We interviewed Professor Erkki Ormala, the coordinator of the Industrial Internet in Transition (IIT) for his views on the opportunities and barriers for European industries growth and competitiveness. Professor Ormala encourages European companies to take advantage of the business opportunities digitalization and digital single market regulation bring about. In order to succeed in today’s market, companies need to make experimental, sometimes risky investments in emerging opportunities and be willing to change their strategies and organizations radically. Recalling Schumpeterian principles of creative destruction he states that in order to create the future, we need to let go of the past.
On the main opportunities for European industries, Professor Ormala cited that the current transitions and paradigm changes in global economy offer countless opportunities for the European players. The key success factor is the courage to grab these opportunities, and change strategies as new opportunities are seized. European companies may have the capabilities to compete in these emerging arenas, but risk taking and slow decision making limit their return on investment. ‘We confront too much change resistance and tendency to hold on to familiar approaches to strategy and innovation’, states Ormala, ‘this mindset needs to be changed.’ In order to create something new, some of the old structures and positions must give in. Speed and volumes are the key attributes for societal and economic wellbeing.
Professor Ormala calls for ecosystems where different actors can jointly take on these new opportunities with the right level of intensity. The European Commission acts as a change agent for mobilizing communities for joint action. The Commission has the mandate to work on high level to make initiatives and encourage member states and individual organisations to act. This can be done through regulations or financial incentives. We should not forget the instruments for growth and renewal in middle of the ongoing difficult economic and societal challenges.
IIT project contributes to the value creation by bringing forward practical means and tools for growth for European companies. These instruments will support companies in understanding and assessing their innovation capabilities and make shorter term strategies to respond to the shortened business cycles.
On the policy side, Ormala notes that Europe should be more proactive in international collaboration, especially with EU-USA free trade treaty, which would yield massive opportunities for European companies. Today’s markets are by definition global, and therefore European companies must be competitive enough for global competition. We must not define ourselves by national or European identity and market. This strong cultural heritage should not hinder renewal, but entrepreneurship and growth companies need to be strongly supported even in traditional industry sectors. We also need to address the evident competence gap in ICT education. We have a 350 000 person defect of ICT professionals, and this number will grow to 900 000 by 2020. USA continues to exceed European investments in ICT research by 50 billion euros, which directly impacts the competitiveness of the companies.
Professor Ormala points out that governments should not speculate which industries will grow, and thus pick winners. Politically defined growth areas do not work. The role of the government is to create enablers and environments, which foster innovation. Regulation can be a double-edged sword with also negative impacts on European and national level. Therefore careful dialogue with all stakeholders in the sector level should become a norm in European policy making, building better policies and overcoming the digital divide.
Professor Ormala has an extensive experience in Innovation research and management, design and implementation of innovation policy and business environment development in global companies and international organizations. His past positions include Chairman of the Board of Digitaleurope – the association of the European Digital Industry, Nokia group as a Vice President, Business Environment and the chairman of the OECD working group on Innovation and Technology Policy.
Petra Turkama – 29th of October 2015, Skype
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 649351
