World Intellectual Property Organization

National Board of Patents and Registration in Finland: SME Project

Background for the Co-operation Project

The background for the project is on discussions between Mr. Kamil Idris, the Director General of WIPO, and Mr. Martti Enäjärvi, Director General, National Board of Patents and Registration in Finland. They started to discuss the project in the autumn 2003, and gradually the project found its way by the summer of 2004, and it has been running since that. It will continue to the summer of 2006, and, of course the developed good practices will survive beyond that.

Target

The projects strategy is to identify relevant activities at the national and regional levels that are meant to help entrepreneurship and faster start-ups and to reduce the risks associated with running of businesses by SMEs, and after that finding the intervention points, where IP-components might be included.

The target for the project is to create good practices for bringing IP-system and its services to use for SME´s.

The objectives are:

1. To demonstrate the significance and effectiveness of IP-system when promoting new entrepreneurship and developing SME´s
2. To create appropriate support services to the target groups
3. To emphasize the importance of creativity, intellectual property and innovations as a promoter of welfare and prosperity
4. To demystify IP and diminish the lack of information and consequently also prejudices concerning IP-system.

In this sense we have to bring out and concretize the advantages that IP-system brings to companies.

We have to verify the problems that are hindering the use of IP-system and take them away with proper means.

We have to also represent the fundamentals and the purpose of IP-system in understandable way. We have to show, that IP-system is a system, that has been created centuries ago specifically to give tools for product development, marketing and co-operation by networking. And this last part has risen to very important role in recent discussions with parties.

Finally, we have to connect IP-system concretely to SME´s business process and give them a clear and simple model of how to utilise IP-system and the necessary tools.

IP-system

The IP-system has to be seen broadly as an essential part of business process during the whole company life cycle. It is a robust and ingenious system generated to back up business processes from the beginning to the end, from the idea to the market, both in protection and as a source of information.

Background

Thinking of the demonstration of the significance of the IP-system as a promoter of welfare and prosperity, we must understand, that behind every workplace there is an innovation that creates growth, and growth creates employment.

The Essential Part of Innovation Environment is IP-system

According to the study concerning entrepreneurship conducted during 2004, the major obstacle to hinder persons to start as an entrepreneur in Finland was the fear for risk, the fear for not succeeding with the business. So, we need an innovation friendly environment to diminish the risk of running business.

What is innovation friendly environment? Innovation friendly must be seen as a synonym to entrepreneur friendly.

In the existing environment there are many familiar elements to SME´s, such as the public financing and consulting services. In Finland we have about 200 different financing and consulting instruments for SME´s and about 4500 support persons to deliver these services. We also have a know-how environment and network of expertise to be utilized by SME´s, that means business incubators, science parks, consultants, universities, vocational high-schools, etc.

We have to add to this environment by bringing out the ways of protection and the sources of information, and so diminish the risk of misdirecting our business or loosing our know-how to competitors or, even worse, to business partners.

Parties of the Project

Since we have so wide-ranging target with the project, we need wide acceptance for our measures, and also we need very good channels to distribute and implement all the practices that we are creating during the project. Besides having linkage to public sector actors, we have found extremely important to have connections to associations for entrepreneurs.

Having relations to three main associations for entrepreneurs in Finland, we can reach thru their information channels about 90 % of Finnish companies, as well as we can utilize their training programs to disseminate the good practices.

Target Groups

For focused intervention, we need to identify the target group thoroughly and understand their way of planning business as well as their way of carrying out product development, marketing, internationalisation.

Identification of gaps concerning awareness of, access to, and use of the IP system is also an essential pre–requisite for promoting the proper use of the tools of the IP system for SMEs.

The target group was defined as SME´s. The EU Commission defines the size of the SME not to exceed 250 employees. In Finland we define the size not exceed 250 employees. If we look at this specification of the amount of companies in different categories according to company-size, we can see, that the focus is on very small companies.

