Revitalising Finnish Competitiveness

Arto Ranta-Eskola Ranta-Eskola Consulting

Ilkka Sorsa Ruukki Construction

Cornerstones of industrial competitiveness

R&D&I- collaboration platforms- public private partnerships- new business models- advanced materials- internet of things- public innovation support- etc.

Systematic development- continuous improvement- Lean- Tacuchi- Kaizen- Six Sigma- LCA- etc.

Infrastructure- political stability- education system- standard of living - availability of funding - labour costs - energy price- transportation network- etc

Operational efficiency- automation- robotics- production ecosystems- digitalization- 3D printing- quality systems- ERP- logistics- integration of design & mfg- etc.

Foundation- country size- location- climate- population - natural resources- etc.

Globalization Climate change

International conflicts

Environment

Finnish view of Finland´s location

Global view of Finland´s location

China.

Finland.

- political stability- education system- standard of living- availability of funding - labour costs - energy price- transportation network- etc

Infrastructure

The Government ”competitiveness leap” program is necessary to revitalise Finnish economy. However, cutting public R&D&I funding has to be made carefully, as it may destroy the positive results achieved.Reduced funding must be focused to boost innovation.

- automation- robotics- production ecosystems- digitalization- 3D printing- quality systems- ERP- logistics- integration of design & mfg- etc.

Operational efficiency

date/month/year www.ruukki.com | Firstname Lastname | INTERNAL11

Integration of design and manufacturing

Integration of design and manufacturing

- continuous improvement- Lean- Tacuchi- Kaizen- Six Sigma- LCA- etc.

Systematic development

Click to edit Master subtitle style

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Continuous improvement (CI) is the solution to Finnish competitiveness problem

Suomalainen työmies ja -nainen kykenevät ja haluavat antaa yrityksensä kehittämiseen huomattavasti enemmän kuin tänä päivänä näyttää olevan mahdollista.

Siihen kannustaa huoli omasta työpaikasta ja lasten tulevaisuudesta

Matti Alahuhta, Talouselämä 28.11.2014

Roles change in CI management

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Traditional management CI management

Top managementStrategic steering =>

competitiveness => jobs

Top management Creates environment and atmosphere

for renewal => continuous improvement=> superior competitive advantage =>

the employee value grows

EmployeeAssumes responsibility

of company success and own learning

EmployeeIs a loyal executor of the

company stategy

1. Selection of object

2. Analysis of current state

3. Brainstorming for targets

4. Targets, impacts

5. Execution

6. Implementation and follow-up

CILean is the systematic execution model of CI

Germany

Impact of CI to performance

CI not in useCI used partially

CI used widely

Producivity (value added / person), k€

Repair and rejections, x 0,1%

Average reset time, min

- collaboration platforms- public private partnerships- new business models- advanced materials- internet of things- public innovation support- etc.

R&D&I

New Companies

HAMK, Tavastia

Vocational Institute Tavastia

Hämeenlinna city and Linna

Business Development

HAMK Seinäjoki Region TUT

Ruukki

Steel Construction Excellence Center

New Companies

TEKES

EAKRESR

RFCSEU

RYM FIMECCTUT

RDI Projects

OVERHEADFearFaith

GOAL 5-10 YEARS10 % OF RESOURCES

STRATEGIC OPTIONSAssessmentSelection

GOAL 4-5 YEARS30 % OF RESOURCES ROI

ProfitGOAL 1-3 YEARS60 % OF RESOURCES

Is it possible?

Is it attractive?

is it practical?Is it desirable?

How do we do it?

MARKETS

Resource allocationIDEA

TEC

HN

OLO

GIC

AL

UN

CER

TAIN

TY

RESOURCE ALLOCATION

Source: William H. Matthews

Tekes projects

Market orientation

Research Applied research Operative NPD

CuriosityresearchR

isk

SHOK or CSTI

Academy of Finlandprogrammes

Tekes programmes

Tekes projects

Market orientation

Research Applied research Operative NPD

CuriosityresearchR

isk

SHOK or CSTI

Academy of Finlandprogrammes

Tekes programmes

Questions after termination of SHOK fundingHow to secure:- industry involvement in selection of research topics- effective transfer of research results into innovations

The share of public funding out of the total R&D investments of companies is in Finland among the smallest in OECD countries

”All the Apple’s technologies were developed with public funding. Without private money, none of them would be in use.”

Marina MazzucatoRoyal Society of Arts Journal, 2015(RSA members e.g. Adam Smith & Karl Marx)Mazzucato, M. and Parris, S. (2014), “Heterogeneity, R&D and growth: a quantile regression approach,” Small Business Economics Journal, 43(1)Mazzucato, M. (2013) “Debunking the market mechanism: a response to John Kay”, Political Quarterly, 84 (4): 444–447Mazzucato, M. and Shipman, A. (2014), “Accounting for productive investment and value creation,” Industrial and Corporate Change, 23(1): 1-27Lazonick, W., Mazzucato, M., and Tulum, O. (2013) “Apple's Changing Business Model: What Should the World's Richest Company Do with All Those Profits?” Accounting Forum. 37: 249-267Mazzucato, M. (2013), “Finance, innovation and growth: finance for creative destruction vs. destructive creation,” in special issue of Industrial and Corporate Change, M. Mazzucato (ed.), 22(4): 869-901

Summary The Government ”competitiveness leap” program is necessary to revitalise Finnish economy. However, the reduced research funding must be used to effectively boost innovation. New types of collaboration ecosystems are needed to utilize the potential of digitalization and integration of design and manufacturing. Continuous improvement offers the fastest effective means to increase productivity. A national development program is required to fully utilize this potential.Industry - univeristy collaboration must be deepened. The model lost due to termination of SHOK funding has to be replaced in order to bridge the gap between research and commercialization.

Acknowledgement

The authors wish to thankThe Federation of Finnish Technology Industries

andFIMECC Ltd.

for providing material to this presentation