Aihearkisto: Articles in English

Digitalization and the Relation between Businesses and Education

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:

Digital Marketing Institute. 2019. 8 things businesses should know about the digital skills shortage [Cited 7 Nov 2019]. Available at:

Goos, M. 2019. Digitalisation and the Future of Work. European Commission. [Cited 7 Nov 2019]. Available at:

Servoz, M. 2019. The future of work? Work of the future! European Commission. [Cited 7 Nov 2019]. Available at:


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: (CC0)

Published 18.12.2019

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:

Creating a User-Friendly Online Learning Platform to Learn Finnish

This article discusses the idea of creating a language learning platform to study Finnish online. As with any digital services and platforms, an online language learning platform should be created by keeping in mind the principles of user-friendly design. Designing such platforms should be based on rich, varied data.

Authors: Polina Moiseeva and Hamid Guedra

As the process of globalization requires people to adapt to new settings and adjust their language skills accordingly, the tools that help in acquiring such skills have to be up-to-date and user-friendly. Online learning platforms, being such tools, are expected to have a well-thought-out structure so that learners can understand the materials and go through the courses effectively and efficiently. Indeed, user experience plays a key role in creating successful online learning platforms (Harrati et al. 2016, 470).

Finland is quickly becoming a more and more multicultural society. While newly arrived immigrants can sometimes manage in English, learning and knowing Finnish is expected.  Even if it is commonly thought that Finnish is somehow more difficult to learn than many other languages and can only be mastered through thorough face-to-face teaching, creating a user-friendly online learning platform to learn Finnish is still well justified. For example, such a platform could help in meeting the growing demand of Finnish for foreigners language teaching.

The Product Development Process

The product development process described by Schneider and Stickdorn (2011, 118) provides a good background for creating user-friendly artifacts. They list the following four stages:

  • exploration
  • creation
  • reflection
  • implementation

The exploration stage relates to the project background and aims to get acquainted with the problem, identify it, and visualize findings. In the creation stage, focus is on collecting all the findings, generalizing on them, and processing them to produce a viable concept. The reflection stage covers prototype creation and collecting user feedback. Potential users are encouraged to test the created prototype in real-life conditions and to report any problems they detect. The usability test carried out at the stage allows researchers to identify possible mistakes in the interactive prototype and correct them at a considerably smaller expense than at a later stage. In the implementation stage, the final product is released and made public, which may bring about the need for further improvements and iterations.

Case Study and Its Key Findings

A study, Developing an online learning platform for studying Finnish, by Polina Moiseeva and Evgenii Sverchkov (2019) reports a research project that examined existing online language learning platforms from a user’s perspective. It also created a prototype of a Finnish language learning website and tested the prototype with potential users.

Figure 1. Neiro Lingua’s website to study Finnish (Moiseeva & Sverchkov 2019, 49)

Designing and creating a user-friendly online learning platform requires varied data. The data can be collected, for example, through user surveys, benchmarking, and usability testing. The key findings of the study were drawn from such rich data.

Regarding learners, full-time students generally seem to attend fewer online courses than those who are either at work or unemployed. (Moiseeva & Sverchkov 2019, 22.) Online courses therefore seem to meet the needs of those learners who are outside educational institutions.

There are five key points that should be considered when designing online language learning platforms: mentorship, course guidelines, study materials, practice, and content representation. In addition, learners generally want a lesson page to include a video lecture where the related grammar is explained; they want the material to be available as text so that it can be studied afterward; and they want resources to help with homework and also links to additional grammar and vocabulary practice. A language learning course page should also have detailed information about the course structure and instructions on how to work during the course as well as links to social media channels and group discussions. (Moiseeva & Sverchkov 2019, 22.)

A language learning platform should generally have a clear structure and a simple, clear interface. The color scheme should be uniform and consist of three to four colors. Finally, to be even more user friendly, a language learning website should provide instructions on how to go through a lesson and have an option to create a personal user account. (Moiseeva & Sverchkov 2019, 22.)

Further Study

Further study could, for example, focus on the topic of scaling a software as a service (SaaS). It brings about the need to choose the best billing model for the new online language learning platform. The choice depends on the type of business and the overall business strategy. Per-user models, the pay-as-you-go billing model, the free-based model, tiered user pricing model are all widely used options. The most essential task is to choose the billing model which contributes to customer satisfaction and loyalty. (Lueck 2018.)

