growth numbers forgroup D for the‘good’years 2000–2008 are: Inflation-adjusted CAGR •• Turnover from Finland 34 % •• Export turnover 45 % •• Tekes funding 46 % And for the whole decade 2000–2009: Inflation-adjusted CAGR •• Turnover from Finland 30 % •• Export turnover 34 % •• Tekes funding 36 % The total cumulative sums without in- flation adjustments for the decade 2000–2009 are: •• Turnover Finland 256M€ •• Export turnover 73 M€ •• Tekes funding 18 M€. As a summary, the micro enterprise group within SPIN participants seems to have grown faster than the indus- try in general. This applies also to the modest growth segment, where the companies are still now in micro class, but there is also a distinctive group of fast growers. Export has played a much smaller role in the growth than proba- bly expected during the programme. The findings of SPIN data are in line with the finding cited in Chapter 4 of this report: Even in the year 2011 less than half of the Finnish software com- panies that responded to an indus- try-wide survey had any international revenues and only 21% in significant amount. Furthermore, it would be very in- teresting to study also the group of SPIN companies that have ceased operation or changed identity. This would, however, be a subject for a separate dedicated study, since the data about nonexistent companies is not available for similar analyses as de- scribed above. 4.2 Evaluation of VAMOS programme 4.2.1 VAMOS programme description Tekes launched the VAMOS – Mobile solutions for business – programme in 2005 in order to enhance the applica- tion of mobile and wireless technolo- gies in companies. It had been recog- nized that the productivity of opera- tions in companies could be improved significantly through existing mobile technologies and therefore the main fo- cus of the programme was not devel- oping new technologies, but develop- ing new applications. The objectives of the programme were: •• To increase the speed of uptake of mobile solutions widely in differ- ent industries •• To support the development of so- lutions for improving the produc- tivity of company operations •• To bring together different parties involved in the development of mobile solutions in the form of an industry cluster. The key questions that the programme sought to answer were: how to recog- nize the development needs of a com- pany’s processes and how to respond to the identified needs using existing technologies. Improvements in produc- tivity through mobile solutions were sought in several different industries with a special emphasis on the follow- ing four, which were considered “utiliz- ing industries”: •• Transport and logistics •• Construction and facilities management •• Manufacturing •• Company services. The aim was to increase both the va- riety and breadth of mobile solutions use; actors in the abovementioned uti- lizing industries participated in the VA- MOS programme right from its incep- tion. The four and a half years of the programme was funded by Tekes with a contribution of 43 million Euros, and by companies and research institutions for an additional 50 million Euros, sum- ming up to 93 million Euros altogether. Approximately 400 different or- ganizations from five different indus- tries participated in the programme to identify solution development needs and to share experiences of the devel- oped solutions. This community gener- ated 188 different research and devel- opment projects related to mobile so- lutions. In order to support the devel- opment of mobile solutions, the pro- gramme targeted SMEs with services to diversify their services offering and to improve their knowledge of the needs of their customers. SMEs were very ac- tive to seek VAMOS funding in order to develop their businesses. Over half of the projects carried out focused on so- lutions for the transport and logistics in- dustry and the construction and facil- ities management industry. Over 70 % of the 144 company projects support- ed micro-, small- and medium-sized companies in creating new business
  • 50.
    50 and growth. Thenumber of research projects was 43. At the beginning of the programme concerns were raised about the significance of mobile solu- tions in the overall software market, but during the programme it became clear, that SMEs wanted to invest significantly in developing new business opportuni- ties based on mobility. Meeting the objective to form a cluster around mobile enterprise solu- tions required that a broad spectrum of different types of actors were involved: companies, research institutions, con- sultants, networks and public entities. The importance of this involvement was heavily emphasized from the be- ginning of the programme. Four exter- nal consultants employed by the pro- gramme were charged with the task of encouraging both the industries devel- oping and those utilizing mobile solu- tions to participate in the programme’s activities.To support this task, a system- atic work method was developed for managing contacts made during the programme. Programme services The objective of the programme ser- vices was to bring clear benefits to the participants and so the projects initiat- ed focused on identifying the needs of the utilizing industries and on finding solutions to meet these specific needs. In addition, the projects aimed at dis- solving suspicions towards new tech- nologies and bringing different actors together to activate networking. During the programme, various different traditional services were of- fered to enhance the application of mo- bile and wireless technologies. These included seminars, reports and stud- ies that clarified the field and general- ly networked people. The programme initiated altogether 130 workshops and events with over 5000 participants. In addition to traditional servic- es, new services were implemented. Key challenges for the utilizing indus- tries were the lack of resources, expe- rience in developing mobility based business strategies and consequently the inability to define the solution and its benefits. To tackle these issues, a ser- vice called Mobile Enterprise Factory (MEF) was initiated.The service was im- plemented by the state research cen- tre VTT. In the core of the activity was a workshop process, where companies developed their solutions with the help of VTT. The workshop process was de- fined in the form of checklists whose purpose was to support the prepara- tion process. The checklists were later organized into a handbook. Different utilizing industries participated in the process as follows: •• Transport and logistics: 48 companies •• Construction and facilities management: 28 companies •• Manufacturing: 20 companies •• Company services: 18 companies. Altogether 47 actual development pro- cesses were initiated. In addition to MEF, the four activators offered tailored com- pany services, and the programme or- ganized match making sessions be- tween utilizing industries and mobile industry. 4.2.2 Programme coverage Programme coverage can be measured on several levels. Starting from the in- side we have the programme enthu- siasts who actively participate in the programme services and common ef- forts. Programmemembers attend some of the activities and use some services while funding users do not care about anything else than funding. Outside the programme we have the industry or an- other target group that can be classified e.g. by the company size. Here, an addi- tional relevant categorization is the uti- lizing industries. Based on the interviews and the fragments of the survey it can be con- cluded that the programme internal coverage was on a good average Tekes programme level. Many companies participated in the programme servic- es, but there was also a portion of com- panies that only took the funding. One reason for this is that Tekes appends many projects to programmes with- out them having applied for the pro- gramme. As a result of this rather unco- ordinated procedure, the project partic- ipants are not necessarily even aware of the possibilities of the programme. Ser- vices are not used by the participants and the added value of the programme suffers. One might also argue that such a procedure gives a biased view on pro- gramme success if reported in funding figures only. One reason for good internal cov- erage is that the services are tailored to the specific need of the company. It may well be that standard services that suit for some companies do not suit others. A good example of tailoring in VAMOS was the widely used company advisory services. Another example of mass customization is the MEF activity and the procedure related to that. In outside coverage the key issue is visibility and marketing via different channels. For marketing, VAMOS em- ployed a professional marketing compa- ny, and over 40 articles on VAMOS were
  • 51.
    51 published. According tothe interviews, the programme was rather well known in the mobility developing industry, but the utilizing industries did not recognize the programme that well. The activators had to do long days in spreading the word in the utilizing industries. Mobility was perhaps a new issue, and selling the idea of mobility utilization to companies was even more challenging: Develop- ment was known to take resources, the outcome and the benefits were uncer- tain and the system should have been taken into use in the organization, which is known to be very hard. 4.2.3 Programme services The programme services were widely thanked by the participants. Especial- ly the company sparring and advisory services were appreciated. Here, the key factor was the hands on experience the coordinators had and were able to dis- tribute. Also the MEF activity was widely thanked, although it was also heard that VTT was not the correct service provid- er; instead, more business oriented and experienced provider was hoped for. Anyway, the MEF activity was able to af- fect companies’ ways of operating and even their strategies. There were also some difficulties in the services. First, it turned out that funding of utilizing companies was al- so needed but this was impossible with the instrument repertoire in use at that time. One consequence of this was that the programme R&D&I support ex- penditure did not reach the budget. Of course, one might ask why companies that gain direct benefit from the pro- ject should be funded, but on the other hand there was a clear need for resourc- es from these companies, and uncer- tainties in the outcomes, which means that also risks of the utilizing companies should have been reduced by funding. This was also the case with service busi- ness funding45 . Second, some new offered ser- vices did not work as planned. For ex- ample, individual tailored marketing and sales argument clarification servic- es were offered to companies, but the service was not utilized by many com- panies. Reasons for this might have been that the services were new and offered without a thorough and suffi- cient internal sales and marketing pro- cess. It may also be that such services were not within the responsibilities of the project contact persons in the com- panies. Third, for SMEs and micro com- panies, reserving the necessary human resources for the service use is not nec- essarily possible. The programme coordinators were widely thanked for the experience and attitude they had. However, according to the interviews, the role of the steering group and the expectations for steering group members were slightly blurred. There were steering group members that never attended the meetings, and it was not crystal clear what the attend- ing members were supposed to do. As usual, the steering group was not au- thorized to select the company projects that were appended to the programme. As a result, the steering group members changed many times. Perhaps a clear- er target setting for the steering group might have helped here. 4.2.4 Programme projects TherewasaclearemphasisonSMEsand micro enterprises in the programme, as 2/3 of the projects were carried out by these groups. Among the big players was, .e.g., Nokia. It seems that the project contents of the programme were not complete- ly in line with the programme objec- tives. A relatively large portion of pro- jects were rather technical develop- ment projects, which does not totally support programme structure and tar- geting and the aim of programme ser- vices. VAMOS might have been a tran- sition programme where the business development view was raised for the first time but the project entry process and the project application alignment outside the programme were not af- fected much. In Verso (see 5.2.4), the project content was – possibly due to more coordinated programme entry – very aligned with the project goals. From the scarce number of an- swers of the survey one may estimate that the projects inVAMOS programme were strategically significant to their owners, technologically demanding, very close to the core competence of the companies, closely linked to other projects in the company, and had quite high risk levels. Clearly the most significant ena- bling factor in the programme was the funding received from Tekes. The add- ed value of the programme to the pro- jects in it were •• increased cooperation with ICT companies •• increased cooperation with utiliz- ing companies 45 Nowadays Tekes has instruments like IJH (Innovative Public Procurement) that partially solve this problem
  • 52.
    52 •• programme roadmapwork •• increased client contacts •• internationalization help. It is interesting to note that issues like information sharing, new solution con- cepts and models, or new partners were of less importance to the projects. It may well be that focusing on a par- ticular solution with a given team make such issues less important for at least some companies. When looking at the benefits the programme provided for the partici- pating companies, following items rise above others: •• Increased cooperation and knowl- edge on potential collaborators •• Increased knowledge on clients and customer industries •• Business (re)alignment •• Increase in technological expertise •• Increase in business expertise •• Increased knowledge on procure- ments and contracting •• Increased knowledge on techno- logical possibilities. Knowledge on customer needs – which was more or less in the core of the pro- gramme – was not highlighted in the answers. No concluding remarks can be made due to the low response rate – it may well be that MEF participants are underrepresented in the sample. Overall, the projects have benefit- ed from the programme, and the pro- gramme has been able to produce in- teresting individual results in its pro- jects. However, the original idea of turn- ing the individual project outcomes in- to software products or easily tailorable service product seems to have been more difficult than expected. 4.2.5 Programme relevance and achieving the objectives As told earlier, in the early 2000’s, Fin- land was among the top leading coun- tries of mobility. Nevertheless, mobil- ity technologies and the positioning of mobility in the ICT/software sec- tor and especially its applications had not been defined yet. Mobility per se was seen as a value. Against this back- ground, the preparation of VAMOS was very adequate and its goals were very understandable. Today, mobility is of- ten seen as one channel among others, and it might be that if reinitiated, VA- MOS would be part of something else. However, one must bear in mind that what is obvious in mobility in 2012 cer- tainly was not that ten years ago. To this end, the objectives of the programme were well set and challeng- ing. Also the programme services sup- port the objectives well. However, there were some technical and administrative difficulties, like the inability to fund uti- lizing companies, the confidentiality is- sues related the use of Tekes CRM sys- tem data in matchmaking, to mention some. One might ask why the nation- al advantage in mobility mentioned above seems to have faded away. The main reason for this is most likely com- mercial. Global commercial selections Case M2M Platform Emtele is a service operator assisting customers to gather vital information avail- able for operations and business purposes. From 2006 to 2008 Emtele studied and developed Machine-to-Machine (M2M) services, technologies and related service processes in engineering, energy and health care sectors in a Tekes project called M2M Platform. M2M platform was carried out in close cooperation with customers and Comptel. Tekes financial support played important role as an enabler of the project but Emtele also attended a number of networking meetings, seminars and other events in Vamos programme that were an important source of networks, information and ideas. According to Mr. Erkki Viitala, Development Director at Emtele, these new networks with other companies and potential customers served as a creative in- novation environment for the project and a crucial stepping stone for the new in- novative solutions that emerged as a result of the project. During the M2M Platform project emerging fast growing M2M business areas were identified and new service concepts and related technologies were devel- oped. Nowadays, Emtele operates successfully in for example electricity distribu- tion networks offering field communication outsourcing services to distribution network operators. Emtele M2M services have also gained interest abroad and Emtele has already taken the first steps towards international growth. According to Mr. Viitala, “Tekes project had a decisive role in development of Emtele’s current innovative product and service offering.” n
  • 53.
