Mission Statement

Information and Communications Technology (ICT) Trade Mission

from Silicon Valley to the Nordic-Baltic Region

December 3 - December 12, 2000

Mission Description

The Department of Commerce's Export Assistance Centers in Silicon Valley, in cooperation with the Commercial Service posts in the Nordic-Baltic Region (Copenhagen, Denmark; Oslo, Norway; Stockholm, Sweden; Helsinki, Finland and St. Petersburg, Russia), will lead an information and communications technology (ICT) trade mission to the Nordic-Baltic region, December 4 - December 12, 2000. Although the trade mission targets ICT firms in Silicon Valley, all U.S. high-tech, cutting-edge firms are eligible and welcome to apply.

The mission will be led by International Trade Specialist Tish Falco. It will focus on the following specific sub-sectors: E-commerce, internet technologies, and telecom equipment and services.

Commercial Setting

The Nordic-Baltic ICT market is one of the most advanced and competitive markets in Europe and the world. A number of leading global ICT firms are located or headquartered in this region and there is a high demand for U.S. products and services in these countries. Anchored at the far eastern end of the Baltic Sea, St. Petersburg is Russia's high-tech capital and is a good port of entry to Russia's emerging and rapidly growing information and communications technology and E-commerce market.

Copenhagen, Denmark

The Danish telecommunications market is now fully liberalized and privatized and the Danish computer hardware market can best be described as being fully developed. There is also an increased focus on E-commerce, offering a multitude of opportunities for high-tech, cutting-edge U.S. firms. All aspects of business, industry, services and public administration utilize state-of-the-art computerization for efficiency and cost savings. Due to the rapid technological expansion of the Danish ICT market, the constant replacement process of old equipment with top-of-the-line hardware will produce an estimated growth of 15 percent per year over the next three years. U.S.- brand equipment manufacturers are market leaders and many major U.S. companies have their own sales and distribution offices in Denmark. With U.S. companies being world leaders, an improved and more open Danish government procurement environment is helping to pave the way for additional U.S. companies as suppliers to the Danish government and providers of E-commerce services.

The privatization of the telecom market and the added and expanded services of advanced technology have led to growth in the telecom market. Computer usage in Denmark is high and is confirmed by a constantly growing market. By the end of 1999,

64 percent of the Danish population had a fixed line telephone. Half of all Danish homes have a PC and the number of homes with PC internet connections is increasing rapidly. In 1997, 48 percent of all homes had a PC and by the end of 1998, the number had grown to 61 percent. By the end of 1999, internet subscribers had grown by 42 percent, to 740,000 users, and the numbers keep growing. Trade sources predict that the percentage of private PCs with internet connection will increase to 75 percent by the end of 2000. Although the Danish market is competitive, there are a multitude of opportunities for new-to-market firms in the following areas: E-commerce services, web design, on-line service, secure payment systems, ISDN and ADSL modems, and related services.

Oslo, Norway

The Norwegian telecommunications market has been fully liberalized since 1998. Norway's telecommunication services market is estimated at $ 3 billion annually, of which $ 2.5 billion is accounted for by voice telecommunication services. Norway also has a very high telecommunications penetration level with a rate of 57 main lines per 100 inhabitants. Only Sweden, Switzerland and Denmark have higher penetration in Europe. Moreover Norway has the highest mobile teledensity after Finland. Consequently, the country has a very well established telecommunications infrastructure, which supports and carries access to the Internet out to some of the remotest parts of Europe.

Per capita expenditure on ICT is very high in Norway, at $1,484, which is approaching US per capita spending levels ($1,628). The average for Western Europe is USD 966. Norway's economy has for some time been very healthy, industry and trade is currently booming, and people have more money to spend on relatively expensive consumer goods. There is also a rapid growth in the number of Internet subscribers, and several Norwegian corporations have recently made considerable contributions to the sales bonanza by buying PC's for their employees. The U.S. share of the Norwegian market is not accurately reflected in official statistics. More than 80 percent of computer hardware is supplied by U.S. companies. However some successful Norwegian companies specializing in local assembly, combined with widespread sales and support activities, have produced growing competition for some well-known brand names.