To sum up, the idea of creating an online language learning platform to study Finnish is well justified based on the current needs of the new generation of young foreigners seeking to establish themselves in Finland. The study conducted by Polina Moiseeva and Evgenii Sverchkov serves as a viable starting point for creating such a platform.


Harrati, N., Bouchrik, I., Tari, A. & Ladjailia, A. 2016. Exploring user satisfaction for e-learning systems via usage-based metrics and system usability scale analysis. Computers in Human Behavior. Vol.61, 463-471. [Cited 30 April 2019]. Available at:

Lueck, C. 2018. What is Saas? Popular billing models you should know. FastSpring. [Cited 24 Sept 2019].  Available at:

Moiseeva. P. & Sverchkov, E. 2019. Developing an online learning platform for studying Finnish. Bachelor Thesis. Lahti University of Applied Sciences, Faculty of Business and Hospitality Management. Lahti. [Cited 24 Sept 2019]. Available at:

Stickdorn, M. & Schneider, J., 2011. This is Service Design Thinking. Amsterdam: BIS Publisher.


Polina Moiseeva is a Business Information Technology student at Lahti University of Applied Sciences. Polina’s interests are in user experience design and edutech.

Hamid Guedra is a Senior Lecturer at Lahti University of Applied Sciences. Hamid’s interests are in teaching English for specific purposes and communication research.

Illustration: (CC0)

Published 10.12.2019

Reference to this publication

Moiseeva, M. & Guedra, H. 2019. Creating a User-Friendly Online Learning Platform to Learn Finnish. LAMK Pro. [Cited and date of citation]. Available at:

A Strategic Guide to Business Model Excellence in Local Food Business – Case: Baltic Sea Food Project

The Baltic Sea Food project was undertaken due to various challenges faced by local food businesses in the Baltic Sea Region. The main objective of this project was to improve the operational effectiveness by collecting and analyzing the data in the Baltic Sea Region. Development of business model(s) was critical for creating improved business solutions for these local food businesses. This article proposes an approach for conceptualization of business models through business excellence model and provides a strategic implementation framework for achieving operational effectiveness and business excellence. This innovative approach is aimed at prioritization of strategies to yield better outcomes.

Authors: Shrusti Jarde & Brett Fifield

Baltic Sea Food Project

The EU and Interreg funded Baltic Sea Food (BSF) project aims at developing more systematic approach to bring value to all the possible stakeholders involved (Interreg Baltic Sea Region 2017). BSF project is divided into phases. Phase–I to collect information about local food business scenario, challenges faced etc. In phase-II, business model(s) are developed while in the last phase piloting and remodeling of these business model(s) is undertaken to develop most financially viable approach.

Problem Space

Market orientation and awareness of market strategies have become more important not only for investors but also for the local food businesses in order to succeed (Lund & Noell 2002). This article serves as a guideline for how to implement business models successfully and how to measure their performance (Jarde 2019). The strategy framework and recommendations provided through this article can guide local food businesses in strategically prioritizing and implementing developed business models. Hence, research objectives are to first map the current situation in local food business in Baltic Sea Region (BSR) and then to provide innovative approach in conceptualizing business models through business excellence model (BEM) for achieving business efficiency.

Business logic and Strategy

The big difference between business model and strategy is, the focal point of business models is creating value for target customers. Operational effectiveness and sustainability is important but not sufficient (Porter 1996). It is important to know that, strategies come in planning as well as in implementation phase of business logic (Osterwalder & Pigneur 2010) and based on objectives strategic tools are chosen. Below image reflects, how various excellence models and strategy tools, are applied in the business logic triangle throughout this article. This aims at understanding the purpose of business model while connecting it with business strategy and progressing it towards the business excellence.

Image 1. Business study logic developed for BSF project (Jarde 2019)

Business excellence model

Prior developing BEM, it is important to develop a basic operational business framework. The local food businesses can adapt two different approaches as their basic business operations to generate revenue. Direct approach connects local businesses directly to the end consumers. While an indirect approach establishes a link with businesses as well as private customers.

To develop a business excellence strategy model, inputs from strategic factors identified and the list of existing barriers to overcome are considered. By using EFQM model, the framework of business excellence strategy model is presented. The model is developed based on the collective findings from all 10 countries’ empirical study.

