Countries like Thailand and Indonesia can provide Nordic companies with new opportunities. However, it’s not as easy as showing up and seeing results.
These challenging markets require businesses to quickly build up a network and navigate tricky cross-cultural issues to succeed. Governments across Southeast Asia have realised they need foreign investment as they look to restart their economies in the aftermath of COVID-19. This has created new opportunities for Norwegian and Nordic companies looking to enter the region. “The timing to enter couldn’t be better. You are seeing countries such as Indonesia and Thailand do more to bring in foreign investment. Entering now is an attractive opportunity,” Mr Axel Blom, Founder, and Director at Norway Connect, says.
An example of these efforts is the massive change happening in Indonesia to make the country more investor-friendly. The country’s Omnibus Law is streamlining regulations, simplifying the tax code, and permitting 100 percent foreign ownership of companies. In many ways, the Omnibus Law in Indonesia has taken Thailand’s Foreign Business Act to the next level. And while it would be easy to lump the two countries together, Mr Per Ecker Managing Director at Seven Stones Indonesia, Jakarta office, Partner of Norway Connect Indonesia, and Chairman of the Indonesia Norway Business Council sees Indonesia becoming something quite different from Thailand.
“Indonesia is on track to be the world’s fourth-largest economy. There are many unique opportunities in multiple industries here,” Mr Ecker states. “The country has a young, educated population and plenty of labour. Natural resources are in abundance. Everything needed is already here but there is little in terms of refinement.”
Meanwhile, Thailand continues to be a country where Norwegian businesses find success. Mr Blom points out that the government is now exploring new avenues to encourage foreign investment to kickstart the economy. Opportunities are present but companies considering entering countries such as Thailand or Indonesia need to be willing, able, and ready and able for such a task.
Approach and Mindset
One of the methodologies Mr Blom brought along from Innovation Norway was the Willing, Able and Ready assessment. This refers to three tangible traits companies entering new markets must possess”
“Willing means having the necessary ambitions, plans, and attitudes required to succeed in those markets. Top management and the board must also approve of the plans. Able is having the necessary competence and resources to succeed. Ready means checking that there is a realistic basis for success in terms of both market acceptance of the product/service and timing,” Mr Blom explains.
Mr Ecker adds the right approach is just one part of the equation when entering a country like Indonesia or Thailand where unforeseen challenges can arise. “You can’t Google yourself into a market. The issues are too complex, and need to be experienced first-hand,” Mr Ecker says. “Cultural understanding can be a challenge. Reading things and decoding signs can be impossible without local knowledge. How to understand and act on local regulations is not always straightforward.”
This has seen numerous companies take a negative view of the markets, Indonesia in particular, over the years. Mr Ecker notes misconceptions or a lack of understanding can lead to a missed opportunity. “Indonesia is not so easy to understand with a pair of Norwegian glasses on. It is often misunderstood and regarded as a hostile marketplace when it comes to legality and transparency,” Mr Ecker. “This is, in some cases, correct. But usually, it is used as an excuse to not enter the market. This leads to Nordic companies missing out on one of the fastest-growing economies in the world.”
Having the right approach and mindset is a good start when entering Indonesia, Thailand or other countries in Southeast Asia. But this is still part of a longer process businesses need to be ready for. “Even if you make it past the first hurdle, it is still important to have connections and meet the right people. It can be hard to find partners and establish key connections in the region,” Mr Ecker notes.
Innovation Norway had filled this role in the region. That changed when the Norwegian government opted to prioritise larger export markets with growth potential and closed offices in Indonesia, Thailand and elsewhere over the past five years. While this was a loss, it presented those who had been working side-by-side with the organisation a chance to fill the gap.
Above: Norway Connect’s Thailand team (left to right): Marketing Manager, Phuchisa Termdejtanakul, Managing Director, Axel Blom and Researcher, Pa-pavinee Pimsomrudee.
