May 29, 2023

Advantages of developing an IoT business in Baltics 

IoT use cases are rapidly growing in many regions around the world, and the Baltics are no exception. Estonia, Latvia, and Lithuania – all three have been developing digital innovations in recent years and as a result have become strong players in the IoT world. Each of the three countries has their strengths and weaknesses but put all three together and they are producing hardware, software services, and solutions recognized around the world.

According to a report by Statista, the Nordic and Baltic IoT markets are experiencing rapid growth and were on track to reach €38 billion by 2022 . Growth in the Baltics has been mostly driven by transportation, manufacturing, smart city solutions, and utilities solutions – and we have a lot of experience in not just these segments, but nearly all segments.

If you are looking into launching your business in this part of the world here are couple of ideas that can help you to manage that:

In the Baltics, the IoT market has several unique benefits for business development when compared to the rest of Europe. Digital infrastructures development that is supported and financed by the government is a driver for fast paced growth development, with the focus on providing high-speed internet connectivity, creating an environment where IoT technologies can be developed in various sectors, and a skilled workforce.

With policies designed to promote innovation and entrepreneurship from the government side it’s a great starting point for tech startups to find a safe ground upon with to develop.  For example, Estonia has implemented a startup visa program or ‘Scale-Up’ visa that helps non-EU founders grow their startups.

Another unique angle is that the Baltics have a strong tradition of exporting.  Being located in northeastern Europe with easy access to the wider EU market (before the war in Ukraine, the region was a strong connection point with Asia) makes the Baltics very attractive for companies who are looking to expand their operations and create a global customer base.

This means that if you are looking into launching your business in industrial IoT (IIoT), the Baltics can be a good starting point.  We have already started developing the industry, with a particular focus on improved efficiency, reduced costs, and increased productivity.

Biggest Challenges

While Baltic government involvement is clear, the region itself is relatively small compared to the rest of Europe, which means that IoT companies may face more limited market accessibility if they only base their service within the region.

At the same time, the regulatory environment in the Baltic states can be complex, with a range of different regulations and requirements to navigate, such as the need of the registered company in the country to participate in government tenders, national languages used in documentation etc. It’s important to understand that a local presence is needed to navigate the business successfully.

Growing an IoT business in the Baltics from the Key Account Management side

Growing an IoT business in the Baltic states requires a strategic approach that considers the unique characteristics of the region. Keeping in mind the previously mentioned advantages and challenges by Lauma here are a few other things that can be key to scaling your IoT business in the Baltic states:

Since the market is not limitless it’s important to identify your target and focus on delivering a solution that meets specific needs and gives the customer a value proposition.  This requires a deep understanding of the local market and how many competitors there are in all three countries.

Partnering with local companies can be a big help for a new business looking to gain traction in the market while also establishing credibility. Identifying companies that have a strong presence in the region and a complementary set of skills and expertise can be the strategic game-changing point that elevates the business to the next level.

Another important thing to consider for growing your footprint in the Baltic market is price sensitivity. Both the Nordic and Baltic regions are highly developed in tech, but the differentiating factor between them is based on price sensitivity versus quality. This is due to the already high competition and historical Baltic perception of price. The winning formula in the Baltic market is the highest quality service with the lowest price, which we call it the Baltic standard.

Overall, in regard to the Baltic market IoT is still adapting and growing. If you are looking to expand or start in the Baltics by leveraging digital infrastructure, partnering with local companies, seeking funding, and staying agile, you can successfully grow your IoT business in the region.  As the market continues to grow, we can expect to see more innovative IoT solutions emerging from the Baltic states in the years to come.

If you have any questions or comments, please feel free to get in touch.

Lauma Rute Misune
Sales Specialist
Tele2 IoT

Agneta Laura Cirule
Key Account Manager
Tele2 IoT

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