    53 had not takenshape yet in the be- ginning of VAMOS. In the lack of clear market that was only to develop, the technological edge was more or less doomed useless. In the customer mar- ket, Internet mobility finally took over, making much of the telecom based de- velopment futile. To this end, an interesting ques- tion is what was the role – intended or unintended – of Nokia in the selec- tion of Finnish focus areas. Nokia, being a worldwide mobility player, has had a significant role in the development of the Finnish ICT sector. Nevertheless, Nokia’s main emphasis was on telecom mobility. Did the shadow of Nokia affect the development in Finland? Of course, there are many other fields of mobility where Internet mobility is not the so- lution, but this particular section is of great importance. In any case, in the evaluation work- shop it was pointed out that there has been only some mobility systems in the world that have been able to form a large or global breakthrough, like Ap- ple iPhone and Blackberry, but a com- mon factor for all three has been that they are proprietary systems. It is very unlikely that any technological edge would have made it possible to form a Finland-based global proprietary solu- tion in the given market situation. To conclude, the VAMOS pro- gramme was a well implemented pro- gramme but a prisoner of its era. In ret- rospect, there was an opportunity but no realistic possibilities to utilize the technological edge on the Finnish na- tional level. VAMOS, though, has made a good effort on this. 4.3 Evaluation of Verso programme 4.3.1 Verso objectives and description Like in Vamos, the key intention of the Verso programme was to bring the end user industries and the software industry together. Originally the client industries selected for the programme were finance, trade, construction, op- erator based telecom, and other in- dustries. The added value of the Verso pro- gramme was seen to be in •• market-based software services products and services •• the creation of integrated solu- tions to help companies compete internationally •• creating industry specific software business growth and in strength- ening the industry specific soft- ware clusters •• enhancing cooperation between software companies and applying industries and combining client in- dustry, business and software ex- cellence in new ways. There were synergy plans with other programmes such as Liito and Serve. Altogether, in the preparation phase there were seven public semi- nars, three external preparation man- agement team meetings, numerous Tekes’ internal meetings and many background reports. Also recommen- dations from earlier programme evalu- ations were taken into account in the preparation. The objectives of the programme were: •• To accelerate the growth and inter- nationalization of Finnish software companies •• To enhance the business know- how of companies and especially know-how related to internation- alization and customers •• To strengthen the role of the soft- ware industry as a key pillar sup- porting Finland’s economy. Tekes funded the programme with over 60 million Euros out of the total pro- gramme funding, which was 125 mil- lion Euros. Verso programme funded alto- gether 220 projects, out of which some 10% were research projects. There was a conscious decision to keep the num- ber of research projects down, and to select only research projects that would directly benefit the business focus of the programme. Programme services The programme services of Verso were something else than usually was carried out in programmes. Besides traditional project activation, events, theme sem- inars and workshops that were seem- ingly successful, there were significant new openings in the programme ser- vices. Perhaps the most important new service was the company-tailored ex- pert sparring service. Like in VAMOS, renowned experts from Tekes but al- so from outside Tekes provided tailored services for business development, business strategies, internationalization,
  • 54.
    54 funding, sales andmarketing. Help was provided by personal consultation but also via telephone and email for smaller issues. The services were very popular and seemingly also helpful also in terms of turnover and exports development. Other sparring services included advisory services in private and public funding and project advising, from the successful formulation of applications to services regarding business devel- opment funding advice. Other significant services were dif- ferent ways in incorporate potential customers. The ways varied from differ- ent forums to funding of participation in the commercial networking events. Growth and internationalization programmes in Verso included •• Open source business programme with trips, seminars and company specific consultations •• Growth and internationalization clinique with company specific expert mentoring, MBA student made business planning, and com- mon seminars •• (together with VAMOS pro- gramme) coaching programme for joining the market offered by US federal government. •• Market information gathering and specific market entry programmes to Russia, India and China with re- ports, seminars, trips and company specific internationalization paths. Also a number of internationalization models were produced in the pro- gramme. Models included internation- alization paths (Gaselli USA and Russia), Internationalization path for Retail and Finance, and the Reality Check model to enhance customer understanding. The programme also produced a set of guides including •• PR Academy Communications guide for software companies •• Pitch Book pilot where an inform- ative brochure for a company to help in internationalization was produced with marketing profes- sionals and market experts •• Collection of templates to en- hance business planning, funding application preparation etc. In addition, Verso brought together science and academia with compa- nies in three Research Bazars where research units introduced their servic- es and project ideas to companies and vice versa. 4.3.2 Programme coverage Both the internal and external cover- age of the Verso programme are quite exceptional in the Tekes programme context. For a long time, the strategies of Tekes have pinpointed the impor- tance of applications, business knowl- edge and impacts. Still, even today it is very customary to see Tekes pro- grammes where the project content is full of technology oriented devel- opment projects with an unclear cus- tomer view. In this context, the pro- ject content of Verso is miraculous. Great majority of the projects con- tains a business case or an applica- tion that in many cases has some- thing to do with internationalization. Of course also technology oriented horizontal projects are present, but the development also in these pro- jects seems to focus on customer and business needs. This is clearly a milestone in Tekes programme histo- ry: the project content very clearly re- flects the spirit and goals of the pro- gramme that are very suitable for the needs of the industry. SMEs and micro enterprises were well presented among the participants. According to the Verso internal survey, two thirds of the participating compa- nies were SMEs. The idea of Verso was to concentrate more on SMEs that had a some kind of proof of concept history behind them than on startups. Conse- quently, most of the SMEs had already years with a reasonable turnover be- hind them. Within the programme, the pro- gramme services were widely used, and finally the companies receiving e.g. personal sparring had to be select- ed from among a big group of candi- dates. Again, some companies concen- trated only on spending the funding, but it seems that the usage of the pro- gramme services overall was on a very high level. One key reason for the project selection and also the success of the programme services was the exter- nal coverage. The programme was able to create an enormous and to- tally exceptional publicity through its systematic and professional brand- ing where professional expertise was utilized. More than 100 media stories were created, and Verso gained popu- larity over the whole Finnish industry. Also the programme content gained a hands-on reputation where success in practical company specific results was achieved. The reputation seems to have cre- ated an excess supply of projects, and in the end phase of the programme it was possible to select the most suita-
  • 55.
    55 ble projects tothe programme and to its sparring services. Such a coordinat- ed project entry is by no means com- mon in Tekes programmes. Since get- ting in was controlled, it was estimat- ed that a remarkable proportion of the programme participants participated somehow in the programme services and benefited from them. 4.3.3 Programme services Overall, the programme services in Ver- so were overwhelming and very dif- ferent from any previous Tekes pro- gramme in terms of their tailoring and practicality. Judging from the reputa- tion Verso received and the effects the services seem to have had, theVerso in- ternal survey and the response to the evaluation survey, the services have served the programme goals well and produced tangible results in companies and also in the software industry. Also some difficulties existed. It was stated that the cooperation be- tween companies and research facili- ties was difficult. Taking into account the size and the development phase of the companies this is not surpris- ing. Also the more or less traditional model of internationalization, where a leading big enterprise is expected to take Finnish SMEs abroad as its part- ners, was explicitly found not working. This is an important finding, since this model has been one cornerstone of in- ternationalization in Tekes context for a long time. It should be noted, however, that also in this programme there were sev- eral companies that did not use pro- gramme services. Either the companies did not need the services or did not know about them.This seems to be un- avoidable in any programme. 4.3.4 Programme projects The programme focused on develop- ing individual companies and compa- ny groups, and on steering funding to- ward development of business know- how, the improvement of commercial- ization prerequisites and R&D. In prac- tice, this meant creating software prod- ucts and replicable, complete software solutions targeted at specific industries or specific functions. Verso sought to attract software companies that had a strong drive to grow and internation- alize and that also had an innovative product or service with the potential to realize the growth objectives. In addi- tion,Verso aimed to involve some of the bigger players in the industry in order to support smaller companies in their in- ternationalization efforts through pro- viding examples and contacts. As men- tioned earlier, the programme project portfolio supported these lines excep- tionally well. From the answers of the survey re- sults it is possible to conclude that the projects in the Verso programme, as in VAMOS, •• were strategically significant to their owners •• were technologically demanding •• were very close to the core compe- tence of the companies •• were closely linked to other pro- jects in the company •• had quite high risk levels. As in VAMOS, the most significant enabling factor in the programme was the funding received from Tekes. Oth- er form of added value to the projects were •• increased cooperation with utiliz- ing companies •• programme roadmap work •• increased client contacts •• internationalization help. When looking at the benefits the pro- gramme provided for the participating companies, following items rise above others: •• Increased cooperation and knowl- edge on potential collaborators •• Increased knowledge on clients and customer industries •• Business (re)alignment (accentu- ated) •• Increase in technological expertise and IPR •• Increase in business expertise •• Increased knowledge on techno- logical possibilities •• Knowledge on client needs. Overall, as inVAMOS, the projects in the projects have benefited from the pro- gramme, and the programme has been able to produce interesting project spe- cific results.
  • 56.
    56 From 2004 to2006 Neoxen Systems worked closely in PRO346 EUREKA-project which led to development of product series based on new information and knowledge management tech- nology47 . After PRO3-project in 2007, Neoxen launched AEC Pro Customer Tekes project in which new market options were studied, evaluated and piloted and their products were fur- ther improved. The product development took place in close collaboration with potential customers that occurred during number of pilots. The piloting and marketing efforts focused on energy sector in Canada. Tekes had a very important role as an enabler of the thorough market research and piloting as well as the related product development. Financial support was crucial for Ne- oxen Technologies and allowed the company to use local experts to bring in profound tailored understanding of the potential markets. According to CEO of Neoxen Systems, Mr. Esa Tervo,“Cooperation with Tekes helped to make it through the first contact to the first meeting but in the negotiation process, the presence of Tekes, gave the small company that crucial extra bit of credibility needed to convince the cus- tomers to start a pilot project”. Also Verso programme per- sonnel receive warm thanks from CEO, who says that“despite the obvious lack of resources, Verso contact persons were very competent and up-to-date, making the successful co- operation possible.” AEC Pro Customer unfortunately ended right when the 2008-2009 financial crisis hit. Therefore, the entry to Canadian market had to be postponed. Despite the drawback, the pro- jectprovidedNeoxenSystemswithveryclear,carefullyplanned processes for evaluating new market potential, estimating en- try costs and actual launching. “Before the actual project our understanding of the market entry and related costs were far from realistic”, explains Mr. Tervo. He also believes that this kind of market testing and product piloting would be very benefi- cial for other companies in the same position too. “It certainly would take down the number of very expensive unsuccessful entries that Finnish companies do,”he continues. In addition to project development and market entry, pro- ject expanded the contact network and improved the coop- eration with current partners like Microsoft. The project also led to improvement in R&D-processes as well as quality and customer contact management practices. Through a number of small changes, AEC Pro Customer had a massive but largely uncategorized strategic impact on the Neoxen System, claims Mr. Tervo.“Had the project no taken place, it would be hard to imagine where Neoxen Systems would stand today.”n In 2006, IT service and solution provider, Tieto Finland Oy, launched in cooperation with Aalto University a five stage Tekes funded program called Real-Time Economy (RTE). The multi-year program, which is currently in the beginning of the last stage, has been participated by a large group of pub- lic and private sector actors. The objective of the program is to develop, automate and harmonize information flows be- tween business partners, authorities and banks. This makes it possible to move towards electronic B2B transactions and improved automation of the administrative processes in all sizes of organizations. The benefits for society at large are enormous – both in terms of productivity, information qual- ity and environment. Tekes has played a critical role in the RTE program as the funding from Tekes has had an enabling role. “For a multi-year program like RTE having long term targets, it would be next to impossible to use normal operative investment practices”, says Mr. Jyrki Poteri, the Head of Global Offering Manage- ment at Tieto Finland who is company’s responsible director of the program. Compared with internal investment initiatives in companies, Tekes funded projects include by definition a strong collaboration between different actors, forming a quite neutral platform suitable for public actors also to participate. In addition to funding, Poteri especially acknowledges the im- portance of the Tekes enabled collaboration, which has had a crucial role in catalyzing the wide successful cooperation with both private and public actors. Case AEC Pro Customer Real-Time Economy 46 For more information, see www.eurekanetwork.org 47 Neoxen QX Technology „„
  • 57.
