TSE Entre is actively involved in developing and renewing entrepreneurship and small business management. In its field of expertise, the team is the leading group in Finland with a wide variety of international activities. If you are interested in having more detailed information, please, refer to our contact persons by phone or e-mail first.lastname@tse.fi
Research
Finland has a smaller share of innovative and high expectation entrepreneurship than other Nordic countries.
The overall entrepreneurial activity in Finland is globally above average. Among adult population the overall entrepreneurial activity is relatively high and established companies survive well during the first years. Finland has, however, a considerably smaller share of innovative and high expectation entrepreneurship than other Nordic countries. In promoting entrepreneurship it is therefore suggested to put more emphasis on the quality of entrepreneurship rather than the quantity. These findings are based on the Global Entrepreneurship Monitor (GEM) –study conducted by the Turku School of Economics and financed by the Ministry of Employment and the Economics. Please find the summary of the main findings below.
Further information:
Professor Anne Kovalainen, anne.kovalainen(a)tse.fi, 050 5027 022
Professor Jarna Heinonen, jarna.heinonen(a)tse.fi, 050 5631 713
Dr. Pekka Stenholm, pekka.stenholm(a)tse.fi
Project researcher Tommi Pukkinen, tommi.pukkinen(a)tse.fi, (02) 4814 474
Summary of the main findings
The main findings of the Global Entrepreneurship Monitor (GEM) 2007 concerning Finland can be summarized as follows:
The state of entrepreneurial activity
Early-stage entrepreneurial activity (TEA index) shows that 6.9 % of the adult population is involved in early-stage entrepreneurial activities in Finland in 2007. The share of early-stage entrepreneurial is slightly, but not significantly higher than that of previous year. Among all GEM countries actual transitions toward entrepreneurship in Finland remain moderate.
The prevalence rate for established business ownership (provided income for more than 42 months) in Finland is 7.6 %, which is the 2nd highest among Nordic countries. The rate is at the same level as previous year.
The overall entrepreneurial activity, measuring the share of Finnish adult population involved in either early-stage entrepreneurial activity or established business ownership, is 14 % in Finland in 2007. Among the Nordic countries Finland has the second highest overall participation rate after Iceland (20 %). Among all 42 GEM countries Finland is just behind the USA in the 18th position.
The nature of entrepreneurial activity
Habitual entrepreneurship – any start-up experience as an owner-manager, prior to establishing the business – is a prevalent form of early-stage entrepreneurial activity. In Finland the share of habitual entrepreneurship (38 %) equals close to the average figures in the Nordic countries. Respectively, part-time entrepreneurship (42%) is common in Finland as in other Nordic countries. The high rankings in the part-time and habitual entrepreneurship reflect the labour market situation in general and suggest that part-time and habitual entrepreneurship are flexible assets for early-stage entrepreneurial activity.
Innovativeness, growth and internationalization
The share of highly innovative early-stage entrepreneurial activity is rather low in Finland. New entrepreneurs manage only in rare cases to bring into the market products and services, which are new to all customers and do not meet direct competition. On the other hand, new entrepreneurs in Finland utilize novel technologies and processes in their activities at least as often as in GEM-countries in average.
The figures indicating the demand of new and innovative products and services remain at the low level in Finland. Among the 12 countries with data for the Innovation Confidence Index Finland is 11th just ahead of Netherlands. Of the indicators, the willingness to try new products or services seems to be rather low in comparison to other countries. The dilemma that lies here for Finland is that the demand of new and innovative products and services is vital for innovative enterprises.
New and established entrepreneurs in Finland have remarkably low growth-orientation. Finland’s rate of high-growth and high-expectation entrepreneurs is only approximately one third that of Denmark, Iceland, and Sweden.
Policy issues
The level of overall entrepreneurial activity in Finland is above the average among Nordic, developed and all GEM countries. The quality of the entrepreneurial activity raises some serious concerns. Finland lacks innovative, growth-oriented and truly international entrepreneurship. This is quite understandable taking into account the high share of habitual and part-time entrepreneurship suggesting that many of those entrepreneurs are not committed to their entrepreneurial careers as such but they rather seek flexible ways to organise their living.
