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Business 2.0 recently published a list of cities called the Best places to do business in the wired world. The twelve cities mentioned were Bangalore, Barcelona, Helsinki, Hong Kong, London, Seoul, Shanghai, Singapore, Stockholm, Tallinn, Tel Aviv, and Tokyo. It is good to see Bangalore on the list. What is also interesting is that there are three cities from the Baltic Sea Region (BSR). While Helsinki and Stockholm may not cause a surprise, the inclusion of Tallinn, the capital of Estonia is indeed worthy of note.

Not many in India may even be aware that there is a regional cooperation network called the Baltic Sea Region Investment Network. The investment promotion agencies of Denmark, Estonia, Finland, Latvia, Lithuania, and Sweden have come together to offer the region as a whole. Interestingly, Norway is not part of the network and apparently does not have an investment promotion agency. A mixed bunch surely. On the one side there are the more established economies of Denmark, Finland, and Sweden and on the flip side there are the characteristic Baltic states of Estonia, Latvia, and Lithuania.

Traditionally, one would classify the Nordic countries of Denmark, Finland, Iceland, Norway, and Sweden as one group and the Baltic states as another. But after the break up of the erstwhile Soviet Union, the Baltic States have realigned their economic policies to be a part of the Nordic group and the larger European Union. Initially, the realignment was more for the purposes of gaining independence. After having done that, the priority for the Baltic States has been on development and is one of the primary reasons for the formation of the BSR Investment Network.

According to the World Economic Forums statistics Finland, Sweden, and Denmark have consistently been in the top 5 of the worlds most competitive economies and Latvia, Estonia, and Lithuania are Europes fastest-growing economies. And, according to a Forbes report, all six countries are in the top 12 for the most investor-friendly in the world. Foreign ownership of companies is over 15% in the BSR.

Between the inner circle of Denmark, Estonia, Finland, Latvia, Lithuania, and Sweden, and the greater circle of Iceland, Norway, and the maritime provinces of Germany, Poland, and Russia, this region has a population of close to 100 mn, an attractive market for business.

The network has been working to attract investments from all over the world into the region. "We are aiming for borderless development in the Baltic Sea Region and want to attract global foreign direct investments. We do not have a target in terms of attracting a specific amount of FDI inflow. That is left to the individual countries," says Annika Rembe, representing Sweden who is the current chair-country for the BSR Investment Network. Invest in the Baltic Sea Region and integrate into Europe is the call. Non-European companies can leverage on the investment in the Baltic Sea Region to gain entry into the EU and get advantaged relationship to the commercial, economic, regulatory and political institutions of Europe. "In the future we will explore the possibility of making a combined offer for companies to invest in the BSR. That way we leverage on the individual strengths of the member countries as well as ensure that a bulk of the investments stay in the region," adds Rembe. The network provides standard services for setting up a business whether it terms of regulatory information, government interaction, or support in finding trade partners.

*Baltic Sea Region Statistics are for Denmark, Estonia, Finland, Latvia, Lithuania, Sweden

Thrust on India
Over the last two years the network has been focusing on attracting investments from India. The sectors being targeted are ICT, life sciences, engineering, and auto. Indian companies in the clean tech sector are also on the radar of the BSR network. "Decision making amongst Indian businessmen is faster than in many other countries," said Jari P Angesleva, investment director of Invest in Finland. One of the value propositions of the Baltic Sea Region is that it is the gateway to the EU markets. Countries like China, Japan, and some other Asian countries have used this route. However, Indian companies on the other hand have more often than not used the traditional route of UK as the gateway to the EU.

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