October 3, 2019
In the future, commercialisation skills may be a significant obstacle to success for Finnish businesses, reveals a recent survey by Kolster and market research company Taloustutkimus. A total of 200 CEOs and senior executives of Finnish companies took part in the survey.
Between April and May, Talostutkimus interviewed 200 corporate decision-makers on behalf of patent and IP law firm Kolster. The survey included decision-makers from 26% of Finland’s 100 largest companies. The interviewees included both CEOs and senior executives.
In the companies they represent, 40 per cent of revenue is generated by new products and services. Still, only 8 per cent of the respondents said that Finnish businesses know how to turn innovations into commercial products.
“When a company falls in love with a new invention, device, service or product, they often forget to consider how to extract the most commercial value out of it. Companies fail to see opportunities for creating added value and leave many steps of the product development process underused,” says Timo Helosuo, CEO of Kolster.
The real value of a well-protected product increases when it or its parts are available to the markets. According to Helosuo, by utilising IPR (Intellectual Property Rights) more efficiently, companies could achieve significant financial benefits: “By investing one million in product development, companies can yield 15 million in return, provided that all possible opportunities for commercialisation are thoroughly explored.”
Company boards need expertise and will to use all opportunities for growth
More than 90 per cent of corporate decision-makers believe that a well-maintained IP portfolio increases the company’s value. Even so, decision-makers in companies rarely possess a deep understanding of intellectual property rights. The respondents felt that the executive teams of their companies possessed only moderate expertise in IPR, and less than a quarter of the companies had created an IP strategy.
“Company boards lack the expertise and will to exploit the results of product development to their fullest extent. Boards of directors need a vision to require that the company's operational and senior management include IPR expertise, either through recruiting or partnerships,” says Timo Helosuo.
“Finnish companies are sold off to foreign owners at a too early stage”
The survey found that 78 per cent of corporate decision-makers hold innovation activities important to their company. 41 per cent believe that Finland offers the best operating environment for product development, followed by the US, Germany, Sweden and China. As the most important innovations, the respondents named the development of new products and services and improvement of existing ones, but well over half also listed processes and business and organisational models as important areas of innovation.
The survey also asked business decision-makers about their views on the rising economy of China. Only a third of them see Chinese companies as a threat to the Finnish economy. Although China is not seen as a major threat, corporate decision-makers are worried that Finnish companies are sold out to foreign owners too early instead of being developed further with domestic efforts. 60 per cent of the respondents agreed with this statement.
As threats to innovation, the respondents listed high costs, counterfeit products and increasing competition. According to Helosuo, by planning and managing IPR operations with diligence, companies are able to minimise potential threats. 69 per cent of the respondents hoped for tax reliefs in return for innovation activities. In turn, 61 per cent believed that business subsidies should be allocated mainly to companies engaged in innovation. Timo Helosuo from Kolster stresses that innovation activities alone cannot serve as the basis for subsidies: “Corporate subsidies should always require a realistic plan for achieving commercial value. This should also apply to universities and research institutions in order to encourage collaboration with businesses.”