Sweden’s subtle difference: Phenomenal growth rates in Sweden’s PR industry prove that the nation’s self-effacing approach to business has been no impediment to its development. Kate Nicholas investigates

Volvo, Ericsson, Electrolux, Saab, Scania: some of Europe’s best known brand names are Swedish, but outside knowledge of the size, nature and potential of this vibrant market is patchy to say the least. The reason for this no doubt lies in the country’s modus operandi and culture. Leading Swedish marketers and PR operators describe their countrymen’s approach to business as ’more humble than the UK or US’.

Volvo, Ericsson, Electrolux, Saab, Scania: some of Europe’s best

known brand names are Swedish, but outside knowledge of the size, nature

and potential of this vibrant market is patchy to say the least. The

reason for this no doubt lies in the country’s modus operandi and

culture. Leading Swedish marketers and PR operators describe their

countrymen’s approach to business as ’more humble than the UK or

US’.



’We are not as hard selling. We want to put our case in a softer way

perhaps because we are a small market,’ says Peje Emilsson, chairman of

the Swedish trade association PRECIS and president and CEO of the Kreab

Group, Sweden’s largest PR group, with offices in Stockholm, Helsinki,

Oslo, Brussels and London.



Small and self-effacing the Swedish market may be, but it is certainly

not stagnant. Over the last two years its PR industry has maintained

growth of between 15 and 20 per cent. And Sweden is only one market in a

fast growing region. Finland for example is feeling the benefits of a

buoyant economy and it also has a fast growing PR market as a

result.



According to Elisabeth Hultquist, managing director of Burson-Marsteller

Stockholm, one of the key factors in this growth has been the growing

globalisation of the Nordic region and in particular Sweden. ’I don’t

know of any other country that is so dependent on major international

corporations,’ agrees Emilsson.



’And if you have a corporation with over 90 per cent of its sales

outside of Sweden, this will inevitably lead to a change in the way in

which we operate.’



There is talk, for example, of Ericsson moving its finance department to

London. As Emilsson points out, if this becomes a trend ’the

consultancies which serve these organisations must have capabilities

outside the Swedish market or they risk becoming niche players’.



The Swedish PR industry as a whole faces a growing challenge in that

while both the media and political infrastructure is very much focused

on national interests, the business arena is truly international in its

scope.



’We have a very complicated problem’ says Odd Eiken, senior

vice-president, director of information of Swedish employers’ federation

SAF. ’When CEOs say ’home markets’ they mean the European Union and when

they say ’abroad’ they mean the Far East or the US, while the media is

national by definition. When the media says home it means Sweden, abroad

is Europe and the rest, just curiosities.’



While this disparity of views inevitably causes problems, some believe

that it also presents opportunities to the Swedish PR industry. As

Hultquist points out: ’Our role is to find ways to narrow the gap

between industry and local media and politicians.’



At present, the vast majority of consultancies in Sweden are still

generalist, although far less emphasis is placed on media relations than

in the UK.



This is partly because of the almost disconcerting openness of the

Swedish media and political system. As a result managers tend to act as

their own media liaison.



’Colleagues in other countries are surprised when we say that we never

talk to the media,’ says Emilsson. ’Swedish corporations talk to the

media and analysts themselves, we never do it for them.’ Instead public

relations practitioners tend to play more of a backroom role,

concentrating on developing media strategies instead of implementing

them.



Another of the many characteristics of Swedish business culture is an

encouragement of entrepreneurialism. The Swedish corporate approach is

one which is a largely decentralised, company offices abroad being to a

large extent the masters of their own destiny.



This combination of decentralisation and openness can create

problems.



According to Cecilia Schoen, senior vice-president of corporate

communications at construction giant Skanska individual departments are

often left to clean up their own mess. In 1997 an accident at Halland

Ridge caused work on a tunnel to Vadbacken to be halted after toxic

substances were found to have leaked into surrounding water sources.

