This post comes from the perspective of Dave Darsch.
Over the past few years, U.S. companies have been reluctant to consider Europe when it's time to internationalize. It just seems too risky. But things are changing, and European business is growing, with every one of the 28 E.U. countries set for economic growth in 2017 and 2018. Where there are risks, there are also opportunities. U.S. companies who rule out Europe are missing out - and here's why.
1. Hunger for imports
The area covered by the E.U. has a population of over 500 million - that's 500 million potential customers. And European consumers are international in mindset, seeking the best products from all over the world. Even during the worst of the Eurozone recession, imports were rising.
Now that Europe's bouncing back, demand for new and better imported products is strong. Germany, Scandinavia and the UK lead the charge - but Mediterranean countries like Italy and Spain also show high consumer uptake of foreign goods. And the one to watch is Eastern Europe. Countries like Poland, Czech Republic and Hungary have a young well-educated workforce and a growing middle class eager for international wares. But remember that it's still a comparatively low-wage region, so you must price consumables accessibly to thrive.
2. First-mover advantage - and best-mover advantage
There are clear gaps in emerging markets like Eastern Europe that can be filled with U.S. companies' products and services. Even developed Europe has certain weak spots that create opportunities for American companies.
American businesses can easily delight customers in many E.U. countries by offering the best E-commerce services, unavailable to them elsewhere (according to the Forrester E-Commerce Readiness Index, E.U. companies lag far behind the U.S.). By seeking out areas where existing product and service standards are low, and offering better alternatives, savvy U.S. companies can become best movers in the current European market.
3. Specialized tech hubs
Europe's technology landscape is more exciting than ever right now. The 2016 Global Innovation Index shows that eight of the world's ten most innovative economies are in Europe. Now is the time to tap into Europe's tech opportunities.
The advantages are especially pronounced in the healthcare and environmental sectors, which have specialized hubs in the Scandinavian capitals and major cities in Amsterdam and Belgium. U.S. life sciences and cleantech companies should consider the opportunities Europe holds. While there are legislative procedures to tackle, access to Europe's grants, talented workers and consumer base could boost your tech company's growth and innovation.
4. Thriving startups
Mergers and acquisitions can be a powerful way to gain a foothold. Savvy U.S. firms are always on the lookout for bright international startups to partner with or acquire. And Europe's startup scene is booming right now, thanks to a growing VC network and strong investment in incubators and development.
Take inspiration from the big guys. Amgen's recent acquisition of Dutch biotech firm Dezima helped give them the edge in innovative cholesterol treatments - and Apple is constantly acquiring the most promising startups in image and voice recognition technology from across the pond. Firms with an international mindset must stay tuned to what's happening in Europe, to take advantage of the promising opportunities emerging right now for U.S. companies.