Scandinavian Investments in the Baltic States – Risks and Opportunities

It was just last year that the Norwegian company "Reitan Convenience" acquired "Lietuvos spauda" ("Lithuanian Press"). Lessons of the recession, Norwegians' determination to invest in the Baltic States and business challenges are related here by Mr. Rens Razums, General Director of "Reitan Convenience Lithuania" and Business Development Executive of "Narvesen Baltija".

For both the Scandinavian and Baltic business communities, the crisis was a very good learning opportunity, though harsh and expensive. It has taken a lot of “foam” away, but those companies that are here with long term plans are staying and expanding.

Certainly there are several sectors that probably will never be as vibrant as before, namely real estate with a tough market, its sluggish growth of a customer base and high development prices, or the media sector. In the media, I would guess Scandinavian companies are facing tremendous challenges and/or opportunities at home, i.e. issues with the decrease in the print media or the TV vs. Internet shift, so cutting “loose ends” is inevitable.

But I am sure that other sectors like production or agriculture are becoming more interesting. And what is also important, there are more and more local players that are not just seeking money or advice, but are ready and willing to talk with Scandinavians as equal partners.

I think the Baltic countries are in a very good position economically. Just think about being located in between the European powerhouse of Germany, the most prosperous part of Europe – Scandinavia on one side and fast growing economies like Poland and Russia on the other side!

But there are few challenges, namely the shrinking population and the fact that our politicians do not understand the concept of competitiveness. Why are we experiencing such an exodus of population? It’s because other countries have been better at selling their image, dream or social model, and active people have chosen their offer! Many politicians still think they are sitting on “golden eggs”, although it is far from that. Every European country is competing for money, the best people and the best ideas. So what are our competitive advantages, really?

I think there are few differences in business culture in the Baltic capitals. We recently discussed customer habits with a lady from Lithuania and as she said, the retail customers in Tallinn and Vilnius are more similar than in Vilnius and Marijampole, for example. And I think the same can be said about the business culture. This is because in the Baltics, I think we are very quick to adapt. Also, historically, we have lots in common with Scandinavia (small nations, German (in the background) and English–language influence, societies rather open to foreign influence, historical gender equality (compared to other parts of the world), etc. However, there are still areas I feel we are lagging behind in general – we are much less outspoken (afraid to criticize our bosses and leaders) and less sensitive to human capital. Therefore, I believe that Scandinavian investments bring a part of their own business culture here and I think we should be very happy about their vast presence in the Baltics. However, we are more passionate about what we are doing and that is a positive trend when looking to the future.