For Bittium, financial influence means securing the profitability of operations for the long term. This way, we will be able to add value to our different stakeholders as well as the society around us. Profitable operations benefit shareholders, employees, partners, subcontractors, retailers, customers, municipalities and the state alike.
Conforming with legal requirements is the basic premise of financial responsibility. However, in many regards, sustainability and influence exceed the legal requirements.
Ensuring Added Value to Stakeholders
When it comes to Bittiumīs financial influence, the local scope is the one that matters most. Local added value is generated especially via direct and indirect effects on employment. In addition to the local effects, our influence extends via tax payments, dividend payments and business effects from the national level to the countries in which we operate around the world.
Bittium operates in Europe, the Americas and Asia. Nonetheless, the majority of our employees work in Finland, more than half of them in the city of Oulu.
Still, ensuring added value means securing long-term growth and financial stability, comprehensive risk management and a long-standing commitment to the development of society and the local community. In addition to financial risks, risk management should take into consideration other risks concerning the valuation of the company, such as reputational risks.
Our business operations should react to the changes in the operating environment to maintain profitability and competitiveness in the future. The technological revolution and the resulting technological solutions create both opportunities and threats changes that we should take into account already during the product development stage.
We already utilize robotics in-house, for instance, for financial administration tasks. As robotics and AI become more routine, they will have a greater effect on the development of our operations down the line. This also includes a change in job descriptions; what kind of skilled persons we will require and how we will recruit top talent in the future.
In Bittium, taxes are part of our business process and tax management supports our company strategy. Bittium operates in six different countries. In line with this, our business profits and the resulting taxes occur locally.
Bittiumīs tax strategy is to support business decisions and ensure their proper implementation also from the point of view of taxation. Tax planning supports business efficiency and productivity creating added value to the owners and ensuring compliance with the established regulations. Our tax planning is not aggressive and it is not based on artificial arrangements. It is always based on our actual business needs.
Our tax strategy is aimed at making sure that we calculate, report and pay our taxes correctly to the authorities, conforming to the established regulations. Bittium is committed to complying with the laws of our operating countries as well as lesser regulations, such as the transfer price instructions of the OECD. Good corporate citizenship is part of Bittiumīs values. Accordingly, the quality of our tax processes is an important cornerstone of Bittiumīs tax strategy. Our philosophy is to be open and transparent towards the tax authorities in all of the countries in which we operate. For its part, Bittium seeks to influence the development of tax systems to make them clearer, fairer and more consistent.
In Finland, Bittium works in close cooperation with the Finnish Tax Administration.
Investments in R&D
We operate in a sector that creates products and services for the future through continuous development, innovations and cross-sector cooperation. We are strongly involved as the spearhead of technological development, and active cooperation with academic researchers increases our understanding of significant new technologies and promotes the digitalization of society. Bittium has a long strong cooperation relationship with the University of Oulu.
In 2018, we took part in several national projects financed by Business Finland as investors and research partners. Europe-wide, our cooperation covered, for instance, the H2020, ITEA and EIT cooperation projects. The focus areas of these cooperation projects included technologies that are critical for Bittiumīs future product and service business, such as authoritative communications solutions, data security, machine learning and software design methods based on the LTE and 5G technologies.
Our product development investments continued to rise from the 2017 level to 34.4 percent of our revenue. The R&D investments were mainly focused on extending the defence product portfolio in tactical communications and in the development of terminals and software for the authorities and special purposes. Furthermore, we continued to develop our secure smartphones and their related security software. We also continued our investments in the further development of health technology products.