Catching up with Consul General: Marko Salonen of FACC on opportunities for Finnish businesses during and post COVID-19

The Consul General of Finland in New York, Mika Koskinen, sat down with Marko Salonen, the Executive Director of the Finnish American Chamber of Commerce in New York, to chat about the latest changes in New York business environment and its effects on Finnish businesses operating or wishing to operate in the U.S.

Marko Salonen, Executive Director of FACC
Marko Salonen, Executive Director of FACC, fosters economic ties between Finland and the United States.

Marko Salonen fosters economic ties between Finland and the United States and promotes bilateral trade and investments between the two countries. He is a business enthusiast with a great deal of international experience developing and leading programs to build healthy startup and scaleup ecosystems, and assisting founders to obtain the resources and knowledge to expand and scale their businesses.

Mr. Salonen holds a Bachelor’s degree in Business Technology from the Aalto University School of Business and serves on the Board of the European-American Chamber of Commerce in the United States and on the International Advisory Board of the Finnish Cultural Institute in New York.


Mika Koskinen: How are Finnish companies coping with the new market situation during the pandemic?

Marko Salonen: Times are very challenging, there is no doubt about that. COVID-19 has affected companies of all sizes and in almost all industries. Many companies have had to drastically adjust their internal work and production processes. Companies now have had to be streamlined to be capital efficient.

Of course, there are lots of questions marks up in the air before we receive the actual export numbers, but statistics showed that the total export of goods to the United States in April was 320 million Euros. The total value of exported goods from Finland to the United States between January and April 2020 was 1,214 million euros, which is a 26% drop from the previous year. We are talking about big numbers and this is the reality. Of course, the challenge is global and numbers have decreased almost everywhere, but Finnish companies can definitely feel it here in the U.S.

However, I would like to mention something positive. The United States was Finland’s most important country for exports of services in the first quarter of 2020. This accounts for approximately 14% in total of Finland’s service exports and it grew by 16% compared to Q1 in 2019, which I would say is very positive to see during these extraordinary times. So cheers to our service export growth!

MK: What are the main challenges for doing business in the United States and New York for the Finnish companies at the moment?

MS: The situation is unique in many ways and the current traveling and visa bans are not helping. COVID-19 itself is challenging enough to deal with, but fortunately, many Finnish companies have enrolled in the paycheck protection program to keep their workforce employed. In addition to COVID-19, some companies have been hit hard by tariffs. For example, there are companies that import steel pipes and they have faced a 25% additional tariff. Luckily, they have been able to keep the U.S. customers, but the price that they are paying to keep them is high and it is not easy to compete in such a market environment.

MK: Have Finnish companies exported to the US any innovations in the fight against the virus?

MS: Yes, Finnish technology companies have successfully partnered with universities and major sports leagues to fight the virus. Also, our EdTech (Educational Technology) companies have explored market opportunities to provide their solutions to American schools, who are forced to operate remotely. In addition, companies are looking to deliver COVID-19 testing kits to the United States.

MK: New York has been one of the most affected cities of this pandemic. Has New York now lost part of its business attractiveness due to this situation?

MS: For many decades, New York has been one of the most popular locations for Finnish companies. With a reasonably manageable 7-hour time difference and straight flight connection to Finland, it makes it a natural place to set up the U.S operations. New York is known for being the financial capital of the world. If New York was a country, it would be ranked as the world’s 11th largest economy. The well-developed capital market makes New York a really attractive place for companies who are looking for funding. Venture Capitalists in New York also tend to invest in companies which are located in New York. There is a saying “local capital is the best capital”, and there is a lot of capital looking for a good home. New York is the nation’s second-largest source of venture capital financing, in 2018 the proceeds totaled $12.19 billion. I do not have a crystal ball but I also do not see New York’s attractiveness and importance in international trade would change dramatically anytime soon.