A Bridge to ASEAN
While Norway Connect first launched in 2017 in the aftermath of Innovation Norway’s Thailand office closing, the firm’s origins stretch back much further. Mr Blom’s operating company, Blue Business Solutions, operated on behalf of Innovation Norway in Thailand since 2008 as well as representing many other Norwegian companies.
“I had already been in Thailand for 25 years, having worked as head of Scandinavian Airlines (SAS) in Thailand for 15 years before leaving to start my own company,” Mr Blom details. “With a long track record, during which time I also had been president of the Thai-Norwegian Chamber of Commerce, I had built up a large network across many industries. Having been in Thailand for such a long time, I had a leg in both cultures, being able to understand the Thai business culture while at the same time understanding the needs of the Norwegian business sector.”
It was a similar story when the Innovation Norway office in Indonesia closed three years later. Understanding the country’s potential, Seven Stones Indonesia (SSI) stepped up to bridge the gap here. Founded in Bali by Mr Terje Nilsen, SSI has robust offerings in the property, investment/business advisory, legal, and marketing/branding sectors.
The firm also opened an office in Jakarta which Mr Ecker heads up. Together with Mr Nilsen, SSI boasts more than 55 years of combined experience working either in or with Indonesia. This is vital for businesses needing onboarding support for a possible entrance into the company. “Norway Connect, through its local partner in Indonesia, has the finger on the pulse when it comes to observing the fast-moving changes in this marketplace. Both culturally and professionally we understand the differences, evaluate the risk and are able to give recommendations of how to act and with whom to partner up with,” Mr Ecker says. He continues, “Additionally, we can offer on-boarding services or represent the client in the market if this is preferred. We have a one-stop offering in Indonesia as we look to bridge the gap for Norwegian and Nordic companies that wish to enter this fast-growing economy.”
It is important to note Norway Connect is not a carbon copy of Innovation Norway. The organisation does not provide financing to companies nor are services subsidised by the Norwegian government. So, while the privately-owned network does mimic the role of Innovation Norway’s foreign offices in terms of assisting Norwegian firms expanding into markets, it does not compete in the same countries. Another key difference is that Norway Connect works with other Nordic businesses.
Ultimately, Innovation Norway and Norway Connect are both a launch point. According to Mr Ecker and Mr Blom, starting in Indonesia and Thailand usually means finding the right partner, although locating one may not be a straightforward endeavour. Their experiences have shown meeting someone who can be trusted, let alone one that will provide a straight answer, is often a challenge.
Having a local connection or representation is a good way to overcome that challenge when entering Indonesia and Thailand but Mr Ecker and Mr Blom once again stress the need for businesses to be willing, able, and ready. From there, Norway Connect can tap into its strengths.
“We have a pragmatic approach looking at what we think is possible to do as well as what is not feasible. Our strength lies in our network, our expertise, and our cross-cultural understanding. Through the years we have had assignments in industries from consumer-related sectors to purely industrial sectors,” Mr Blom notes. “We try to encourage businesses in sectors where Norway and the Nordic countries have strong footprints and where there also is a demand for products and services in the countries where we are present.”
Norway Connect’s expansion into Indonesia in 2021 was recently followed by the organisation joining the independent business advisory network Asian Insiders. This gives Norway Connect’s clients access to industry experts all over Asia. See further details on Asian Insiders’ website.
- Norway Connect opened in Thailand and Malaysia in 2017 and in Indonesia in 2021 in the wake of Innovation Norway’s departure
- Norway Connect offers a Nordic centric business advisory and representation business assisting Norwegian and Nordic companies expanding into Thailand and Indonesia
- Norway Connect’s offices are led by Norwegians with 20-30 years’ business experience in respective countries
- Indonesia recently passed the OmnibusLaw which permits 100 percent foreign ownership of companies
- Many ASEAN countries are looking for new foreign investment to aid in economic recoveries
- Norway Connect recently joined the independent business advisory network Asian Insiders covering most Asian countries.
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