Cross-border investments can drive growth in the Nordic countries and in Europe in general, yet published statistics on investment flows are scarce.
Nordic Innovation is a strong promoter of cross-border cooperation and investments and believes that the Nordic region will become more competitive if, competence and capital can flow freely between the countries. Furthermore, competent, risk-taking capital is essential for growth and internationalization of unlisted Nordic companies.
Small national markets make cross-border investments
Each of the Nordic countries is relatively small. From the perspective of growth companies, this implies limited access to relevant investors with capital, industry knowledge and international networks. From an investor point of view, small markets mean small deal flows .
Investors and investment funds seek attractive deals, and appropriate risk allocation. This sometimes be hard to locate only within national markets and as a consequence cross-border investments become important.
Better statistics on cross-border investments
Better statistics on cross-border investments are important for the development of a well functioning market. European Venture Capital Association (EVCA) produces annual statistics in their Year Book, and have recently included an annual Nordic Report. However, according to Dr. Markku Maula, professor of Venture Capital at Institute of Strategy, Aalto University in Finland, there is a potential to extract and produce more detailed statistics of the investment flows of the Nordic region based on the data collected by PEREP_Analytics.
Market based statistics (including investments received by Nordic portfolio companies and funds raised by Nordic VC focused funds) are most relevant. Splits by region, stage and industry sector can help identify functioning areas and bottle necks. Splits by investor type can be useful when considering the role of government agencies. Furthermore, analysis of active versus passive ownership can be useful for understanding the role of foreign investors in Nordic companies.
Unveiling cross-border investments in the Nordic region
In order for Nordic Innovation to facilitate cross-border cooperation and investments and provide accurate recommendations for policy actions, it is important to map inbound and outbound investment flows to the region and between the Nordic countries.