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Photo: Melina Granberg
Vinit Parida, Professor of Entrepreneurship and Innovation and David Rönnberg Sjödin, Senior Lecturer in Entrepreneurship and Innovation. Photo: Melina Granberg View original picture , opens in new tab/window

SMEs need new business models

Published: 1 September 2016

Researchers at Luleå University of Technology will help small and medium-sized companies (SMEs) in process industry from northern Sweden, Finland and Norway to start selling more services, form alliances with each other and take aim at an international market.

– We are very reliant on process industry for economic growth here in northern Sweden. They are the key employer for us in the Luleå region. Therefore, it is important to help process industry SMEs to become globally competitive and not only strong locally, says David Rönnberg Sjödin, Senior Lecturer in Entrepreneurship and Innovation.

A shift toward selling more services

The research group in Entrepreneurship and Innovation at Luleå University of Technology has long experience of working with Product Service Innovation among large companies (e.g. Volvo, Ercisson), which means adding services to existing products. This project will for the first time focus on SMEs within process industry in northern Sweden, Finland and Norway.

This target group is important because more than 90 per cent of the companies in Sweden are SMEs. We also lack research on how product-centred companies within this group of companies can start offering more services, what challenges they have and what support they need.

SMEs in the process industries also tend to be dependent on bigger players, and as many of them are struggling with their business, such as the mining industry in North, it becomes critical for SMEs to seek new business opportunities through cooperation.

Projects with a direct benefit

The project will be implemented in cooperation with about 80 companies. Researchers will help to develop business models that answers questions such as: How do we sell our services? Who do we work with? How should we design our contracts? But it can also involve providing support in how to seek funding, for example.

– Small and medium enterprises have completely different challenges than large enterprises when it comes to designing business models. For example, imagine a negotiation between a company with three employees and a large company. They have completely different opportunities for business negotiation and interacting, says Vinit Parida, Professor of Entrepreneurship and Innovation.

The three-year project of around 16 million SEK is financed by EUs Interreg Nord and will be implemented in close cooperation with, John Lindstrom, Centre Director of Process IT Innovations at Luleå University of Technology and other Swedish partners such as Anders Högström, CEO at IUC Norrbotten. The project also includes university and industry partners from north Finland and Norway.