“Death of the Dinosaurs and Survival of the Fittest in the Digitized Age” is how I want to summarize the report “Internationalization by Digitization – Prerequisites and success factors for digitization of Swedish businesses international marketing and sales” that was released by Business Sweden Friday, September 18th 2015.
The report put light and words on what for me, that for many years have worked both in the digital and analogue world, has been oblivious for several years. In my book “WIFL – Your guide to the digital work life” that was published 2 years ago, I for e.g. wrote about new business models that Prof. Michael Rappa, Inst Adv Analytics, NC state Univ, summarized already 2006. Somehow it’s kind of a mystery to me that the business models are not yet more widely spread and used in businesses in Sweden. At least they’re not according to this report. And the slow rate of adaption to a digitized work life still surprise me. Seems like many businesses still think that it´s a fad and no need to be there.
Sweden has a high level of digitization and so far has always been ranked in the top-10 of using e.g. Internet. Sweden is known for advanced technological knowledge and companies like e.g King, Mojang and Spotify were founded here. The startup-scene in Sweden, with cities like Malmö and Stockholm, is ranked in the top 10 in the world. So what’s happening with well established Swedish businesses that have been on the cutting edge for many years? As well as for the rest of the business world in Sweden? Let’s see what the report says.
Swedish businesses have lost 20% ! of the global market share! I was stunned by the numbers presented at the release of the report in Helsingborg, Sweden. A city that has come very far in the digitization mindset and for example have free WIFI throughout the whole city.
The report is based on four parts; literature studies, in-depth interviews with 6 successful businesses in internationalization by digitization and a questionnaire that was answered by 150 small- and medium sized businesses in March 2015, of which 82 % were product suppliers and 12 % service suppliers. It doesn’t say though how the businesses were selected, how many businesses the questionnaire was sent to; neither does it say why the businesses didn’t answer. So in one way, this puts my hope up a little bit that it´s not as bad as it seems. Or is it?
It’s stated in the beginning of the report that digitization has a global impact and on all business life, and that it will have an impact on how to make business and future competitiveness. I would say that it’s already happening. The future is already here, and we’re right in the midst of the transition from the industrial age to the digitized age. And both worlds co-exists and there is a need to deal with it – now! Then is too late, the businesses will die the death of the dinosaurs. Only the fittest will survive, meaning that the businesses that re-think, think new and adept to the new conditions and opportunities in the digitized business life will survive. That is agile, innovative organizations that moves quickly and adapt fast to change.
Digitization happens parallel with globalization, and that also include internationalization of people and businesses. Just by connecting to Internet you´re going global and international right away, and it opens up a global market and talent pool. That too means increased competitiveness. And it’s only a click away.
Marketing and sales is highlighted in the report with focus on website, content marketing, e-mail marketing and digital newsletters. Google has more than 90% of the market for Search Engines (SE) in the Nordic countries. SEMarketing and SEO, e-commerce and online marketplaces are also extensively written about in the report. In 2015 the top three social media in the Nordic countries are Facebook, Tumblr and Twitter. Tumblr ranking as number two was a surprise to me, since I would have guessed that LinkedIn would be one of the three. The use of mobile devices as first screen of doing most of the online activities are rapidly increasing. Approximately 30 % of m-shopping was made through a smart phone. Only 2% of the businesses say they work digitally with big data to acquire knowledge about their international target groups and customers, with the purpose to increase relevance in marketing and sales. Omni channel marketing is highly stressed to be used by the report.
So, it’s stated that there is a need to fast adaption of new and digital business models and organizations to create sustainable competitiveness to survive in the tougher competition to come. Businesses need to be able to adapt a new mindset and not to get stuck in old-fashioned ways of handling the new and digitized business life. The management needs to be digital competent and have to recruit digital competence to their business. New positions need to be introduced in the organizations and a new mindset has to be formed in the organization. “An adapted digital business model is a prerequisite for increased turnover and revenue”.
- About 10 % are internationally present.
- SEO and e-mail marketing are the most used digital tools for international marketing (about 40%).
- Digital Communication systems are the most used digital tool used for international sales (about 30%).
- High competitiveness and low digital maturity are the two most pronounced challenges to use digital technique to expand to global markets.
- Lack of capacity and competence within the organization are marked by about 40% of the organizations to hold them back from expanding by digital channels.
- Low digital infrastructures and low digital maturity in other countries are the biggest challenge to businesses to handle.
In the replies to the open questions most of the companies respond that the face-to-face meetings are still crucial in the competitiveness and to success in international marketing and sales. The more complex the product is, the more need for face-to-face meetings. Small- and medium sized (SMEs) businesses within traditional industries are seen as risking to be left behind within digitization, with possible effects on international competitiveness in the long run. To increase the digitization for internationalization and globalization of businesses, Business Sweden points out two major areas that may be of importance:
- Educational training of staff to increase digital maturity.
- Financing of digital investments, especially for SMEs.
So to sum it up, these are the major success factors for businesses to use to internationalize by digitization
- Do digital homework Map your digital prerequisites for your international business.
- Develop an international digital business model Challenge your existing business models and plans for expansion to see what kind of new business opportunities on an international market may be created with digital procedures.
- Take on “Big Data” Get in to the world of opportunities in the world of digital analytics.
- Work with Omni channels Include your digital channels in your analogue work.
- Strive for digital symbiosis Integrate digital technologies, channels and tools in your operative work with internationalization.
The presentation of the report was followed by presentations of three successful businesses in Helsingborg that has digitized and internationlized their businesses; Skånska Byggvaror, Fieldly and Gents, and well as the co-working and event space MindPark. Impressive concludes the presentations.
It’s cooking in the startup scene in Sweden and it’s really awesome. A new business life is emerging and it’s happening right now and in a fast pace. I spend most of my time in the startup-ecosystems in the Greater Copenhagen area, south of Sweden and Stockholm and I can tell that the entrepreneurial startup mindset rules. One of my favorite places to hang out at is at the Startup-dojo at FooCafé in Malmö.
I hope that this report will be an eye-opener for businesses in Sweden to digitize, to internationalize and to think global. It’s a prerequisite for businesses to survive and in the long run to sustain the high level of living conditions Sweden still has. There is knowledge to do it, and it has to be done in an economical way by the use of Swedish natural resources, that is the people living in Sweden. That includes developing conditions for sustainable good leadership, creativity and health in an environmental friendly digitized world .