    57 4.3.5 Programme relevanceand achieving the objectives Strengthening Finnish software clus- ter has been in the core of Finnish in- novation policy for some time.The goal was to broaden the success of Nokia to other software industries as well and to make software industry one base pillar of the Finnish economy. The preparation report of the Ver- so Programme concludes that in 2004 there were 1100 Finnish software com- panies out of which only one half had some kind of internationalization in- tentions. At the same time, large grow- ing international demand for software products and services for different in- dustries was recognized. The growth of Finnish companies happened main- ly in the Finnish market. Internation- al networks and client industry specif- ic software miniclusters were practically nonexistent. A clear and important find- ing was that technological innovations were not enough for internationaliza- tion – core problems were on the busi- ness and internationalization capability of the companies. It is easy to conclude that the prep- aration of the programme was thor- ough and responded well to the needs of the software industry itself, Finnish innovation policy as well as Tekes’strat- egy. Also according to the interviews the programme was very relevant for the field. The timing, the objectives and the implementation of the Verso pro- gramme were almost ideal. From the policy learning perspective it should be noted, however, that the programme drifted a bit away from the original idea of software verticals but still ended in a perfectly good spot. Furthermore, also VAMOS had difficulties in bringing the utilizing industries to the mobility table. It may well be that verticals (or connect- ing utilizing parties and implementing parties) are a good idea but hard to im- plement in practice. Both programmes did succeed well but the effort was big. The taken effort is of utmost impor- tance, however, since user interaction with technology implementers is very important. This interaction and its chal- lenges are discussed in the micro clus- ter analysis under the Demanding client micro cluster in Section 5.4. The goals of the programme are given in the previous subsection. It is easy to see that they reflect the prep- aration material and the identified key challenges adequately. Given also the Finnish business climate and some- what technology oriented mindset it is also seen that the goals are very chal- lenging. Further evidence on the ad- equacy of the objectives and the pro- gramme services is given in Figure 20 that presents the central challenges of Verso participating companies in 2009. Besides funding, help hoped fromTekes included e.g. •• International sales, sales training •• Marketing •• Organizatorial changes •• Sparring of experienced consult- ants, concrete help •• Knowledge on markets •• Networking, client meetings, and match making. The results of the RTE program have already been also in- ternationally remarkable as the program has for example had the leading role in the development of the ISO20022 stand- ard for electronic invoicing. The active role of Aalto University and academic research have been key success factors in the program, which served as the stepping stone for the founda- tion of the Real-Time Economy Competence Center at Aalto University. In addition, the program has contributed to the role of Finland as the forerunner in the area of electronic busi- ness solutions. Based on the research and development in the program, new service concepts and services are being built to enable electrifying the value chains in Finland. These ser- vices have great potential to be turned into successful export products later on. In Tieto the program has contributed in de- velopment of Business Information eXchange cloud services, where Tieto is by volumes one of the biggest service providers in Europe and received recently two international innovation awards. The fifth and last stage of the RTE program is currently launching. It concentrates on productizing the concepts and technologies developed in earlier stages. “If the cooperation with Tekes and other collaborators continues equally successful, breakthrough of new services can be expected as a result of the RTE program during the coming years”, believes Mr. Poteri. n
  • 58.
    58 However, in thelight of the eval- uation data, Verso’s goals are aligned with the company and industry needs, and the programme seems to have achieved the goals exceptionally well. Figure 20. Central business challenges of Verso participants in 2009 (Source: programme survey) The selection of programme services supported the goals; the project con- tents suited ideally with the targets and the programme internal and external coverage were excellent. Central business challenges
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    59 5.1 Introduction In this sectionwe present the results of the micro cluster analysis described in chapter 2. The themes of the micro clusters were decided by the evaluation steering group, and individual contents of the clusters were negotiated with programme managers and responsi- ble people. The themes of the microclusters were 1. Finnish games industry and the role of Tekes in its development. 2. Born global companies: also in the Finnish software industry there are companies that aim directly at in- ternational markets.The intention of the analysis is to find out how Tekes can support these companies. 3. Super growing micro companies. Analysis ofTekes’client data showed that in there are micro companies in VAMOS and Verso with astonishing growth figures. Supporting these companies is very important but they may require different means of support than the other compa- nies. The objective is to see how the programmes services have served these companies. 4. Demanding client is a fundamen- tal element in user-oriented design and operations. On the other hand, demanding clients are fading away from the national market. Both in VAMOS and Verso demanding cli- ents were in a key role. In this mi- crocluster, the role of the demand- ing client is investigated in more de- tail. For each micro cluster, project selec- tion criteria, the analyzed projects, and main findings are reported. The report- ing structure varies slightly according to the micro cluster target, as some adap- tations in the methodology were need- ed. Two clusters are presented without explicit company names, for two other clusters case companies are presented. 5.2 Games cluster in Verso progamme During the last decade, games indus- try48 has been the most rapidly growing business area in the entertainment sec- tor, with turnover around 50 billion in 2008.49 The industry has been constant- ly evolving as new areas like mobile and social games have opened completely new markets. Partly the growth origi- nates also from increasing number of new age and other customer groups attracted by more sophisticated games and new innovative gaming solutions like dance video games. Although many areas in games industry like con- sole and PC games have largely reached the maturity stage, the new business ar- eas are still at growth stage providing opportunities to fast success.The future growth potential makes the games in- dustry rather attractive for investments. In early 2000’s, there were only a handful of game companies in Finland and the industry was largely under- developed compared to internation- al markets. The early steps of games in- dustry funding were taken by Tekes in the SPIN programme and later in Fe- nix programme. It should also be not- ed that Nokia was heavily involved in games industry funding in early 2000’s due to its N-Gage game phone experi­ ment. The Finnish games industry has developed dramatically during the last decade, growing from 20 to 70 com- panies. At the same time, the turno- ver has multiplied from 40 million in 2004 to 165 million on 2010.50 The fu- 5 Micro cluster analysis 48 The games industry is defined here to consist of companies that manufacture game hardware, develop games or publish and retail game products. 49 KooPee Hiltunen et al. 2010. Suomen pelitoimialan strategia 2010-2015 - Visio 2020. Suomen pelinkehittäjät ry & Neogames 50 Neogames 2011. The Finnish Games Industry 2010 – 2011
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    60 ture looks alsopromising as new com- panies are being founded in increasing number and the annual growth in the coming years is expected to be as high as 50 %.51 There has been success in several areas including mobile, PC and console games as well as social gaming and game franchising. Among the most successful companies have been Rem- edy Entertainment with its Max Payne and more recent Alan Wake franchise and Rovio Entertainment with the puz- zle game Angry Birds franchise.The fact that Finnish games industry has created remarkable success stories and some game companies have been acquired by large international companies sug- gests that the Finnish games industry has, despite rather late start, reached the forefront of the field. Although game business has tra- ditionally been strongly privately driv- en, continuous support from the pub- lic sector and especially Tekes since 2000 might be one of the crucial fac- tors behind the quick advancement of the industry. Many Finnish game com- panies including Rovio and Reme- dy Entertainment have been strongly supported by Tekes. For example, Ver- so programme has supported 26 differ- ent game companies52 . Entertainment industry including games took its first steps among “the other focus areas” in the SPIN technology programme in 2000–2003.53 Tekes Fenix programme in 2003–2007, had a major role in the birth of the Finnish games cluster as it led to foundation of a national game centre Neogames. Nowadays, Finnish games industry forms a horizontal rather sepa- rate cluster in which larger internation- ally successful companies buy services from smaller ones.54 In games cluster,Verso programme has continued the Tekes support when Fenix programme finished in 2007. This section evaluates the influence of Ver- so on games cluster and, on the other hand, brings forth ideas to develop the program through four case companies. The companies also serve as touch- stones to illustrate the variety of pro- jects supported, services used and im- pacts of the support. Each company re- ceived Tekes support for two different projects under Verso programme. The companies and the projects are •• Remedy Entertainment: The flex- ible development methods of games (2007–2008) and Remedy’s new business model (2009) •• Advant Games: Game Design- er Release1 (2006–2008) and Mul- tiplayer modeling, analysis and game execution (2008–2009) •• RedLynx: Multichannel communi- ty (2007–2008) and User-Generat- ed Content in Cross-Media Game Communities (2009–2010) •• Sulake: Habbo’s Competitiveness Through Development (2007– 2008) and User-Generated Web of Virtual Worlds (2008–2010) They represent different areas of the in- dustry as Remedy Entertainment has focused on PC and console games and franchising; Advant Games is on tech- nology consultancy sector for lotter- ies, gaming operators and technology vendors; RedLynx develops and pub- lishes games in various platforms; and Sulake defines itself as social entertain- ment company with focus on social games and communities. The compa- nies are presented in company profile boxes below. 51 Neogames 2011. http://www.neogames.fi/fingames/ 52 KooPee Hiltunen 2012. Interveiw with KooPee Hiltunen 20.01.2012. Neogames 53 Lankinen ym. Ohjelmistotuotteet SPIN 2000-2003 –teknologiaohjelma, Ohjelmistotuotteilla kansainväliseen menestykseen - loppuraportti. Tekes. Teknologiaohjelmaraportti 15/2003. Helsinki 2003 54 Syrjänen ym. 2007. Tietoyhteiskunnan uudet toimintatavat mahdollisuutena ja haasteena – Fenix Teknologiaohjelman arviointi, Teknologiaohjelmaraportti 9/2007
  • 61.
    61 Remedy Entertainment isa developer of action games, game franchises and 3D game technology. The first Verso project focused on game development and enabled Remedy to test new technologies and software. The second project aimed to develop Remedy’s business from game developer towards an entertainment media company building overall franchises in- stead of games. Despite Remedy was successful well established company already before Verso programme, the Verso projects had an important influence on the company. The first project played a crucial role in enabling the company to test the latest tech- nologies and solutions and maintaining its forerunner position in the swiftly evolving game business.The project had consider- able contribution to the core competences of the company and improved the overall product development process.The second project had especially strong strategic dimension, building up a completely new franchising business around the games. For example, Remedy’s recent story-driven action game Alan Wake has been franchised out into book, clothes etc. Remedy did not use any other services in Verso pro- gramme but funding. As a larger internationally integrated company, services like market research, consultancy and net- working were found largely unnecessary. However, Remedy could have used some kind of match-making with Finnish small and start-up companies. Currently Remedy uses a num- ber of foreign subcontractors that could be this way perhaps replaced with Finnish providers. This would also contribute to the creation of strong Finnish games cluster. n Advant Games Advant Games was founded as a university spin-off in 2006 providing gaming so- lution testing platform and tools for Finnish lottery Veikkaus. At that time, all their products were practically suitable only forVeikkaus. In the first project, the company concentrated on completing their product development and productizing it. In the latter, a new multiplayer gaming testing platform was developed. As a result of the projects, Advant Games was able to develop new independent products and ser- vices, which the company has now been selling successfully also abroad. For Advant Games, clearly the most important part of Tekes support was fund- ing, which was considered very important as their product development was large- ly based on it. Tekes projects were also closely connected to the key competences of the company, contributing to the core R&D and key technological expertise. This way, Tekes contributed to the development of the company’s key products and the business of the company in general. In addition to funding, the company also participated some networking events that Tekes arranged and used Tekes expert support. These services were, however, not found very useful. In general, Advant Games remained largely unaware of other services in Verso programme and, for example, the networks of the company were not expanded through Verso. On the other hand, Advant games did not seek to utilize other Tekes services actively as they were primarily focused on their R&D. Also their area of business is rather limited and they knew already quite well their potential customers and partners. n RedLynx RedLynx is a multiplatform game de- veloper and publisher. The company was originally concentrating on television games but, as these mar- kets began to wither in 2005, Red- Lynx faced a remarkable challenge of moving to new markets. In 2006 began company’s first Verso project which focused on developing new technologies related to multichan- nel community services. The second project aimed to expand the knowl- edge as well as the commercial and technical components related to new business areas. The projects were carried out in cooperation with other international private compa- nies and they served as a stepping stone to new multiplatform game markets. Redlynx was recently ac- quired by international video games publisher Ubisoft. Remedy Entertainment „„
  • 62.
