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How clusters in East and North Finland support their businesses to find solutions to COVID-19 crisis

Communities, clusters and SMEs have all been hit hard by the COVID-19 epidemic. During the last few months we have seen rapid action taken by government as well as regional authorities to support businesses suffering from high fix costs without almost any sales under the current crisis. We have also seen clusters, networks and SMEs showcasing remarkable resilience and ability to help their members adapt to the new and challenging situation. This article highlights some of the actions taken in East and North Finland in response to the COVID-19 crisis.

Businesses conquering new markets

From the beginning of the pandemic, thorough hand washing has been emphasised as one of the most effective ways to prevent Coronavirus infections. Instructions on how to disinfect your hands correctly became very familiar to most people already at the beginning of the pandemic, also resulting in an acute shortage of small hand sanitizer bottles. This created an opportunity to some businesses to further develop and re-invent their products as well as to seek new business partners to innovate with. One of these types of new partnerships was formed between Vivotech and Vauhti Speed operating in North Karelia in order to produce automatic hand sanitizer dispensers. Vauhti Speed in fact adapted their production capacity from ski waxes to hand sanitizers in just a few days. Similar type of collaboration and product development was also done in Pohjois-Savo region between a chemistry company, Reagena, and a distillery named Lignell & Piispanen.

Shortage in supply of hand sanitizers has also provided product development opportunities to distilleries and breweries in East and North Finland. Companies such as Kalevala Distillery and Nordic Premium beverages operating in North Karelia as well as Olaf Brewing in South Savo have all now quickly reoriented their production to conquer new markets. Kalevala Distillery is also adding vitamin E to their sanitizer to prevent drying of skin.

COVID-19 pandemic led to many shortages in the health care sector such as shortage of testing capacity, facilities and of supplies such as respirators. Over the last few weeks, we have seen some newcomers on the medical market. The ski hat manufacturing company Husky in Lapland started production of facemasks made of fabric while the printing company Teippari has started a production of protective visors. In North Karelia, the Muovisola company developed a mask model where only one piece of filter fabric is needed and production capacity can be scaled-up up to 5000 units per day. Oulu region, a home to numerous health & life science companies has also seen many companies stepping up to provide innovations and support. iSTOC, for example, developed a mobile diagnostics solution for screening and mapping the virus spread.

Clusters supporting businesses

Clusters have also played a crucial part in supporting businesses as well as local hospitals and health care workers. We have seen clusters offering information on opportunities to companies as well as webinars and training for free. For example, MicroENTRE, a cluster that promotes growth and internationalisation of micro-entrepreneurs, provided free online education on digital sales and marketing to its members.

In response to the new situation, clusters not only support their members but also take part and create social initiatives. Higher education institutions as members of clusters have donated hospital beds and respirators from their teaching labs to the local hospitals. Higher education institutions, like Lapland University of Applied Sciences and University of Eastern Finland are offering free webinars for companies facing rapid changes in their business. They also offer the chance to get supplementary training free for those that have lost their jobs due to the COVID-19 crisis. Clusters are helping to map the situation and share the valuable information about needs of businesses in regional and national networks.

Intermediaries, chamber of commerce and business associations are supporting SMEs in many ways. Arctic Industry and circular economy cluster in Lapland is helping industrial SMEs in crisis management, foresight services and rapid projects to ensure future of local business in Kemi and Tornio area.

Pushing funding for SMEs and clusters

Clusters, intermediaries and the public sector are pushing for funding for SMEs in the East and North Finland. New measures have been placed on the agenda during the spring months in every region. Regional Councils play a key role in supporting regional stakeholders who operate directly with businesses. National actions have been rapid, and government has committed and prepared more direct funding for some lagging lines of business suffering from the new situation.

Public authorities have put in place several ad-hoc funding instruments for SMEs due to the Coronavirus outbreak. Sole entrepreneurs and self-employed persons without employees can obtain finance from municipalities through public development organisations consisting of a lump sum payment of EUR 2,000 to cover the costs of running their business in the current circumstances.

Micro-enterprises that have suffered from market and production disturbances can apply for business support from an ELY Centre (Centre for Economic Development, Transport and the Environment). The support applies to all types of companies. The ELY Centre’s business support can be granted to businesses with no more than five workers.

In addition, business development funding is directed for SMEs operating in Finland and employing between 6 and 250 people. The funding is available for almost all sectors where business activity has been hit by market and production chain disruptions as a result of the Coronavirus epidemic. With this funding, businesses can identify, plan and implement new development measures to deal with these effects and address any further disruption. Funding is available through Business Finland.

Most of the East and North Finland regions have launched a specific call for Corona crisis related projects. The funds are allocated from ERDF or other regional funds. The first calls are already closed, and it looks like there will be at least 5 million € allocated for projects selected from more than 60 proposals in East and North Finland. Oulu region, Pohjois-Savo, Kainuu, North Karelia and Lapland have been taking rapid actions for helping SMEs and stakeholders in corona crisis.

The article above was published on ELMO ( East and North Finland Regions in Industrial Transition pilot) website here

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