Business model implementation

This article proposes an innovative strategic approach for BSF Phase III i.e. ‘Conceptualizing business model through BEM’. Many practitioners get confused with how to implement these business models to achieve desired results or to gain competitive advantage (Casadesus-Masanell & Ricart 2010). Some businesses are more profitable than their competitors, even if they apply same strategies (Nielsen 2010). Hence, conceptualizing business models using BEM plays a significant role in not just achieving business excellence but also in effective implementation of these business models to achieve desired results.

The various components for Business model canvas (BMC) and BEM are analyzed to identify some common aspects and to fulfill their respective objectives, so that they can be mapped with ‘Enablers’ and ‘Results’ of EFQM.

After business excellence strategy model is developed, it is important to prioritize the strategies identified. Evaluate market competitive position of each factor. Rate and position these factors in the business strength and market attractiveness framework for developing GE-McKinsey nine-box matrix. The positioning is done based on market and business understanding, past experiences, importance of factor etc. Once strategies are prioritized, determine the category for each factor for developing strategic implementation guidelines and set the measurable objectives. Analyze this matrix in timely manner to measure the results. Update, eliminate, add, reposition these strategic areas on the matrix based on achievements.

Evaluation and Conclusion

Businesses always struggle to know how to execute their business models and value propositions successfully to achieve desired objectives (Casadesus-Masanell & Ricart 2010). The approach proposed through this article, can also be adapted by other businesses to implement their business models effectively. A simple strategic analysis tool – SWOT analysis, is used to analyze the strengths, weaknesses, opportunities and threats associated with this approach.

Table 1. SWOT analysis of proposed approach (Jarde 2019)

Achieving business excellence through strategy innovation in local food business is about reimagining their own growth strategy through a focused and multi-functional approach. It is not a one action step to achieve something, but it is creating multiple iterations towards achieving operational effectiveness and business excellence.


Casadesus-Masanell, R. & Ricart, J. 2010. From Strategy to Business Models and onto tactics. Long Range Planning 43. pp. 195-215. [Cited 1 Oct 2019]. Available at:

Interreg Baltic Sea Region. 2017. Baltic Sea Food Application Form.

Jarde, S. 2019. Driving Business Excellence in Local Food Business Through Strategy Innovation. Master’s thesis. Lahti University of Applied Sciences. Lahti. [Cited 8 Nov 2019]. Available at:

Lund, M. & Noell, C. 2002. The Balanced Scorecard for Danish Farms – Vague Framework or Functional Instrument? Farm Management. Proceedings of NJF Seminar No. 345. October 2002. Norwegian Agricultural Economics Research Institute. pp. 187-204.

Nielsen C. 2010. Conceptualizing, Analyzing and Communicating the Business Model. Aalborg University. Department of Business Studies. No. 2. 2010. [Cited 18 Nov 2019]. Available at:

Osterwalder, A. & Pigneur, Y. 2010. Business model generation: A handbook for visionaries, game changers, & challengers. John Wiley & Sons, Inc., Hoboken, New Jersey. [Cited 8 Sept 2019]. Available at: https://profesores.virtual.uni&

Porter, M. 1996. What is strategy? Harvard Business review. 1996-2000. The Harvard Business School Publishing. pp. 61-78. [Cited 17 Mar 2019]. Available at:


Dr. Brett Fifield has been actively involved in developing Business Schools for the Finnish Universities of Applied Sciences since 1994. Most recently he has been responsible for courses in Futures and Strategies, Innovation and Creativity, and Leadership and Management of Projects in Distributed Organizations.

Shrusti Jarde has completed Master’s Degree program in International Business Development in 2019.

Illustration: (CC0)

Published 20.11.2019

Reference to this publication

Jarde, S. & Fifield, B. 2019. A Strategic Guide to Business Model Excellence in Local Food Business – Case: Baltic Sea Food Project. LAMK Pro. [Cited and date of citation]. Available at:

Customer-driven marketing penetration strategies for Nordic-Baltic eight academic segment

This article concerns proposing B2B customer-driven marketing strategies for a software company, Statzon, to penetrate Nordic-Baltic Eight (NB8) countries’ academic segments following the subscription business model. In a more in-depth perspective, the study discusses the search engine optimization tactics regarding marketing strategies.

