New export initiative between Baltic Sea countries to launch this fall

This fall, Tehnopol will launch the export program Baltic Sea Region – Go Abroad, aimed at increasing foreign trade between Baltic Sea countries and enhancing export cooperation. The program includes companies from Denmark, Norway, Sweden, Finland, Germany, Poland, and Estonia.

Although goods exports grew by 3% in April 2024 compared to the same period last year, imports outpaced exports, resulting in a trade deficit of nearly 305 million euros. This means the trade deficit was 65 million euros larger than in the same period last year, showing a significant downward trend.

The driver of international trade continues to be the export of services, which achieved a record result of 3.1 billion euros in Q4 2023, representing a growth of nearly 6%. Although the result was slightly lower in Q1 2024, at 2.8 billion euros, it remains notable, with a surplus in the services trade balance of 595 million euros.

Q3 2023 can be considered historic as, for the first time, Estonia’s services exports surpassed the exports of locally produced goods. The reasons are clear – domestic and tax policy fluctuations and the international economic stalemate have left their mark on trade. An unstable tax environment, high energy prices, a shortage of skilled labor, and so on – the crises faced by entrepreneurs today are numerous enough to dissuade them from entering new export markets. Or maybe not.

Focus on the internationalization of Micro-SMEs

BSR Go Abroad focuses primarily on enhancing the export capabilities of micro-enterprises, meaning companies with up to 10 employees who have little or no experience in international trade. This focus is based on the fact that only 6.3% of micro-SMEs in the Baltic Sea region actively export their products and services. In comparison, 22.6% of SMEs with 10-49 employees and 49.5% of SMEs with 50-250 employees are engaged in exporting.

While the primary focus of the program is on the internationalization of micro-SMEs, companies with up to 49 employees interested in starting or expanding exports to Baltic Sea countries are also welcome to apply.

The program aims to empower cross-border trade for regional entrepreneurs, such as the sale of services and goods, participation in international tenders, and attracting foreign investments. Izabella Steinerowska-Streb has researched the international competitiveness of micro and medium-sized SMEs and found that the potential for survival and risk tolerance during economic crises is 30% higher for exporting companies. Therefore, internationalization directly contributes to ensuring business sector crisis readiness and preparation for unexpected changes, especially in a world that is constantly and rapidly evolving.

Effective resource and process management is key to success

Internationalization begins with the efficient management of company processes and resources, meaning a clear understanding of available resources in terms of time, human power, and finances helps design the export journey to the customer and prepare for challenges in the new market. The biggest mistake is focusing solely on sales strategies, which can make entering a new market very resource-intensive due to unclear strategic goals.

BSR Go Abroad offers export consulting to entrepreneurs on three different levels. The first phase focuses on companies with minimal or no knowledge of international trade, aiming to help them understand the risks and opportunities, process design, and resource management associated with exporting. The second phase targets companies seeking solutions to specific challenges with the help of mentors – this phase is primarily for companies with at least minimal experience in foreign markets. The third phase involves networking in foreign markets with the goal of selling services and goods, participating in international tenders, or attracting foreign investments. The program is designed as a step-by-step growth platform for entrepreneurs looking to expand into new markets in the near future.

The participating countries are among Estonia’s largest export destinations – Finland, Denmark, Norway, Poland, Sweden, and Germany alone accounted for goods exports worth 620 million euros last year, placing these countries among the top ten export destinations for local entrepreneurs.

BSR Go Abroad launches this fall, but applications are already accepted. If you are interested in applying, read more information on the Tehnopol website and submit your application as soon as possible. The BSR Go Abroad program runs from November 2023 to October 2026. The program’s budget is 2,998,300 euros and it is funded by Interreg Baltic Sea Region and the European Union.