Schoen says: ’It was a week before the management became aware of the

situation. It is very much part of the culture - every guy fixes his own

area.’



But consultants are reporting a growing recognition of the need for

centralised communication strategy. At a recent international management

conference held by pharmaceutical giant Astra, there were consistent

requests from staff for more guidance from corporate headquarters.



’This was totally new,’ says Staffan Ternby, vice-president PR and

information ’Traditionally we have a culture where the managing director

for each country is solely responsible for everything in that country.

That is changing.’



Despite the emphasis on openness, there is widespread belief that the

Swedish business community does not really understand the political

system and while lobbying by organisations such as SAF is widely

accepted, consultant lobbyists are often viewed with mistrust. ’Most

consultants here are quite used to clients denying their existence’ says

Eiken.



However the relationship with Brussels of necessity means that lobbying

is becoming a growth area. Kreab has had an office in Brussels for five

years now, and many other agencies work with international networks.



Other areas of growth include financial PR and investor relations.

According to Nils Ingvar Lundin, managing director of Investor AB, PR

consultants have been taking investor relations business away from

banks. In addition, with a rise in the scale of ownership by pension

funds, the whole concept of shareholder value has gained respectability.

Fifteen years ago the profits were going to employers, now they go to

the people, so shareholder value has a different meaning,’ says

Lundin.



Another area of expansion for the PR industry is the deregulation of the

public sector. The electricity market has already been deregulated and

the telecoms sector will soon follow suit. The healthcare sector, which

has traditionally been one of the most strictly regulated, is also

beginning to look at partnerships with the private sector for the

running of hospitals and services and, while five years ago there were

only 50 private schools, now there are 500.



In addition to moving into new areas of activity, the industry is also

pushing its way into the board room. At the top end of the market there

is a growing trend towards bringing in a strategic agency to give a

second opinion, and a decreasing involvement in product PR. This in turn

is creating opportunities and generating growth among smaller

consultancies.



Now that Sweden has overcome its reticence over the euro, the political

and media infrastructure will inevitably have to become less inward

looking, and the Swedish PR industry is in a prime position to help it

do this.



When PRECIS formulates its ranking of 1999 fees it is likely be able to

report an even more impressive growth rate.



CROSS CULTURES: SUPERFICIAL HOMOGENY MASKS A COMPLEX PICTURE



All too often companies seeking to enter the Nordic market fail to

understand the substantial cultural differences between its constituent

markets. Linguistic similarities in particular create a false impression

of unity, when in fact there is fierce competition to become the hub of

the Nordic region. ’It is hard to make people from overseas understand

that we are all separate countries,’ says Lars Aldermark, senior adviser

at Lexivisionins.



But there are significant differences. Sweden’s relationship with

Brussels, for example, has not been an easy one, while Finland has

whole-heartedly espoused the EU. And the Swedish PR approach is more

informal, while the Finnish is more traditional.



Swedish consultants are well aware that US companies, in particular,

tend to simply ’turn up the volume’ in an attempt to get their messages

across. ’US-style press releases won’t work here,’ says Bo Jansson,

founding partner of Grayling affiliate JKL. ’We are the masters of

understatement.’



Even within Sweden itself, there are regional differences which are

having an effect on the PR industry. Stockholm has traditionally been

the industrial centre of Sweden and where industry thrives a flurry of

PR activity will follow. But the past few years have seen substantial

industrial growth in other regions of the country and these are now

beginning to show signs of developing their own self-supporting PR

industries.



’Many regions are changing from being satellites to being independent

areas in their own right. The relevant importance of Stockholm is

probably decreasing,’ says Odd Eiken, senior vice-president, director of

information of Swedish employers’ federation SAF .



The Malmoe and Copenhagen bridge which is due to open in this year will

create even more regional business opportunities. Mercedes, for example,

has located its main operation in Malmoe instead of the capital. It

remains to be seen whether this internal competition will lead to even

greater growth for the Swedish PR industry.



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