State of the Nordic Region 2018

Theme 3: Economy


The Nordic countries are generally performing well above the EU average when it comes to economic development, despite the significant and ongoing impact of the economic crisis. From a macro-regional perspective, the Nordics constitute a very coherent region. Nevertheless, large and economically significant variations remain, at both the regional and national levels.  Norway has seen a decline in its economic performance in recent years, whereas Iceland has enjoyed significant growth. In terms of GDP per capita, Iceland and Denmark are rapidly catching up with Norway though on disposable household income, Norway is still well ahead, despite the ongoing challenges posed by the global drop in oil prices. Below the national level, many of the regions and sparsely populated or inland municipalities which are already suffering because of their unfavourable position in terms of physical and social ”infrastructures”, are falling further behind the main metropolitan areas. Despite this, and looking beyond the standard economic indicators, the northern parts of Denmark, Finland and Sweden all rank very highly on the more broadly focused European Social Progress Index.In terms of innovation, the Nordic countries also rank highly and in all Nordic regions, the share of employment in knowledge-intensive sectors is well above the EU28 average. A large share of high tech jobs can even be found in the more peripheral regions.The Nordic countries have maintained a strong position in the field of green solutions, but many of their European competitors are now beginning to catch up. Even so, the  Nordics still make up the most innovative region in Europe and almost all regions, with the excep-tion of some areas of Finland, exhibit a stable pattern when it comes to R&D expenditure.The Nordic Region also remains an attractive destination for foreign investment, accounting for 7% of Europe’s total Foreign Direct Investment (FDI) inflows, in a Region having 4% of the European population. Sweden makes up almost half of this total and has by far the highest level of investment activity in the Nordic countries.Greenfield investments have completely dominated the scene in some peripheral regions, but the regions with the highest deal values are by far the capital city regions, with Stockholm, as the clear leader.Overall, the Nordic economy is doing well  and despite the various challenges linked to ongoing global market changes, the Nordic’s recovery rate after the economic crisis has  been impressive.