Competitors can be partners in an industrial ecosystem

The digitalization of large-scale industry requires a wide range of advanced solutions, not all of which can be obtained from the same supplier (Benitez, Ayala & Frank, 2020). Traditionally, large-scale industry has collaborated with large suppliers,
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The digitalization of large-scale industry requires a wide range of advanced solutions, not all of which can be obtained from the same supplier (Benitez, Ayala & Frank, 2020). Traditionally, large-scale industry has collaborated with large suppliers, but in recent years, digitalization has increasingly taken place with SMEs and micro-enterprises as well (Parkkila 2020). The strategy of large companies is to focus on their own core business, and expertise is acquired through partnerships, equipment suppliers, and other external resources.

This blog post looks at how large industry and micro-enterprise players see opportunities for collaboration. Interviews with stakeholders are part of the DigiProcess project (1.10.2019 - 30.9.2022), which aims to support the digital maturity of SMEs, the provision of digital services, and the digital ecosystems formed by SMEs and industry.

Industrial companies want small businesses to work together

According to the experience of industrial companies, micro-enterprises are innovative, agile, fast, and flexible, and often have some very specific knowledge. The risk of cooperation with a small company is seen as the risk of bankruptcy, resource shortages, changes in the ownership of the company, risks of acquisitions, resignation of key personnel, and security risks.

From the perspective of industrial companies, the cooperation of a small company with others reduces the supplier's risk and increases the attractiveness of the cooperation. Large companies want so-called joint offers from small companies. The experience of the large industry based on the interviews was that very few small companies are currently cooperating in this way.

Industrial companies wish that SMEs and micro-enterprises should network with each other and come together to present something whole. Both may have a solution that is not interesting on its own, but when combined with another solution, it would be interesting. They can even come up with just an idea.

Opportunities for co-operation between micro-enterprises

Based on interviews with micro-enterprises, it may be easy to collaborate with industrial enterprises or it may take several years of hard work. Interviewees had been able to collaborate through piloting or proof of concept (POC) experiments or as an SME partner.

For micro-enterprises, cooperating with another company offers a wide range of benefits, such as a wider offering, wider shoulders, and increased credibility. Micro-enterprises will have more existing information as well as more resources to gather more information about the needs of the industry. This will help them to better understand the requirements and demand for digital services. The collaboration also makes it easier to find the services of micro-enterprises, as customers can find what the company has to offer through other companies as well.

There are many ways to cooperate. For example, a small company can partner with a large company, two small companies can work together, or a small company sells some of its operations to a larger company. It is essential to make good agreements on cooperation so that responsibilities and income distribution are unambiguous.

This article is also published in Digiprocess project´s website.Writer: Liisa Koivisto, BBA, Digitalization Expert, Project specialist, Digiprocess-projectPhoto: Pexels

References:Benitez, G., Ayala, N. & Frank, A., 2020. Industry 4.0 innovation ecosystems: An evolutionary perspective on value cocreation. ScienceDirect: International Journal of Production Economics, October 2020. Accessed 7.1.20221.Parkkila, L. 2020. Suurteollisuuden digitalisaation avainalueet ja mahdollisuudet pk- ja mikroyrityksille. Pohjoisen tekijät 8.12.2020. Accessed 7.1.2022