Authors: Shima Edalatkhah and Tiina Pernanen

To examine customer-driven B2B marketing strategies for Statzon, as market data and forecast provider, the research aims to enhance the number of subscribed users by figuring out:

  • Statzon service Key Performance Indicators (KPIs) for NB8
  • The potential competitive advantages that Statzon can provide
  • NB8 penetration process
  • Suitable pricing policy for NB8
  • Marketing promotional strategies for Statzon
Research Methodology and Data Collection

After an Economical, Social, and Technological analysis of NB8 (table 1), a ten-question questionnaire was emailed to 273 subjects to fulfill the study goals. The survey subjects were library directors, vice directors, and the head librarians of NB8 universities as the authentic source for data collection. The collected result presents the demanded data categories in the NB8 academic segment, the KPIs of data service platform, the decision-making process, and pricing indications from NB8 academic users’ point of view. (Edalatkhah 2019)

Table 1. NB8 Economical, Social & Technological Analysis (adapted from WorldBank 2019)

Key Findings

According to the study results, Statzon’s biggest potential markets among NB8 countries are Sweden, Denmark, and Finland considering population, the number of academic centers, and the Research and Development (R&D) share of Gross Domestic Product (GDP) as shown in figure 1. (Edalatkhah 2019)

Figure 1. NB8 biggest Academic Markets

The research results indicate that the principle faculties in the target market are Business and Hospitality as well as Social Sciences and Technology. Based on survey results, the most popular data categories are Education, Finance, Health-Social work, and Manufacturing. The essential features of data service in NB8 academic users’ point of view are the variety of data categories, regular data updates, and downloadable visual data. Thus, it is recommended to Statzon to specify its core concentration on mentioned above countries, faculties, in-depth data categories, and the service feature at preliminary steps of market penetration phase. (Edalatkhah 2019)

The potential competitive advantages of Statzon

Amadeo (2019) believes, competitive advantages do not root only in more competitive price, quality, and speed of responsiveness, the role of innovative and high-tech service is very sensible in the current technology age. Statzon already benefits from competitive advantages, including modern, user-friendly, and engaging design, downloadable and printable visual data, regular updates, and market forecasts for all industries (Statzon 2019.) Study outcomes indicate that Statzon content needs to be revised by more detailed niche data classification, also the applied technology of Statzon needs to be automated (figure 2).

Figure 2. Statzon Potential Competitive Advantages for NB8 Academic Segment

Penetration Process to NB8 Academic Segment

To penetrate in NB8 academic segment, Statzon should reflect on the decision-making process. According to the study results, decision making in the NB8 academic segment, highly (70 %), depends on students’ feedback. The dominant decision-makers are library managers who decide about data service; however, in less than half (40 %) of academic centers, the university’s managing team decides about the data service. The study recommends Statzon does not confine targeting library managers to contact. The figure 3 declares how to convince the academic segment, Statzon first needs to build awareness among university teachers and research staff, before giving trial access to the university. In this way students as dominant end-users, would engage more efficiently in trying Statzon service, and then by providing feedback, they will influence the decision-making process. (Edalatkhah 2019)

Figure 3. Penetration Process to NB8 Academic Segment

Pricing Strategy for NB8 academic Segment

The study results imply that there is a correlation between GDP and R&D expenditure share of GDP of the NB8 members with academic users’ price consciousness. The study outcome shows while the average data service fee in NB8 is €5,194, fair annual subscription fee in the Nordics is considered to be €5,000-7,500, while in the Baltics users had more diversified anticipations (€2,000-10,000). (Edalatkhah 2019)

Recommended Strategies for Statzon in NB8

First, Statzon needs crystal clear goals as pillars of its marketing campaigns and content. The selected and filtered content should be adjusted based on customers’ demanded data categories. The second determining step is lead nurturing by creating a branched content funnel to drive leads toward fitting content, targeted video ads, engaging market data quiz, and communicating with leads in a friendly and innovative way. The third tactic is increasing visibility by other people’s networks (OPN), including academic experts and prominent influencers. The fourth step for Statzon to penetrate the educational segment of NB8 is setting barriers for the competitors and taking the market leader role. To do so, Statzon needs to create a big gap with competitors with its leading technology, massive academic niche data scale and ongoing innovation.

By limiting the access of trail users to all data categories, Statzon will have more professional and niche data provider image; likewise, as subscription bonus, Statzon can offer further access to more detailed data class, subcategories, or relevant data categories during the limited time with specific price bid to meet the needs of different academic users by setting Budget, Premium and Customized tiers. 

