Etla to examine productivity in the service sector and the renewal of companies in two new multi-year research projects

In autumn 2023, two big research projects will start in Etla, both funded by Business Finland. The first project will look at how productivity in the private service sector could be improved through digitalization. The other project will study the role of intangibles in the renewal of companies. Both projects will end in 2025.

The private service sector is a critical driver of the Finnish economy, contributing significantly to economic growth and employment. Currently, the sector is undergoing a major transformation due to a wide range of factors, one of the most important being digitalization.

The research project “Boosting Productivity in Services through Digitalization” examines the impact of digital technology in the private service sector in Finland, and particularly, the impact of digitalization on the sector’s productivity. Furthermore, the project analyses the allocation of labour and capital within the service sector in response to digitalization and changing market conditions, and how firms are adapting their business models.

“Changes due to digitalization are reshaping the private service sector and providing new opportunities for growth and innovation. It is crucial to understand the impact of digital transformation on productivity and other economic outcomes for firms in this sector. Our findings will help drive growth and competitiveness in the domestic economy and support the scaling up of service firms in Finland,” says Etla Chief Research Scientist Natalia Kuosmanen, who is responsible for the project.

Her colleagues, Chief Research Scientist Terhi Maczulskij and Researchers Mika Pajarinen, Otto Kässi, Ville Kaitila and Olli-Pekka Kuusela will also participate in the project. In addition, the project involves cooperation with professors and researchers from Jönköping International Business School and the University of Oxford.

Intangibles as drivers of renewal

Intangibles play a vital role in economic value creation and the overall well-being of societies. Intangibles are non-physical things such as brands, data, patents, software, and human and organisational capital. However, our current understanding of intangibles remains imperfect.

The new research project “Intangibles as drivers of change and renewal – Firm dynamics underlying the next stage of the knowledge economy (InChange)” provides insights into the role of intangibles and offers a comprehensive framework for measuring them. Answers to the project’s pivotal questions will tell us which specific intangible assets, and combinations thereof, are most likely to propel businesses towards survival and success, and how intangibles contribute to the process of creative renewal in business organisations. The project will give us new insights into socioeconomic value creation and creative renewal.

Etla Research Advisor Petri Rouvinen is responsible for the project.

“This research addresses gaps in our understanding of intangible assets, their accumulation, their utilisation, and their impact. The project will help us to provide better information to support decision-making in both private and public spheres, through a broader knowledge of what importance intangibles can have in the renewal of companies,” Rouvinen says.

Etla Research Directors Heli Koski and Tero Kuusi and Researchers Otto Kässi, Sakari Lähdemäki and Mika Pajarinen will also participate in the project. The research team will cooperate closely with professors and researchers around the world.