November 28, 2014

Guest blog post: This is just the beginning of digitalization

Anni Ronkainen

Country Manager Finland, Google

In this guest post Anni Ronkainen, Country Manager Finland at Google, adds her voice to the blog challenge commenced by Tieto CEO Kimmo Alkio. Previous posts have been written by VR Group CEO Mikael Aro and Cisco Sweden‘s General Manager Niklas Andersson.

Kimmo Alkio wrote an excellent blog post about the future competitiveness of companies. It outlined four key arguments for success:

  • The world will look different in the future and we need to take this into consideration
  • Startup companies and startup-like thinking are required to foster innovation
  • Customers have all the power now
  • Companies will need to compete more and more to attract the best future talent.

It’s easy to agree with all these arguments. Kimmo also asks, "How do we ensure world-class services in ever-tightening competition?". These four points indeed cover some of the challenges faced by companies in Finland as well as highlighting opportunities, and I have been discussing these topics a lot.

Early morning of the web

I believe the digital transformation we have seen so far is only the beginning - it’s the "early morning" of the web. If 1% of what can be done has been achieved, then 99% of digital transformation still needs to be done. Digitalization will change everything, and everything that can be digital will undergo this transformation. This process has only just begun.

And this provides a huge opportunity for companies.

I’ve often referred to research done by the Boston Consulting Group already back in 2011. In that report Finnish consumers were ranked in second when it came to their ability to utilize the internet. However the Finnish companies ranked 17th among the OECD countries analysed.

This has created a gap between the consumers and the companies: we have the demand but the supply is often coming from abroad. For example, over 60% of the money spent on online apparel purchases happen outside of the country.

Fortunately, we're seeing that companies are starting to understand the opportunities of digitalization, and I’m sure the remaining 99% will create great stories for Finland.

SMBs need to think big

Kimmo writes about startups. He lists openness, individualism, creativity, innovation and the willingness to take risks as the values behind startups. These are needed whether the company is young or old.

I would like to emphasize that we also need to focus on growing the existing SMBs. The vast majority of Finnish companies are very small. According to a Finnish policy and pro-market think tank EVA the 130 biggest companies employ as many as the 300,000 smallest ones. Some 500 companies represent about 90% of the exports.

The Internet has created a huge opportunity for Finnish SMBs by opening up markets that were inaccessible before. Now even the smallest companies can seek new customers across the country and abroad. The EU alone is a market area of 500 million people.

We need to change our focus from small to big and aim for international growth. Online marketing makes it possible to find clients from the other side of the world when your business idea is good enough. The Finnish gaming industry is a perfect example how to become international right from the beginning.

If we can grow the SMBs (the majority of the Finnish companies) even a little bit we can gradually create a bigger German “Mittelstand” class of powerful, globally active, medium-sized companies. That would have an enormous impact on the Finnish economy.

Customer experience is everything

Not so long ago, every business thought that the key to success was a combination of the highest quality product and the best customer service. But today, everyone is talking about customer experience. This refers to designing and reacting to customer interactions in a way that exceeds expectations and increases satisfaction and loyalty.

In a digital world, building a great customer experience is a must since the competitor is only one click away. Customers want a good experience. Once you have lost a customer, it’s hard to get them back.

Today’s customer sits behind the steering wheel and decides whether the experience has been satisfactory or not. If the foreign online stores outperform domestic ones, that’s where our customers will go.

We cannot lose half of the talent pool

As Kimmo says, finding the right talent is and will continue to be one of the key success factors for companies. As digitalization will affect all businesses, it’s crucial to ensure that we have the talent needed in coding, understanding the digital business and so on. That’s why the education system also needs to address these needs.

The fact that girls and young women are currently not as inspired by tech potential as male peers poses one of the biggest challenge for the success of Finland. When talking about talents we need to be able to use all the talent we have, not only half of it.

It's also important to keep in mind that half of the users of any digital services are women and girls. We need to make sure that we have both men and women to work on customer experience to make it reflect the world around us.

That’s not to say there are no any positive examples to report - quite the contrary, in fact. The discussion about girls and coding is relevant and schools are already going to teach some basic skills related to this subject matter. Also, Finnish women are often as interested in founding tech startups as men. But the distribution is still uneven and we need to work hard until everyone can fulfill their passions regardless of their gender, whether it’s related to technology or any other profession. By having more role models and open discussion, I believe this can be done.

Anni Ronkainen is the Country Manager Finland at Google. You can find her on LinkedIn. In this guest post Anni Ronkainen, adds her voice to the blog challenge commenced by Tieto CEO Kimmo Alkio. Previous posts have been written by VR Group CEO Mikael Aro and Cisco Sweden‘s General Manager Niklas Andersson.

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