Has a new money spinner been found – can big data be turned into business?

A few weeks ago, Mika Toikka, Vice President, Sales and Business Development, reminded us in our blog how big data provides a multitude of answers, but you also need to remember to consider your questions carefully. Research Manager Katri Valkokari continues on the same subject, presenting different business benefits big data could offer.

Data is the new oil, and the possibilities of data economy are limitless. However, to seize the opportunities you must be able to identify the data that is essential for your business operations from among the data available via various sources (e.g. IoT data, customer/CRM data, service log data, data from public sources).  In addition, you need understanding of the validity of data and the possibilities of analysing it from the perspective of both the company’s internal and the customer’s development needs.

Even more important for finding new opportunities is asking the right questions, asking why and what kind of data or information you need, what you are aiming at with the data and where can you acquire the data you need. You should also boldly consider what you do not yet know, and thus identify which data you are still missing and what kind of new data sources could be used.

To find new business opportunities you rather need to combine several different data sources than more of similar data or deeper analysis of the existing one. In other words, you should consider wide data in addition to big data. In Figure 1, the process of use of data summarises the main phases that explain why data is needed (understanding the current state and forecasting the future trends), and how and for what it is used (choices and decision-making).

Big data business

When the strategic goal for use of data is to identify new business opportunities, the viewpoints for questions and answers presented in Figure 1 include the following:

  • Increasing customer understanding and finding leads
  • Identifying potential customers and markets
  • Forecasting trends within the sector and collecting competitor information, as well as forecasting the future customer needs
  • The benefits provided by use of various data sources for the identification of new innovations or business opportunities
  • Development of the processes for use of internal data

Katri Valkokari VTT

Katri Valkokari
Research Manager
Twitter: @valkatti

Good Life for Finland – Time to launch a health data & AI ecosystem in Finland

Health data

An American serial entrepreneur and investor Bill Gross gave a popular TED Talk in 2015, in which he stated that timing is the single most important reason for startups to prosper. Perfect timing was the main reason in the successes of Uber, AirBnB, YouTube, and LinkedIn. As examples of failures Gross mentioned e.g. the food delivery service Webvan and the social media pioneer Friendster, both of which entered the market a bit too early. Launching too late doesn’t work either, since the market has already been conquered by others.

Nailing the perfect timing concerns businesses beyond startups. It is also very vital in research and the commercialization of research results. Research groups should have their eyes and ears open for trends in consumer behavior, legislation reforms, and technological innovations.

Finnish health data into use

We are now in the verge of such pivotal moment in the area of health data. From spring 2018 onwards, a new EU GDPR legislation is going to be in effect. GDPR is going to enable a secondary usage of health data. By virtue of this new legislation health data can be utilized in research a lot better than earlier. At the same time, The National Institute of Health and Welfare is going to become a governmental body granting permissions for data usage (link in Finnish).

Why should this be of interest to Finland and the Finnish research and business scene? First of all, Finland already has top quality research in and around the health sector. Furthermore, Finland has excellent ICT know-how and applying artificial intelligence (AI) is supported by the government (link in Finnish).

An even more significant reason, however, is the fact that Finland has a unique health and genomic data population. Health registries have been in use for long and one can get into hospitals with the same credentials across Finland. In this sense Finland is one of a kind.

Added value for health care

The government stated in their midterm resolutions, that the ecosystem model is the way to go in order to speed up digitalization (link in Finnish). Clearly one of the most important ecosystems is in the area of health data and ICT: “Good Life for Finland”. Last spring a strategic research agenda (SRA) in this area was prepared by VTT together with companies and research institutes. The SRA lays out the most significant priorities of the area.

As a unique health data possessor Finland has the opportunity of attracting also international stakeholders to this new ecosystem. We can provide a testbed for validation of research results and trying out new innovations before global launches. In other words, the ecosystem model of operating benefits both research and business, domestic and international alike.

And what’s most important, all these findings and innovations will in the end result in decrease in diseases, increase in life expectancy, less costs in healthcare, as well as overall growth in wellbeing.

All the puzzle pieces are at hand for completing the ecosystem. VTT is already starting operations for reaching the SRA goals. Now is the time to act for making the most of what health data can offer us!

