NORTHERN EUROPE REPORT
From Site Selection magazine, November 2006
enmark, Finland, Iceland, Norway and Sweden are notable countries for industrial development independent of their resource bases … unless you count highly
All five countries rank in the bottom half of OECD countries in corporate taxation percentage, with Denmark, Finland and Iceland having reduced their rates over the past six years by 12.5 percent, 10.3 percent and 40 percent (to 18 percent), respectively. What's more, their collective sense of the collective good, while often disparaged by some business people as a high- cost factor, takes on a different hue when it comes to infrastructure innovation and market transparency. The labor base is highly skilled, but at a comparatively low cost. And the region, while busy with its own portfolio of projects, continues to reassert its historical role as the gateway to Russia and the Baltic states.
Sweden's talent base is girded by a growing reputation for real estate fundamentals. The Real Estate Transparency Index released by Jones Lang LaSalle in July noted Sweden's ascendancy to the "highly transparent" category. Those attributes will assist the country's new government in its job- creation initiatives.
"The single most important task during this electoral period," new Prime Minister Fredrik Reinfeldt told the Swedish Riksdag during his Oct. 6 statement of government policy, "is to create the conditions for more jobs in more and growing companies."
Among the growing companies is homegrown Volvo, which is investing $20 million in a new paint shop at its construction equipment complex in Hallsberg, which employs 750. Siemens is investing $80 million in a customer care center expansion in Malmo. The region's growing importance as a North European logistics hub was highlighted in early 2006 by ProLogis, which followed up its Nordic headquarters relocation from Amsterdam to Goteborg in 2005 with the announcement of two major shipping hub projects in Goteborg and Stockholm.
Finland saw 185 foreign- owned companies start operations in 2005, up 10 percent from 2004. Denmark continues to see hubs and regional headquarters projects, including German communications firm Sennheiser in early 2006: "The reason why we chose Denmark in preference to Norway, Sweden or Finland, is because it brings us that much closer to everything," said Steen Peitersen, Nordic director of Sennheiser.
"One thing I found fascinating was the interest coming from China, not only for natural resources, but for other expertise," says Randall Johnston, president, Colliers ABR in New York, who was part of a delegation sent to Sweden in September by the Swedish- American Chamber of Commerce.
Illustrating that interest was the August announcement by China's Fanerdun Group that it would build a headquarters and exhibition center in Kalmar, in southeast Sweden, for the introduction of Chinese products into the European market. The center is expected to generate 800 new jobs.
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