Their way of planning as well as their capability of accepting new information and new ways of acting is totally different from the bigger companies.

This is something that we definitely have to understand, while creating our materials, procedures to utilize IP-systems and training programs.

Critical Success Factors

To succeed with this project and to start a process that continues diffusing also after the project, we have to succeed in few steps:

  • Firstly, we had to do good background studies to know our target group and to understand, how they work, and we have to understand the environment, where they work
  • Secondly, we have to make them to understand IP-systems good impact to their business and the nature of IP-strategy as being a natural and inseparable part of their business process
  • Thirdly, we must create easy and understandable tools and ways of quiding SME´s to use and utilize both protection and information
  • Fourthly, we must create ways to get access to the IP-systems services, both consultancy and information services.

IdeaPilot

IdeaPilot – project was build and based on these elements.

Background Studies: Potential IP-utilizers

After identifying the target group and the amount of them, about 25 000, we definitely need some more segmentation and understanding of their way to operate.

We did the segmentation based on existing users of IP-system. We downloaded the customers of all IPR-users from our registers and did a matching with existing commercial database covering all the companies in Finland to find the official company identification as well as some classifying elements. In the matching process we got out a profile of most potential IP-system utilizers and several classifying elements. These are as follows:

1. Standard Industrial Classification
2. Size
3. Region, postcode
4. Business life cycle ( an exclusive information telling the economic status of the company)

Based on this classifying information, we could organize the amount of 27 000 companies to an order where we can find the most potential IP-utilizers, and we can identify them by company name, decision maker (person name), and if we add to this to….

Background: R&D Activities in Finnish Regions

… the information of the regions that are most active in R&D in Finland, we are able to approach the SME´s in a segmented way, and we can handle the target group in an organized manner.

Background: The Status of the Awareness and Usage of IP-system

To know the existing situation more thoroughly, we made a questionnaire concerning the awareness and the use of different elements of IP-system. To get information which is reliable and which could be expanded to describe the whole population of SME´s, we did the survey in co-operation with the Statistics Finland. The results are still in the process.

For example, we can see, how important is copyright to different size SME´s, are they using copyright as a strategic way, are they using it occasional or not at all.

After few years we repeat the survey to see if there are any changes in the situation.

Background: The Planning Situation in SME´s

Talking about the way of planning among SME´s as well as their capability of accepting new information,

  • The know-how of the entrepreneur is emphatic
  • Instead of innovating, SME´s talk rather about development, and the process is simple from idea to development, implementation and feed-back
  • Basis for development is usually the information from customer, and they often aim to minor changes in the product or process. Production originated innovations are often based on growth possibilities detected on the market
  • The interaction between customers and suppliers in the development is emphasized. The actual development happens usually integrated in usual business operations

Background: The use of Expert Services in Companies Becoming International

This is an example of the planning level in the companies that are becoming international or are planning to be international. If we think about company planning to be international, without doubt we are probably dealing with the elite of SME´s, that means part of the best potential among SME´s. Even so, the level of planning practices is poor.

This emphasizes the idea that we have to keep our good practices very simple and easy to adopt.

Background: Co-operation Projects, Networks, Integration

When studying the field, where we are going to operate and planning how to get most effective coverage for diffusing the good practices, we learned one very important KEY WORD: INTEGRATE

We have numerous amount of public organizations supporting SME´s in financing and delivering consultancy and expert services. Altogether we found that there are some 4 500 persons serving SME´s in the customer interface, 3 000 of them giving services connected to product development, marketing, and internationalising.

Also we noticed that we have a huge amount of developing projects going on in Finland, main part of them financed by European Commission, and aimed to develop better services to SME´s.

Our conclusion was to pick up the most potential organizations and projects and to integrate with them, not creating new project to our Finnish project jungle, but to build small steps, easy ways of acting in a new way to take into consideration also relevant IP-matters.

So, we are making two different approaches: The other is to approach SME´s directly, and the other is to influence them via so called intermediate organizations.

