Micro-enterprises as an industrial superpower

Micro-enterprises should be seen as the superpower of our industry – they are flexible, strongly entrepreneurial as well as service-efficient partners for our SME sector. How can we promote this together?
Teemu Polo

For most people, large companies and chimneys first come to mind when thinking about the technology industry, but neither impression is accurate.

More than 90% of members of Technology Industries of Finland consist of SMEs, and if the mostly entrepreneur-driven mid-size companies employing 250–499 people are added, the figure mounts up to about 98 per cent. There are very few large companies in Finland, even in the technology industry.

More and more companies in the technology industry represent information technology or design and consulting. The added value of manufacturing companies is also increasingly created through digitalisation. The manufacturing industry has been able to reduce its own carbon footprint and increase its handprint through digitalisation and other innovative investments. For example, Dinolift Oy, a manufacturer of aerial work platforms based in Loimaa, invests in digitalisation in a determined manner: machine data can help, for example, to increase the utilisation rate of machines and extend service life.

SMEs employing less than 250 people account for as much as 66% of net investments, and even those employing less than 10 people account for 27%. Development and investments are therefore increasingly needed in order for our companies to remain competitive on the global market. Companies in the technology industry generate about half of the total earnings from Finland’s exports of products and services.

The superpowers of micro-enterprises

After talking to managing directors of industrial companies, it has become clear that a delightful number of people have already found micro-enterprises as their partners. Partnerships with micro-enterprises have been created for many different reasons. For example, a micro-enterprise may have specific expertise or competence missing from the industrial company.

Most industrial companies have a continuous shortage of experts, but, on the other hand, their predictability is short-term in nature (link in Finnish). In this respect, micro-enterprises are able to offer the flexibility needed to relieve the shortage of labour in industrial companies, even during peak periods.
The formation of interdependency is often seen as a challenge: if a micro-enterprise is unable to provide services at a critical moment, the SME may end up in trouble.

The identification of critical dependencies, openness and the provision of alternative solutions make it easier for micro-enterprises to create customer relationships built up on trust also in situations where the customer company would otherwise rely on its own personnel.

Opportunities for micro-enterprises as partners for the technology industry

To put it simply, industrial companies are micro-enterprises’ customers who bring bread to the table. However, they can also be much more than that.

At the heart of value creation in a company, there is always a product or service that is so good that the customer wants to pay for it. However, in most cases, the company must also have expertise in financial administration, management and even sales, which reduces the ability of small companies to focus on the main issue at the heart of value creation.

Partnership with larger companies may enable smaller companies to specialise strongly in a certain area. When a marketing person has an opportunity to specialise in social media marketing, the end result is good for everyone: the employee can focus on their specialist area, the customer will gain clearly better expertise – skills that should not be developed in the customer’s own staff – and the micro-enterprise will be able to develop their competences further.

At their best, partnerships consist of long-term cooperation in which the supplier acts as a trusted growth partner for the customer, and both parties benefit. As the customer grows and becomes international, it will also open up new opportunities for the supplier to grow with the customer.

How can cooperation be developed?

– Finding a win-win situation together. What can be done together in the short term, and how could the cooperation develop in the future?
– Identifying the special characteristics and challenges on both sides. In long-term cooperation, it is also important to discuss the more challenging situations in advance.
– Prioritising openness. The rules of the game must be clear and communications regular.

Read more about the technology industry and the economy: https://teknologiateollisuus.fi/en.

Author: Teemu Polo, Head of Entrepreneurship & SMEs, Technology Industries of Finland

Image: Liisa Takala