“The European market” does not exist. Europe is a motley collection of countries and states, each with their own culture, language, history and oddities. For software and tech companies it is often difficult to determine where to begin. So what should be the starting point of your European market entry strategy?
Many organizations choose the UK as the basis of their Pan-European expansion. Especially for American companies, the United Kingdom seems the logical choice. There is obviously a historical connection between the two, but the main reason for starting off in the UK seems to be a practical one: the Brits speak English. In many cases, other geographies are only considered secondarily and thus the market which could in fact be the most interesting and promising can easily be overlooked: Northern Europe, by which we mean the area covering the Benelux and Scandinavia.
Market entry in Northern-Europe
For innovative software and tech companies, Northern-Europe is often at least as interesting – and provides at least as much revenue potential – as the UK. First of all, the sheer market size is significant. Northern-Europe is home to a large number of leading enterprises in the oil & gas, banking and finance, publishing and media, telecom & utilities, food & beverages and automotive domains. In addition to that, the SME sector is extremely vibrant and healthy and – thanks to the excellent physical infrastructure and distribution networks – end customers can be reached and served quickly and easily.
Another reason why many leading technology companies have established their European headquarters here, is the level of the IT infrastructure. In the field of mobile telephony and high-speed Internet connections, but also in deploying LoRa networks, machine learning, artificial intelligence, (UX) design, 3D printing, big data and cyber security, Northern-Europe is leading the pack.
A wide variety of technology giants
The presence of a wide variety of technology giants in combination with a thriving and often government-stimulated startup environment ensures that innovation and progress are the norm. New technologies, disruptive solutions and products which are still in an early stage of their life cycle are often implemented and tested in Northern Europe first; other European countries will follow later.
Another variable which has a positive effect on the Northern-European investment climate is the no-nonsense, non-political, open and transparent business culture. Although outsiders sometimes have to get used to the directness of the Danes and the Dutch, their straightforward, cut-to-the-chase communication style is generally perceived as a major advantage. No time is wasted, there’s no beating around the bush and what you see is what you get. And there’s no money stuck to the fingers, because corruption levels are the lowest in the world.
Still, there’s the language issue. You don’t speak Dutch, Norwegian, Swedish or Danish, you say? You don’t need to. As the English Proficieny Index shows, the “Very High Proficiency” band features the Netherlands and four Nordic countries (Denmark, Finland, Norway, and Sweden). These five countries have occupied the top five slots in five of six editions of the EF EPI, proving themselves to be world leaders in English language education.
All the more reason to start your European market entry strategy in the North!