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Article Article November 5th, 2015

The Nordic path to prosperity, performance and impact

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British policymakers have long been intrigued by the Nordics' approach to public services

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Nordic competitiveness is now trending downward

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Innovation is an area where an injection of British know-how could make a huge impact

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There is much that binds the Nordics with the UK. Geography, for one. Britain's borders are only a few hundred miles away across the North Sea. I know that my many friends and colleagues in the UK appreciate the fact that English is the de facto language of business both here in Finland, as well as in Sweden, Denmark and Norway.

Our respective governments also enjoy a strong connection. I'm not just referring to the popularity of Borgen in the Westminster Village, but something far richer. Strong public services underpinned by a market economy and fiscal discipline is an approach that enjoys deep resonance across our respective borders, and is widely seen as the optimal way to achieve a positive public impact.

This relationship has grown even more acute in recent years. British policymakers and parliamentarians have been particularly keen to jump on the shuttle from Heathrow in order to find out how we have succeeded in reforming our public sectors, balanced our books and achieved strong economic competitiveness and living standards. It's an alluring mix of success but this is no time for complacency - quite the opposite in fact.

Times are a changing

It's fair to say that policymakers love a league table. The transparency and sheer ease of checking how your sports team or country is performing is hard to beat - especially if you're doing well. We in the Nordics have been particularly fond of these recently. From competitiveness to wellbeing, public deficit to the environment, ours has been a track record of considerable success. However, fault lines are fast emerging.

It's not just that Nordic competitiveness is trending downward - though this is certainly a factor - but other warning signs are starting to flash. For example, the Nordics are home to many successful multi-national corporations but the vast majority of these were founded more than 20 years ago and our smaller businesses have not grown fast enough to prevent this assembly line from grinding to a halt. Only four have been created over the previous two decades and the existing ones are migrating their operations outside of the region.

And although the global financial crisis left relatively few scars when compared to other parts of the world, continued prosperity and wellbeing will require at least the restoration of at least 2% annual growth until 2030. For this to happen, there needs to be a significant change in the amount of work (workers and hours worked) and a much higher level of productivity growth. Take our labour markets. By 2030, we will need to increase our labour force by 1.7 million new workers. Some 1.2 million will need to come from the population currently outside the active labour force or from immigration.

Blighty bound

While these unwelcome facts have not - yet - managed to shatter the Nordics' reputation as a hot spot of best government practice, it is clear that we need to quickly change course. A good starting point would be to get better at the wider deployment of successful projects and policies from not only in our region (Denmark's flexible labour market and Sweden's value-based health care spring to mind) but from further afield. Like Britain.

Innovation is an area where an injection of British know-how could really make a huge impact. While our record has been in decline - all Nordic countries have seen their global ranking fall since 2012 - Britain's, by contrast, has been fast improving. In 2010, the UK Government introduced a long-term initiative to improve the UK's innovation climate and business conditions for start-ups. It focused on four main areas: infrastructure and innovation clusters; access to capital and funding; talent and skills; and supportive regulations and taxation. The UK's ranking on the Global Innovation Index has since surged from 14 to 2. As another timely example, Britain has also fared far better in fuelling economic growth through immigration than our Nordic model has been able to do.

Innovation is just one example but it shows how Nordic countries much to learn from other countries and regions. Although the success of an initiative in one country does not automatically guarantee that it would work as well elsewhere, it is equally true that our interconnected world has opened up new opportunities to see how other governments have improved their public impact.

After years of playing host to visiting parliamentary delegations, it is time for our policymakers to pack their bags. Destination: Heathrow.

Read BCG's full report, Nordic Agenda 2016: Bringing growth back to focus



  • Track changes. Sweden may already enjoy a strong level of infrastructure but even more can be done to improve its public impact, explains MTR Nordic's Robert Westerdahl
  • Transformation from the grassroots. Driven by the belief that the best solutions to challenges can be found in communities across the country, the Obama administration created the White House Office of Social Innovation and Civic Participation to find new ways to solve old problems. Here, Dan Vogel talks to the Office's first director, Sonal Shah, about her experiences in reshaping American government
  • It's all about impact. Governments need to rethink and reset their approach to delivery, suggests Larry Kamener  
  • The time to deliver is now. Sir Michael Barber reflects on the lessons learned and insights gained from a career at the heart of government delivery
  • From vision to reality. Government leaders worldwide share the objective of making an impact and getting things done but it's rarely straightforward - Hans-Paul Buerkner offers some advice
  • The God Revolution. Public impact is easier said than done, admits former UK Cabinet Secretary Lord Gus O'Donnell, who explains why impact is rarely viewed as a key priority among policymakers

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