Indian ICT businesses held back by digital exclusion expand to Finland overcome this

Digital exclusion or digital poverty refers to the lack of Internet, mobile and other technologies to facilitate technological innovation. This prevents countries and businesses from keeping pace with the technological advances taking place globally and has long-term repercussions, such as being unable to face competition with foreign players, lowering the quality of life and standard of living,and widening of the gap between the haves and the have-nots.

picture of an Indian woman holding a phone

India is seeing a growth in digitization. PC: Adam Cohn

Technological progress leads to wealth creation, the dissemination of information and it affects the way people think. Hence it is important for internet, mobile and other technologies to be available to India’s population. The government, and especially businesses play a key role in bringing affordable technology to people, hence ICT advances within businesses is necessary for technological and economic wealth of India.

India is growing in leaps and bounds, with the Digital India campaign being promoted by the Government of India and the growing number of mobile and internet users in India. However, ICT firms in India, especially SMEs are lagging behind in the race for technological advancement.

Historically, SME firms face a number of problems such as lacking skills, skilled human resources, funding, marketing and sales skills and access to recent technology. Even with the improvement in connectivity in India today, ICT SMEs are unable to develop their products or innovate because of a lack of a strong innovative business ecosystem, and non-availability of current technology to use in their business.

The major components of a highly digitized country are:

Connectivity: Fixed broadband, mobile broadband and prices
Human capital: Internet use, basic and advanced digital skills
Use of internet services: Citizens’ use of content, communication and online transactions
Integration of digital technology: Business digitisation and e-commerce
Digital Public services: eGovernment and eHealth

Source: Europa 

In India, all these components are still developing and ICT SMEs, which are by nature dependent on technology, are lagging behind.

Internationalization as an answer to digital exclusion.

Hence, the best step for Indian ICT firms is to set up their business in a foreign location which supports their product-innovation goals. This step of internationalization is embarked on after careful consideration of factors such as ease of doing business, nearness to other markets, demand for their product at the host location, legal issues etc. The main benefit to such as step is the accessibility to the latest cutting-edge technology and technology transfer which can be used by the Indian business to develop their own product.

Home country benefits

The benefits of internationalization are not to the business or the host country alone. Indian ICT businesses bring benefits to the Indian economy as well. The technological transfer and innovation is brought back to India. Local businesses, the government and people then get access to higher technology. This leads to an improvement in the nation’s economy and the standard of living.

Indian businesses find a tech-haven in the land of a thousand lakes

A fast growing trend of Indian firms venturing into icy Finland has been taking place for some years. Finland is a major technology hub in Europe and supports several hundred thousands of small tech firms. Major Indian companies like TCS, Infosys and Wipro have long since in established their operations there. However, smaller Indian technology companies have also been opting for the land of a thousand lakes as their primary foothold in the international arena.

Helsinki Building

Indian companies are going to Finland to cope with digital exclusion. Source: Daniel Spase

Why Indian firms choose Finland over other countries

Finland’s population is highly educated and technologically skilled and the majority of the young population speak good English, making Finland a better choice than Germany, Amsterdam and other locations where the local language is more predominant.

Companies like Allied Digital, GrayMatter, Ncrypted and many more have chosen Finland as their R&D base for product innovation and as a springboard to going global and entering the western markets. Finland is an apt choice because of its nearness to other European cities, as well as an entry point to the USA.

Indian companies once incorporated as a Finnish business also benefit from being branded as an international business based in Finland.

Finland ranks top place in several indexes: It is the 5th most innovative country in the world, It has the 4th highest gross expenditure in R&D and it has the 2nd highest number of business-university collaborations.

This means that Indian firms have the best chance of getting access to technology, getting funding, advancing their R&D efforts, and pilot testing their products.

Finland also holds a high rank in the Ease of Doing Business Index, and there are currently dedicated agencies and consultancies in place helping Indian businesses enter Finland, such as PrEver Consulting and their partner Helsinki Business Hub.

An Innovative Solution to the innovation problem in India

Regardless of the effects and setbacks of digital exclusion in India, Indian ICT firms and especially SMEs and startups can find solutions to this through internationalization to a tech hub like Finland.

Businesses can enhance their product with new features, improve their existing technology, assimilate current knowledge and even develop an entirely new range of products.

With product innovation and access to markets, SMEs have the potential to go global and find customers around the world, build their brand and make an impact in India and around the world. Even though digital exclusion is a major concerns for Indian ICT firms, and India is still growing in the digital arena, firms that need to ‘innovate or die’ will find it judicious to expand to a foreign tech hub like Finland with the aid of a local Indian consultancy like PrEver.