Background studies: SME´s Directly via Associations for Entrepreneurs

We have in Finland three main associations for entrepreneurs:

The Confederation of Finnish Industries, having ****** members, big and medium sized companies

Technology Industries in Finland, having ******* members, medium and small sized companies,

and The Federation for Finnish Enterprises, having ****** members, mainly small companies

These associations are very interested in this project, they see the importance of IP-system and it´s impact to the company competitiveness. They also see, that the existing practice of networking and co-operating between companies is lot easier to live out, if you have practices to protect your own know-how.

So, we have access to the associations´ information and training channels, and they are covering about 90 % of all companies in Finland. Co-operation with the associations gives us also more credibility among SME´s.

Background Studies: Intermediate Organisations

As I earlier mentioned in Finland we have about 200 different financing and consulting instruments for SME´s and about 4500 support persons to deliver these services. We have also a know-how environment to be utilized by SME´s, that means business incubators, science parks, consultants, universities, vocational high-schools, etc.

To utilize effectively the intermediate organizations, we have analysed them and discussed with them, and we have located several relevant organizations to continue with.

Our main aim is to integrate IP-system to the appropriate extent to their processes and quality systems. In practice that means, that when a company is dealing with the intermediate organization, the intermediate organization asks the right questions of protection or relevant searches in a business phase where they are relevant. They also will give guidance of how to proceed to make the right operations. This should be thought as a pre-requisite for SME to get the public services.

The relevant organizations in this sense are:

  • Tekes, the National Technology Agency, is the main public funding organisation for research and development in Finland, handles about 6 000 business cases / year
  • The Foundation for Finnish Inventions supports and helps private individuals and small entrepreneurs residing in Finland to develop and exploit invention proposals. They are handling about 3 000 cases / year
  • Jobs and Society-network is concerned mainly to consult starting business, and they go thru 12 000 ideas / year, of which about 4 700 new companies are born
  • We have 22 technology centres, in these centres about 1600 companies, and the centres are offering

1. Training and consultancy services for

  1. Start-ups
  2. Business management
  3. Financing
  4. International expansion
  5. IPR and law
  6. Communications and marketing


2. Incubator services for start-ups

3. Business expertise for commercialising innovations

  • The Centre for Expertise – programme (CoE) networks top expertise and experts in the universities, polytechnics, industry and public sector for joint projects, to develop new products and services, and to promote entrepreneurship and employment in order to strengthen the competitiveness of Finland’s regions. This programme covers about 3 000 companies
  • Regional TE-Centres, 15 public organization giving diverse financing and consulting services, about 500 relevant business advisors
  • Regional Business Service Points, 50 early phase advisors directing the actors to right services
  • R&D networks, a national project building regional R&D networks, all of them connected together via nationwide help-desk-organization
  • Universities, vocational high-schools, we are having discussions with the Innovation Centre of Helsinki University of Technology to create a process for utilizing IP-system in research and technology transfer
  • Regional financers and development companies
  • Business consultants, thru MTI-agreements we have access to about 150 business consultants

Via these intermediate organizations and operators we can reach about 40 % of the business activities in Finland that can utilize IP-system.

[It is important for us to understand, that this change will take time. The project is merely the beginning for a new way of thinking, but it gives us a very good start.]

Desirability: Brochures, Guides

Of course, to be able to go thru these changes in the way of acting, we need some materials to convince the targets, and to give guidance that is needed. The brochures and guides that we are producing, will be very simple, very practical and very business oriented. The materials will be tested by a reference group of SME´s, so that we use language they can understand.

Desirability: 30-50 %

There is one significant problem among SME´s that really needs our attention.

