What is the Nordic Region?

Stockholm, Värtahamn. Credit: Baltic Media Translations

What is the Nordic Region? The Nordic Region consists of Denmark, Finland, Iceland, Norway and Sweden as well as Faroe Islands and Greenland (both part of the Kingdom of Denmark) and Åland (part of the Republic of Finland). State of the Nordic Region is based on a suite of statistics covering all Nordic municipalities and administrative regions. 

It is however worth noting here that several Nordic territories, e.g. Svalbard (Norway), Christiansø (Denmark) and Northeast Greenland National Park (Avannaarsuani Tunumilu Nuna Allanngutsaaliugaq), are not part of the national administrative systems. Nevertheless, though not strictly included in the administrative systems, these territories are included in the report where data is available. 

State of the Nordic Region displays data using national, regional and municipal administrative divisions (this edition according to the 2017 boundaries). Large differences exist both in terms of the size and population of the various administrative units at the regional and municipal levels across the Nordic Region. The four largest municipalities are all Greenlandic, with Qaasuitsup being the world’s largest municipality with its 660,000 km² (however, split into two municipalities in 2018). 
Even the smallest Greenlandic municipality, Kujalleq, at 32,000 km² significantly exceeds the largest Nordic municipalities outside Greenland, i.e. Kiruna and Jokkmokk in northern Sweden with approximately 20,000 km² each. Excluding Greenland and the Faroe Islands, the average size of a Nordic municipality is 1,065 km². The smallest are less than 10 km² and are either insular municipalities (e.g. Kvitsøy in Norway or Seltjarnarnes near Reykjavík) or within the greater capital areas (e.g. Sundbyberg near Stockholm, Frederiksberg surrounded by the municipality of Copenhagen, or Kauniainen surrounded by the municipality of Espoo near Helsinki).

The average area of a Nordic region is 17,548 km². The smallest is Oslo (455 km²), followed by two Icelandic regions, Suðurnes (884 km²) and Hövuðborgarsvæði (1,106 km²). The largest region is Norrbotten in Northern Sweden (106,211 km²), followed by Lappi in Northern Finland (just under 100,000 km²). The average population density of a Nordic region is 66 inhabitants per km² with densities ranging from 1 inhab./km² (Austurland, Vestfirðir, Norðurland vestra, and Norðurland eystra – all in Iceland) to 1,469 inhab./km² (Oslo region). Other high-density regions include the Capital region of Denmark Hovedstaden (706 inhab./km²) and Stockholm (335 inhab./km²). 

Among the Nordic countries Denmark, Finland (including Åland) and Sweden, are Member States of the European Union (EU), although only Finland is part of the Eurozone. Iceland and Norway are members of EFTA (European Free Trade Association) consisting of four countries, which either through EFTA, or bilaterally, have agreements with the EU to participate in its Internal Market. The Faroe Islands and Greenland are not members of any of these economic cooperation organisations. These differences in supra-national affiliation have an impact on which data that is available for this report. For example, Eurostat, the statistical office of the EU, only provides data for EU, EFTA and EU candidate states, thus excluding the Faroe Islands and Greenland. Whenever possible, data for these regions has been supplemented from other sources. In the regular register data of Eurostat and the National Statistics Institutes (NSIs), which are the two prime data sources for this report, commuters to neighbouring countries are not included in the Nordic countries. 

This results in incomplete information (i.e. underestimations) regarding employment, incomes and salaries for regions and municipalities located close to national borders, where a substantial share of the population commutes for work to the neighbouring country. 

Estimates have been produced in some cases and included in this report. In 2016, the Finnish presidency of the Nordic Council of Ministers launched a project to develop statistics on cross-border movement in the Nordic countries. There is however still no up-to-date and no harmonised Nordic cross-border statistical data available, other than that provided by some regional authorities.

The combined economy of the Nordic countries is the 12th largest in the world

The Nordics in the world With its 3,425,804 km2 , the total area of the Nordic Region would form the 7th largest nation in the world. However, uninhabitable icecaps and glaciers comprise about half of this area, mostly in Greenland. In January 2017, the Region had a population of around 27 million people. More relevant is the fact that put together, the Nordic economy is the 12th largest economy in the world (Haagensen et al., 2017). The power of the Nordic economy was acknowledged in the light of its general handling of the economic crisis of 2007–08 (Wooldridge, 2013). 

What particularly impressed e.g. the journalists at the magazineThe Economist, that published a special editoin on the Nordics, was the the ability of the Nordic countries to combine a generous tax-funded welfare system with efficient public administration and a competitive business sector. As such, the locational aspects of the Nordic Region are noted in this edition of the State of the Nordic Region, where relevant and when reliable data is available. In addition, European developments generally and specifically those pertaining to the EU level are also addressed.

The Global Innovation Index 2017 lists Sweden, Denmark and Finland in the top ten most innovative countries globally (Cornell University, INSEAD, and WIPO 2017). Indeed, on the Global Cleantech Innovation Index 2014, Finland ranks second best globally while Sweden and Denmark are fourth and fifth respectively (WWF and Global Cleantech Group 2014). Furthermore, as already noted in this chapter and confirmed by the RIS 2017, the Nordic Region has maintained its strong position in international rankings with respect to the promotion of a high level of innovation performance. The majority of Nordic regions are categorised as innovation leaders and strong innovators with Stockholm,

Östra Mellansverige and Sydsverige (Sweden), the capital region of Denmark, Hovedstaden and Länsi-Suomi (Finland) emerging as the most innovative regions in the Nordics, as for 2017. Over the period 2009–2015, all Nordic countries exhibit a relatively stable pattern as regards R&D expenditure although there are some regional variations. Only the Finnish regions show a significant downturn in this respect, primarily as a result of the slow post-2008 recovery from the financial crisis. In all Nordic regions, the share of employment in knowledge-intensive sectors is well above the EU28 average. 
Although, all capital cities (especially Stockholm) and larger cities in the Nordic countries remain strong economic centres where knowledge-intensive activities are highly concentrated, a large share of technology and knowledge-intensive jobs can also be found in more peripheral regions e.g. Norrbotten in Sweden. Finally, the Nordic countries have maintained their strong positions in the field of green solutions though many of their European competitors are now beginning to catch up. According to the Eco-Innovation Scoreboard, the overall eco-innovation landscape has remained rather stable across the Nordic countries over the period 2010–2016; whereas the positioning of many other European countries (e.g. Lithuania, Latvia, Greece, Portugal) on the index has significantly improved in recent years. The presence of eco-innovation parks facilitates eco-innovation and industrial symbiosis as well as improving ecosystems and enabling new and innovative business opportunities. The spatial dispersion of eco-innovation parks in the Nordic countries indicates that a strong research base and a critical mass are the determining factors in locational terms.