    62 The role ofTekes and Verso support for games cluster Tekes has been practically the on- ly public and the single largest funder and supporter of Finnish games indus- try. According to the interviews, Tekes and Verso programme have had a de- cisive role in the development of Finn- ish games industry. Although large part of support and funding has con- centrated on R&D&I, the influence has been, in fact, much broader. Even the projects that were not very successful have generated information and know- how that has often shown to be useful in other applications. As the coopera- tion between companies has improved and the professionals have moved be- tween the game companies, the knowl- edge generated in Tekes projects has spread efficiently. This accumulated knowledge now forms one of the cor- nerstones of Finnish games cluster. The influence of Verso programme varied very much from project to pro- ject. The largest benefits were very like- ly related to R&D and product develop- ment which were in the core of most of the projects. However, the projects had many other important impacts as well. Here are some of them: •• For companies that had not yet achieved a competitive position in the markets and companies that were for some reason moving to new markets, Tekes was often al- most the only source of funding in the death valley before first suc- cessful product. For these compa- nies Tekes had guaranteed steady income flow and in some cases even saved the company from go- ing bankrupt. Sulake Corporation Oy Sulake Corporation is as social entertainment company focused on social games and communities. The first Verso project concentrated on development of more efficient R&D processes and the latter on user generated information management. The first project had a crucial impact on the development of new services. It largely renewed the company’s approach to service development and led to both savings and better products. The second project resulted in a new product and advanced some of the main technological competences of the company. It also created new information and expertise in the core areas of company’s business. The product, however, did not become very successful. Both projects were closely connected to the key business areas of Sulake and had some degree of strategic relevance. However, most of the benefits will be realized in long term. In addition to funding, Sulake did not use other Tekes programme services. The company was not properly aware of other services in the Verso programme but, on the other hand, did not actively seek or really need other service options. For Sulake, more information regarding, for example, current and forthcoming Tekes programmes would be useful. Regular meetings with Tekes personnel, also when there is no common project running, could be an appropriate way of delivering this information. n Tekes support played significant role in the difficult transition phase from televi- sion to multiplatform game developer. It had significant contribution to building new core expertise, technologies and products. The support also enabled strong networking and internationalization efforts which led to RedLynx’s current desir- able international position. The projects had a major strategic influence on RedLynx and they were closely connected to the core competences and business areas of the company. RedLynx planned and carried out the projects in close cooperation with Tekes. Especially in the beginning of the projects, collaboration led to important improve- ments in the project plans and execution. Tekes experts brought, for example, very much needed understanding of new game business areas to the company.The net- working services of Tekes were also valuable for the company as it needed to build new contact networks in the new markets. Altogether, Verso provided an excellent and resourceful support platform for the company. n
  • 63.
    63 •• Even thelargest Finnish game companies are very small interna- tionally and, therefore, they strug- gle to keep up with the technolo- gy and software development and innovations. With Tekes support these companies were able to test new technologies, produce dem- onstrations, invest on R&D, and develop their processes. This way, Tekes had often an important role in maintaining their position in the forefront of the games industry. •• Mostly the Verso projects have fo- cused on the core competence and business areas of the inter- viewed companies. In many cas- es, strengthening these areas has given important competitive edge compared to competitors. Even the projects that have not been very successful, have still ad- vanced the expertise of the com- pany in the right areas. •• Many Verso projects focused on development of a new product or service or improvement of an old one. Despite the clear focus, Tekes support usually enabled the com- panies to consider their product development, R&D and other rele- vant processes during the project. This way, many projects led also to improvement of these processes. •• Many projects included elements which required cooperation with other companies. This led to im- proved contact networks and con- tributed to the development of the Finnish games cluster. •• Verso programme had a strong in- ternational dimension and for ex- ample a number of delegations and trips to technology trade fairs were arranged with support ofVer- so.These were important channels to build international contacts for many especially smaller compa- nies. •• Verso has contributed to the first reviews of Finnish games industry published by Neogames. Verso services and ideas for improvement Inadditiontofunding,Versoprogramme provided support in many other forms including various types of consulting; market research and testing; events and seminars; and customer contacts and networking. However, the funding was clearly the most important form of support. Many projects did not actual- ly include any other support elements. This was the case especially with larger companies that had already a well es- tablished position and advanced con- tact networks in the market. On the other hand, for smaller companies also the other services were often very use- ful. For example, in games industry the domestic markets are very small and companies have to aim to internation- al markets from the beginning. There- fore, Tekes support in forms of market research, customer meetings and inter- national contact network was very val- uable for small companies looking for channels to internationalize. In general, the game companies were highly satisfied withTekes support in Verso programme. The new more business minded approach inVerso was considered as a big step to right direc- tion. Tekes contact persons were very competent and useful especially in the beginning of the project when the pro- ject was planned. Although the funding required certain amount of bureaucra- cy this was not considered problematic by the companies. Some room for improvement could be found, however. Many com- panies were also not properly aware of the other services in the programme. Therefore, the communication and advertisement of Tekes programmes should be improved. One possible so- lution might be also regular meetings between game companies and Tekes programme advisers also when there is no common ongoing project. Com- munication after the project could be useful forTekes as well because this way it could collect feedback from old pro- grammes and projects and get ideas for new ones. Many companies were also won- dering how the valuable pieces of in- formation that were produced in the project are delivered to the next Tekes programmes. It seems thatTekes lacks a system to collect for example best prac- tices in successful projects. It is unfortu- nate that these experiences cannot be utilized in other projects and coming Tekes programmes. 5.3 Born Global companies 5.3.1 The concept of Born Global company Globalization of commerce and man- ufacturing, and especially the devel- opment of telecommunications have created in early 2000s a new concept of business internationalization. Tradi- tionally companies started their export operations after establishing a com- petitive position in their home market. Nowadays some enterprises can suc-
  • 64.
    64 cessfully pursue globalor international customer base from the beginning. In software business this is often an espe- cially attractive approach due to econ- omies of scale and the possibilities pro- vided by Internet in marketing and de- livery of products and services. We picked for interviews from the participants of SPIN, Verso and VAMOS a group of startup companies that from the beginning had a strategy to go for international customer base. Games in- dustry is very typically a segment where Born Global approach is quite natu- ral, and among the participants of the three programmes the Born Global- microcluster largely overlaps with the games cluster. For the interviews we, however, picked intentionally compa- nies that represented a variety of differ- ent applications from games to reserva- tion service and system components. In spite of different products and different customer base they shared some com- mon characteristics that may helpTekes to develop services for this type of com- panies. One very essential feature is that a company that wants to serve interna- tional customer base efficiently cannot rely on labor intensive customization of software. The products and tools need to be solid and the business requires big product development effort, mak- ing it a natural customer for traditional Tekes services. 5.3.2 The role of Tekes and the applicability of programme services The interviewed Born Global enterpris- es had been utilizing Tekes funding within programmes and outside them. From the company point of view, the in- dividual projects (and hence the financ- ing services) were far more important than the entity of programme; the in- terviewees were not always even aware of whether the project had been part of a programme or not. Funding of R&D projects was the essential contribution of Tekes; the participation in the pro- gramme seminars and networking has been minimal. Tekes was seen as dedicated fi- nancier of technology development. In general the interviewees were satisfied with Tekes contribution and to some extent the contribution had been cru- cial to the very existence of the com- pany, especially during economy crises. The applicability of Tekes financing ser- vices and the expertise of Tekes in rela- tion to the enterprise needs was evalu- ated to be very good. Tekes was given credit as the on- ly Finnish financier working for tech- nology SME’s, the money available else- where was not considered ”intelligent” in the same way. Tekes strives to ana- lyze the projects seriously; other public organizations were seen to have some- what less interest in the problems of SME’s. Tekes has also been smart in tak- ing the necessary risk. 5.3.3 The results achieved with the support of the programmes & Tekes services The interviewees mostly identify the support and results obtained with Tekes cooperation in general and indi- vidual projects rather than with a pro- gramme. The opinions presented here must be understood to address the results achieved by Tekes services in general rather than by specified pro- grammes. Quite unanimously the compa- nies see that Tekes financing has ena- bled sufficient investment in R&D and thus been essential for competitive- ness. Tekes support has contributed especially in the development of solid technological platforms and tools that have made possible efficient develop- ment of further products. In most cases Tekes financing was considered essential for the speed, scope and quality of the development, and even for the existence of the com- pany. The technological change sup- ported by Tekes financing had made it possible to open business with signifi- cant international customers. 5.3.4 Development propositions from the born global point of view Since Tekes is – according to the inter- viewees – the best financing organiza- tion for technology SMEs, it is vital that Tekes keeps its focus tight.The technol- ogy competence of Tekes is really pro- fessional. HenceTekes should use its re- sources in the analysis and support of Born Global Enterprises, the interna- tionalization and necessary network- ing should be left to the enterprises themselves. More Tekes financing for business development could be useful, if this goes together with product develop- ment. However, the place of Tekes is in R&D. Good experiences were report- ed from having both Tekes money and venture capital, although all interview- ees did not see venture capital being of much help. Tekes can influence business de- velopment competences of interna- tionalizing SMEs best by providing money for R&D so that company has free resources for business develop- ment. Tekes is an enabler – the R&D project model of Tekes helps the enter- prise to focus.
  • 65.
    65 Thefocushastobesettightlytoen- able the successof Finnish enterprises. More hard core technology experts are needed inside Tekes. The commercial success potential of the projects has to be understood; business competence is necessary to the analysis of commercial success potential. The seeking of external help is not the task of Tekes, the basic will to net- working has to be inside the enterprise. 5.4 Supergrowing micro companies For this analysis, we interviewed anony- mously five microenterprises55 that had participated in the VAMOS and Verso programmes and had a few years af- ter their participation experienced rap- id growth in their net sales. The group was selected using Tekes’ CRM data and contained companies that had al- ready some turnover and that expe- rienced a hundred or thousand per- cent annual growth figure. Pure start- ups were left out. 5.4.1 The suitability of the programmes and their effect on rapid growth Rapidly-grown microenterprises had primarily used the financial services of these programmes but had made a rather limited use of the other servic- es. The interviewees felt that the finan- cial services were very suitable for their purposes. Most interviewees said that there would not have been any growth without the programmes. Funding had been a concrete way to boost growth by allocating resources, e.g. for recruit- ing in addition to product develop- ment. However, the application stage was considered somewhat heavy on their resources, especially when it was the company’s first application. For ex- ample, small companies sometimes wasted their limited resources on poor- ly directed applications. As far as the interviewees knew, programme management and their practices were considered flexible, functional, and properly sized. Further- more, the representatives of Tekes pro- vided enough support and guidance during the projects, especially in the application phase. Utilizing the pro- gramme services was considered prob- lematic, since due to their limited re- sources, small companies had to con- centrate on, e.g. operative actions in- stead of participating in the servic- es. The services, however, promoted growth by increasing e.g. networking. The microenterprises we inter- viewed had been able to bring their current main products to the market and acquire notable expertise with the help of these programs. For some of the companies, new contacts with e.g. international operators within the field, subcontractor networks, and pilot customers established during the pro- grammes were also very important. VAMOS and Verso programmes were thought to have significant- ly helped the companies develop and guide their operations. Planning their development project and reporting their progress forced the companies to think about their strategy and work meticulously throughout the develop- ment project. The programmes also made it sig- nificantly easier to recruit more people into small companies and to improve the know-how of their personnel. This way, the companies acquired expertise that they have been able to commer- cialize later. The majority of the company rep- resentatives felt that without these pro- grams they either would not have been able to grow at all or the growth would have been significantly slower. They al- so felt that having Tekes participate in their product development had brought credibilitythathadmadethediscussions with private financiers easier. 5.4.2 Wider reaching effects According to the interviewees, VAMOS andVerso have had a clear effect on the development of the software industry ecosystem.The programmes were con- sidered to have a significant effect on the research, development, and inno- vation investments in the microenter- prises. Without them, the investments would be significantly smaller. Busi- ness generated through the develop- ment project had also made it possi- ble to continue the development with company’s own money. The expertise was considered to have improved sig- nificantly, mainly through technolog- ical knowledge accumulation but al- so in business aspects: the programs in their part helped increase the exper- tise to the current internationally-com- petent level. Some companies felt that e.g. new contacts with subcontractors 55 According to Statistics Finland, a microenterprise is a company that employs less than 10 people and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million and, which fulfills the definition of an independent enterprise.
  • 66.
