Analysis of competitiveness in a Nordic perspective
Analysis of competitiveness in a Nordic perspective
The Nordics are strong – but need to step up
The Nordic region is one of the most competitive in the world. But the lead is narrowing. Since 2000, productivity has grown by 25 per cent in the Nordics, against 43 per cent in the US.
A new analysis, carried out by Copenhagen Economics for the Nordic Council of Ministers, looks at why – and what it would take to hold the position.
A strong foundation
The Nordic economies remain among the most productive in the world, with strong institutions, high trust, world-class research and a deep savings base. Innovation capacity sits well above the EU average. And growth here reaches widely: high labour market participation and low inequality mean prosperity is broadly shared.
But the momentum is fading
The problem is not that the Nordics invest too little – they invest more in productive capital than the US does. It is what the investment goes into, and how much risk it carries.
More companies need to scale up. The Nordics produce more high-growth companies than the EU average, but few reach global scale. The median age of a top-15 company in the Nordics is around 120 years, against 50 in the US and 30 in China.
More risk-willing capital. Productivity growth is increasingly driven by high-risk investment in software, data and new business models. Measured relative to GDP, US venture capital investment is nine times the Nordic level.
Resilience is part of competitiveness. The Nordic economies are small and open, with around half of GDP coming from exports. In a more uncertain world, security of supply, critical resources and fewer strategic dependencies matter more – and the ability to create and scale new companies is what allows an economy to adapt.
The Nordic countries have a strong foundation to build on. But holding the position will require reforms targeting the barriers to growth – including the framework conditions for a greater appetite for risk, in investment and in entrepreneurship.
This study was commissioned by The Nordic Council of Ministers.
In brief
Nordic productivity growth has fallen behind the global frontier: a 14 per cent lead over the US two decades ago has narrowed to near parity, and on current trends the Nordics risk falling behind within the next decade.
25 vs 43%Productivity growth in the Nordics since 2000, against the United States. Annual growth since 2005 runs at around 0.6 per cent against 1.13 per cent in the US.
24% How far Nordic productivity levels sit above the EU, broadly on a par with the US despite the slowdown in growth.
0.1-0.2% of GDPVenture capital investment in the Nordics, against roughly 0.8 per cent in the United States. Private equity shows a comparable gap.
9%Gap in GDP per capita against the US, driven mainly by lower total labour input: participation is higher, at 85 per cent for men and 81 per cent for women against 71 per cent in the EU, but average hours worked are significantly lower.
41%Fall in Nordic emissions since 1990, against 38 per cent in the EU and 30 per cent in the US.
Written by Copenhagen Economics for the Nordic Council of Ministers. Published 2026 as TemaNord 2026:538. Covers Denmark, Finland, Iceland, Norway and Sweden, with separate treatment of Greenland, the Faroe Islands and Åland.
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Related Links
Read the article in the national Danish newspaper Berlingske here
About this analysis
The report asks whether the productivity gap identified in the 2024 Draghi Report applies to the Nordic economies, which differ structurally from much of Europe. It is in two parts: an analysis of the factors behind historic Nordic competitiveness and the challenges to it, and a structured international benchmarking exercise across eight dimensions, namely innovation capacity, entrepreneurship and firm dynamics, access to capital, digitalisation, administrative and regulatory burdens, energy costs and the green transition, economic resilience, and Nordic market integration. The benchmarking combines quantitative indicators, case studies and international comparison.
Unless otherwise stated, the statistical analysis covers the five Nordic states rather than the autonomous territories. Capital stock estimates are subject to significant uncertainty. Emissions are measured territorially, so they do not account for where goods and services are ultimately consumed, and exclude international shipping and aviation. The publication was funded by the Nordic Council of Ministers, whose views it does not necessarily reflect.