Stockholm, Sweden

The Swedish telecommunications market is mature, well developed, and sophisticated, demanding state-of-the-art technology with a high per capita rate of telephone ownership. The following sectors are expected to be of most interest: IP-based communication systems, dual-band telephones, mobile and WAP telephones, E-commerce, and broadband communication solutions. There are no restrictions protecting Swedish interests or restricting foreign operations from establishing themselves in Sweden. Internet usage is among the highest in the world and is growing steadily.

Sweden is one of the most computerized countries in the world with 6.49 percent of GDP invested in ICT. Despite Finland's contention, Sweden is considered to be the most wired and wireless nation in the world (after the U.S.). It is estimated that Swedish companies bought one million personal computers during 1999. It is estimated that the Swedish companies will invest $125 to 190 million on upgrades. PC penetration is currently at the 75 per cent of households level. The need to make IT equipment Y2K compliant, the introduction of the Euro, and the technological change toward the adoption of electronic commerce and applications for the Internet have been a driving force in the increase of computer services. The following sectors are deemed to be of most interest: Internet/intranet, process outsourcing, systems and networks implementation, education and training, and support services. The Swedish computer software market will see a healthy growth during 2000 and beyond as e-commerce, m-commerce and internet banking all expand. U.S. products are considered to be of high quality and reliable. Best prospects for U.S. software suppliers are PC and network operating systems, Windows-based applications, Web security, enterprise development tools, and multimedia platforms. A great number of companies in Sweden will need more powerful machines to handle the new operating systems.

Helsinki, Finland

Finland's telecommunications market is one of the most developed in Europe and arguably one of the most developed anywhere in the world. In Finland, telecommunications operations have been opened up gradually to competition since 1985. Both the volume of telephone lines and the volume of telephones per capita are among the densest in the world. Finland presently has the world's highest penetration rate for mobile telephones (65 percent).

Finland's population of 5.1 million people comprises a highly sophisticated market for computer hardware and software. Finnish data transmission speeds are among the fastest in the world. Finland was the first country in Europe to take the ATM technology into commercial use and the first country in Europe to grant licenses for third generation mobile networks. Finland has the highest number of computers per capita connected to the Internet in the world. Presently, about 40 percent of Finnish homes have computers and about 60 percent of the population have access to the Internet either at home, at work, or through a local institution, such as a library. This has had a beneficial impact on telecommunications know-how, in terms of the variety of telecommunications services available. With about a 30 percent import market share, the United States is Finland's leading external source of computers and peripherals.

Due to high technical standards and the liberal telecommunications market, Finland also serves as an excellent test market for development of new services. U.S. companies wishing to enter the Baltic markets and Russia (especially St. Petersburg) should view Finland as a natural gateway and Finnish companies as experienced partners in any such effort.

St. Petersburg, Russia

With an emerging ICT market and its close proximity to Finland, St. Petersburg is a natural choice for the conclusion of the mission. The revival of the Russian economy since the 1998 financial crisis and ruble devaluation resulted in a growing demand for many high-tech products and services.

The telecom sector provides some of Russia's best prospects for U.S. companies, especially in St. Petersburg. Since August 1998, the number of subscribers for commercial telephone services has grown at an annual 7%-10% rate, but the sector suffers from a lack of installed lines, outmoded switching gear and inadequate investment. There is a large potential for growth, considering the low teledensity (19 lines per capita) and the active digitalization campaign for Russian public area networks (only 15% of local access lines are digital). In 1999, telecom services in St. Petersburg totaled $320 million for corporate and consumer sectors, with ten new public operators entering the local market. Currently, all operators are either constructing or enlarging fiber-optic telephone networks. Along with the development of cable networks, operators are exploring the use of wireless communications, which may create significant opportunities for the import of wireless applications into this country.

The Russian computer hardware and peripherals market also represents a significant target market for U.S. exporters and has solid growth potential. Industry sources estimate that the PC and peripherals market reached $1 billion in 1999 and will grow to $1.2 billion by the end of 2000. The most attractive products for end-users are modems and other Internet-access gear. Additionally, both corporate and non-corporate end-users are increasingly interested in obtaining network stations, internet service channels, printers of various systems, sophisticated desktop PCs, monitors, servers and mobile PCs. Currently, there is significant demand in Russia for moderately priced PCs, hardware components (sales of locally assembled PCs are up significantly), high-performance computers, and equipment for the SOHO (small office/home office) market. American firms dominate printer markets, while laptop computers have found a small niche that will grow as small business develops.