    66 and partners hadboosted the creation of domestic and international networks. The programmes were considered to have an effect on company policies through the adaptation of the systemat- ic and goal-directed approach required by the funding. Additionally, a possible negative effect was brought up; The de- velopment projects could instruct the companies to concentrate too much on development work at the expense of marketing.This is notable: even in highly business oriented programmes like VA- MOS and Verso, it is possible to concen- trate too much on technological devel- opment, especially among companies that only utilize funding. The programmes also have had an effect on productivity, e.g. through increased orderliness, but these have been rather minor compared to oth- er effects. On the other hand, the inter- viewees felt that relying too much on funding can also hamper company’s productivity. The effect on the companies’ growth and internationalization was considered essential. Apart from a very small number of business angels, Tekes was seen as the only place where a new software company can acquire funding for growth.Tekes also had a major effect on the internationalization of those mi- croenterprises that were trying to enter the international market. 5.4.3 The role of Tekes The interviewees considered Tekes to be important for growth enterprises. In general, software companies consid- ered the Tekes’ programmes to be reli- able and useful for their development. Two specific reasons were mentioned. First, Tekes may be the only channel for microenterprises to acquire nota- ble financial support for their develop- ment work and growth – especially if the company wants to maintain its in- dependence. By participating in these programmes, the microenterprises can find concrete development areas and new angles that will increase growth. Second, the role of Tekes as a network- ing agent and door opener was very important to some of the companies. Without it, it may be very difficult for small companies to get in contact with global enterprises. The programmes were considered very important for the rapid growth of microenterprises. 5.4.4 Development suggestions from the microenterprise point of view In the following we present some quotes from the interviews of the mi- crocluster companies. •• Better monitored application pro- cess. Small growth enterprises would benefit significantly from a better monitored and guid- ed application process. This way, the company’s meager resources would be directed correctly from the first steps. •• Improved networking opportuni- ties. The programme could even better support the need for the microenterprises to network with e.g. customers, partners, financiers, and sales and marketing profes- sionals. On the other hand, it was felt that it would require strong- er incentives or even mandatory attendance to make the growth enterprises to utilize the services more intensively. •• ”One-stop service”. Due to limited resources, it was considered some- what frustrating to seek funding from several different public sourc- es to be able to cover both prod- uct development and marketing (e.g. separate applications through Tekes and ELY Centres). Also fast- er application handling process- es would be important because speed can be critical for a small company. In general, it would be good to have separate services for start-up companies, which would better take into account their spe- cial characteristics. •• Research facility spin-offs. The cre- ation of research facility spin-offs could be supported through a sep- arate programme. 5.5 Role of demanding client In user oriented R&D&I and business it is vital to actively communicate and receive feedback from the po- tential and actual customers in order to improve and develop the products and services. The concern on the lack of demanding customers in the na- tional market was raised during the programme evaluation workshop. Among the workshop participants, there was a concern that the absence of demanding customers and proper user feedback within the Finnish ICT industry is compromising the prop- er development of the products and services. This particular case study focuses on describing the user/customer in- teractions induced in the VAMOS and Verso programmes and lessons learnt through three projects where there
  • 67.
    67 were utilizing companiesand imple- menting companies present in each56 : •• MOMA project (funded through VAMOS programme) •• Ilmatar project (funded through VAMOS programme) •• Solar project (funded through VERSO programme). The objective was to examine how these projects incorporated the cus- tomer perspective and what kind of measures Tekes could take in enhanc- ing the developer and user/customer interaction. 5.5.1 Customer/user perspectives in VAMOS and Verso programmes In the VAMOS programme developer- customer relations were mainly pro- moted and established through a pro- gramme support service Mobile Enter- prise Factory (MEF). One of the key ob- jectives in MEF was to generate a high- er service level by developing more ef- ficient work processes. In the MEF con- cept the availability of real-time infor- mation did not merely affect a compa- ny’s internal functionality, but also en- hanced the quality of service experi- enced by the company’s customers. Put into practice the service was based on workshops held together with develop- ers, technology suppliers and custom- ers and thereby building a networking platform for bringing up wishes and expectations that were considered and utilized in further product or service de- velopment.57 InVerso programme user/customer perspective was more of a requirement than an additional programme service. The bearing philosophy was that users/ customer needs will guide the innova- tion- and product development pro- cesses. This meant that most of the Ver- so funded projects were implemented in conjunction with end users and po- tential customers. Even though the user/ customer perspective was built in to the project, the Verso programme provided several opportunities to further widen the user/customer networks mostly in marketing related events. One example was the customer driven “technology meetings” where the customer compa- ny could express their technology needs to service providers. 5.5.2 Experiences from the selected projects MOMA-Mobile technology to support maintenance efficiency- project The MOMA project examined the role of mobile technology in strengthening maintenance operations by identify- ing the maintenance operations where mobile solutions can provide significant benefits. Furthermore, the project stud- ied methods of measuring the benefits of mobile solutions. The project was mainly done by VTT with joint funding from Tekes, VTT and partnering compa- nies; Helsingin Energia, Maintpartner Group Oy, Rautaruukki Oyj and Solteq Oyj.58 The main objective in the pro- ject was to find practical and func- tional mobile solutions for the mainte- nance sector. The research done with- in the project was useful in the sense that the partnering companies provid- ed information on general and specif- ic needs for mobile technology within the maintenance service sector. In re- turn, user companies received informa- tion about key issues related to incor- porating mobile technology into var- ious work processes as well as gained insight into what kind of processes the mobile technology is most beneficial. The project also provided companies with a way to benchmark and compare various mobile solutions as well as mo- bile devices. According to the interviews, the user/customer needs were prioritized from the beginning. End user expe- riences were gathered during joint workshops and interpersonal discus- sions with the users. It is known that users from the manufacturing industry are demanding; “they know what they need and they demand it”. Based on viewpoints of the part- nering companies there is an obvious need for developing mobile solutions for the maintenance sector. Firstly the technology contributes the daily rou- tines with up to date information and this by itself can improve work efficien- cy as it gets easier to e.g. prioritize tasks. Secondly accurate and up to date infor- mation can and should be used in en- hancing work safety aspects. Thirdly it 56 Projects were suggested by the programme management 57 http://www.mef.fi/index.php?option=com_content&task=view&id=14&Itemid=31 58 http://www.vtt.fi/sites/moma/?lang=en
  • 68.
    68 is important modernizethe tools set to attract the best possible work force to the industry.59 The result of the project was a solu- tion concept for maintenance compa- nies on how to develop, maintain and further develop mobile solutions for various work processes. The concept will be utilized by the partnering com- panies when planning new software solution and choosing the appropriate mobile technology platforms.60 Ilmatar – real time weather service for maintenance companies SOL together with Foreca and VTT de- veloped a software solution for provid- ing real-time weather information for maintenance companies and profes- sionals for accurate and better timing of certain work processes e.g. clearing of snow from roofs or roads. According to the interviews, the VAMOS programme and especially the Mobile Enterprise Factory provided ex- cellent platform for exchange of ideas. Actually the idea of a weather software tailored for maintenance professionals originated from a meeting within the MEF concept. SOL had identified the need for real time weather software but need- ed partners with the technological and meteorological expertise to develop a functional product. The VAMOS pro- gramme provided an opportunity to develop the software with a leading meteorological information service pro- vider (Foreca) and a major research in- stitute (VTT). In addition, a small soft- ware company was hired to implement the software. With a large company, such as SOL, it was possible to test and pilot the soft- ware together with maintenance pro- fessionals from the company: “In a way we were the developer and the cus- tomer of the software at the same time. This gave us great insight in product de- velopment from a customer perspec- tive. User experience and feedback was continuously gathered, evaluated and used as a basis for further development of the software”. It is often challenging for service users to understand technological in- novations and the new opportunities that they can provide. Furthermore, it is challenging to choose optimal techno- logical solution and the best technolo- gy platform. The Ilmatar project provid- ed opportunities to co-operate with or- ganizations and persons with the valu- able technological knowledge and ex- perience of ICT product development: “Without VAMOS programme the Il- matar software would never have seen daylight”. The Ilmatar software has now been productized and software licens- es can be bought from the Internet61 . The software is vastly used within SOL and the user experiences have main- ly been positive. However, the sales of the Ilmatar have not been as success- ful as expected. The main reason is that other maintenance companies are very careful of investing in technology de- veloped by a competitor company. An- other reason for poor sales is that the rapid development of mobile technol- ogy resulted in a variety of rather use- ful weather software applications for mobile devices that have appeared on the market. Even though these applica- tions are not nor tailored for the needs of maintenance companies, they are of- ten provide free of charge or at a very low price, which is a strong disadvan- tage for the Ilmatar software. Solar The Solar project was initiated by Solteq Oy in conjunction with Microsoft, with the purpose to develop management and supervision software mainly for maintenance companies. The main driver for developing a new kind of soft- ware was to create an internationally compatible management and supervi- sion driven software to replace outdat- ed and inefficient procedures. The soft- ware was built on Microsoft Dynamics ERP platform. Solteq has been in the mainte- nance business for more than 20 years and they had a good understanding of the main requirements and features of the new software. The main partner, Microsoft, also provided a wide range of expertise from user experience per- spectives. Although both Solteq and Micro- soft had a rather clear understanding of the user needs, the Solar project guar- anteed that end users were actively in- volved in the development of the soft- ware. According to the interviews, the development process was very prag- matic and the interaction between de- 59 www.promaint.net/downloader.asp?id=3786&type=1 60 www.promaint.net/downloader.asp?id=3786&type=1 61 https://www.solilmatar.fi/index.php?p=Tarjouspyynto
  • 69.
    69 velopers and userswas active through- out the project. Interaction with users was often informal by nature which opened the development process for active and inventive discussions. Dur- ing the project an interaction platform named “software development part- ners” was formed with the intention of engaging both developers and users to the project. Within the “software devel- opment partners”framework three two- day workshops were held as well as sev- eral user/customer meetings. The cooperation with Microsoft was successful and evolved during the project. In addition to the software de- velopment know-how, the project was able to tap into the broad customer and marketing networks of Microsoft. It was emphasized many times in the interview that it is of outmost impor- tance to develop software in close co- operation with users to get an under- standing of what is working and what still needs further development. If the users are dissatisfied they will not buy your product. The Solar product resulted in a software solution which helps com- panies e.g. to predict the maintenance needs of production lines and moni- tor and analyze the failure history and manage the maintenance material needs. With the software it is easier to optimize the timing of maintenance operations. This will lead to improved efficiency and reliability of the ma- chines and equipment. The Solar soft- ware will help to shift the maintenance perspective from reaction to response. The software has already attracted cus- tomers and the interest in it has been very positive. The Verso approach that empha- sized the close cooperation with the end user/customer organization gen- erates a win-win outcome. The devel- oper gets useful feedback from the us- ers and even potential customers. The users/customers are able to influence the end product to better fit the com- pany needs. 5.5.3 The role of Tekes in supporting customer based interaction Both VAMOS and Verso programmes underlined the importance of software development based on user experience and customer needs.The joint develop- ment process is a way for software de- velopers to enhance potential custom- er relationships. For users or customers the joint development provides ways to tailor the product to better need own need. The close cooperation between developers and users/customers in software development endeavors is al- ready a norm for the most successful ICT companies in the world. For many domestic software developers this type of user/customer interaction still feels somewhat strange and unnatu- ral. However, this was also a key finding in the case interviews in this thematic analysis. Several interviews indicated that the developers tend to wait rath- er long for launching the software for user/customer testing compared e.g. to the already standardized practice that most of the top ICT companies’ com- ply; launch the beta version as soon as possible. In this respect, the instruments and services in the programmes have been filling in an obvious gap in the Finnish mobility and software industry. Engaging developers and users togeth- er by facilitating interaction through in- novative ways and to look for opportu- nities hopefully changes the culture of co-operation from formal to more infor- mal interaction. It seems that user orientation is still not self evident in many compa- nies. There might be a need to take this into account in all the phases of project life cycle inTekes; in project selection, in implementation, and in evaluation. Re- ceiving critics and feedback and inte- grating it in the development process at all stages could even be considered as a risk reduction routine to ensure that developed software has realistic busi- ness potential and at least satisfactory customer base. Practices in VAMOS and Verso present good examples on how the implementation phase can be cov- ered. In a broader sense, Tekes can play an important role also as a match-mak- er between developers and users es- pecially because Tekes is often seen as trustworthy and neutral actor. 5.6 General conclusions on micro clusters Games cluster During the last decade Finnish games industry has risen from student demo scenes into a lively cluster that is highly internationalized and networked. Tekes has had a fundamental role in this pro- cess. Early signs of the game develop- ment were seen in SPIN (and Fenix) programmes, but at that time games as a source of income were largely sus-
  • 70.
