The greater Helsinki area is increasingly being seen as a gateway between Europe and Russia. There are a number of companies currently planning to set up operation in Helsinki with an aim to operate in the EU, Russia, or both markets.
Finland is somewhat unique in that it exists with one foot in traditional Western Europe and one foot in Russia. During the nineteenth century Finland was a Grand Duchy in the Russian Empire, and that history is still apparent today in unexpected ways, such as the fact that Finland’s railway uses the Russian gauge as standard. More recently Finnish relations with our eastern neighbour were such that western powers often used Finland as a messenger, or neutral ground, for international diplomacy.
Starting in the 1990s Finland has been more integrated into the common European project. Ranging from the Euro currency to EEA commercial and industrial standards, Finland has been part of the greater European market.
“Helsinki is the place to be for many companies looking for access to the Russian market,” says Olivier Bonfils, Senior Business Advisor with Greater Helsinki Promotion.
Finland has a long history of doing business in Russia. During the Soviet era many Finnish companies traded with our eastern neighbour, and those relationships continue today. In July 2011 Russia became Finland’s most significant trading partner after exports to Russia grew 30 per cent during the first seven months of this year. Imports grew by a quarter.
There are about 650 companies doing business in Russia, with about 500 with a presence in St. Petersburg. In fact, Finns account for about twenty per cent of all foreign-owned companies in St. Petersburg. Finnish companies have invested about seven billion Euros in Russia and employ almost 50,000 people.
To help the process is the Helsinki Centre in St. Petersburg. It represents three Finnish cities – Helsinki, Kotka and Tampere – and aims to promote co-operation in a variety of ways, such as logistics and traffic issues. It also focuses on research, tourism, culture and communications.
To the world
Although many international companies may look at Finland as a portal to Russia, Russian firms are increasingly seeing Finland as a gateway to Europe.
“We have up to 20 active cases right now,” says Bonfils. “All of them are Russian companies looking at using Helsinki as a way to go international.”
European rules allow any company to do business anywhere in the European Economic Area, with some restrictions. This is termed “passporting,” and Bonfils says this is especially relevant to Russian companies looking to expand. In addition to passporting rights, companies can also benefit from common standards, such as for patents.
The idea of using Finland as a transit point between Russia and Europe extend across a range of economic activity. For example, almost 30 per cent of Russia’s imports use Finland as a transit point. American Airlines moved its Baltic hub to Helsinki because of the ability to use Finland as a transit point into Russia.
“We offer a lot of value to Russian customers,” says Bonfils, and begins ticking off a host of benefits. “Technology and quality validation for EU markets. A fast track to strategic partners. A functional environment for taking the first steps in going global. Access to public and private funding.”
Of special interest to the Helsinki metropolitan area are high-tech businesses. They are actively searching for key partners that they believe could gain from a presence in the area.
“The region is highly suitable for knowledge-intensive businesses, and especially when research, development and innovation are key,” says Bonfils. “The business ecosystem is varied and has strengths in cleantech, ICT, life sciences, design, logistics and knowledge-intensive business services.”
Finland has made the strategic decision to focus on high-technology industries, devoting billions of euros in providing the necessary educated workforce, infrastructure and financing. The Helsinki metropolitan area is home to about half of all Finnish spending on research, development and innovation.
Greater Helsinki Promotion has been actively targeting Russian high-tech companies for about a year now, with the aim to help the right kind of companies set up operations in Helsinki. One of the key partners in these activities is Finpro, the organisation that seeks to help Finnish companies internationalise. Finpro staff in St. Petersburg have been contacting local companies to gauge their initial interest, while personnel from Greater Helsinki Promotions offer their expertise.
Another key partner is FinNode, which works in collaboration with Lappenranta Innovation under a three-year program entitled “Commercialisation of Russian Innovation.” They have been able to screen some of the best Russian innovators looking for a suitable environment for their business growth, such as in Finland. GHP also offers their expertise with the help of strategic partners from the Finnish side.
Text: DAVID J. CORD, Helsinki Times
Did you know?
Taking the train from Helsinki to St. Petersburg
Allegro, the 220 km/h high-speed rail link, takes a traveller from downtown Helsinki to downtown St. Petersburg in three and a half hours, while a similar trip by air could take over five. Border formalities take place on board during the trip, saving passengers’ time. Finnish President Tarja Halonen and Russian Prime Minister Vladimir Putin inaugurated the link almost one year ago. Information about the route can be found at the state railroad company VR: www.vr.fi.