Tactics to avoid penalizing by Google Panda

As Search Engine Optimization (SEO) profoundly matters for the data service provider’s credibility, it also is crucial to be aware of the content types for which Google Panda algorithm penalizes the websites. Many websites after being penalized fail to retrieve their previous ranking. Panda updates are a big surprise to SEO and webmasters. Statzon should consider Google Panda sensitive hints including thin content, duplicated pages, lots of advertisements, unintuitive or poor navigation, automatically generated content, squeeze pages, doorway pages and meta-refresh technology which are respectively explained in figure 4. (Google Support 2019)

Figure 4. Tactics to avoid Google’s Panda Penalization (adapted from Google Support 2019)

Final Remarks

This study highly recommends Statzon to build a relationship with its subscribers by offering unique loyalty programs and having a “Honey Pot” service plan (Morris 2015), which leaves no excuse for potential users not to subscribe. The “Honey Pot “service package of Statzon should contain limited yet tailored niche data classifications, with the price range the target users consider fair. While Statzon is applying the suggested strategies toward increasing its credibility and visibility, it should be cautious about Google Panda content-sensitive guidelines.


Amadeo, K. 2019. What Is Competitive Advantage? Three Strategies That Work. Blog [Cited 25 Jun 2019]. Available at:

Edalatkhah, S. 2019. Customer-driven B2B Marketing Strategies for a Software Company. Case: Statzon. Lahti University of Applied Sciences. Thesis [Cited 30 Oct 2019].  Available at:

Google Support. 2015. Thin content with little or no added value. [Cited 9 Oct 2019]. Available at:

Morris, J. 2015. The Right Way to Launch a Subscription Business [Cited 19 Jun 2019]. Available at:

Statzon. 2019. What Is Statzon? [Cited 20 Jun 2019]. Available at:

Worldbank. 2019. United Nations Comtrade Database Through the WITS Platform [Cited 28 Jun 2019]. Available at:


Shima Edalatkhah, International Business Student at Lahti UAS

Tiina Pernanen, Lecturer at Lahti UAS


Published: 6.11.2019

Reference to this publication

Edalatkhah, S. & Pernanen, T. 2019. Customer-driven marketing penetration strategies for Nordic-Baltic eight academic segment. LAMK Pro. [Cited and date of citation]. Available at:

LAB: Boosting Startup and SME Ecosystems in the South Karelia and Päijät-Häme Regions

Startups and SMEs are considered the backbone of any growing economy. As a collaborative entity, research-oriented universities (LUT) and polytechnic schools (LAMK & SAIMIA) can boost business ecosystems by providing fuel in the form of innovations.

Authors: Afnan Zafar and Marja Ahola

Why are startups and SMEs important for regional and national growth?

There is growing interest in innovations across the globe, irrespective of the size and origin of the country in question (Ghisetti et al. 2015). While multinational companies (MNCs) struggle to find innovative products (Jay 2013), the focal point has shifted toward startups and small and medium-sized enterprises (SMEs) (Rosenbusch et al. 2011). The freedom to explore new ideas in startups and SMEs is becoming ever more important. They are acting as drivers for regional and national innovation systems and leading to economic growth for emerged or emerging markets (Hessels & Parker 2013). After the 2007 economic crisis, most economies learned the important lesson of not relying solely on MNCs for economic growth (Helleiner 2011).

Countries have shifted their focus more towards promoting startups and SMEs to achieve longer and more stable economic growth (Ciravegna et al. 2014). There has also been a shift observed from industry-driven, incentive-based to regional and national economic policies with long-term planning (McCann & Ortega-Argilés 2013). Groupings of similar SMEs, strong funding bodies for innovation needs, single governing bodies and openness among firms to collaborate are the most important initiatives many countries have followed to achieve remarkable growth (Gunasekara 2005). Many countries have formed clusters of startups and SMEs at the regional level, referred to as ecosystems (Kanter 2012). These ecosystems have been proven to function as factories of new ideas and innovative products over the last decade (Triguero et al. 2013).

In Europe, it is evident that startups and SMEs are key players when it comes to their economic contribution at the national and EU level (Mrva & Stachová 2014). Finland is not an exception; after the well documented problems faced by Nokia, the need to expand startup and SME ecosystems both vertically and horizontally became apparent (Zafar 2018). Startups and SMEs produce approximately 60% of EU GDP, employ around 100 million people, generate about € 3,934 billion and are considered as an innovation powerhouse of the EU (Eurostat 2015). The main players in startup and SME ecosystems are Malta, Cyprus and Estonia (Eurostat 2015) while Finland, one of the world’s most innovative countries, lags behind (Filippetti & Archibugi 2011).