    70 pected. One stepin the development was the funding from Nokia to Finnish games industry in connection with its N-Gage game phone. Final develop- ment took place during the Verso pro- gramme, where the game sector was actively present. Nowadays the game sector can be regarded as a flourishing standalone networked industry. Whereas the chal- lenges of the industry in the beginning of the Verso programme were typical for a young unstructured set of compa- nies, the next challenges will be much more heterogeneous. To see this, note that many of the companies in this mi- crocluster have not taken actively part in the programme services.This is either due to missing information or the fact that the services as such were not need- ed. The microcluster consists of large and rather established companies, and most likely small and young companies will still need services similar to Verso. This poses a great challenge to the planned games industry programme. On one hand, one should be able to serve young companies with network- ing and business directing challenges, while at the same time part of the in- dustry will face the problems of early saturation, like productivity issues and even enterprise mergers. Hence, a tai- lored, broad spectrum of services will be needed. Born Global companies Some startup enterprises can success- fully pursue global or international cus- tomer base right from the beginning, without establishing first a presence in the home market. Economies of scale and the possibilities provided by Inter- net make this approach especially at- tractive in software product business. Among the participants of the evaluat- ed programmes the Born Global micro- cluster largely overlaps with the games cluster, but there are also some Born Global companies with different prod- ucts and different customer base. Born Global companies are natural customers for traditional Tekes support due to the substantial effort needed for product or service platform development. Funding of R&D projects was the essential contri- bution of Tekes; the companies had not been using programme services. The in- tervieweeshardlyremembered,inwhich programme their project had been. Tekes was seen as a dedicated fi- nancier of technology development. The applicability of Tekes financing ser- vices and expertise was evaluated to be very good.Tekes was given credit as the only Finnish financier working for tech- nology SME’s, the money available else- where was not considered”intelligent” in the same way. Tekes has also been smart in taking the necessary risk.Tekes financing was considered essential for the speed, scope and quality of the de- velopment, and even for the existence of the company. The technology base created with the support of Tekes fi- nancing had made it possible to open business with significant international customers. According to the interview- ees the place of Tekes is in R&D. Tekes can best influence business develop- ment competences of a SME by provid- ing money for R&D, so that the compa- ny has free resources for business de- velopment. Supergrowing micro companies The extremely fast-growing software companies represent various sectors – from games to industrial solutions. Out of the companies that participated in the Tekes programmes, we interviewed a group of growth enterprises that grew rapidly during the program or immedi- ately after it. The growth in annual net sales was typically from tens of thou- sands to millions of Euros. The compa- nies were selected usingTekes’custom- er database. A challenge for microenterprises with growth potential is to fill the gap between visible possibilities and con- crete growth. Innovative ideas require significant development investments, for which small companies do not of- ten have sufficient resources. The mi- croenterprises saw Tekes as almost the only possibility for investing in the initial development work. In Finland, the pri- vate investment sector has still not de- veloped very far in this respect. The microenterprises do not uti- lize the various services within these programmes very often because of, e.g. insufficient personnel resources. The growth enterprises would benefit es- pecially from tailored services, includ- ing, e.g. closer guidance and various in- centives to participate in networking activities. The Tekes programmes are usual- ly seen as enablers of growth for micro- enterprises – “good gardeners who en- sure that the soil is fertile”. The growth that started after the initial stage has sustained itself, and the ecosystem of the software microenterprises has be- come stronger.
  • 71.
    71 Role of demandingclient TraditionallyTekes has brought custom- ers close to service providers mainly in research projects, where companies participate in the specification and di- recting of research projects. In a broad- er sense, the user orientation of busi- ness products and services has been taken more or less for granted. VAMOS and Verso took a big leap in inducing user orientation by explicitly bringing the utilizing companies and software verticals into programmes62 . The cases presented here and in the final report of VAMOS programme reflect the liveli- hood of the interaction and the bene- fits gained from interaction. Being a demanding client is not straightforward. Development requires resources also from the user side, and the outcome is uncertain. Furthermore, de- velopment process decisions are often very difficult to make. Therefore also the involved customers need suitable incen- tives – in many cases a vague promise of increased profitability is not enough. In general, globalization means that more selections for a given need are available. This in turn means that ready to use solutions are more likely found, which may mean that the need for joint development projects decreas- es. Since user feedback is a key issue in market understanding and steering or R&DR&I activities, this development has a negative effect on user orientation. Therefore it is justified and even impor- tant to support the user-developer in- teraction in Tekes programmes. The good support attempts in VA- MOS suffered from the lack of suitable instruments to fund the utilizing com- panies. In the future, suitable means and instruments to support the inter- action are needed. 62 One reason for game developer and born global clusters not using the programme services was simply that their clients are all over the world and hardly reachable for programme purposes even by Tekes.
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    72 6.1 Long termimpacts of SPIN 6.1.1 R&D of the industry During the preparation and starting phase of SPIN the boom of ICT mar- ket was going on, the whole volume of SPIN funding was tiny in comparison with risk financing available for software industry. Later during the programme the risk investment disappeared, and for many small companies SPIN fund- ing was essential for survival, because it allowed the continuing of develop- ment and enabled keeping the com- petent core personnel in the company over the period of consolidation. According to the interviews, Tekes funding was essential for the R&D of the enterprises. The development without Tekes support would have been slower, if not impossible. In some cases Tekes support was seen as vital for the survival of the company, whereas in some cases the same product would have been de- veloped also without Tekes. The state- ments about the importance vary, but also in these cases, where the devel- opment would have taken place even withoutTekes, the support enabled suf- ficient scope of the development pro- ject, which was considered critical for market breakthrough. The individual cases differ e.g. with respect to the size of Tekes con- tribution in comparison to the total development project budget. In some successful cases even a small Tekes contribution had been essential, be- cause it encouraged the use of sub- contracting and thus improved scala- bility of the operations and helped to build useful networks. In a corporate environment, where all budget spend- ing is formally strictly controlled,‘exter- nal’ Tekes money can enable flexible use of external competences that may bring the needed fresh thinking to a development project. It is safe to assume thatTekes fund- ing, both grants and loans, have sub- stantially increased the total technol- ogy development volume of the in- dustry, and also operational quality of R&D effort. Many interviewees point- ed out, however, that the bottlenecks and challenges more often are in mar- keting side, as well in the knowledge of customer needs as in the competences and resources needed for bringing the products into the markets. This is a well known handicap, and Tekes has tried to address it in more recent revisions of its strategy. VAMOS and Verso are both good examples on the implementation of this strategy change. 6.1.2 Development of competences SPIN reached well its main target group, small and medium software compa- nies. The impact on competence devel- opment came into effect mainly in the technology development in projects funded by SPIN. Projects were aimed at concrete products and had concrete tar- get settings creating the necessary pres- sure to increase competence. Although fast change in technologies continuous- ly makes technological knowledge ob- solete, it can be concluded that SPIN has contributed significantly on the growth of technological competences in Finnish software SMEs. In the beginning of SPIN, Finn- ish SMEs in general were known to be quite weak in the skills of developing international business, and during the programme itself no dramatic improve- ment was seen. For many small enterprises SPIN created a relationship with Tekes and was the beginning of long cooperation with Tekes in subsequent projects and programmes. Over the years Tekes sup- port has indirectly helped in develop- ing the competences and competitive- ness in international markets. Some in- terviewees saw the continuum of Tekes projects as an enabler of the company’s transition to the global class. 6 Impacts of programmes
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    73 6.1.3 Networking One of theunderlying ideas behind the preparation of SPIN was to reinforce the networks within the domestic software industry. Networking may refer both to real value networks between compa- nies through customer relationships, and more informal professional net- works between people. Informal networks certainly have been built in the seminars and other joint activities in the programme, al- though the interviewees after the years typically remembered SPIN programme for the funding only. It seems that oth- er programme services have not been used much, or at least not remembered. Here one must bear in mind that the or- igins of acquaintances and networks are often hard to memorize. The Finn- ish Software Entrepreneur Association was an important stakeholder group in the programme. The organization of SPIN pro- gramme was regionally decentralized. The programme had good coverage and communication countrywide and managed to avoid the usual controver- sy between Helsinki area and the rest of the country. In several cases it was reported that the programme encouraged and enabled the companies to use subcon- tracting in their R&D work. This had en- abled faster and bigger development projects, and was seen mostly posi- tive by the companies that used the subcontractors. The importance of the programme from R&D subcontractors’ point of view was not specifically ex- amined. In the interviews, very little refer- ence was made towards cooperation with universities and research institu- tions. SPIN was very directly aiming at creation of concrete software products and the linkages of enterprise projects to academic world seemed to be most- ly related to recruitment of new per- sonnel. 6.1.4 Strategic and operative changes in the enterprises Generally Tekes was seen to contribute very positively in the ways the compa- nies do business. Attitude of Tekes to- wards the SMEs has been mainly good, and help available. Some complaints about overly bureaucracy were voiced, but in general the outside help was seen necessary for renewal – it ena- bles taking distance from the grey eve- ryday routine struggle of a small en- terprise. Very educating was even the mere preparation of a project applica- tion for development of an entire prod- uct concept. Even when the financial contribu- tion of Tekes has been a small part of the total project scope, Tekes has giv- en valuable external insight and help in formulating and validating the pro- ject, and driven a more systematic way of operating. SMEs could use more active sup- port in the development of business it- self. Limitation might be the availabil- ity of high quality small enterprise ex- perience. It is impossible to understand the problems of entrepreneurship with- out having faced similar challenges per- sonally. As Tekes focused less on business development at the era of SPIN than it did at the times of VAMOS and Verso, it is natural to assume that more strategic and operative changes appear in these programmes, which is indeed true as can be seen in Section 6.2. 6.1.5 Growth and internationalization There is not much evidence about strong export driven growth due to SPIN programme. The companies seem to have grown mainly in domestic mar- ket, and unlike in VAMOS and especial- ly Verso, there are not many examples of ‘born global’ companies among the participants of SPIN. Born globals of VA- MOS and Verso are elaborated in the microcluster analysis in Section 5.2. Some companies that during the ICT boom had a strategic focus in glob- al market, survived by shifting their focus to serving domestic customers. Also op- positeexamplesexist,however;somein- terviewed companies see the products developed during SPIN as the basis of their success in international markets. Only few of the products devel- oped in SPIN projects did reach interna- tional market success as such, accord- ing to the findings of the interviews. The reasons varied, e.g., as follows: •• A product was developed with the support from SPIN. Product was technically OK, but in the market- ing phase it turned out, that it was not sellable as a separate module. Now that functionality is a part of the offering of big global platform providers. (Note the lack of cus- tomer needs!) •• The project in SPIN developed a new product that did not find a market, but the technology devel- oped then is now in use in other products that sell well.
  • 74.
    74 •• A problemis that the investment in a new product is not technolo- gy only. It would be good if some of the funding could be used for finding markets for the products. •• The services based on the product developed in SPIN were never de- veloped and commercialized, be- cause the recession came and all investor money disappeared. •• The recession stopped everything, and when the market finally start- ed to recover, the technology had already become obsolete. •• It turned out that the capacity of telecom infra was insufficient for the envisioned services and vol- umes. •• Development project was success- ful, and the software is still in use, although the benefit has been in smaller scale than originally ex- pected. Above, the lack of customer interac- tion and understanding is obvious. However, there are also direct success cases among the interviewed compa- nies: •• The core software developed in SPIN is still in use, new software has been built on top of it. •• A couple of really huge orders were won because of SPIN devel- opment. •• Turnover has tripled to 10M€ in nine years, due to Tekes project. •• Software still in use; Company and the society have got back ‘thou- sandfold’the money invested. The statistics presented in chapter 4.1.2. indicate that especially a group of the microenterprises that participated SPIN have been able to generate fast growth and also modestly growing share of ex- port business. Participation in a programme is in many cases only one phase in a long- er relationship between a company and Tekes. It is clear that the impact of any single programme or even a long coop- eration with Tekes on the growth and success of a company can seldom be verified reliably. One illustrative story: “The significance of our first Tekes- project was in that there was somebody who believed in the potential of an en- trepreneur starting alone. Our second project was in SPIN. We were searching a direction to go. The timing of this risk financing was really excellent.The prod- uct itself did not advance to the mar- ket, but the technology that was de- veloped is now used in other products. The third Tekes project, after SPIN, re- sulted in an architecture that is clearly more modern than the competition. It has brought big international custom- ers.” A lot of software developed in SPIN is still in use. Even though the front end applications, such as mobile devices have undergone repeated generation changes and also the platforms for In- ternet applications have changed, there is a lot of less visible backend software that is used year after year. This is gen- erally true in larger software systems, and sometimes attributed e.g. to the conservatism of financial executives, in whose responsibility the corporate ICT often belongs. It may also be that back- end software has longer lifetime just because it is less exposed to the pres- sure from end user needs and fashions that force faster renewal of front end applications. 6.1.6 General impacts on industries and society The impacts of programmes to socie- ty have been demonstrated in the mi- crocluster analysis through the societal impact model developed by Tekes and its different impact areas. In this model, R&D&I activity and its flow to impacts to society is modeled as inputs, activ- ities, outputs and impacts to different impact areas that are Economy and economic renewal, Environment, Well- being, and Skills and culture (see fig- ure 21). The former two areas are rath- er well defined, whereas the latter two still search their form. The descriptions of the different impact areas are based on a recent report by Tekes.63 The impact area for the econo- my and economic renewal observes the effects that research and innova- tion activities have, or should have, on the development and regeneration of the economy and the opportunities and challenges arising from this, such as the economic downturn. The phe- nomena having particular significance for the economy and economic renew- al impact area are national prosperity, productivity of the economy, job crea- tion, high growth enterprises and for- eign direct investments. 63 Päivi Luoma, Tuomas Raivio, Paula Tommila, Johan Lunabba, Kimmo Halme, Kimmo Viljamaa and Henri Lahtinen Better results, more value A framework for analysing the societal impact of Research and Innovation Tekes Review 288/2011, Helsinki 2011
  • 75.