Tua Huomo VTT

Tua Huomo
Vice President, Data-driven solutions
Twitter: @tuajh

Industrial renewal is upon us – be bold and gain a foothold!

Digitalisation, automation, IoT, AI, blockchain, 3D printing – I could continue the list with quite a few juicy terms. How many times have you read or heard one of these words during the last week? I dare to wager that it was quite a few. Certain themes rise to the surface and remain a topic for discussion, until a new trendy word rises to everybody’s lips. Instead of using inordinate amounts of time and energy around an individual concept or technology, we should shift our focus to the change taking place in the big picture and to what kind of a future we could create with the help of various technological enablers.

New trends force changes upon the current operations

Automation and robotisation alone are not enough to answer the challenges placed on companies by the global market and the increasingly demanding customer needs. Companies have no choice but to draw parallels between their development and, for instance, the following trends:

  • Smart products, production systems, production and delivery chains;
  • Renovation of the design of products and production through digitalisation and automation;
  • Need-based production, real-time delivery chain, distributed production;
  • Robotisation and flexible automation combined with artificial intelligence;
  • Service business with (or without) the help of digitalisation; and
  • Industrial ecosystems and platform economy.

I believe in the claim that the smart products and services of the future will be created in new industrial ecosystems supported by a globally connected platform economy. The leap from today to this vision seems wild, and the ability of companies to see the steps they need to take can be limited, when there is no concrete action plan available. It is therefore gratifying that we can find examples around us where a company’s own desire for development launches a networking project full of growth potential.

Expand your operations with the help of industrial networks

When a Finnish medium-sized machine manufacturer wishes to broaden its offering in order to speed up its growth in the global marketplace, the traditional model is to start planning business acquisitions. It would be more agile to avoid the risks and slowness of acquisitions by establishing a network structure, where a number of companies linked to the sector in question commit to creating a shared offering.

For global customers, this network appears as a seamless entity, while inside it, different actors work according to their own core competencies and deliver their share of the total. In this model, the success comes from working together, challenging each other within the network and obtaining help from select key customers.

Automation streamlines and adapts production

The radical renovation of design, manufacturing and service business with the help of digitalisation builds competitiveness and business opportunities for the industry also in countries with traditionally high cost structures. Robotics offers various solutions for making production more efficient and increasing productivity in the manufacturing industry.

However, it is not a question of robotisation only; an industrial company must be able to increase its agility and flexibility in order to create solutions that maximise the customer benefit. New manufacturing processes and the delivery chains built around them will bring customer-specific solutions up to a level we have not yet seen.

Thus far, automation has mostly been linked to equipment and production processes. However, the real leap in productivity will take place at the systemic level, where the entire delivery chain is examined, boldly questioning the current operating models. Must a company producing products have its own manufacturing capacity, or could it connect to a network of manufacturing plants and commission the manufacturing of the products from the plant that is most optimal to the need? On a longer term, one could think that this kind of a system is self-learning and able to adapt to the production needs of the owner of each brand. Once again, these are major questions from the perspective from the Finnish manufacturing industry; after all, we wish to ensure that we have strong connections to the future network models.

We help companies realise bold and ambitious visions

VTT possesses strong competence in the above-mentioned themes of industrial renewal, and even now, we are involved in enabling the birth of several industrial networks. In addition to technological research and development, we are a natural and competent partner also for the creation and organisation of new ecosystems.

Mika Toikka VTT

Mika Toikka
Vice President, Sales and Business Development
(Smart Industry and Energy Systems)

Is the circular economy just a fad or future necessity?

We live an era of different economies: bioeconomy, platform economy, digital economy – and circular economy. Are these only fads or the new reality that will change the way we consume and live our lives?

The circular economy is not a new phenomenon. Throughout history, it has been the way of acting and managing in times of scarcity. Our grandparents and great grandparents lived sparingly and put everything to good use down to the very last thread. People still do this in the developing countries and under severe or exceptional circumstances, such as during war.

The circular economy has become a topical issue again, since the increasingly limited global raw materials, food, and water and energy resources are not sufficient to cover the needs of the still growing population. We must learn to think differently about ownership and consumption.

