eThesis - School of Business electronic theses

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Objectives: The Finnish fashion industry and especially the small and micro sized companies are facing challenges. It seems that there is strong design know-how, rising talents and a seemingly increasing interest for Finnish fashion, yet these companies fail to reach sufficient growth and expand into international markets. A hindrance for this development is the existence of equity and entrepreneurial gaps, which refer to the lack of business know-how and appropriate financing. However, in Sweden and Denmark these gaps have been successfully bridged in more occasions than one. This study is built on the assumption that the fashion industry ecosystem in these nations provides a better environment for emerging fashion companies to develop. The purpose of this study is to explore the current state of the Finnish fashion ecosystem and examine reasons for its underdevelopment from a financer’s approach. The Swedish and Danish fashion ecosystems are studied to explore the determinants of success that enable small fashion companies to prosper and succeed under very similar macro-economic conditions. Methodology: Qualitative case study research was selected as the research method. The empirical part explores three fashion ecosystems: the ecosystem cases of Sweden and Denmark provide a setting and background into the topic, whilst the case study on the Finnish fashion ecosystem is more analytical and from an investor viewpoint. The cases were examined by using the constructed fashion entrepreneurship ecosystem model. Primary data was collected by interviewing private and public investors, business consultants and professionals in Finland, Sweden and Denmark. Secondary data to support the empirical findings was collected from a number of different sources, including government reports and studies, previous research, private analyses, newspapers and websites. Results: The finance, culture, human capital and market domains were identified to have had a relatively higher impact on the development of the fashion ecosystem in Sweden– implying on a relevance of the private sector. In Denmark, the government’s strategic support and public policies have had a significant role in developing the nation’s fashion ecosystem. In Finland, the ecosystem is underdeveloped because there seems to be a lack of business skills and collaboration among the fashion companies and entrepreneurs. This reflects on the finance domain as investors do not perceive the industry as a viable business case, and thus individual companies face challenges in acquiring external capital and smart money into their companies. Furthermore, there is a very limited amount of understanding and prior knowledge about the industry dynamics among potential investors and a lack of public and policy level support.