    75 Although SPIN precededthis mod- el and its guidance, the central objec- tive of SPIN, developing software prod- ucts for international markets, direct- ly contributes to national prosperity and creation of high growth enterpris- es. Generally, the companies that used SPIN funding and services have grown at least as well as industry average, and a group of high growth micro enter- prises could be identified. What is the contribution of SPIN-supported devel- opments in this, is not easy to say. Any- way, the interviews revealed several in- dividual cases, where a company sur- vived the slump of 2001–2003 largely thanks to SPIN funding, and has since then been able to return to the path of profitable growth. The target for SPIN was to create international business for Finnish soft- ware product companies. SPIN was, co- herently with Tekes mandate and strat- egy at that time, focusing in the tech- nology development. Although that part was handled well, many compo- nents of Finnish business infrastruc- ture that were essential for internation- al business creation were weak or miss- ing. Tekes had neither mandate nor means to address e.g. lack of financing for marketing and distribution, legal ex- pertise, etc. The area of environment covers the impacts that research and innova- tion have or should have on the envi- ronment such as climate change, sus- tainable consumption of natural re- sources, energy consumption, biodi- versity and the well-being of the eco- system among others. SPIN programme included very few directly environment related de- velopment subjects. Use of ICT, in gen- eral, has positive effects to environment through dematerialization, when con- sumption of material and energy is re- placed by processing information and more accurate and timely physical op- erations. The area of well-being covers the impacts that research and innovation have or should have on the health and quality of life, well-being at work, and healthy and safe living environment as well as the opportunities and chal- lenges arising from these. SPIN pro- gramme included only a couple of pro- jects, where the application being de- veloped was directly addressing issues of health, safety and well-being. The in- direct impacts of useful software prod- ucts are not very easy to track, although can be imagined. Likewise difficult to quantify is the impact of a single technology pro- gramme in the Skills and culture im- pact area. It is obvious that a pro- gramme supporting innovation and development of technological compe- tences contributes to skills and culture. Knowledge and education form the es- sence of science, technology and inno- vation capabilities that create the basic conditions for the realization of other impacts. Phenomena and effects most directly related to research and devel- opment activities like SPIN, include the amount of information increased, skilled labor, method of knowledge, ex- pert networks, technological problem- solving ability, etc. When the knowledge and learn- ing perspective is expanded to cover a more comprehensive culture and civili- zation-related view, where education is defined as the ability of the individual to function successfully in a society, this impact area covers not only the com- petences of individuals and teams, but also the information and communica- tion infrastructure that shapes the iden- Figure 21. The impact areas of research and innovation. Well-beingEnvironmentEconomy and economic renewal Impacts Outputs Activities Inputs Skills and culture
  • 76.
    76 tity and activitiesof a human in socie- ty. In this interpretation the media, tel- ecommunication tools and information retrieval services based on multitude of constantly evolving software products are an essential factor. 6.2 Short-term impacts of VAMOS and Verso 6.2.1 Impact on participating companies and industries Both programmes have had consider- able impacts on the development of technological and business expertise. Technological competence accumula- tion is more or less self evident in the projects funded by the programmes, but true increase in business exper- tise is new. The effects are true in the sense that in the survey increased busi- ness expertise was pointed out, in the interviews this was pointed out, and the investigation of Tekes’ CRM data shows considerable increase of turno- ver and exports in selected companies. The relationship between Tekes activ- ities and the increase is of course not self evident, but at least signs of corre- lation exist. Compared to the era of SPIN, the strategy, mandate and goals of Tekes were changing towards a more holis- tic business development. Both pro- grammes seem to have implemented this change well, andVerso exceptional- ly well. In addition,Verso services includ- ed deep and persistent internationaliza- tion services that seem to have flourish- ing results. Share of international turno- ver among Verso companies rose from 26% in 2008 to 33% in 2010. In 2009, 17 companies had more than 70% of turn- over coming from outside Finland. 11 of them were game enterprises. Most fa- vorite target markets were Europe, USA and the Nordic Countries. In both programmes the achieve- ments are largely due to the tailored services aimed aggressively and deci- sively for business development. Two general approaches can be distin- guished: •• Large scale quick results: Custom- izable handbook type approach (MEF in VAMOS), with which it is easy to incorporate large amounts of utilizers and service providers •• Small scale deep results: Company specific sparring by experienced long-term business experts (both programmes). Especially among the programme par- ticipants, the true, proven and deep business experience the coordinators and the advisory service providers rep- resented were much appreciated. Furthermore, both programmes had a profound effect on the formation and revival of networks in the industry. One of the goals of both programmes was to formulate and strengthen the in- dustry clusters, and both programmes succeeded well. Collaboration of the VAMOS pro- gramme with industry associations of both ICT and utilizing industries, pi- loting organizations, professional net- working organizations and research fo- rums was lively. Verso carried out very close cooperation with industry associ- ations like Neogames, Finnish game de- velopers’ association, The Finnish Soft- ware Entrepreneurs Association, the Finnish Centre for Open Source Solu- tions, and the Technology Industry as- sociation. The cooperation has been very intense in games business, where nearly all activities were implemented in close cooperation with associations. In Verso, the close cooperation with in- dustry players made it possible to trans- fer the activities to these players in a co- ordinated manner as the programme ended. However, in VAMOS, all coor- dinated activities more or less ceased once the programme ended. In principle, VAMOS and Verso had collaboration with other programmes like Liito, Ubicom, Giga, Tila, Sote, and Serve programmes, but according to the interviews, the connections in prac- tice were rather thin. This is a structur- al problem in Tekes that is still encoun- tered frequently. Especially for vertical programmes likeVAMOS andVerso, this issue is a futile hindrance that should be removed by all means. In a broader con- text this relates to the renewal of the programme instrument that has been discussed in Tekes. To productivity, the programmes had mostly indirect effects. The appli- cations developed in VAMOS and Verso most likely improved the productivity in the companies utilizing them. In the evaluators’ understanding, the original idea of generalizing the individual mo- bile applications into products did not proceed. Therefore, also the indirect ef- fects to productivity remain marginal. It should be noted that the productivity of software production or productivity in general were not in the scope of the programme. It is clear that the programmes, es- pecially Verso, have had a profound ef-
  • 77.
    77 fect on thegrowth and internationaliza- tion of companies. Verso shows that ef- fective results are achieved with a. Selected committed companies that are willing to internationalize instead of masses of uncoordinated companies with unclear goals b. Hard tailored work by distinguished experts in addition to general infor- mation gathering and sharing c. Many year development perspec- tive. In addition, a remarkable benefit is if the required immaterial investments to sales channels are small; this is the case in e.g. software B2C business like games where the Internet serves as the main distribution, information, sales and pay- ment channel and the funding is based on micro financing. The downside of tailored work is its efficiency; it does not scale well. How- ever, if one considers that an interna- tional breakthrough in one company is more important than gathering in- formation and capabilities of multiple companies that do not internationalize, then a tailored approach is preferred. 6.2.2 Impacts on society In a larger perspective, any programme has direct impacts only to their target companies and industries. The impacts to society are indirect, resulting from the direct impacts. These impacts also appear and evolve over time. For VA- MOS and Verso programmes it is ear- ly to say anything about the impacts to society. Some preliminary remarks can be made. Impacts of ICT and software pro- grammes are mainly economic. It can be concluded that this component in the programmes here is heavily accen- tuated: both programmes have had a fundamental role in the building and support of Finnish mobile and software industry and their clustering. Especially the work of games industry that started in the Fenix and SPIN programmes, and finally clusterized and internationalized in the Verso programme, has produced truly internationalized companies and a vital cluster. Bearing in mind the impact model presented in the previous sec- tion, the programmes have had effects also to the impact areas of well-being, and skills and culture, too. Impacts to environment mainly arise through pro- ductivity and efficiency rise, but these impacts are most likely marginal.
  • 78.
    78 7.1 Summary In thiswork we have evaluated three Tekes funded ICT and software indus- try related programmes: SPIN, VAMOS and Verso. For SPIN, the evaluation per- spective was retrospective: the aim was to identify long term impacts and the ef- fect the programme had to the partici- pants and the industry. For VAMOS and Verso, the evaluation was a typical post programme evaluation where the focus is in the programme success and short term impacts.To support the evaluation, the development of Finnish software in- dustry during the 2000’s was described. The methods of the evaluation in- cluded document analysis, background interviews, programme interviews, two surveys, and a short analysis of the eco- nomic figures of the programme par- ticipants. The results of the survey were not published because of exceptional- ly low response rate. Some careful in- dicative judgments were made. ForVer- so, the questionnaire taken by the pro- gramme itself, was used. The analysis was finally deepened by case examples and a microcluster analysis, a semi-qual- itative methodology to analyze interest- ing topics further. In this work, the mi- crocluster themes were Game business, Born Global companies, supergrowing micro companies and the role of the demanding client. Many of the effects of the SPIN programme were still recognizable. Although many developed products never made a market breakthrough, some successful businesses are based on technology originating in projects of SPIN. Several software companies did survive the recession in 2001–2003 thanks to SPIN support, and have later been steadily growing. VAMOS and Verso were initiated at about the same time. VAMOS con- centrated on developing mobility so- lutions in close cooperation with the customer, whereas Verso concentrat- ed on developing software solutions on vertically aligned business areas. Both programmes offered similar ser- vices and succeeded quite well over- all. However, there were some remark- able differences in the programmes. For some reasons, Verso was able to brand itself exceptionally well. As a result, the project flow to the pro- gramme raised and unlike in many previous programmes it was possible to select the participants. It should be noted that the reason for the success in branding remains unclear, as both programmes used almost similar com- munications services. The programme services in both programmes, especially in Verso, were partly new, and very successful. Main points explaining the success of the programme can be summarized as fol- lows: •• Utilization of true expertise and hands-on business experience from within Tekes but also outside Tekes; the main role of the pro- gramme management being to enable expertise •• Patient customization and tailor- ing of services for individual com- pany needs. •• Excited programme management •• Systematic and professional branding of the programme which resulted, among other things, ex- ceptional coverage and oversup- ply of projects •• Oversupply of projects made pro- ject selection and coordinated project entry possible •• Close cooperation (and partial re- vival) with industry associations to gain trust and reputation and to see the essential challenges •• Ability to adapt the programme based on new information; •• Transfer of the activities of the programme to the industry asso- ciations after the end of the pro- gramme. One may well conclude that Verso is among the most succeeded Tekes pro- grammes ever. 7 Summary and recommendations
  • 79.
