Survey: SMEs reluctant to invest in new technologies – help is available

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According to a survey commissioned by VTT, SMEs are reluctant to invest in new technologies. Only one third of the SMEs in the manufacturing industry that responded to the survey seek growth and new business by investing in technology. The result can be considered very disquieting, as the manufacturing sector has been accumulating investment debt since 2008. The results were revealed by a survey commissioned by VTT1), in which 200 Finnish SMEs operating in the manufacturing industry were interviewed.

As a rule, SMEs seek growth and new business from new customers, new products, and new partners and networks. The results concerning growth engines mostly complied with the results of the previous 2018 survey, but there has been a clear drop in the companies' willingness to invest in new technologies since then. Investments in new technologies were only seen as the fourth most important engine for growth.

The manufacturing industry has been suffering from insufficient availability of skilled labour for a long time. This already seems to be reflected in the companies’ reluctance to make investments.

“Are companies thinking that lack of skilled labour would prevent them from taking full advantage of their new technology investments? In any case, the unwillingness to invest weakens the labour productivity and competitiveness of the Finnish manufacturing industry,” says Jyrki Poikkimäki, SME Business Development Lead at VTT. 

Less than 10% of respondents consider deployment of new systems and tools

The survey asked companies whether they are using digitalisation solutions or planning to deploy such systems. Based on the responses, companies have started to digitalise their operations, but at a slower pace than would be desirable. For example, when it comes to business management systems, the ERP system is used by almost 90 per cent of the respondents, while MES systems, combining the control of manufacturing systems and factory automation, are only used by one in ten companies. Only two per cent of the respondents consider introducing MES.

The result is very descriptive of the state of digitalisation in the Finnish manufacturing sector: the basic systems are in use, but the companies are yet to take the actual digital leap. It is conspicuous that typically less than 10% of the respondents consider introducing new systems and tools. The SMEs in the manufacturing industry seem to be lacking resources and expertise needed for long-term strategic planning.

RDI cooperation helps in raising the degree of automation

According to the survey, SMEs in the manufacturing industry are optimistic about the future. 95% of the respondents expected their company's turnover to increase or remain unchanged. Two thirds of the respondent companies also intend to increase their international trade, which was 10% higher figure than in the 2018 survey. The most important trading partners continue to be the Nordic countries, the EU countries – Germany in particular – and Russia, the US and China.

In the future, the manufacturing of machines and equipment will continue to be profitable in Finland, provided that companies extensively utilise digital solutions in their business operations and invest in increasing the degree of automation and robotisation. This requires closer cooperation between SMEs and research organisations.

“A number of measures are under way to support the development of the manufacturing industry. VTT participates in drawing up an industrial roadmap for Finland in collaboration between the industry and research organisations and is involved in the formation of national Sustainable Industry X (SIX) clusters. They aim to accelerate cooperation and help companies develop digitalisation solutions and deploy new technologies. One more aim is to build a better network of test environments suited to the needs of SMEs,” says Karoliina Salminen, Vice President, Cognitive Production Industry at VTT.

1) VTT commissioned from Innolink Research Oy a survey on the latest trends in the Finnish SMEs in the manufacturing sector. The survey was responded by 200 decision-makers from SMEs. The survey was conducted by means of telephone interviews made during December. The SME survey was conducted as part of additional funding granted to VTT by the Government for promoting the digitalisation of the manufacturing industry and the competitiveness of companies in the post-COVID-19 operating environment.

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Jyrki Poikkimäki

Jyrki Poikkimäki

SME Business Development Lead
Karoliina Salminen

Karoliina Salminen

Lead