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FDI and the transformation from industry to
service society in emerging economies:
A Lithuanian - Nordic perspective
Gediminas
Ramanauskas
FOCUS AND OBJECTIVE
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The focus of the research is the emergence
of new cross-border clusters, which arise
from FDI.
The research objective is to analyze the
motives and functions of Norwegian FDI in
Lithuania from 1990 to present.
KEY WORDS
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Foreign direct investment
Clusters
Knowledge transfer
MOTIVES FOR FDI
PRECONDITIONS FOR CLUSTERS
Source: Adapted from M.E. Porter, “The Competitive Advantage of Nations,” Harvard Business Review, March-April, 1990, p. 77.
RESEARCH METHODOLOGY
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Semi-structured interviews of the Norwegian
executives who invested in Lithuania were
employed.
The interviews consisted of a number of open-ended
questions that were followed by customized
questions regarding specific details attributed to
particular issues.
The transcripts of the interviews were analyzed
using an editing approach applied to qualitative data
analysis.
Industry association reports, newspaper articles and
other published documents were also used.
CASES
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(1991) BI Norwegian School of Management:
increasing competence;
(1991) The Baltic Investment Company:
consulting and hotels;
(1993) Statoil: gas stations;
(1998) RIMI: retail.
FINDINGS
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None of the cases are examples of
outsourcing to a low-cost country in order to
produce commodities to the home country or
to the international market at a lower price
than previously.
The Norwegian investments were driven by
the possibilities to become key players within
a new market, which was transforming.
CASE OF FURNITURE INDUSTRY
(NORWAY & LITHUANIA)
In 2001
 There were 506 producers of furniture in
Norway, and only 3 of these companies
employed more than 200.
 There were around 200 producers in
Lithuania, and 10 largest companies
produced almost half of the total furniture.
LITTLE SUNNMORE:
CROSS-BORDER CLUSTER
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40 percent of all employees in Norwegian furniture
industry are employed in the county Møre and
Romsdal, which Sunnmøre is a part of.
From the interwar years the district had different
service organizations, marketing organizations and
training institutions related to the furniture industry.
In 2002 Hove Møbler followed by Hjellegjerde
Møbler (Sunnmøre) moved production to Panevezys
(Lithuania): “Little Sunnmore” .
NORWEGIAN EXPERIENCE
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The investments in furniture production in Lithuania
were originally done as outsourcing to take
advantage of low labour costs.
After a short period of time the Norwegian furniture
companies became surprised when they discovered
that the competence within Lithuanian furniture
industry was higher than they expected.
Advantages of investing in Lithuania: general
positive attitude towards new technology, high level
of education and hard-working labour force.
THE ROLE OF NORWEGIAN
STATE
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SND & SIVA: institutions that the Norwegian
state has been using to promote start-ups
and to diffuse business and technical
knowledge to private industries.
CONCLUSION
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The experience of the Norwegian investors
indicates that there is an increasing tendency
of developing business relationships based
on the idea of exchanging knowledge and
taking advantages of local competence
rather than of lower labor costs.
THANK YOU!