    79 7.2 Recommendations Some companieshave gone bankrupt, others have been merged, and others sold. Since there is no tangible data on these companies, we can only hypoth- esize the destiny of the innovations and IPR in these companies. An interesting topic for future research would be to explicate the pathways of innovations among this group. There were several examples of companies that survived recession thanks to Tekes support, and were lat- er able to create profitable growth. It would not be a bad idea to speed up the activity at times when the market goes bad. In the Verso programme it was ex- plicitly found that the model of interna- tionalization where a leading big com- pany is supposed to take Finnish SMEs abroad does not work. Big companies always choose the best subcontrac- tors and often it is beneficial to have the subcontractors from the local mar- ket. Unless a Finnish SME is exceptional- ly good in its field of expertise it is unre- alistic to assume that in can internation- alize in such a network. This finding has a larger significance as this model is one of the traditional cornerstones of inter- nationalization in the innovation poli- cy. Therefore, this model should be re- evaluated and reassessed e.g. in a form of a small retrospective study. In the microlusters, the born glob- al companies and the supergrowing mi- cro companies seemed very different from e.g. SMEs in terms of their needs and capabilities. These companies have been using clearly less programme ser- vices than the rest of the participants of, e.g., Verso. As a separate research topic it wouldbebeneficialto understandwhat the distinctive characteristics of these companiesare,andhowtheserelateto need and use of programme services. Relevant recommendations from the evaluation of Finnish innovation system to ICT and software business and Tekes can be summarized as fol- lows64 : •• When the national productivity is close to international productivity, R&D&I policy must support exper- iments and risk taking. One must also accept the chance of failure. •• One must strongly support the re- newal of the traditional strengths of Finland and product innova- tions •• Growth entrepreneurship must become central in Finnish R&D&I policy •• Finland must support fast growing internationalizing companies. From the industry and Tekes point of view these recommendations have largely been taken into account al- ready in the VAMOS and Verso pro- grammes and their instruments. To fur- ther support the development of these issues, the same line should continue. In this respect the preparation of the new games industry programme is an excel- lent step. To further implement these recommendations, the programme ser- vices should continue on the line set up by Verso and VAMOS: tailored top lev- el expert services offered to a select- ed group of companies that have the ability and the willingness to grow. Fur- thermore, the microcluster analysis on games industry suggests that diversi- 7.2.1 General recommendations Since the beginning of the decade, the constraints and strategy of Tekes have changed so much that it is not easy to conclude from the evaluation of SPIN alone good advice for the Tekes of to- day. The ideas and recommendations presented here are largely based on the interviews. The interviewees re- flected on the role ofTekes against their own background and present situation. Many of them had been working with Tekes not only during SPIN, but contin- uously also after it. Looking backwards to SPIN, it is clear, that R&D is not enough and that small technology companies need fi- nancial support for productizing and market entry. Hence, Tekes is on the right track when not only the product, but also development of marketing channels, training, and sales process- es are supported. On the other hand, Tekes is a competent partner especial- ly on technology development projects and should not go too far from the do- main of its core competence. Generally Tekes support should be directed to small starting enterprises that have some history behind. When the companies grow, they should find other ways of financing. Maybe Tekes could support consulting effort need- ed to get financing from outside. Tekes money, e.g. risk loan, could also be used for taking care of the patents of SMEs. Applying and managing patents is a heavy burden for SMEs. About half of the enterprises that participated in SPIN have disappeared. 64 see www.evaluation.fi
  • 80.
    80 fication in gamesindustry will contin- ue, and consequently very tailored pro- gramme services will be needed. As mentioned in section 3, SHOKs (Strategic Centres for Science, Tech- nology and Innovation) are an innova- tion system effort, peculiar to Finland, to support the R&D&I on different in- dustries. SHOKs were initiated in 2008– 2009, and currently there are 6 SHOKs operating, and the TIVIT SHOK65 oper- ates on software industry. SHOKs op- erate as companies owned by industry companies, VTT and universities, and are financed by the owners and Tekes. Despite the fact that the pro- grammes networked with SHOKs, in the evaluation interviews it was consistent- ly concluded that either the companies or the projects had virtually no connec- tions to TIVIT or other SHOKs. Of course, the programmes were already running when TIVIT was founded. When SHOKs were founded, SMEs, (two thirds of theVerso andVAMOS pro- gramme participants) were seen as one focus group in their motivation. Now it seems also in the greater perspective that throughout the SHOKs this view is largely disappeared; SHOKs are regard- ed as operators serving mainly their owners and large companies. In the interviews of the evaluation, the possible added value from the co- operation of programmes and SHOKs was found unclear, mainly due to the nonexistent cooperation. Therefore, giving any conclusions or recommen- dations on the role of SHOKs regarding Tekes ICT programmes is rather awk- ward. Most likely important general an- swers will be received from the forth- coming evaluation of SHOKs. In this evaluation we have delib- erately not taken any stance on the in- ternational initiatives and programmes that should be affected by Finnish ac- tors. The field is very big and versatile and rapidly changing. The description in Section 3 gives some directions, but a comprehensive analysis would re- quire a separate project. In such a pro- ject, one should gather and classify the information from the Finnish associa- tions and other actors and rank it. 7.2.2 Programme instrument specific recommendations The experiences on programme servic- es inVAMOS andVerso, especially inVer- so, have been very good. In the follow- ing we give recommendations, specif- ic to programme instrument, derived from these experiences. Programme services should be customized and tailored to compa- ny needs more carefully. VAMOS and Verso have clearly shown the value of customized services that are adapt- ed to specific company needs – very good company specific results can be achieved. Naturally the drawback is the amount of resources needed for tailor- ing, but most likely tailoring pays off. One should also accept that there are always a certain number of companies that will not use the services. Tekes should offer also hands on experience and other activities along- side with funding and general knowl- edge dissemination for programme participants. Especially young com- panies in immature industries benefit from credible business oriented experi- enced hands on help from experienced and renowned substance experts in business planning and internationali- zation. Also the use of external services in networking and marketing worked very well. In these programmes the ap- proach was quite new. The experiences encourage us to suggest to further de- veloping especially the expert services. Programme project portfo- lio contents should be coordinated more on the basis of programme ser- vice needs. At present, projects are ap- pended to programmes on the basis of the project scope and the applicant’s willingness to participate in some pro- gramme. Especially in the programmes developing immature industries the programme access should be coordi- nated also on the basis of the appli- cant’s willingness to participate in the programmes services and the estimat- ed capability of the applicant to uti- lize the services. Nevertheless, as stated above, one must also accept that not all companies need the services. All the programmes that aim at developing an immature industry should have an exit strategy. When a programme ends, the activities in the programme end, too. In VAMOS, pro- gramme services were ceased at the programme end, whereas in Verso many activities related to strengthening of the cluster and industry were moved to industry organizations. It is clear that if the activities keep on running, the im- pacts of the programme become deep- er. Also one should be able to brief the 65 See http://www.tivit.fi/en/
  • 81.
    81 target group onpost programme ac- tions in good time. To prevent abrupt programme endings, the exit phase should perhaps be planned more care- fully so that the services are transfer- rable and there are organizations to which the transfer can be done. User interaction should be more strongly supported by Tekes pro- gramme instruments. If there is any doubt on the adequacy of the market orientation of programme participants, instruments supporting user interac- tion should be employed. The instru- ments should be such that also small companies can afford using them. In addition to these, we also re- peat the earlier recommendations on programme cooperation deepening and at least partial implementation of evaluation during the programme (e.g. evaluation data gathering from projects upon ending with a standard- ized questionnaire with questions de- rived from the standardized evaluation questions).
  • 82.
    82 Appendix 1. Listof interviewed persons Petteri Alahuhta VTT Pauli Berg Tekes Keith Bonnici Finnvera Venture Capital (formerly atTekes) Karri Hautanen Technopolis Ventures Oy Juha Heiskanen Basware Oyj Heli Helaakoski VTT Kaleva Helin Solteq Mika Huhtamäki Aspida Oy Lauri Hölttä Liaison Technologies Oy Janne Jansson Modultek Oy Hannu Jyrkkä Sasken Finland Jouko Järvinen BookIT Oy Matti Jääskeläinen Tofuture Oy Jarmo Kalliola Profict Partners Oy Jani Kaskinen Hotelzon International Oy Juha Kela FinWe Oy Kimmo Kouhia Opus Capita Ilari Kuittinen Housemarque Oy Nils Lagerström Novowave Oy Irmeli Lamberg Tommi Lehtonen Whitevector Oy Jouko Lintunen Spinverse Oy Otso Mäkinen Umbra Software Oy Martti Mäntylä Aalto University Seppo Nikkilä Innovative Ideas Oy Asmo Oinaanoja Digia Oyj Jyrki Penttonen Viola Systems Oy Ari Pihlajavesi Predisys Laura Rantanen Basware Oyj Heikki Roikonen Nixu Oy Pekka Roine Seppo Ruotsalainen Profict Partners Oy Kari Ryynänen Tekes Jukka Salovaara Modultek Oy Jarmo Sarantila Vineyard Oy Matti Sihto Tekes Marco Sivonen SOL Taneli Tuurnala Fastrax Oy Appendix1
  • 83.
    83 Appendix 2. Workshopparticipants Markku Antikainen Pauli Berg Keith Bonnici Marko Heikkinen Hannu Jyrkkä Jarmo Kalliola Nils Lagerström Irmeli Lamberg Santeri Laner Johan Lunabba Martti Mäntylä Tuomas Raivio Seppo Ruotsalainen Matti Sihto Marit Tuominen Appendix2
  • 84.
    84 Tekes’Programme Reports inEnglish 2/2012 Software, mobile solutions and games industry – Evaluation of Tekes software related programmes. Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér. Evaluation Report. 83 p. 6/2011 Co-operation to Create Converging and Future Networks – Evaluation of Five Telecommunications Programmes. Annu Kotiranta, Olli Oosi, Mia Toivanen, Jaakko Valkonen and Mikko Wennberg. Evaluation Report. 69 p. 4/2011 GIGA – Converging Networks programme 2005–2010. Final Report. 217 p. 1/2011 FinNano Technology Programme. Final Report. 6/2010 From Spearheads to Hunting – Evaluation of Nano Programmes in Finland. Tuomas Raivio, Piia Pessala, Jatta Aho, Tiina Pursula, Alina Pathan, Jukka Teräs and Kaarle Hämeri. Evaluation Report. 67 p. 3/2010 MASI Programme 2005–2009. Niina Holviala (ed.). Final Report. 137 p. 4/2009 ClimBus – Business Opportunities in the Mitigation of Climate Change 2004–2008. Final Report. 564 p. 6/2008 Finnish participation in the EU 6th Framework Programme – Evaluation of Participation and Networks. Soile Kuitunen, Katri Haila, Ilpo Kauppinen, Mikko Syrjänen, Juha Vanhanen, Paavo-Petri Ahonen, Ilkka Tuomi, Pekka Kettunen & Teemu Paavola. Evaluation Report. 91 p. 2/2008 Impact Evaluation of the Wood Material Science and Engineering Research Programme. Evaluation Report. Kimmo Halme, Sami Kanninen, Kimmo Viljamaa, Erik Arnold, Tomas Åström and Tommy Jansson. 79 p. 11/2007 DENSY – Distributed Energy Systems 2003–2007. Final Report. 155 p. 2/2007 FENIX – Interactive Computing 2003–2007. Final Report. 136 p. 1/2007 FUSION Technology Programme Report 2003–2006. Final Report. 184 p. Seppo Karttunen and Karin Rantamäki (eds). 17/2006 PINTA – Clean Surfaces 2002–2006. Final and Evaluation Report. 228 p. 13/2006 Finnish National Evaluation of EUREKA and COST. Evaluation Report. 95 p. Sami Kanninen, Pirjo Kutinlahti, Terttu Luukkonen, Juha Oksanen and Tarmo Lemola. 11/2006 Competitiveness through Integration in Process Industry Communities. Evaluation of Technology Programme“Process Integration 2000–2004”. Evaluation Report. 17 p. 8/2006 AVALI – Business Opportunities from Space Technology 2002–2005. Final Report. 79 p. 6/2006 New Knowledge and Competence for Technology and Innovation Policies – ProACT Research Programme 2001–2005. Final Report. 137 p. Edited by Pekka Pesonen. 3/2006 ELMO – Miniaturising Electronics 2002–2005. Final Report. 238 p. Subscriptions: www.tekes.fi/english/publications
  • 85.
    Software, mobile solutions andgames industry Tuomas Raivio, Johan Lunabba, Erkka Ryynänen, Juhani Timonen, Markku Antikainen and Santeri Lanér TekesProgrammeReport2/2012 EvaluationReport March 2012 ISSN 1797-7347 ISBN 978-952-457-541-6 Further information Pekka Pesonen Tekes pekka.pesonen@tekes.fi Tekes – Finnish Funding Agency for Technology and Innovation Tel. +358 10 191 480 Fax +358 9 694 9196 Kyllikinportti 2, P.O. Box 69 FI-00101 Helsinki, Finland E-mail: tekes@tekes.fi www.tekes.fi Evaluation of Tekes software related programmes