Technology accelerates the circular economy and business activities

In addition to being a necessity, the circular economy is a great opportunity to create sustainable demand and, consequently, new kind of business activities. Once a product has reached the end of its life cycle, technology makes it possible to recover its raw materials and components, and use them for new purposes. Nothing goes to waste.

Efficient use of resources calls for new operators, distribution networks and systems to make sure that the right shipments are in the right place at the right time. In the textile industry, there are good examples of how used clothes can be recycled into secondary textile fibres for the needs of clothing and technical textile industries. For example, the awarded Ioncell-FTM method, for which VTT developed a pretreatment technique for cotton waste, dissolves cotton waste for reuse without any toxic agents. 3D printing, on the other hand, allows resource-wise use of materials in the manufacturing industry and, best of all, recycling of recovered materials. All this, however, requires that people everywhere in the business environment adopt new ways of thinking.

Current modes of operation will not bring success

Research and development play the key role in ensuring that the circular economy functions efficiently. We need radical innovations that promote resource-wise and sustainable economic growth.

The circular economy is not only a way of thinking, but it is also a business activity that creates value, jobs and tax revenues. We need good ideas, broad-mindedness and bold trials to transform the ideas into business activities. How to minimise the amount of waste and reuse the remaining waste? What used to be regarded as the final point of the process, can nowadays generate new business, of which the side streams from food production serve as a good example. These include the manufacturing method patented by VTT, where the berry press residues from juice processing industry are used as an ingredient for augmenting the fibre content in muffins. Innovations like these are not generated from nothing, but they need to be founded on research and developed further to succeed.

Feathers to the catwalk

Innovations do not happen either if there are no individuals who dare to think big or in novel ways. A good example of this are feathers – a small, light material lending itself to many purposes. After having provided warmth and protection for their owner, feathers can be transformed into protein-rich animal feed or used in packaging materials.

We are familiar with feather-filled pillows, but how could, say, the textile industry make better use of feathers as raw material. When will we see feathers on the catwalks at fashion shows?

Growth for Finland from circular economy

What lies at the core of the circular economy are services: buying and owning are transforming into lending and shared use. This has been the reality in, for example, the housing market for a long time, and now similar way of thinking is also expanding from tools (see the pilot project Liiteri) to vehicles.

Services already account for more than two thirds of the value of Finland’s gross domestic product. When the opportunities offered by the circular economy are understood everywhere in society, this share will grow even more – and the burden on the environment will reduce.

New services will boost growth and employment in Finland. On one hand, digitalisation replaces jobs, but, on the other hand, its use in the circular economy will provide growth opportunities for enterprises: the whole manufacturing and product life cycle needs new solutions that the Internet of Things applications can offer.

Finland is well equipped to become a pioneer in the circular economy. The key issue is the boldness to think things anew. Do I really need a car of my own? Are there any real obstacles for renting a car whenever I need one? We must call our conventional ways of thinking into question.

The way of thinking and acting the former generations used to practice will transform into business activity that helps to build the welfare society. Finland has a highly-educated population, plenty of natural resources, and R&D activity, so this small country can develop global solutions that really save resources and enhance well-being.

Anne-Christine Ritskchoff VTT

Anne-Christine Ritschkoff
Executive Vice President, Strategic Research
Twitter: @AnneRitschkoff 

How to accelerate innovations and new business?

Companies have been struggling with going to the market for ages and the problem has become even more relevant in the fast-changing technological environment. Acceleration is a combination of processes, tools and methods that help companies go faster to the right market. The Accelerate project is here to tackle these challenges – Senior Scientist Päivi Jaring explains how it happens.

Päivi Jaring VTT

Accelerating an innovation is much more than creating the technology – an innovation must go to the market. An effective go-to-market strategy identifies the ways to reach potential users quickly in order to get feedback of the product and its features and this way adapt to users’ needs and requirements.

Various methods such as lean and agile have been developed for speeding up the time-to-market and for validating the customer needs in early phase of development, but still more experimental approaches to rapidly validate the match between the market need and their innovative technology are still needed. In short: more knowhow and tools on acceleration are needed, and the Accelerate project was launched.

Accelerate research project for European technology companies

Accelerate, an ITEA3 project, took the challenge of enabling the adoption of acceleration knowhow by European technology companies by focusing on two goals: large scale knowledge transfer on acceleration, and the introduction of the so-called validated learning process that systematically searches for the technology-market match by validating it against the business model.

