The interest amongst Finnish companies to enter the United States market is increasing rapidly, and to provide some information on how to best achieve that the International Business Club together with the US Embassy Innovation Center organised an event for HEKO members in September. The target audience were those considering market entry, and most of the attendees did either plan on entering the market or were helping their clients do so.
The event was hosted by Rodney Hunter, the Economic and Political Section Chief of the US Embassy, who described both the Innovation Center’s purpose and its design and dedication to green technology, which is reflected among other things by having used only led lighting throughout the building.
Guest speaker via videolink was Tom Strodbeck from the National Business Incubators Association (http://nbia.org/). The NBIA is an organisation dedicated to helping early stage companies, including early stage market entries, by providing information and networking assistance.
There is a multitude of factors that have to be considered in new market, such as legislation, culture, financing and finding the right partners and distribution networks. Even the very first decision is a big one: what does US mean in terms of a specific location ? The country is vast, and the most obvious choices may not be the best for all companies.
One reason that there is help readily available is because the US also wants to attract business into the country. They welcome foreign investment, jobs created and supply of new products, but there is a difference in the ease of getting established in different parts of the country. If you set up shop in Silicon Valley or the New York City, with any potential partner or financer you meet you could be the third foreign company they meet on that same day. Whereas if you set up in a midsize city in the Mid-West, you might be the first within a month. Needless to say the level of attention and consideration will be on very different level. And that midsize city still has a couple of million people and the surrounding market area equalling the population of Finland as a whole. A company looking for a place to locate could well benefit from the fact that the US consists of 50 states that compete with each other for investment and jobs.
The other reason to consider different regions within the country is that clusters of certain industries have developed in some parts of the country, such as green technology and medical technology in Florida, and food and agriculture around Chicago. Being located in a cluster provides access to expertise and speeds up development, which of course for many technology companies is the reason why they find it necessary to locate in Silicon Valley.
Although the market is open toward new entrants, it doesn’t mean that entry is easy. You do need to do your homework – which is where organisations like NBIA can help – but also need to act and get out to the market. The US is relationship-driven, and your customers and partners will have to know and trust your company in order to do business with it. This in turn takes presence and commitment, just visiting or trying things out for a short while is not likely to cut it.
After the presentation and a Q&A session with Mr. Strodbeck the participants divided into four person groups to discuss the takeaways, followed by a group discussion of the findings. The main points that the audience went away with were the consideration of different regions, the need to both do the research and act, and the existence of organisations that are available to help.
Text: Martti Kouhi
Photos: Antti Verkasalo
Published in HEKO Magazine 7/2013