More investment is needed in the arctic areas of Nordic countries

The first Business Index North concludes that the Arctic needs more influx of capital to create jobs and unleash the economic potential of the region. The Business Index North (BIN), launched on 6.4.2017 during the High North Dialogue conference in Bodø, shows that development in northern regions falls short of national averages in a number of areas, but that the region also shows great potential for future value creation.

The report presents and analyzes a wide array of statistics that show development in the northern parts of Norway, Sweden and Finland, and concludes that the North lags behind when it comes to growth in population, education levels, business revenue, job creation and innovation.

Project leader Erlend Bullvåg says that the report should be a wakeup call for policymakers and investors.

“There is no reason why these regions, which have considerable comparative advantages, should fall behind. They have abundant natural resources, a surplus of renewable energy and an increasingly educated workforce. There is a great potential in the Arctic, but we need to see more investments in these regions.”

Slow population growth, an ageing population and a shortage of female population rural peripheral areas experienced as some of the challenges facing the northernmost parts of Scandinavia. According to Bullvåg, one of the key findings of the report is that the biggest challenge for future development in the Arctic is making the region an attractive place to work and live, especially for young people.

“It is important that we make these regions great places to live. In order to achieve that, we need policies that make the region attractive for businesses. If we want populated and sustainable communities in the Arctic, we must find ways of creating economic growth and new jobs.”

Bullvåg also underlines the fact that Norway performs far better than Sweden and Finland when it comes to employment and production growth.  “This is in part due to the resources and transportation possibilities offered by Norway coastline, but it can also be traced back to investments in fisheries, energy production and fish farming in these areas,” says Bullvåg.

Northern Finland and Sweden are clear leaders in the area of innovations. The county of North Ostrobothnia in Finland is a clear leader in the BIN area in innovations measured as patenting activity. Northern Ostrobothnia is to be the first one in the BIN area to generate nuclear power; this may give new industry growth opportunities but change the energy balance in the Nordic north. The county of Northern Ostrobothnia was the most successful in growing the population of active enterprises (limited liability companies) during 2008-2015.

The report offers a number of recommendations on how to boost economic growth in the Arctic, and compares the development in different counties to highlight how these regions can learn from each other. The project will expand its scope to include Northwest Russia in 2017.

The researchers behind the BIN project hope that the report will serve as a tool for businesses, potential investors and legislators.

“Even between these three Scandinavian countries we see very different approaches to Northern development. We have different ways of managing infrastructure, knowledge, energy and nature, but there is no real discussion about what works, and why. This report will provide us with comparable and reliable data that can serve as a starting point for such discussions,” Bullvåg concludes. 

About BIN

Business Index North (BIN) is a project that contributes to sustainable development and value creation through increased global awareness of business opportunities in the Arctic. The goal of the project is to set up a recurring, knowledge-based, systematic information tool for stakeholders. The reports will be a freely available resource for businesses, academics, governments and regional authorities, as well as media in the Arctic states.

The project is led by the High North Center for Business and Governance at Nord University Business School. Implementing partners for the BIN report include University of Oulu Business School, Luleå University of Technology and Bodø Science Park.

The first edition of the BIN report covers developments in eight northern counties of Norway (Finnmark, Troms, Nordland), Sweden (Norrbotten and Västerbotten) and Finland (Lapland, Northern Ostrobothnia and Kainuu). The project is funded by the Norwegian Ministry of Foreign Affairs and by Nordland County Council.

Website: www.businessindexnorth.com

Last updated: 11.4.2017