Oceans of opportunity: Cities increasing trade with Norway

Photo: Michael Kleiner
From left: NACC Philly Board Member Michael Byrnes, CPA and Business Development Director at BDO USA, LLP; Tess Kristensen, NACC Philly Board Member and adjunct professor at Temple, who worked with the students, was the moderator; Steinar Nerbøvik, CEO of Philly Shipyard and NACC Philly Board Member; Frode Kjersem, President of NACC Philly; R. Aubrey Kent, Temple University’s School of Sport, Tourism and Hospitality Associate Dean and Professor; Lauren Swartz, Director, International Business Investment at City of Philadelphia, and Yelena Barychev, Corporate Governance and Securities Partner at Blank Rome Counselors At Law, LLP.

Michael Kleiner
Philadelphia, Penn.

Philadelphia is a city of firsts—the birthplace of the nation, Declaration of Independence, U.S. Constitution, and countless others. On March 30, a first step was taken in “selling” Norwegian businesses on the viability of the City of Brotherly Love for future investment. The Norwegian American Chamber of Commerce Philadelphia, along with representatives from the city, law, business development, and higher education sectors, sought to answer the challenging questions raised in a collaborative report NACC conducted with five students from Temple University’s School of Sport, Tourism, and Hospitality Management. Temple hosted the on-site and virtual program, Oceans of Opportunity: Increasing Trade Between Norway and Philadelphia. Approximately 58 people attended overall.

Though focused on Philadelphia, there were some elements from the report, first presented in December, that other cities could use.

“The report is a guide to a new business model to increase awareness of the Norwegian Chamber of Commerce in Greater Philadelphia and awareness of Philadelphia in Norway,” said NACC Philly President Frode Kjersem in opening remarks. “We want all of you, the stakeholders, to critique the findings and suggest how we can implement them in the marketplace. We wanted to focus first on our region. We are a young chapter (2013) and we want to make our own space. The old chamber model is outdated. It worked well for certain businesses, like shipbuilding and fish, and some that already had a presence in the United States. We are living in an increasingly globalized world and different products are being produced. The distinction between Norway and other places in the world is not as distinct. We need to come up with better reasons why a chamber of commerce is relevant. We have to look at other industries in Norway that might provide expertise on a project or has a new product to launch.”

The major finding in the report was that 60% of Norwegian businesses polled did not know about Philadelphia; the 40% that had some awareness knew little. This event was to build up awareness, while answering the challenges that Norwegian businesses faced in the city and in America in general:

• Difficulty for Norwegian companies in finding local partnerships

• Lack of success due to “a lack of professional networks that meet the needs of those Norwegian companies”

• Fierce competition

• Immigration policies/obtaining visas and work permits

• Identifying potential customers

• Slowing Norwegian economy

• Culture and language barriers

• Lack of familiarity with the area

• Regulatory/legal issues

• Acquiring a skilled workforce

• Sourcing local suppliers

• Marketing products and services to American people

Bilateral trade relations between Norway and the U.S. “remain limited to the strong traditional Norwegian sectors, such as oil and gas, information technology, maritime, aquaculture, and shipping,” while Norwegian direct investment in the U.S. is mainly in mining, oil and gas extraction, and manufacturing. These industries may not be other cities’ strengths. The major Norwegian anchor business in Philadelphia is Philly Shipyard, which arrived in 1996 as Kværner, changed to Aker, then Philly Shipyard. The Navy Yard had closed and Philly Shipyard saved it, answering a need.

The industries of NACC members have expanded in the 21st century to include technology, finance, banking, medicine, filmmaking, business, law, tourism, food, journalism, writing, public relations, marketing, and women-owned businesses. Many businesses choose “safe” cities: Houston for oil and gas, San Francisco/Silicon Valley for tech, New York for finance. NACC chapters can be the resource and network for these Norwegian companies.

