91����

2 July 2018

As part of the recent 91���� Business Engagement Trek to Iceland, we were asked as a group to reflect on the trek's themes, as well as the differences and similarities of doing business in Iceland. In my group were 91���� candidates Laura, Reese, Kaleb and Gillian, and these are the insights we gained from the trek.

Themes

The key themes that emerged from the Iceland trek are Iceland's unique economy, their rapid growth, a high regard for quality of life and their unique approach to solving problems.

Unique Economy

Iceland is a strong western economy whose key industries are tourism, fishing and aluminium. However, they also have a small population of approximately 350,000, clustered primarily in one city. The recent boom of the tourism industry combined with their low population creates unique challenges for the country.

Rapid Growth

In recent years, Iceland's tourism industry has grown more than the next two largest industries, fishing and aluminium, combined. This has resulted in an economic boom, however it has also had several unintended consequences. Tourism requires additional supplies (for example: food, groceries) especially in rural areas. There are increased safety needs, putting a strain on police and search and rescue efforts. The majority of job growth is in the tourism sector, which limits the job choice for locals. Questions have also been raised about the sustainability of increased visitors, such as the long-term impact on environment.

Quality of Life

Icelanders appear to place a high regard on the quality of life of their citizens. This can be seen in the strides the country is making towards gender equality. Interestingly, although they are leaders in this space, businesses such as Íslandsbanki do not take this to mean there is no work to be done. Our company visits also left us with the impression that a sense of community is important for Icelandic businesses, and there is significant effort put into engaging the local community. is predominantly run by volunteers and funded by the local community and Íslandsbanki uses its strategically placed branch locations to host community events.

Problem Solving

Iceland’s unique economic circumstances have led businesses to solve problems in unique, innovative, cost-effective and fast ways. For example, Ocean Cluster House focuses on connecting entrepreneurs within the fishing industry in order to ensure they are achieving maximum value for their products as an industry. Such unconventional partnerships may include connecting a cod fishery that sells the fillet with a cosmetics company that uses other parts of the cod in their products. This theme was also evidenced by strong focus on digital marketing to drive continued growth in the tourism industry on a limited budget.

Differences of Doing Business in Iceland

Physical Location and Geographic Layout

Iceland is an isolated country, making it very different from other western economies. This affects their trade agreements, the shipping costs of imports/exports and how they engage in growing business opportunities such as e-commerce. The geographic layout of the country also brings its own challenges, as the majority of the population is clustered around Reykjavik, with the rest of the population in much smaller communities around the coast of the country. The highlands in the middle of the country are largely unpopulated.

Natural Resources and the Impact of Tourism

There is a low cost to the geothermal production of energy, heat and water, an environmental advantage for Iceland. Their unique landscape and the country's natural beauty are a significant draw for tourists, however companies also need to be careful to protect these natural resources so that the influx of tourists does not result in long-term, irreversible damage.

Icelandic Currency

The strong currency has led to a high cost of living for locals, and for tourists visiting, as well as high costs for exporting goods.

Similarities of Doing Business in Iceland

Western Business Approach

Doing business in Iceland is similar in many ways to doing business in Europe and North America.

Language

While Icelandic is a unique language that is not spoken outside of Iceland, nearly all Icelanders are fluent in English, allowing international business to take place with ease.

Education

A strong emphasis on quality universities and education systems has created a highly educated population.

National Pride

Icelanders are very proud of their country and heritage, creating a strong sense of community and camaraderie. For example, crowds gathered in the town square to watch football matches during the world cup; a behaviour that can be seen in many countries worldwide.

Gillian, 91���� 2018