Mission Goals

The mission's goal is to introduce ICT firms to potential buyers, agents, and joint venture partners and/or help them expand their presence in Copenhagen, Oslo, Stockholm, Helsinki, and St. Petersburg. Participants will gain access to key government and business figures through market briefings, pre-arranged meetings, and business networking receptions, designed and coordinated by the overseas Commercial Service posts in the Nordic-Baltic region.

Mission Scenario

Participants will spend approximately two days in Copenhagen, two days in Oslo, two days in Stockholm, two days in Helsinki, and two days in St. Petersburg. At each stop, the Commercial Service will provide an extensive market briefing highlighting opportunities in the ICT sector and recent policy developments, schedule one-one-one appointments with potential business partners for each participant, and arrange a business networking reception to introduce the participants to key business and government officials in the respective ICT sectors.

Mission Timetable/Agenda

Stop One (Copenhagen, Denmark): Mission participants will arrive in Denmark, Sunday, December 3. They will begin the mission with a market briefing on the evening of December 3. This stop will conclude on Monday, December 4 with various one-on-one appointments and a business networking reception. The mission participants will travel to Oslo, Norway on the evening of December 4.

Stop Two (Oslo, Norway): Mission participants will arrive in Oslo, Norway on the evening of Monday, December 4. They will have a market briefing, a day of meetings, and a business networking reception on Tuesday, December 5. Mission participants will travel to Stockholm, Sweden on December 6.

Stop Three (Stockholm, Sweden): Mission participants will arrive in Stockholm, Sweden on Wednesday, December 6. They will have a market briefing on the evening of December 6. The stop will conclude with one-on-one business meetings and a business networking reception on Thursday, December 7. The mission will travel to Helsinki, Finland on December 7.

Stop Four (Helsinki, Finland): Mission participants will arrive in Helsinki, Finland on Thursday, December 7. They will have a market briefing, one-on-one business meetings, and a business networking reception on Friday, December 8. Participants will travel to St. Petersburg on December 9.

Stop Five (St. Petersburg, Russia): Mission participants will arrive in St. Petersburg, Russia on Saturday, December 9. They will have a market briefing, business meetings, and a business networking reception on Monday, December 11. The mission will conclude in St. Petersburg, Russia with the participants flying home on Tuesday, December 12.

Recruitment will begin immediately after the mission statement is approved and should be concluded no later than November 3, 2000. Applications received after that date will be considered only if space and scheduling constraints are available. The mission will target eight to ten U.S. companies. The participation fee for the mission will be $3750 per company.

Criteria for Participant Selection

Eligibility and Selection Criteria for the eight to ten representatives will be based on the following principles:

Mission participant should be a company decisionmaker with the ability to fully represent the company's market goals.

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Internet, direct mail and broadcast fax, e-mail, notices by industry trade associations and other multiplier groups, and press releases. Partner associations of the Silicon Valley Centers (e.g. Telecommunications Industry Association, Center for International Trade Development, and the California State Trade Office) will support the mission by recruiting pertinent U.S. companies through the appropriate channels (i.e internet, publications, fax, and email).

Relevance of the company's business line to mission goals

Potential for business in the selected markets

Timeliness of the company's completed application, participation agreement, and payment of the mission participation fee ($3750).

Certification that the company meets Departmental guidelines for participation, including certification that the company's products and/or services are manufactured or produced in the United States, or, if manufactured/produced outside of the United States, the product/service must be marketed under the name of a U.S. firm and have U.S. content representing at least 51% of the value of the finished good or service.

Any partisan political activities (including political contributions) of an applicant are entirely irrelevant to the selection process.

Contact

Tish Falco

U.S. Commercial Service

Santa Clara Export Assistance Center

5201 Great America Pkwy, Suite 456

Santa Clara, CA 95054

Telephone (408) 970-4615

Fax (408) 970-4618

Email: tish.falco@mail.doc.gov