Crisis tends to bring high flying ideas down to earth and favor cost-effective, high-value products and services, which works very well for our Finnish companies. Our Finnish top-level engineering combined with trustworthiness is a good match in business now. We are known for delivering what has been promised.

MK: What kind of positive outcomes could result from this pandemic business-wise?

MS: I scratched the surface a little bit in an earlier question, but some companies have found new ways to operate more efficiently and have found, or are exploring, new streams of income. Good cash flow management is vogue again.

These extraordinary times have dramatically changed the way we work and have created new business opportunities for Finnish businesses. The pandemic has accelerated the transition of the buzz-word, “digitalization”. Working in the cloud is not “futuristic” anymore, it is now. We have a good number of cloud-based businesses and software as a service businesses who are busy at the moment and I can give you some real-life examples. Companies are building their own marketplaces and e-commerce is thriving. We have an excellent technical solution called Shuup(Link to another website.) (Opens New Window) to answer this demand. Leaders and executives are in need of technical tools to lead and execute the strategy and transformation to work remotely, Tangible Growth(Link to another website.) (Opens New Window) provides a solution to this challenge. The list goes on, cybersecurity is probably one of the industries that should be mentioned as well. All new business opportunities are not only for technology companies though, as mentioned, e-commerce businesses are also doing well, which means that more and more packages are being sent. Finnish forest industry companies have been able to show how to adjust their supply to ever-changing demand. Traditional paper business as we know it might have seen its best days, but the e-commence boom has given plenty of room for growth for packaging solutions business. Again, just to give you an example, when iPhone maker Apple decided to move from plastic packaging, it decided to use Stora Enso as a key supplier. Metsä Board has also found growth from the United States and they are the largest supplier of folding boxboard in the country.

Crisis tends to bring high flying ideas down to earth and favor cost-effective, high-value products and services, which works very well for our Finnish companies. Our Finnish top-level engineering combined with trustworthiness is a good match in business now. We are known for delivering what has been promised.

MK: What kind of services is the Finnish-American Chamber of Commerce in New York offering to companies and local partners?

MS: The Finnish American Chamber of Commerce was founded in 1948 to promote and foster trade, business, financial and professional interest and commercial relations between Finland and the U.S. We still remain loyal to our mission. Naturally, the way of doing it has changed since the 40s.

The Chamber works also as a source of information. For example, in this month, FACC hosts two time-relevant webinars. The first one addressed the current visa bans and the second webinar will focus on the real estate market in New York. This way we try to keep our members up-to-date on the current, fast-changing business environment.

Every company has its individual needs, more mature businesses naturally need different services when compared to the new ones, that are in the planning phase of entering the U.S. market. We help new companies to find the right partners to set up their presence here and to find the first, critical contacts to make sure that the story starts smoothly on the new market. Things are a little bit different here than back at home and often companies are in need of guidance.

We are in the people business and it is all about the connections you can make. The Chamber helps you to open doors that may not otherwise be available. The Chamber itself looks exactly like the people it is surrounded by, the number of members has grown exponentially over the last couple of years, and I think we have never had so many company members than we do today. It is also nice to see many new and younger companies joining our Chamber. FACC gives you a community to meet people who are in the same boat as you. I should note that all the companies previously mentioned are also members of the Finnish American Chamber of Commerce in New York, I wish I could tell you a story of all them, but unfortunately, the time is limited. The Chamber is a nonprofit and would not exist without its members. I would like to extend my gratitude and thank all the members who continue to support us. Supporting the Chamber means that you are also supporting the Finnish companies located in New York. Also, I should say many thanks to you and your team, Mika. The Consulate General of Finland has been a great support to us and it is always a pleasure to work with you.

I hope I was able to answer all the questions and I wish you all great summer, wherever you are! Hopefully see many of you in person once we’ve established the “new normal”.

 

Read more about Finnish American Chamber of Commerce on their website: www.facc-ny.com(Link to another website.) (Opens New Window) 

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