“As a leader, I don’t know much about Philadelphia and that’s not good,” said Jason Turflinger, Managing Director of the American Chamber of Commerce Norway in Oslo. “I’m from Indiana and we have a lot of members interested in the rural U.S., but predominantly Houston, Boston, D.C., New York, and San Francisco. I’ve never had a member come to me and ask ‘where should we set up my American business?’ They’ve already decided. I have to get them before they make a decision. There’s an over-simplification of what areas of the States cater to which industries.”

Among Philadelphia’s assets are a Greater Philadelphia population of 6.28 million people; the second-lowest office rental rates; less labor costs; inexpensive cost of living compared to New York, Washington, and Boston; a leader in life sciences, professional and financial services, information technology, energy, medical schools and medical centers, law and business schools; home to 104 colleges and universities and 500,000 students, with strengths in engineering, computer science, information technology, chemistry, physics, business, finance, and biosciences. It’s the only American city that is a World Heritage City.

Lauren Swartz, Director of International Business Investment at the City of Philadelphia, is a transplanted Scandinavian from Minnesota. While selling Philadelphia, she could be talking about any city.

“We host trade delegations from different countries all the time,” she said. “We look for marketing partners. Then, you have the right ingredients. You have to approach this as ‘which of the world’s problems is your city solving?’ You have to be here to take the next step, to be part of something big. When companies see there are opportunities and partners who are already doing business here, then things start to flow and the new people become your advocates.”

Both Swartz and Yelena Barychev, Corporate Governance and Securities Partner at Blank Rome Counselors At Law, noted that one of the biggest surprises for foreign companies is the legal system and the safeguards they must take. They need an attorney, a CPA, and tax advisor.

“With any problem you try to solve it,” said Barychev. “First we analyze the needs of the company. Do they need some real estate work? Do they need tax help? Do they need licensing? Are they going to be a limited liability? Do they need to protect their trade name? We show them how to cope with the legal system piece by piece. We help them find easy solutions. Once they have that, things can start working for them.”

The University of Oslo has numerous exchange relationships with American universities. Turflinger pointed out that American universities are better at keeping track of alumni than Norway, so universities should contact those Norwegian alumni to become spokespeople.

Gro Dyrnes, Regional Director Americas for Innovation Norway, San Francisco, put a perspective on any city’s recruiting efforts.

“We need to take a step back,” she said. “All of us are trying to strengthen business relations between Norway and America. There’s a big difference between working for an increased value situation for Norwegian business in Norway and increased establishments for Norwegian businesses in the U.S. It’s not entirely equal. If your initiative is to establish more businesses in Philadelphia, you might be better working with Select USA than Innovation Norway. We have complementary missions. Then, we need to go one step further in analyzing the opportunities. There are opportunities in the health tech, smart energy, tourism, and smart building sectors all over the world. We tell our customers to identify the niches. Why is Philadelphia special? Why should you choose the health care system of Philadelphia, rather than Texas, where Norway already has strong links and a lot of companies to piggyback on? Are there niches where Philadelphia is the place to choose? It’s super important to collaborate with Norwegian companies or companies with some Norwegian links in the region that have ties back to Norway. They want to help. They want to have more Norwegian companies come to the region. They are role models and easier to piggyback on. That’s what Innovation Norway has found most successful.

“I really liked listening to Lauren say how they go into the details about why Philadelphia should be attractive. That can be easy for Norway to relate to. It’s trustworthy. This can be a role model for showcasing to other potential Norwegian investors. You have enlightened me on the niches. Most businesses would not choose Philadelphia just because it’s a nice place to live. It has to be a complete business opportunity. If a city has a specific challenge or need that they want help to solve, then we can work together to identify places where the Norwegian eco-system of companies can go to solve those needs. They know that there’s a match. We know what Norwegian companies can deliver the solution to the needs.”

For copies of the report, e-mail: fkjersem@gmail.com.

This article originally appeared in the May 19, 2017, issue of The Norwegian American. To subscribe, visit SUBSCRIBE or call us at (206) 784-4617.

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