2010-08-26
In my current job, I have daily contact with companies in the Nordic countries, something I feel is extremely rewarding and a highlight in addition to the real work. In other words, I analyze and evaluate the approximately 220 applications that Nopef receives annually in consultation with my colleagues.
During the 2000s, in the Nordic countries - especially in Finland and Sweden – we have noticed how the industry has refocused its strategies and logistics.
This has too often resulted in the closing of sawmills and paper mills. Instead, they have started businesses on emerging markets with lower costs and more opportunities.
Of course, this concept is about business administration and realities: the production is established in countries where the profits can be maximized. Companies on the multinational level happens to still have headquarters in the home country, but nowadays the headquarters are easy to relocate.
The Nordic countries represent a fairly small and uninteresting area. In addition, it is expensive for the big companies to have their headquarters located here over time. In different words, this is called “subsidiary economies”.
In Sweden, we have seen many examples of companies that have moved their headquarters in order to be closer to the actual main markets - or in some cases - to avoid a burdensome taxation. We turn into so-called “subsidiary economies”.
The presentations that I have listened to over the last few years, constantly repeated that small and medium sized enterprises are the Nordic region's future and anchor. The big companies are no longer expected to invest in the Nordic countries. It is certainly true, but if so, then the entrepreneurial climate should be more favorable than it is.
Surveys have shown that individuals are far more familiar with the term “Scandinavia” rather than any of the individual Nordic countries. We should not forget that each Nordic country has a population equal to a medium sized Russian city.
As an example, the entire Finnish population of 5.3 million borders the city of St. Petersburg with its 5 million inhabitants. The entire Nordic population equals a medium-sized country in Europe and so forth.
When our Nordic small and medium sized enterprises take the international step, they soon notice how small they are by all standards. Being able to grow relatively rapidly is often a prerequisite for financial sustainability and success.
A common way to grow is to merge with another company, such as a regular fusion, joint venture or a partial cross-ownership. Such solutions are always challenging, especially if the other party is foreign. Surprisingly, such decisions are commonly entirely based on business administration criteria.
There is rarely room for intuition. If you only have this pragmatic approach as a tool and nothing more, one might easily be affected by the cultural differences which in the best case are minor, but as a rule are more profound. Even the best strategies can fail due to completely trivial obstacles.
With the fusion of different cultures, many things change in the company. To make everyone strive for the same objectives requires a different leadership style and a portion of luck. Emotional intelligence and world knowledge are two important characteristics.
In selecting business partners, we should not only let us be convinced by stylish computational scenarios, without identifying which types of critical factors necessary for a successful long term partnership. The most suitable partner may actually be within a radius of 1000 kilometers if we start from Stockholm, such as another Nordic company.
Us northerners tend to cultivate a regular course of the stereotypical jokes about our differences, which admittedly can be quite hilarious. We are, after all, much more alike than we are different. In the Nordic countries we share a very fine, common set of values that one would pay large sums for elsewhere in the world. It is, in other words, our common relative strength on display.
I think it is about time that we really find each other and start creating important alliances in the Nordic SME level - a Nordic Anchor. With joint efforts, we have a chance to bring our know-how out to the world and fight the giants.
A fun - albeit stereotypical - quote from Dagens Industri which I think represents a valid conclusion: "The optimal mix is perhaps, when harsh Finns (and perhaps even Icelanders), courageous Norwegians, wily Danes and decent Swedes join forces and work together".