The Nordic Model

Sweden, Finland and Denmark’s Competitiveness Factors

Nordic countries are regarded as success cases due to their competitiveness, economic performance and high standards of living for their citizens. The European House – Ambrosetti analyses the competitiveness factors of Nordic countries and how they have built their success leveraging on these elements.

Sweden, Finland and Denmark’s Competitiveness Factors

Lessons for Italy and Europe

The Nordic Model is widely regarded as a benchmark since many comparative studies of economic and social performance have ranked the Nordic countries very high. Also for the EU-28 Competitiveness Index, a tool prepared by the Observatory on Europe (link), which measures the current level of competitiveness of the EU-28 Member States, Northern European Countries are the most competitive followed by Western, Eastern and finally Southern European countries.

The Observatory on Europe’s EU-28 Competitiveness Index clearly shows 4 geographical clusters, characterised by different competitiveness levels: Northern European countries are the most competitive, followed by Western, Eastern and finally Southern European countries.

An analysis – presented during the 41st edition of the Forum “Intelligence on the World, Europe, and Italy”– of the Nordic countries’ competitiveness shows that they outperform the EU average in 41 of the 55 analysed key performance indicators.

The main competitiveness factors for these countries are related to 5 areas:

  • Innovation and Education. Nordic countries are the biggest spenders in R&D in Europe with the highest share of private investments. All Nordic countries offer equal educational opportunities for all citizens, and invest in training all the way up to pension age. All these countries have introduced entrepreneurship courses in their education programs.
  • Labour Market. The Nordic countries invest more than others in active labour market policies in the form of job intermediation as well as training and subsidized employment. The main feature of these policies is flexibility in hiring and firing. Finally, Nordic countries have consistently favoured and continue to promote gender equality, encouraging female labour supply.
  • People & Wellbeing. The Nordic countries combine a high standard of living with equality and an extensive public sector. The main elements of Nordic welfare include health insurance, unemployment insurance, social security and pensions for both early and later retirement.
  • Public Sector. Nordic governments invest in digital infrastructures offering high quality e-government services: accessibility, openness and transparency facilitate information exchange. In addition, the Nordic countries have an exceptionally low level of corruption.
  • Networks. The Nordic countries have a strong tradition of well-developed digital infrastructure: their citizens are the most “connected” in Europe. Regarding energy, renewables’ share of consumption is among the highest in the EU, which ensures security of supply and favours environmental sustainability.

Even if their current strengths assure positive macroeconomic forecasts for the next 5 years, they will have to face various challenges in order to maintain their competitive advantage: the most significant are related to aging population and productivity levels.

The Nordic Model: Sweden, Finland and Denmark’s Competitiveness Factors

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