In Accelerate, a four-phase model for acceleration was developed. The four phases of acceleration – the idea, problem/solution fit, product/market fit and scaling phase – are presented in the figure below. In Accelerate, the four-phase model was used in creating services based on technological innovation, advanced processes and new software technologies. The companies found the model also very suitable for accelerating existing businesses activities.

The Accelerate project has created a lot of visibility for this highly relevant topic and had a significant transformational impact on several of the participating companies in the form of new spin-offs, products, business models, and organisational culture change.  Various tools, such as an acceleration platform as a meeting place for start-ups and investors, and an acceleration self-test were developed to help companies in their acceleration process.

Acceleration phases, Accelerate project

Four phases of acceleration.

A to-do-list for business acceleration

Lessons learnt from the work done in the Accelerate project and its use cases can be summarized in the following eight points for new business acceleration:

  1. Step outside to recognize the real problems your potential customers are facing.
  2. Make the whole acceleration journey with and for your users and customers.
  3. Act fast but also invest time on eliciting material from the problem space, competitors and indirect competitors. There needs to be a well-argued problem statement.
  4. Never stop with idea generation and small experimentations – also with regards to your business model.
  5. Use the power of social media in identifying problems, finding solutions, creating awareness and new markets.
  6. Test and find the social media channels suitable for you.
  7. Progressively select and use KPIs to track customer experience, business performance and learning to guide your journey to scalable business.
  8. Use acceleration tools & mindset and startup-like structures regardless of your company’s age and size.

The above points suit to companies regardless of their size and domain.

More information

Päivi Jaring, Senior Scientist
Twitter: @PaiviJaring

Theme energy: From optimising the energy production mix towards new services

VTT arranged the ‘Growth from the energy transition’ seminar on 13 September 2016, in Helsinki. During the event, we showcased VTT’s extensive know-how in the energy sector – the related research findings, scenarios and visions. Together with our partners, we also pondered the energy transition and growth prospects for Finland. In this blog series “Theme energy”, we take a closer look at the themes of the seminar. Vice President, Smart energy and transport solutions, Tuula Mäkinen starts the series with a summary.

Tuula_Mäkinen

To take advantage of the new business potential rising in the energy transition, we need to develop new, comprehensive services. Seeking a new optimal energy production mix while separately optimising energy use will not be enough. We are in a changing situation in which energy consumers can also serve as energy producers; we therefore need to take a holistic view of energy production and consumption. We also need to combine new technologies and business models much more rapidly.

Energy is becoming more about services, and revenue models are changing. Within energy systems, value is shifting from energy units to flexible resources.

Buildings will become a more active part of the energy system in the future. From the energy-saving perspective, we are moving towards optimal production of good indoor conditions and from sales by energy units towards the sale of comfort and living-condition services.

At VTT, work is under way on the development of new services, based on a novel approach to the optimisation of living conditions and energy consumption. For example, indoor living conditions and comfort can be improved and energy saved by combining predictive control based on weather data and energy prices with information on human comfort using the Human Thermal Model, developed by VTT.

Technology development has accelerated and we have seen a number of technology leaps. In recent years, the greatest advance in energy production technologies has been in reducing the production costs of solar and wind energy.

Finland is a world leader

Finland is at the forefront of many areas of energy technology. We are internationally strong in areas such as smart grids, combined heat and power production, district heating and cooling, and the development of integrated and hybrid solutions.

Finland’s digitalisation expertise provides outstanding opportunities for the creation and implementation of new services, since such services are closely linked to the transfer and use of data, and to mobile devices.

The energy transition offers new opportunities

New models of cooperation and the desire for renewal are needed in the current transition. New players have appeared in the energy sector. Sectoral boundaries are disappearing, which means that different sectors need to engage in cooperation, renewal and risk-taking. The start-up culture and new business models, such as crowdsourcing, are enabling experiments and the introduction of totally new services and products. Promoting a culture of experimentation is important.

