I was recently looking into how the business opportunities in Europe have changed over the last years due to the worldwide recession particularly in the technology sector.  While Europe has suffered a pullback as has the USA and other countries, it has not affected all countries in the same way.  According to the Economist Intelligence Unit there continue to be opportunities for positive growth in the continent if one analyses the opportunity carefully and targets the market in the right way.

Europe is a diverse market area and the largest trading bloc in the world.  The 27 countries that comprise the European Union have a combined GDP of over $20 trillion, far larger than the second largest USA at $14 trillion.  And it is a diverse region with many languages, cultures and traditions.  Trade policies are normalised between member countries in the EU meaning that goods and services can flow freely across borders.  You can make goods in Romania or deliver services from France and access all the countries in the trading bloc.

However, the global recession has taken it’s toll on Europe and affected the individual countries in different ways.  Some countries are experiencing very challenging conditions.  The poorest performing today are the Baltic nations of Latvia, Lithuania and Estonia.  These countries were once the tigers of Europe after accession to the union in 2004 growing almost 10% a year.  But amidst large budget deficits, the boom has turned to bust in recession and their GDPs will continue to decline through 2011 from -6% to -11%.  On the other hand, some countries are growing nicely during this global downturn with Poland, Romania and Norway predicted to grow over the next couple of years due to favourable fiscal policy and strong domestic demand.  It pays to look at the details in Europe.

Where are the best places to invest in Europe to capture growth?  Looking forward to after the recession ends to the period of 2011-2020, the economies that will experience the highest growth according to the Economist are mostly in the New Europe.  These are the former communist countries that joined the EU in the last decade.  The fastest growth will be in Serbia, Romania, Bulgaria, Turkey, Poland, and Adriatic countries.  All will grow above the average for the EU.

Why?  Today, the European Union continues to invest in these countries with a stimulus programme started years ago to build in areas neglected during the communist past.  In the latest funding round which started in 2007 and runs through 2013, the EU is pouring €176 billion into Central and Eastern European countries to improve infrastructure, institutions and subsidise purchases of equipment and training by small businesses.  Much of these funds are available to small businesses looking to develop staff, train partners, or buy software and IT equipment covering up to 85% of the project cost.  By taking time to investigate how these funding public funding programmes work, IT vendors can help their customers and partners access it.

If you are looking to expand or enter Europe today, take a look at the countries of Central and Eastern Europe where the best opportunities will be to grow with the market in the next years.  After working in this region for many years, I believe that the dynamic nature of these economies combined with the fuel from a major government stimulus will yield big rewards for all.