Young companies lead digital readiness in Finland

Startup businesses are leading the way in Finland when it comes to having the right customer-facing technologies in place

Startup companies in Finland are leading the charge to digitisation, according to research by Finnish software-as-a-service (SaaS) provider Vainu.

Vainu studied the digital readiness of Finnish companies by analysing open and public data on more than 40,000 businesses on its database. Companies were rated on their use of digital tools, technologies, mobile responsive websites and social media, as well as whether they offer e-commerce.

“We focused on those aspects of digital that can be analysed computationally,” said Mikko Honkanen, CEO at Vainu.

“We have previously given individual municipalities and cities data on the companies [in their area]. Just by analysing a website’s source you can interpret a lot of things, such as what kind of digital tools a company utilises, and whether they personify site visitors and use certain analytics tools.”

Vainu found companies established after 2010 had the highest marks in the study. In contrast, businesses more than 25 years old lagged behind in embracing both digital tools and technologies.

“What surprised me is that I would have expected five- to 15-year-old companies to be ahead of startups. It takes time and investment for some digital things to work well, so it would be natural for the youngest companies to be left behind. But it turned out to be the younger the company, the higher its digital capability,” said Honkanen. 

When digital readiness was looked at on an industry level, the information sector took the top spot, with telecommunications, employment services and retail also making the top five. The bottom five places were occupied by traditional sectors such as forestry, maintenance and repair, social services and metal product fabrication.

Finnish companies were also compared to their counterparts in Sweden, where Vainu has data on more than 57,000 companies. It found similar results in the two countries.

Far from digital transformation

Despite the sheer number of companies in Vainu’s study, it is important to note the research only looked at one side of digital.

“We cannot access certain internal digital processes companies have implemented. [Our study] is limited to digital that can be seen externally by consumers and partners,” said Honkanen.

It is the hidden side that Mika Helenius, head of research programme at Helsinki-based Aalto University, would like to see investigated more. He said to reach real business gains companies need to embrace digital on a strategic and innovation level.

“There is still a long way to go to understand the strategic significance of [digital] change for business and the market, and what kind of expertise that requires,” he said.

While Honkanen focuses on the external, he agrees Finnish companies have some way to go to reach their full digital potential and there remain huge differences between the most digital-ready companies and those finishing near the middle of the study.

“There is still a lot to do, but based on our two country comparisons it seems the challenge is the same everywhere,” added Honkanen. xxxxxxxxxxxxxxxxxxxxxx

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