The piloting and demonstration play an important part in the development of innovations and new technologies, and in accelerating their commercialisation. Piloting of individual technologies has given way to holistic and business model piloting. Piloting and demo projects are increasingly often about extensive ecosystem projects between several players. In support of growth and exports, it is important to have references for Finnish expertise.

A good example of the new approach would be the Living Lab Bus joint project, coordinated by VTT and launched in the Helsinki metropolitan area in early 2016, which is using Helsinki Region Transport’s Finnish-made electric buses as a practical R&D platform. The goal is to create a new type of everyday development environment for accelerating the product development of companies by means of agile experiments, in close cooperation with end-users and research institutions.

In the future, the role of consumers will grow, while their needs and opportunities to influence will be emphasised. We need to understand what kinds of services and products consumers want and need, and we should encourage them to experiment and participate in the related development.

In Finland we have excellent opportunities to grow into an international piloting platform and a forerunner market for new energy systems and new solutions, and thereby enhance export opportunities of Finnish industry in global competition. We have already seen good progress achieved for example by utilising public procurement.

Tuula Mäkinen
Vice President, Smart energy and transport solutions

Tuula.makinen (a) vtt.fi, +358 50 301 4661

Is security achievable in a digitalised and networked platform society?

Mikko_Dufva

The digital transformation and platform economy are expected to herald an era of new growth and a break with existing industries. By platform economy, we mean a new, multi-directional way of creating value, in which producers and users of services are connected by social and technological structures and the distinction between them is blurred. Driven by the digital transformation, the rapid and extensive collection and analysis of information will enable networked activity within the platform economy.

Companies based on the logic of the platform economy have already gained market share from actors sticking with traditional practices. However, the impact of the platform economy is not restricted to new companies breaking into the market, but challenges the current economic logic in general. For example, the concept of the cooperative is enjoying a renaissance, while the sharing economy is creating a new kind of communality. All of this is giving the tax man grey hairs.

What do you mean, security?

Discussions of the platform economy have gradually shifted their focus from technology-orientation and the contemplation of new business models to social impacts. The debate has centred on the transformations in various industries and the workplace. Less attention, on the other hand, has been paid to security – now is the time to consider preparing for the changes being ushered in by the platform economy. Security is about more than information security and privacy issues; it also concerns other challenges and opportunities – related to trust, risks, the distribution of power and the management of complex wholes – that will accompany the new networked practices.

Networks and increasing mutual dependence have led to an entirely new approach to the concept of security. The risks are now much more complex and difficult to identify. In place of hierarchies, organisations are now network-based and temporary venues where traditional top-down control no longer works. This means that we are operating in a complex world of adaptive systems in which chaos theory would be a more appropriate starting point than process models. In this context, concepts such as power, control and trust gain new meanings and dimensions. What does power mean within an interdependent system? Can trust be outsourced to algorithms?

Rather than individual and single players, in the platform economy the focus is shifting towards communities and collaboration. The platform economy is a particular headache for legislators because its business models and the blurring of roles between customer and company do not fit into existing ‘pigeonholes’. Traditional supervision and regulation are difficult to apply when, for example, an accommodation service frames itself as merely a link between supply and demand – and owns no accommodation. Although regulations and restrictions will remain important for networked operations, the related culture will become an even more important source of security.

Will the platform economy take security to a new level?

On the other hand, security could be boosted by the platform economy, digital transformation and networking. Platforms connect people, while communities built on platforms take care of their members, particularly if the platform incentivises them to do so. The design of platforms and networks involves a social as well as technical and business challenges: how can we create platforms that promote security and build a sense of community? In a situation where all interactions leave a digital trace, will the resulting, reputation-based economy build trust or inequality? What role will companies, the state and individuals play in shaping platforms?

The digital transformation, platform economy and many other, corresponding terms refer to the transition from a production-based society to a collaborative one. Instead of focusing on which sector will be the next to be disrupted by a platform economy player, perhaps we should take a proactive attitude and talk about how to create the kind of future we all want. How can the digital transformation and platforms serve common goals and forge security? How can we ensure fairness, the minimisation of risks, and common ground rules?

These questions, among many others, are explored by the foresight, organisational dynamics and systemic change team at VTT in projects such as Platform Value Now.

Mikko Dufva, Research Scientist

mikko.dufva (a) vtt.fi

Twitter: @mdufva