Finland, as most other European countries, is going through economic and social challenges. Low birth rates will change the structure of the population, affecting heavily the welfare society. Due to the lack of workforce business processes will slow down, employees will work longer days and the pension age will slowly raise. Innovation and internationalization, along with education and migration, are the core for the success. This article describes why SMEs need digitalization and its needed skills to improve their performance and provide equal opportunities for the labour force.
Authors: Erika Bottacci & Tarja Ahonen
New skills required
Digitalization is no longer an option but a necessity for business’ success. Hence, employers are now competing to get the best of IT-talented employees. In addition, recruiters may not have the right knowledge, nor strategic visions about the most important skills required. On the one hand, students may graduate without having needed skills, while on the other hand, the current workforce may have skills that will be easily performed by machines. At the same time, it is becoming more difficult to help workers improve their skills and to keep them engaged in their jobs. Even though employees highly value training and education alongside work, automation may be a threat as it could easily replace humans. To win this competition, companies must provide training-at-work programs. A business is successful when its workforce is committed. Thus, both companies and employees must be agile and flexible and must show the ability of adapting quickly to the rapid changes. Digital skills are necessary, but attention should go towards soft skills, especially on creativity, communication and problem-solving. Therefore, companies should seek for committed and passionate employees: if they provide excellent training, they will also attract new talents. (Bottacci 2019; Digital Marketing Institute 2019.)
Globalisation, digitalisation and automation: the forces shaping the European labour market
Due to globalisation and digitalisation the presence of SMEs in the market is stronger than ever before. The work allocation is more flexible, networks are decentralised, and individuals can work independently. Digitalisation changes the way humans and machines work together. It allows workers to focus on more complex duties which would then have an impact on the quality of job performance. Thus, motivating workers to develop their skillset. This is a transitional process that allows industries to constantly improve their productivity, services, and tasks. Even though digitalisation may disrupt certain roles, it increases the work participation of people with special needs. Integrating business operations with artificial intelligence (AI) improves business processes and their efficiency, e.g., by reducing the expenses. AI processes data quickly and can help in the decisional processes. It can generate new sales and improve customer relationships. AI allows organizations to become more collaborative and team oriented. It also supports diversity at work. The vertical hierarchies are no longer efficient, as are long-term contracts and physical environments. This means that the corporate culture will be based on learning and cross-functional collaboration, mixing different disciplines and including expertise from all over the world. Today, many firms are still not able to take advantage of this technological advancement: in 2017 only 20% of European SMEs reached high levels of digitalisation. The big challenge for SMEs is the competition with multinational businesses. These have better access to AI specialists, and by developing their own digital platforms, they tend to monopolise the market and even influence the legislation. Thus, the European Commission has proposed the Digital Europe program to allow innovation in smaller companies by giving them access to public algorithms. For SMEs, anyway, there is not only the difficulty of accessing high-quality databases, but also attracting skilled people. This is often related to the lack of resources and management. (Goos 2019; Servoz 2019.)
The Finnish scenario and findings
The best way to attract professionals from outside the EU is via mobility programmes. However, this also requires a revision of the immigration policies and residence permit applications (Servoz 2019). Finnish universities attract highly skilled youth from outside Europe, but it is hard for them to find employment after graduation. The main obstacles for foreigners in getting into entry-level positions in Finland are lack of language skills, previous work experience and the time and uncertainty behind the residence permit application process. Local SMEs are affected by lack of diversity and limited resources. For some of them, international graduates are means for internationalization strategies. Going beyond this vision would lead to the implementation of employment opportunities and advance human resources strategies, especially in diversity management and learning at work. Companies that are more internationalized have a diverse workforce and they have closer relationships with universities of applied sciences. These companies are established after the ‘80s – their leadership style and corporate culture are already reflecting the changes of the business world. This is the reason why universities of applied sciences should be the first ones supporting their international students in finding internship opportunities in Finland, as well as thesis works, by strengthening their collaboration with local SMEs. (Bottacci 2019.) Thus, employers and schools should work together and emphasise the importance of soft skills and critical thinking, as well as competency acquisition throughout multidisciplinary programs (Servoz 2019; Digital Marketing Institute 2019). To guide the undergraduates from the finalisation of their studies to the entrance into the labour market, schools should further develop their work-world-related language classes and the digital services, especially the career services (Bottacci 2019).
One strategic plan of the Finnish government is that SMEs enter the international market. Highly skilled migrants could be a valuable resource for international activities. Universities of applied sciences are a pool of skilled migrants, and due to the lack of workforce, educational and business sectors should work together to encourage foreign students to find employment and stay in the country. (Bottacci 2019.) Digitalization, coming between full-time education and employee training, is the tool to reduce skill shortages, job mismatch and to boost internationalisation. For this instance, the Digital Europe program is clearly the main support that companies have to proceed with the digital transition. (Goos 2019; Servoz 2019.)
Bottacci, E. 2019. The Finnish labour market: internationalisation and future challenges : The role of local universities of applied sciences in improving foreign students’ employability in small and medium-sized companies of Päijät-Häme and Kanta-Häme. Bachelor’s thesis. Lahti University of Applied Sciences, Faculty of Business and Hospitality Management, Lahti. [Cited 14 Nov 2019]. Available at: http://urn.fi/URN:NBN:fi:amk-2019111521316
Digital Marketing Institute. 2019. 8 things businesses should know about the digital skills shortage [Cited 7 Nov 2019]. Available at: https://digitalmarketinginstitute.com/en-eu/blog/8-things-businesses-should-know-about-the-digital-skill-shortage
Goos, M. 2019. Digitalisation and the Future of Work. European Commission. [Cited 7 Nov 2019]. Available at: https://ec.europa.eu/digital-single-market/en/news/digital-assembly-2019-report-and-recommendations-digital4jobs
Servoz, M. 2019. The future of work? Work of the future! European Commission. [Cited 7 Nov 2019]. Available at: https://ec.europa.eu/epsc/sites/epsc/files/ai-report_online-version.pdf
Bottacci, Erika. 2019. LAMK graduating student. Lahti University of Applied Sciences, Business and Hospitality Management. Lahti
Ahonen, Tarja. 2019. Senior Lecturer. Lahti University of Applied Sciences Ltd, Business and Hospitality Management. Lahti.
Illustration: https://pxhere.com/en/photo/710510 (CC0)
Reference to this publication
Bottacci, E. & Ahonen, T. 2019. Digitalization and the Relation between Businesses and Education. LAMK Pro. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2019/12/18/digitalization-and-the-relation-between-businesses-and-education/