Greinar

The international financial crisis and Iceland's burst financial bubble hit this nation so hard that it looked for a while like it would go bust. This has meant tremendous problems for the business community: bankruptcies multiplied and the unemployment rate shot up as never before. The two-party centre-right Government coalition collapsed, and a left-of-centre minority Government took over until this spring's Parliamentary elections.

These enormous international and internal crises have hit the small, but growing, PR agencies in Iceland extremely hard. Some of them have had to lay off staff, while others have shifted to a three-week working month, with the fourth week off without pay. It will be months until the situation starts improving again, but Iceland's basic economic foundations are quite strong, and the work force is well educated, which will ease the turnaround and re-building of the economy. Over the past decade the PR agencies in this country have been growing slowly but surely.  But it now looks like it is back to square one, and the agencies will have to fight for survival until the economic turns around, which will take several months, at least.

Iceland was the first country in Europe to succumb to the banking and economic recession, which resulted in enormously negative and, at times, hostile international press coverage. This has seriously damaged the country's image and reputation abroad. Iceland, the northernmost country of Europe, has up to now enjoyed a robust image as a strong, independent and democratic country, with vast areas of unspoiled nature. It has been at the top of most quality-of-life lists for years. Tourism has been growing every year. All of this took a nosedive when the Icelandic banks collapsed last fall, and now we are near the bottom of the European countries' reputation list. In an instant Iceland became a symbol for everything that can possibly go wrong in the current crisis. Problems in London are described with the heading "Reykjavik-on-Thames".

 Both the previous and present Government have had little or no understanding of the urgent need to utilise professional public relations to rebuild the country's international pristine brand.  There seems to be no short- or long-term government plan for reconstructing the nation's reputation internationally.  This makes marketing abroad very difficult for the country's valuable seafood sector and other export businesses. The tourism industry, however, is gaining, if anything, from the economic downfall since until its currency exchange rates hit the skids last fall, Iceland was one of Europe's most expensive destinations. Now it is among the least expensive and should therefore attract more European tourists, who cannot afford to visit expensive destinations when every home is short of cash.

Icelanders are quicker than most in adopting innovations and electronic advancements in communications and computer technology. Over 70% of Iceland's 20- to 35-year-olds are on Facebook; this is the highest percentage in the world. There is at least one PC in most homes, and a vast majority of Icelanders own a mobile phone, iPod/MP3 player and other state-of-the-art electronic gadgets. This keeps the PR consultants constantly on their toes learning to utilise all the new electronic avenues of modern communications.  The print media are having a very difficult time due to serious contraction in advertising and fast-growing competition from web media. Most people under the age of 35 to 40 do not subscribe any longer to newspapers but instead seek news and information from web media several times a day, according to polls.
It is clear that Iceland's PR companies will continue to grow and play an increasingly more important role in the country's internal and external public relations and communications once the country and the world pull out of the deep recession. The Icelandic situation is actually not as bad as one might think from reading international press coverage. But it will take a major PR effort to convince the world of that.
None of the big international PR companies have offices in Reykjavik, but some of them are represented through local PR associates.

Þessi grein eftir Jón Hákon Magnússon, framkvæmdastjóra KOM almannatengsla, birtist í uppsáttarritinu Hollis Europe sem gefið er út í tugþúsunda upplagi.