What is smart industry? How are Swedish businesses handling digitalisation?
These were two of the questions asked when IVA’s Smart Industry project in cooperation with Automation Småland, Produktion2030 and Region Jönköping County arranged a conference.
There was one immediate indication of what business leaders in Småland are thinking. Using their mobile phones the 100 individuals present answered that they think Swedish businesses have a big lead in digitalisation. But they didn’t agree on everything; 30 percent of the respondents had some more negative views.
On the issue of which area of digitalisation companies are focusing on right now, an obvious trend emerged. Automation and more efficient internal processes were at the top of the list, while the possibility of creating new business models was towards the bottom.
IVA’s Smart Industry project arranged a number of conferences on digitalisation during the year. This time it was not the sole organiser but instead joined a meeting that Automation Småland arranges every year. The day started with the participants taking a guided tour of three companies in the neighbourhood. After lunch everyone gathered in the combined sports/conference hall of the company Axelent in Hillerstorp.
One of those invited to speak during the day was Mikael Kraft from Siemens.
He thinks it is fair to say that digitisation is a threat.
“Kodak and Facit are two telling examples of what can happen when you don’t keep up with the times.”
Despite this negative message, his main point was that new technology is creating enormous possibilities.
“We need to understand that digitalisation is not something that is coming – it’s already here and the changes are already apparent in everything from concept development to how companies are handling their aftermarket.
During his speech Mikael Kraft shared some pieces of advice, but there was one piece he emphasised in particular.
“Gather all the data being generated at every stage. Do it even if you don’t know yet what you will do with the information. Believe me, you will find a use for it sooner or later. The way in which you use your data bank will one day determine your success.”
Mikael Kraft also talked about twins; not the human kind, but as products, where one is virtual and the other is physical.
“By first creating a digital twin for your future products you can keep track of everything you will want and need to know before you start production. This will make you much more efficient.”
Björn Langbeck from the Swedish Agency for Economic and Regional Growth was also present in Hillerstorp. One of his messages was that the arrival of a new industry doesn’t mean that the old one should go away. But companies need to develop.
“A third of all employees in Sweden are still dependent on industry. This means that one million people every day go to work at an industrial enterprise or a related business. But there will be challenges in the future, including digitalisation moving too fast, the need for businesses to be sustainable, and access to talent. The issue of how to increase and maintain innovative capacity in industry is also a challenge.”
He believes that many companies today are finding it very hard to meet the demands made of them. Smaller companies in particular are finding it difficult to keep up with the fast pace of change.
“Those of you working in industry are the ones with the solutions, but you need to accept the fact that you can’t handle the challenges on your own.”
This is a view shared by the Government, according to Björn.
“That’s why they’re now investing SEK 300 million. Companies will, for example, receive support to explore how robots can play a bigger role in their operations.”
In answer to one question about how the efficiency of government investment can be maximised, audience members said that funding should go directly to companies with no intermediaries. This was not an opinion shared by all however. Rickard Skogsward from Axelent, for example, said that Automation Småland is a good example of an initiative that provides business leaders with useful help.
“There is no doubt that a shortage of talent is one of the main challenges facing Swedish industry. The long-term solution is, of course, to educate more people. But if we are to be honest, it’s not really as simple as that. Today there are more young people who want to be on a TV soap opera like Paradise Hotel than applying to upper secondary vocational programmes.”
A representative from Smålands Tekniska College testified to how hard it is to fill its education programmes.
“To recruit more students we need help from you as business leaders, especially to get the message out that industry isn’t dead. Young people also need to know that industry today is entirely different from the way it was in the past.”
Frida Andersson from Teknikföretagen expressed her opinion that it is time to rethink education.
“Today we only talk about the value of a long education, but it’s probably just as important for employees to take frequent short training programmes alongside their jobs.”
It’s possible that those representing local authorities did not fully appreciate the answer to the question of what business leaders think about willingness for cooperation between them and the private sector. At best the responses could be interpreted as moderately negative.
A grimace appeared on the face of Björn Langbeck from the Swedish Agency for Economic and Regional Growth when he heard that the private sector would rather circumvent the authorities. He thought this was a bad idea.
“You can no longer just collaborate amongst yourselves. If you’re going to handle all of the challenges, you need to find more partners. One option is to work with a science park or university.”
Carola Öberg, a project manager at the Innovation Runway science park, also decided to stick her neck out and say that the much talked-about willingness to collaborate in the region is mainly a myth.
“Our success is driven more by envy. And that’s not enough any more; if we’re going to survive we need to create new cross-cultural types of collaboration.”
One conclusion from the day’s discussion panels was that the future is here. Another was that those who haven’t started yet need to act now – tomorrow may be too late.
This prompted Frida Andersson from Teknikföretagen to exclaim: “Good god, this is so exciting; imagine that I will be able to experience the transition.”
Finally, Björn Langbeck from Swedish Agency for Economic and Regional Growth issued a challenge.
“Be pushy when you contact us. The money we have is not just shared equally among all companies in Sweden. That’s why you need to put your hand up and tell us you want the funds that are available to you.”
During the breaks the delegates had a chance to take a look at a small exhibition where a number of companies presented their solutions and products.