People often ask me what I do for a living. My usual reply is I run an international business development consultancy, but what I really ‘do’ is spend every day speaking to business people from around the world, extolling the virtues of the Baltic States.
After 14 years you would have thought I might be getting bored, but I’m not. I look back to my first visit in 1999, and the opening of the first office a year later, and I see the progress the three Baltic States have made despite some tough times, I feel proud to be involved in introducing these remarkable countries to people who knew nothing about them.
Don’t get me wrong, doing business here can be frustrating, the people can be stubborn, and building trust takes time.
You need to know the recent, often tragic history of the region to get even a little way into the Baltic mindset.
Nevertheless, what these countries have achieved in the past 22 years is nothing short of amazing. From being vassal republics of the crumbling and oppressive Soviet Union to modern robust European democracies, they have stood against the worst economic crisis for a century, and survived.
Many more established EU members could look at this achievement and learn lessons. But the point of this column is not merely to heap praise, but to talk about some of the key areas for companies looking for opportunities.
One slightly unusual sector where I am seeing a lot of activity is the trend for international companies looking at developing research and development (R&D) teams in the markets. Obviously to many companies R&D and innovation is a vital component of their business, but as the return on investment may be some way down the road, it is also the area that gets cut in hard times.
I saw this a few years ago and started talking to UK companies about the potential of developing R&D in the Baltic, as it has a range of compelling advantages. Not only is there a ready supply of highly educated people, there are distinct cost advantages, excellent facilities, a strong university base, and of course – if the proposition is properly structured - grants to support projects.
The Baltic governments have recognised that their one real natural resource is their people. They have spent many millions developing the necessary business infrastructure to support the R&D sector.
I would single out Lithuania in particular. This country has stated its ambition to become the northern European R&D hub by 2015, and backed that with over one billion euros of investment in commercialisation infrastructure through the development of the academic-industry science ‘valley’ programme.
But Latvia and Estonia are also putting themselves on the R&D map. Latvia is in the process of launching a major new green technology incubator, based in Riga and will look to further develop the already high level of expertise in the green technology sector.
At the moment my company CCG is working with eight companies from the UK and USA who are in the process of developing their R&D activities in-market.
One has already taken the plunge, and established two subsidiary companies in Latvia, and is developing a range of products linked to the European Space Agency. I expect the next two to make the move within the next month or so.
To me this is the perfect type of inward investment for the Baltic States.
Large manufacturing inward investment comes and goes, and is always moving to the next low cost destination.
R&D offers serious high quality jobs, and is seen by companies as a key part of their strategic development. This means the jobs stay, and new ones are created at a slower, more sustainable pace. Having lived through the Baltic roller-coaster of the last few years slow and sustainable sounds good to me!