83% of Amcham executives say their business has been negatively impacted by the recent political and economic uncertainty in Europe.
Europe continues to face both internal and external threats to security and stability. The current refugee crisis, increased military tension, and political uncertainty have all had an impact on business within the Nordic region. We surveyed our members to find out just how much they have been affected by the turmoil and in what ways.
Thirty-five percent said that investments were being delayed by the unpredictability, while 20% specifically mentioned the continued weakness of the Russian economy as a reason for this difficult environment. Other reasons given include fluctuations in exchange rates and the price of energy, the possibility of Britain leaving the EU, and a lack of confidence resulting in slow decision-making.
At the same time, 89% of the respondents say that the relative attractiveness of the Nordic market has either increased or stayed the same recently. The respondents praised the overall stability of the Nordic countries, with 20% citing this as a reason for the strength of the region’s performance.
However, the respondents noted that Finland’s position has deteriorated relative to the other Nordics, particularly Sweden and, to a lesser extent, Denmark. Finland’s economic weakness has become increasingly apparent lately, and 14% commented on the stark differences between Finland and its western neighbors. Specifically, they mention public-sector inflexibility as a source of frustration.
On the other hand, we see that companies are no longer organizing their operations based on national borders, but on competencies and efficiencies they identify within the Nordic market.
Nearly all of the responding members had advice to give to the current government, with dozens of different variations on similar themes. 34% urged the government to simply make decisions, and stick to them, with this being the most popular response. 29% suggested that public sector reform is crucial, while 17% noted the importance of increasing Finland’s attractiveness as a destination for foreign investments. Other suggestions included the promotion of regional ties and the integration of immigrants.
When asked about what they would like to share with decision-makers, the main message they gave was that Finland needs to decide on what it wants to be as a country, build its unique capabilities, and be brave. Finland’s companies face global, not domestic, competition, and this is something political leaders need to remember.
Competition surrounds us where ever we choose to operate. The Nordics – each on their own – are not viable on the global market. Together, however, nations as well as companies can be something quite unique and interesting.
The survey was conducted among upper management of Amcham member companies between April 12th and 27th as part of the New North Forum, an Amcham program for Nordic CEOs. The respondents are situated in all the Nordic capitals and their companies represent all industries and sizes.