How did the first six months of the coronavirus crisis affect the activities of Finnish companies, and what kinds of measures are they planning for the coming six months? These questions were tackled by Aalto University's recent decision-maker survey which brought responses from more than 300 corporate executives.
The coronavirus had its most negative effects on activities such as expanding into new markets, building production capacity, and mergers and acquisitions. In all these areas the level of activity has decreased on average compared with the corresponding phase in the previous year.
Jukka Luoma, Assistant Professor in Strategic Management at Aalto University, emphasises that the impacts of these changes may become visible only in the long run.
‘It is concerning that these effects will unfold gradually over the next couple of years. Businesses have had excellent success in operational crisis management, but as the crisis continues, they will have to reactivate to search for growth again,’ he says.
New innovations may not work in the future
Amid the crisis some companies have actually accelerated innovation activities. More than 30 percent of companies have launched more new products and services onto the market than before the crisis. Respondents said that they had actively looked for new processes and services, believing that they will also be used in the future.
Luoma says that increased innovations might not necessarily lead to long-term growth.
‘When innovation activity suddenly accelerates there is a risk that the innovations will not be based on the competitive interests of businesses, which means that corporate growth might stagnate over the long term. After the crisis, the innovations might not be in demand anymore.’
Forty percent of companies felt that the crisis had changed customer needs at least to some degree. More than half of respondents said that key resources and talent used to create value for customers had changed.
Doctoral student Susanna Takkunen, who is investigating digital transformation of organisations, presumes that the change of these strategic priorities and work practices emerging during the corona crisis could have organizational consequences in the long run.
‘This anticipates increased competition for skilled personnel, especially related to new technologies, which will undoubtedly affect educational needs and employment. It is possible that the crisis will eventually give rise to numerous waves of organisational renewal, which unfortunately also means lay-offs,’ Takkunen says.
Researchers say that the coronavirus crisis has clearly served as a starting gun for changes in technology and in branches of industry and that this will not stop even when the situation eventually eases.
‘Companies have identified new and more efficient procedures. This will later be reflected in the industry structures and value chains. As the crisis recedes, we will see mergers and acquisitions, and other structural changes. It will be interesting to see what new products and services that emerged during the crisis will survive in the long term,’ Jukka Luoma says.
The research report is available (in Finnish) on the project website: http://koronavirusstrategiat.aalto.fi
The research team partnered with Technology Industries of Finland, Palta, and the Finnish Commerce Federation to execute the study.
The academic director of the project, Assistant Professor Jukka Luoma
Aalto University School of Science
Tel. +358 40 353 8412
The project director, doctoral student Susanna Takkunen
Aalto University School of Business
tel. +358 50 460 6183