The GEM study supports the need to promote innovative entrepreneurship with high growth expectations. This aim is challenged by the low innovation receptivity of the country. Over half of working-age people in Finland lack confidence in new innovation. Some other continental European countries face the same challenge. Fast-growing economies (e.g. India or Brazil) seem to have a more positive acceptance of innovation. Therefore, the companies with innovative products need to look also at emerging markets. The markets in developed countries are not sufficient for innovative and growth-oriented companies.
The Finnish Government has succeeded in creating a stable and predictable business environment, which does not, however, promote ambitious, growth-oriented and innovative entrepreneurship. Although the nature of the Finnish entrepreneurial activity may partly explain the modest performance in this respect, the lack of market dynamics also appears to call for policy attention. If the market and competitive environment change slowly, there are less new business opportunities available, and successful competition does not require constant renewal of the business activities. In addition, the modest amount of innovative and growth-oriented businesses reflects the small number of innovators and potential entrepreneurs willing to start-up a business rather than insufficient measures to support their entrepreneurial endeavours. Therefore, any attempts to reinforce highly growth-oriented and innovative entrepreneurial culture of the country are still most welcome.
Portraying family businesses – a hard core under a soft shell?
This new publication edited by Dr. Pekka Stenholm presents new research findings with discussions and conclusions on family businesses. The publication analyses family businesses, especially growth and innovation as a hard shell of the family companies as well as ownership and values as a softer core of the family companies. The researchers, however, conclude that this can as well be understood the other way around: the hard core of family businesses consists of values and ownership which give a special family flavor to business. Based on the study it is crucial to understand how hard and soft are successfully integrated in family businesses.
The publication is targeted to family business owners, consultants and educators, policy makers and many others who work with family businesses and want to understand how family businesses function. The study continues the research on family businesses conducted by the TSE Entre –research group, and widens the perspectives on family businesses presented in the previous family business publication of the research group, namely ‘Quo vadis, Finnish family businesses?’
Accommodation measures in the firms enable the employment of the disabled in the open labour market
TSE Entre is joining the research project Providing reasonable accommodation for persons with disabilities in the EU, which is coordinated by the Austrian Institute for SME Research. The aim of the project is to find best practices to provide reasonable accommodation for the disabled in private and public organisations. Also the financial schemes available for the companies and employees are charted.
Finnish firms suffer from a lack of labour force in many sectors. At the same time, there is a lot of unused workforce among the disabled, who are willing and capable to take a job. The interviews made in the project so far have revealed that when a right person and a right task come across, both the employee and the employer are winners. However, usually the physical environment and the distribution of work have to be adjusted in these situations. Nevertheless, these efforts are often counterbalanced with the fact the employer gets a very motivated worker for his/her firm.
The realisation of this research in TSE Entre is founded on the know-how gained in the previous projects. Entre has been involved in the research projects on the labour market situation of the disabled from the perspective of the companies and entrepreneurs – above all in the context of social enterprises – since the year 2000 (projects ‘Social Enterprises in Finland’ and ‘Study on the Practices and Policies in the Social Enterprise Sector in Europe’).
Providing reasonable accommodation for persons with disabilities in the EU –project is financed by the European Commission.
Additional information:
Satu Aaltonen, project researcher, tel. (02) 481 4512, satu.aaltonen(a)tse.fi
New course in Sports entrepreneurship and Sports management
On autumn 2007 Turku School of Economics executed one of the first Finnish academic courses concentrating on sports entrepreneurship and sports management. During the course, students created business plans that related to the sports or exercise. In addition, in cooperation with local sports clubs, students executed projects that focused on, for example branding of top athletes and development of sponsorship cooperation between local companies and sports clubs.
The next course will take place on autumn 2008. Now we are seeking new topics for the student projects. Contact person of the course is Arto Kuuluvainen, tel. (02) 4814 546
News
Jarna Heinonen has been appointed to a Professorship on entrepreneurship (fixed term).
