DIGINNO study: Growing SME Digitization in the Baltic Sea Region 

Nowadays digital transformation in business marks the border between success and failure. The project “DIGINNO – Digital Innovation Network” (co-financed by EU’s Interreg BSR programme)  aims to increase the capacity of policymakers, industry associations and industrial SMEs to enable faster and more efficient uptake of digital solutions both in public and private sector. The study was conducted in two parts, through an online survey and focus group discussion in national language, in various countries of the Baltic Sea Region – EE, LV, LT, FI, DE, SW, PL. The mechanical engineering and metalworking sector was chosen as the common within all member states of the project.

Through an online survey and focus group discussion directed to SME’s within different sectors of industry the study has analysed the current uptake of a number of digital technologies in SMEs and their planned uptake in a five-year perspective.

Currently there is widespread use of Automation; Databases; Wireless; Security/ Encryption; Cloud Computing; Data Visualization; Sensors and Virtual Simulation. Other digital technologies as Robotics; Big Data; AI/ Machine Learning; Augmented Reality; Block Chains; Drones and especially the last four are introduced to a lesser degree. The reason for the lower adoption of these is lack of perceived value resulting from: high cost of deployment; absence of clear revenue streams; and fewer use case scenarios for the utilization of the technology.

A widespread digital disruption is not foreseen in the coming five years. But there is a positive expectation towards adoption of more Automation, Databases, Wireless, Security/encryption, Cloud Computing, Data Visualization, Sensors, Virtual simulation, Robotics and Big Data. Whereas AI/machine learning, Augmented Reality, Block Chain and Drones are technologies that still is expected to be used to a lesser extent.

DIGINNO has formulated policy recommendations to deal with this incl. suggestions for coordinated programmes for education and awareness raising related to advanced digital technologies. The full text of the study is available here.

There are very different levels of development of digitization for manufacturing companies, service providers and traders, as well as different strengths and weaknesses, and their current needs. The main prerequisites for digitization of the industry are understanding of the benefits of digitization among corporate management, skilled human capital and a successful cross-sectoral cooperation. The better will be understanding of all the parties involved about the availability and use of digital technologies, the better for the economy as a whole.