How can LAB boost development of startup and SME ecosystems?

Research-based educational institutes in any country are always considered the lifeline for innovative ideas (Bozeman et al. 2012). In Finland, institutes play a vital role in developing entrepreneurial competencies and have introduced many programs at bachelor and master levels to train future entrepreneurs. Due to changing dynamics, it is now time for institutes to merge and collaborate on a single agenda of economic growth with the help of startups and SMEs. LAB is now the flag bearer for such open innovation collaboration (Zafar & Ahola 2019). LAB is the result of the merger between LAMK and SAIMIA and will influence R&D in the South Karelia and Päijät-Häme regions and then later at the national level. These regions have great potential to develop, align and enhance startup and SME ecosystems (Ministry of Employment and the Economy 2019a & 2019b). As mentioned earlier, startups and SMEs have the natural ability to bring innovative products to the market. However, initially it is very difficult for them in this region (South Karelia/Päijät-Häme) to take the initiative alone. Here, LAB can play a key role in boosting the creation of startup and SME ecosystems by fueling them with initial research-based innovation and helping them to develop business plans.

Figure 1. LAB as a booster of business ecosystems (Figure: Afnan Zafar 2019).

At the backend, LAB can enable startup and SME ecosystems (Figure 1) to materialize product plans and service development and at a later stage market them (service/product) successfully. LAB can also play a role in post-market surveillance with firms for innovative products.

How can LAB be a game-changer at the national level?

It is evident from the literature that educational institutes are an important pillar in the growth of a country’s economy (Bozeman et al. 2012). They not only educate the nation but also play an important role in knowledge creation. When LAB successfully helps to develop the regional ecosystems in South Karelia and Päijät-Häme, which are just 150 km apart from each other and 90km from the Uusimaa region, it will start to emerge as a major national game-changer for the economy. LAB will act as an umbrella, under which regional strategic focus will be discussed, evolved, implemented and analyzed (Zafar & Ahola 2019). The well-aligned strategic focus will influence national policymaking and strategic focus and vice versa. However, as a bigger influencer in the future, more responsibility will fall on LAB’s shoulders to initiate, develop and execute R&D and business activities.

Startup and SME ecosystems are a win-win situation for all stakeholders

The level of knowledge and innovativeness is a key factor for the success of SME and startup ecosystems. The competitive advantage of such ecosystems is directly related to the role of each stakeholder (Gunasekara 2005). In this case, LAB (LAMK and SAIMIA) and the startups and SMEs themselves all are stakeholders. LAB has extensive experience related to entrepreneurship and innovations. It will play a lead role in future business ecosystems. Nevertheless, firms also have to respond positively to make this happen. LAB can learn the practical aspects of industry from firms, and firms can have initial R&D support from LAB. All growing economies have active collaborative ecosystems among various research institutes, startups, SMEs and MNCs (Kanter 2012). Responsible roles played by each stakeholder (LAB & firms) can lead to a win-win situation for all as the ecosystem will provide an open innovation environment so all stakeholders can learn from one another and grow together (Zafar 2019).


This article explores the possible future influence of LAB at the regional and national levels in Finland. The overall discussion shows that LAB can boost the creation of startups and SMEs due to its extensive collaboration with three main institutes. These three institutes have experienced RDI experts and extensive accomplishments in research. It is important to align the strategic focus of research with the needs of regional startups and SMEs. There should be set guidelines and SOPs before the actual collaboration starts to get the best results in the form of successful business ecosystems. The well-planned execution of LAB and its scope will definitely prove to be a game-changer for regional and national economic growth in the long run.


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Afnan Zafar, Ph.D., works as a research fellow at the University of Vaasa, Finland and as a private research consultant. His areas of expertise are innovative solutions, innovative product and service development, brain drain problems and its solutions in developed countries

Marja Ahola, MA, works as an RDI expert at Lahti University of Applied Sciences, as an expert in entrepreneurship education for highly educated immigrants (Kokoma ESF) and as a project manager in the Ossi 2 – Skills for a Work project

Illustration: (CC0)

Published 26.9.2019

Reference to this publication

Ahola, M. & Zafar, A. 2019. LAB: Boosting Startup and SME Ecosystems in the South Karelia and Päijät-Häme Regions. LAMK Pro. [Cited and date of citation]. Available at: