Innovation Processes in Transition; SMEs

by Erkki Ormala

Professor of Innovation Management

Aalto University, Business School

Innovation processes in SMEs

•Involves all the elements of innovation process

•But is not formally organized

•Informal dialogue with key persons

•Close customer orientation

3 © NOKIA

Elements of Favorable Innovation Environment; critical elements for SMEs

FIRM

Good understandingof the changing landscape

Access to top-level research and high quality experts

Easy access to Broadband; abilityto use ICT

Favourable regulatoryenvironment; harmonized rules; IPR provisions; company statutes; taxation, etc

Rich fabric of private partners;enabling vertical and horizontal integration

Access to VCfunding and support

Access to market;Cost efficiencyMacro economic stability

Access to raw materials

Building a VC market

1980s 1990s 2000 and beyond

Public funding, education, incentives

Partnership funding, matching service, risk sharing. education

Public seed funding, risk sharing, education, exit market

Venture capital investments by country

• Million US dollars, 2012

• Estonia (2011) 1.8 Italy 91.7 Australia 331.3

• Slovenia (2011) 2.5 Finland 101.6 Korea 606.9

• Czech Republic 6.7 Denmark 101.7 Germany 706.2

• Russian Federation (2011) 9.3 South Africa (2011) 109.6 France 710.5

• Poland 11.7 Ireland 113.5 Israel 867.0

• Greece (2011) 13.7 Belgium 115.9 United Kingdom 929.1

• Luxembourg 14.2 Norway 143.4 Canada 1470.1

• Portugal 20.4 Spain 148.1 Japan 1553.6

• New Zealand (2011) 28.9 Switzerland 209.5 United States 26652.4 (75% of all OECD)

• Austria 43.5 Netherlands 226.5

• Hungary 82.6 Sweden 285.6

• 1 2 http://dx.doi.org/10.1787/888932829837

Small Business Investment Company in the US (SBIC)

• Established 1958• Direct investments in VC funds and quarantees• Last year 2.2 billion US$• Profitable

Private corporate VC companies; case Nokia

• BlueRun Ventures (BRV®) is an early stage venture firm focused on mobile opportunities in key global markets. Offices in Menlo Park, Beijing, Shanghai, and Seoul.

• Nokia Growth Partners. In a converged digital world, every business must be mobile. NGP provide access to resources beyond the capital investment: mobile expertise, strategic guidance, a global network of partners and thought leaders, and innovative partnership opportunities.

Plug and Play; Silicon Valley in a Box

• Private business incubator• 300 companies• Other locations: San Diego, Canada, Jordan, Singapore• Weekly meetings with VC companies and experienced

industry leaders• Big company sponsors• Ten times better than the current competitive offering• Transfluent

Venture capital in Finland

• TEKES: R&D, Organization and process development, Internationalization; Rapid growth; venture investements 200k€->500k€->1000k€

• Vision+: new partnering model; a revenue shared business model without dilution http://visionplus.fi/

• Tax incentive: private persons can deduct losses up to 200 k€

Partnering

• Partnering is a key to success for SMEs• Patnering can take many different forms: customers (Delfoi),

platform providers (Rovio, Supercell) , subcontractors, etc• IPR plays a significant role• Internationalization is a big step where a global partner can

help a lot (Forum Nokia)

Nokia Developers Community –Large and Active

11

4.5 milloin of developers

Over a millionmonthly visitors within our community sites (wiki, blog, discussion boards)

Research & Education

AppCampus

3500+ submissions reviewed in 24 mths300 Investment decisions made100 Applications launchedAproaching 10 million downloads

Corporate partners ComplementaryPartiesCoaches

PYK (Small Business Center)

Training for entrepreneurs

Aalto Center for Entrepreneurship

Around 200 innovation proposals/year -> 10-15 companies->15-20 patent applications

Aalto Ventures Program

Problem based learning program to foster entrepreneurial mindset and skills

Co-operation with Stanford

Startup Sauna

30-40 companies in acceleration / year 20 million Euros raised30 students trained with internships

SLUSH Established as the leadingStart-Up event in Europe

Aalto Start-up Center80 companies in incubation/ 32 high growth

AaltoES

9000 community members100 activists Annually 8000 participates events

EIT ICT LabsEIT Nodes &partners in Europe

Entrepreneurship ecosystem

Aalto University: Expertise workshops: Design Factory, Media Factory, Service Factory and Health Factory• Combining the expertise of the

schools in the fields of product development, media and services.

• Students, researchers and companies will meet in connection with joint projects.

Units based on Design Factory's

mode of operation have also been established at

universities in Shanghai, Melbourne and

Santiago.

Thank you