30-50 % of the R&D is redundant, and in Finland it means 1,5 – 2,5 billion euros / year. The allocation of this investment can be significantly improved by the use of patent information. Pointing this out in a right manner will definitely give some attractiveness to IP-system. A right manner is that we give some tools to utilize

Desirability: Process Description:

In large companies patent information services can conduct patent searches and share the relevant information with the product development, but in SMEs further research is needed in order to determine how the use of patent information could be integrated and utilized in NPD processes. Therefore we have launched a study with Helsinki University of Technology that deals with the knowledge management practices in SMEs, especially in New Product Development, and the role and possibilities of patent information as a source of new knowledge.

Objectives of the Study

The research consists of a detailed literature review about information and knowledge management in New Product Development, and the results of an empirical study of 14 small and medium sized enterprise and their NPD practices from a knowledge management point of view. The objective is to determine how information and knowledge is managed in SMEs’ NPD process, to identify the role of patents at this process, and to provide practical guidelines about how the NPD processes could be developed to fully benefit from available patent information. The research questions are:

  1. What kind of general knowledge management models of NPD processes can be identified in SME’s?
  2. How patent information is used in knowledge management models of NPD processes in SMEs?
  3. How patent information could be integrated and utilized more effectively in knowledge management models of NPD processes?

Usability: IP-workbook to create IP-strategy, guide to information retrieval, using the results

After being convinced that IP-system is useful, the company really needs a simple ways to be able to use the services. For that purpose they need very practical approach to IP-system built in to their business process. For that purpose we are creating a work-book, that goes thru SME´s business process and in relevant points asks simple, relevant question. Having answered to those simple questions, the company has built a first approach to their IP-strategy. In the internet-version of the work-book the users can find paths to different concrete services either in internet or in the nearest service point, for example innovation agent in TE-Centre or detailed guidance to information retrieval.

Accessibility

  1. The increasing of the accessibility of the services of the IP-system is based on networking.
  2. We are working together with the associations for SME´s using their information dissemination channels and their training organizations.
  3. We are working to integrate IP-awareness to the quality systems of numerous intermediate organizations, so that they will require conscious decisions from their clients concerning IP-questions and the usage of for example patent information.
  4. With the universities and vocational high-schools our concept is in this phase based on so called Venture Cup.
    Venture Cup Finland is a three-stage business plan competition for aspiring growth companies. The competition is primarily designed for researchers, teachers and students, yet it is open to everyone. During the three stages of the competition participating teams go through a demanding process of education, coaching and screening, developing their business ideas into complete business plans with a clear focus. Venture Cup is organized by universities, polytechnics, business incubators and technology centers.

There are four distinct elements that complement the competition itself: knowledge building, coaching, feedback, and facilitating network building. Venture Cup offers a series of lectures especially adapted to the different steps of the competition and developing your business idea. The lectures are free of charge and also free for everyone to attend. Basic questions will be covered, such as how to write a business plan and also more specific matters such as the services of the IP-system. Venture Cup lectures will be held through out the competition period. The topics are current and inspiring and at the same time they offer a possibility to network with coaches and other like-minded people.

Main sponsors are Ministry of Trade and Industry, Tekes and McKinsey&Company. We are going to be partners for the Venture Cup and so we will have possibility to build in the process all the necessary IP-questions, so that the participants and the whole network will have a good look to the whole IP-picture.

Directly for the SME´s we are building a training concept together with EED-Centres. The concept starts with the discussion of the innovation agent and the company. As an advanced information the SME is going to get the work-book for home-work. The primary training consists of two different training days and between them the customer is working independently based on the work-book. During the second training day the customers have possibility to discuss with the Offices expert via video-conference. After the training period the company can have one half days consultation from the innovation agent on the EED-Centre. Finally, if needed, the company can continue with a subsidized consultation concept called ProductStart, which is aimed to help in the commercialisation of product and service ideas.

After that SME´s still need some guidance of how to act according to their IP-strategy, and we will produce the most important guides leading step by step thru the processes.

We believe that after giving a good and simple taste, the economic decision makers will work their way thru the IP-jungle.

If we can create simple processes in simple language, using intermediate organizations to disseminate the available IP-information to SME´s when the situation is right, then we are on a route to success.

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