Nordic vs Northern

March 06, 2013

The Economist provides an upbeat report on the Nordic countries, “The Next Super Model”, in its February edition. There are more than a few similarities between the North (northern part of North America, north of 56 degrees) and the Nordic countries.

The Nordic countries make up a region in Northern Europe and the North Atlantic which consists of Denmark, Finland, Iceland, Norway and Sweden and their associated territories, the Faroe Islands, Greenland, Svalbard and Åland. The region’s five nation-states and three autonomous regions share much common history as well as common traits in their respective societies, such as political systems and the Nordic model. Politically, Nordic countries do not form a separate entity, but they co-operate in the Nordic Council. The Nordic countries have a combined population of approximately 25 million spread over a land area of 3.5 million km² (Greenland accounts for around 60% of the total area).

Greenland is part of the North American continent. Hence it is the ‘common’ element between the Nordic countries and northern North America.

A few highlights form the Economist special report and comments vis a vis the North:

• Public spending has been declining in the Nordic countries. For example Sweden public spending as a % of GDP has declined from 67% in 1993 to about 49% today. High public spending is a characteristic of the North as well.
• The Nordic population of 26 M is hugely bigger than the North with only a million people.
• The Nordic economies dominate measures of competitiveness and well-being. Two particular strengths are innovation and social inclusion. While the Nordics have a few globally competitive giants (Nokia, Ikea, Noma) the North has no world competitive business. The North is small an non-urbanized and has a relatively low level of research and development activity.
• The North’s economy is more or less a resource extraction play while the Nordics have little resource extraction ( Norwegian oil excepted).
• The Nordic countries share high costs with the north. A Big Mac in Norway costs $7.69 vs. $4.37 in America.
• Norway has used its natural strengths to build up world-beating expertise. For example, it become the world’s deep sea drilling capital and a leader in fish farming. Interestingly, Norway exported LNG to Japan through the Northeast passage last year from a far-north terminal.

 

 

 

Commentary

The Economist suggests the Nordic countries have discovered a few keys to success: Pragmatism in government policy. Ability to control spending. Honesty and transparency in government. Innovation and creative environments are encouraged. Market forces create business champions.

Sources

• a)http://en.wikipedia.org/wiki/Nordic_countries



• b)Special Report on the BNordic Countries, The Economist, 2-Feb-2013.