The council of the Turku School of Economics has appointed D.Sc. Jarna Heinonen to a fixed term (1.5.2008 – 30.4.2011) professorship on entrepreneurship. Professor Heinonen´s research interests include corporate entrepreneurship, growth and family entrepreneurship, enterprise education and promotion of entrepreneurship. Heinonen continues to work as a director of the TSE Entre, the research group on entrepreneurship within the Turku School of Economics.
More information:
Professor Jarna Heinonen, tel. (02) 4814 577, Jarna.heinonen(a)tse.fi
European Day of the Entrepreneur in Turku on 11.6.2008
European Day of the Entrepreneur will be arranged for the sixth time in Turku on 11 th of June. This year's main theme is "Growth in sight" and there will be seminars like "How to do business with Finnish enterprises" and "Enterprises and responsibilities for environment in the Baltic Sea region".
In the opening session, there will be addresses by local entrepreneurs and from the new Ministry of Employment and of the Economy. A completely new feature in the programme is the EDE-Business Park where the businesses can seek advice from various experts. The day closes with the EDE Gala to enjoy good food, meet colleagues and recognize the best firms with EDE Awards.
On the following day, June 12, an international business-to-business contact day will be organized.
Details about the programme will be updated on www.edeturku.fi The deadline for registrations closes on May 30, 2008.
Did you know this about firm growth?
Firm growth is not accidental: Innovative team firms that target the international markets have a better chance to grow than other firms. If the firm does not aim at growth, the likelihood for actual growth is also very unlikely later.
Source: Mäki, Katja & Hytti, Ulla (2008) “Pitching Out the Lost Cases” – A Longitudinal Study of the Precedents of Non-Growth of Recent Incubator Graduates. The paper will be presented in a conference next summer; ICSB 2008 World Conference, Halifax, Canada. 22.–25.6.2008.
From the perspective of growth entrepreneurs growth is about actions, not plans. In practice growth implies for example opening up new branches. If the firm opens one or two each year, it will grow substantially in five years. Growth is not a value in itself but a necessity for the existence or to maintain a competitive position, or a tool for maintaining personal engagement of the entrepreneur.
Source: Hytti, Ulla & Heinonen, Jarna & Paasio, Kaisu (2008) ”Generating a Case for Growth: discourse analysis of the entrepreneurs’ accounts on growth”. The paper will be presented in a conference next summer; ICSB 2008 World Conference, Halifax, Canada. 22.–25.6.2008.
Training is one of instruments that aim at fostering growth and it is expected that efficient training programmes reflect the recent research findings and understanding on company growth. Growth is one dimensional or monotonic phenomenon. It can take many different shapes and it is dynamic by nature. Educational and other support measures should then be flexible providing and supporting the capability of individual entrepreneurs and companies to focus, plan and carry out their individual successful business growth processes.
Source: Lamminpää, Kirsi (2008) “Training for Growth – A Study of a Growth Programme for SMEs". The paper will be presented in a conference next summer; ICSB 2008 World Conference, Halifax, Canada. 22.–25.6.2008.
In addition to small business managements’ growth intentions, firm growth requires different actions. Innovative activities, such as
acquiring new technologies and development of internal procedures, are examples of the actions that are a positively related to
firm growth. Moreover, the development of internal procedures enhances the effect of growth intentions on actual firm growth.
Source: Stenholm, Pekka (2008) “From an Intention to Realized Firm Growth? The Moderating Role of Innovativeness in this Relationship.” Paper is also presented at the ICSB 2008 World Conference, Halifax, Canada, June 22.–25.2008
Growth firms are clearly in a more dynamic way than non-growing firms. Growth firms are more active in opportunity search and discovery, and in addition, they acquire more often new resources in order to adapt their operations to the changes in the market.
Source: Kuuluvainen, Arto, Pukkinen, Tommi & Stenholm, Pekka (2008) “Do Growth Firms Grow in a Particular Way or Do They Just Grow? A Study on Dynamic Capabilities, Entrepreneurial Process and Firm Performance.” A paper to be presented at the ICSB 2008 World Conference, Halifax, Canada, June 22.–25.6.2008