While many members of the European Union struggle to recover from the global financial crisis of 2008 and the European debt crisis, the Baltic countries are making a strong comeback. The Baltic countries of Estonia, Latvia, and Lithuania have recently experienced real GDP growth well above the euro area average. While other countries like Greece, Italy, Spain, and Portugal continue to struggle in midst of European debt crisis, the Baltic countries are leading way to recovery. Lithuania and Latvia are predicted to remain the best performers in Europe, with GDP growth surging over 3 percent for both countries. Looking at the recovery path of the Baltic States, many business lessons can be learned from these countries.
The Baltic countries are experiencing falling unemployment and economic growth, causing other countries to wonder how these countries can recover so quickly when others are still fighting for growth and recovery. The three Baltic nations constricted their government deficits with austerity measures and experienced great success. However, the Baltic nations are small, open economies so these austerity measures do not provide the same advantages to the larger, closed economies in Europe. This fact stresses an important aspect of the global economy. With differing political and social environments all around the world, viewing several different economies as similar models because they are from the same continent is a trap we should be careful to avoid. This idea also holds particular importance in the international business world. Globalization may cause businesses to view foreign markets as similar to domestic markets. However, this is certainly not the case as each country is marked by different social, cultural, and political environments.
Another global business lesson we can learn from the Baltic States is the importance of flexibility. Baltic labor markets are less burdened by rules and business friendly regulations allow companies to begin operations with more ease. These regulations in the Baltic countries have attracted foreign firms and new companies allowing more jobs to fight unemployment rates that have plagued other countries in Europe. This has allowed the country to develop economically even in the midst of difficult economic times. Whether or not the Baltic countries can continue to shine in their economic recovery is up for debate. However, by analyzing trends in the Baltic States thus far, lessons for the international business community have certainly been learned.