Cooperation is essential for the international success of Finnish cleantech SMEs

According to a new study, networking represents the best path to internationalisation for the Finnish cleantech sector. A research project underway at Lappeenranta University of Technology (LUT) has found that the success of cleantech companies depends on mutual cooperation with diverse and project-style support from public funding providers and decision makers.

The internationalisation of Finnish small and medium-sized enterprises in the cleantech sector requires that they build networks with other players in the sector. Small cleantech companies are usually only suppliers of parts, but the broader network can deliver comprehensive clean technology solutions instead of individual products.

Juha Poutanen, Customer Relations Director of TPI Control, a company specialising in heat transfer processes, confirms that the cleantech sector has a particularly significant need for larger consortiums.

"For example, Finland has unique district heating expertise that holds tremendous market potential around the world, especially in China. However, with the Finnish companies in this field being suppliers of partial solutions, none of them alone have the necessary overall expertise required for market entry and the capacity to deliver complete systems. There is a need to build larger consortiums that can collectively offer complete system deliveries and thereby enter markets together," Poutanen says.

To achieve internationalisation through cooperation, it is necessary to reconcile the participants' goals. This can be very challenging, as the Finnish cleantech sector comprises a variety of different industries and enterprises. Organisations such as Tekes, Cleantech Finland and Finpro play a significant role in building up the consortiums and the necessary cooperation, and this role will only increase in importance in the near future.

While the study was focused on SMEs, the researchers note that large players will also be more successful by networking with smaller operators.

"Large players should recognise the agility and high-level innovation of smaller businesses. The big companies typically benefit from their smaller partners having their fingers on the pulse of the industry, while the small players benefit from the backing of big companies in gaining access to larger markets," explains Project Manager Lasse Torkkeli, one of the authors of the study.

The third factor that has a bearing on the success of internationalisation is the support for cooperation provided by funding agencies and decision makers. For example, when policy makers consider decisions on new energy production, the different alternatives of wind power, hydropower and solar power end up competing against each other. Previous decisions to only support one form of energy, such as wind power, can also put certain solutions at a competitive advantage.

"Funding providers in the cleantech sector must offer diverse support to various types of cleantech innovations. Focusing funding and support on only one type of innovation can compromise the future development and commercialisation of new cleantech innovations that compete with them," Torkkeli adds.

The growth of Finnish SMEs generally requires internationalisation. The significance of internationalisation is emphasised in the cleantech sector because cleantech innovations usually have strong international potential.

The study is based on the research project "Boosting the Internationalisation of Cleantech SMEs" (BICS), which is funded by Tekes, the Finnish Funding Agency for Technology and Innovation.

Further information:

Sami Saarenketo, Professor, +358 50 308 6181, sami.saarenketo@lut.fi

Lasse Torkkeli, Associate Professor, +358 40 359 1740, lasse.torkkeli@lut.fi
Research project website: www.lut.fi/bics