History of Iceland

History of Iceland

It is a mid-Atlantic island that is 103000km2 in size, which is roughly equated to the size of Kentucky. It has a population of 320000, making the European country with the lowest population in the region . Its population density consists of three people in every square kilometer. Geographically, it is larger than many European countries making it an ideal country for investment due to availability of land for setting up business facilities . The economy of Iceland is driven by exports with fishing as the main export.

However , aluminium industry overtook the fish industry in terms of export income in 2008. 40.9% of export earnings were generated from power intensive industry. Politically, it is a liberal country that embraces parliamentary democracy. It promotes free-market economy integrated with strong social elements. The country enjoys close political ties with the Nordic countries , and is one of NATO’s founding members. Iceland is also a member of the European Economic Area, making it possible for free movement of labor, goods and services, and capital within 27 countries which are member states of the European Union. The country imposes investment restrictions mainly on fishing and energy.

Technical and Technological EnvironmentTechnical and technological advancements are key factors that lead to prosperity of a business establish in a given geographical region . Opening a production facility in Iceland is a viable business option for Lewis Globalworks Company because the country has shown tremendous development in technical and technology sector . The country has a highly qualified labor force with many experts who have attained high education levels . This makes it possible for foreign investors to have a wide range of skilled labor . The country boasts of sophisticated telecommunication systems that facilitate business activities between companies and consumers (Hill, 200).

The ICT companies in Iceland possess specialist and technical expertise that is crucial for the development of companies that operate in the country . The country has highly qualified personnel with long practical experience and technical know-how crucial in the creation of viable business solutions that Lewis Globalworks Company requires to run a successful business venture in the country . There are many experts in the country who have the technical abilities to provide creative solutions for bank technology, electronic commerce , internet applications , electronic commerce , transportation , database systems . The country has created a conducive environment for international companies to thrive by creating a strong ICT sector which has attracted many investors from overseas to invest there (Deresky, 132).

There are many international companies that are increasingly showing interest and investing in Iceland in order to expand their business ventures . Currently , there are many international marketing companies , producers and distributors that have invested in Iceland . There are big local companies that are starting to announcing plans to list their companies’ shares on stock markets that are overseas in order to attract foreign investors . Many industries in Iceland are equipped with sophisticated levels of automation, making it viable for Lewis Globalworks Company to set up a production facility to supply local industries with computers to enhance computerization in industrial production .The country boasts of highly sophisticated telecommunications infrastructure which uses connections enabled by fiber-optic cables (Barton et al, 58).

Economic EnvironmentThe favorable economic environment is paramount for a business venture to succeed in the given location . Lewis Globalworks Company is a highly reputable business that requires a good economic environment in order to continue replicating success . The economy of Iceland has undergone notable changes in the past years as a result of its financial sector’s collapse in 2008 . Despite numerous challenges that faced Iceland’s economy, her general state of the economy has remained relatively stable making making many businesses to remain financially stable . The financial crisis that rocked the country is gradually diminishing making it a good business hub once again .

Both the past and present Icelandic governments have worked hard to make sure that stringent measures are put in place to improve the economy of the country . 23.4% of Iceland’s GDP is contributed by construction, manufacturing and utility companies , making it favorable for companies like Lewis Globalworks to invest in such productive entrepreneurial ventures . Currently, the government is promoting privatization of business firms in the country by phasing down public ownership of companies . The economy is currently improving after experiencing financial crisis that which affected other European countries as wells .

The government has abolished many investment barriers that existed because Iceland is a member of the European Economic Area . This is a positive step towards attracting foreign investors to establish their businesses in the country . The country as a stable economy which is a growth oriented, making her ideal for investors to start businesses in the country . Moreover, the country offers competitive labor costs which are ideal for business investment . The county charges 18% as corporate income tax , which features among the Europe’s lowest income tax . The country also offers tariff-free access involving most products circulating in the European union market. The government is playing a big role in making sure that foreign investors are attracted to adequately invest in Iceland (Hill, 205).

Political EnvironmentPolitics play a big role in determining the outcome of a business establishment in a given region . It is important for investors to closely study and analyze the political situation of their preferred business location in order to prevent business risks that may arise as a result of political uncertainties in countries that they have invested in . Political stability in Iceland makes it very conducive for foreign investors to set up their business facilities because of abundant safety and security in the country .

Legal Considerations Business investments require proper legal structures laid out in order to produce maximum returns . It is therefore important for Lewis Globalworks Company invests in a country which offers favorable legal environment to run a successful business . The country offers a favorable tax system which is relatively simple and classical . Iceland is among the countries that offer the lowest corporate tax rate, which is equivalent to 15% . Unlike other countries where here are any investment restrictions, Iceland proves to be the best investment destination because of her limited investment restrictions . The country’s main investment restrictions are applied in fishing and energy industries in order to streamline business activities in those areas of business . Iceland has an antitrust law in place to make sure that effective competition is promoted to improve business opportunities in the country . This helps to increase reliability and efficiency of production factors in the country in order to attract more business investors (Porter, 63).

Cultural EnvironmentThe People of Iceland are culturally known to value unity and cooperation . This is fundamental for a business to thrive in a given area . Unity brings people together , and this creates a conducive working environment for employees of a given company . Consequently, production of a company is boosted by a sense of unity and cooperation among employees . The people of Iceland value and promote education as a way of improving the living standards of the citizens as a well as empowering them in different capacities . This culture of education has led to the emergence of highly qualified personnel capable of tackling any arising issues in the society . This has proved to be very essential in the labor market because the country produces employees with high technical know-how . This is good for business to thrive in a given area .

The constitution of Iceland also prohibits enactment of privileges, ranks and titles .This enhances the sense of equality among employees and their seniors . This helps to create a good working relationship among employers and employees . The country promotes equality among people leading to equitable sharing of resources available . There is great social cohesion among the people of Iceland making it possible for them to work together as a team . This is very essential in running a successful business because cohesion among employees is important for business . The people of Iceland have insulated their Nordic culture from being eroded by other cultural influence from other regions of the world . They speak one common language which is integral in running business activities in a country . Iceland’s unique culture makes her a strategic region for Lewis Globalworks Company to set up a production facility that will achieve set goals and objectives oof the business investors (Burton, 67).

It is evident that Iceland is a stable country that Lewis Globalworks Company should consider setting up a production company . The country offers highly qualified technical personnel with quality technical know-how to run the production facility .The economic environment in Iceland also offers a great investment opportunity to foreign investors willing to establish businesses in the country . Politically , Iceland is one of the most stable countries in the world making it conducive for investors to set up business facilities in the country . Iceland also offers a favorable legal environment for foreign investors to start business ventures in the country . The country boasts of a great cultural environment that promotes business opportunities that foreign investors may initiate in the country . The People of Iceland embrace education as a culture , and this has led to increase in the number of highly qualified labor force which is ideal for running a successful business .

Work Cited

Burton, F, Malcolm,C. and Adam Cross. International business organization: subsidiary management, entry strategies, and emerging markets. New York: St. Martin’s Press, 1999. Print.

Deresky, H. International management: managing across borders and cultures: text and cases. 6th ed. Upper Saddle River, NJ: Pearson Prentice Hall, 2008. Print.

Hill,W. L.. International business: competing in the global marketplace. 5th ed. Boston: McGraw-Hill/Irwin, 2005. Print.

Porter, M.E… Competitive Strategy: Techniques of Analyzing industries and Companies. New Yolk: The Free press, 1980);