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­­chapter 8

business perspective oN the economy

AuthorS: Sigrid Jessen, Karen Refsgaard and Carlos Tapia
DATA AND MAPS: Maria Bobrinskaya and Kamila Dzhavatova

The business as a unit of analysis

This section adopts a business-level perspective to analyse important economic, social and environmental indicators. Approaching the regional economy at the business level makes it possible to untangle some of the mechanisms in play at the more aggregated regional level.
In the following, we focus on both small and medium-sized enterprises (SMEs) and larger companies. In this chapter, SMEs are companies with between 10 and 250 full-time employees. SMEs play a significant role in the economies of many countries. This is also the case in the Nordic countries, where there are approximately two million SMEs, corresponding to approximately 90% of all companies in the region (Nordic Cooperation 2021).
Companies are shaped by the regions in which they are based and operate – and they, in turn, shape those regions (Dosi & Metcalfe 1991). They also come in various types and shapes and have distinct regional characteristics depending on the local context. This is evident in the geographical patterns in the sizes of companies, with a larger share of smaller companies in rural areas over time. The companies’ sizes, resources and capabilities create different opportunities to conduct innovative activities and act in socially and environmentally sustainable ways (ILO 2019). This chapter will, therefore, zoom in on the economic and innovative dynamics of Nordic companies.
The following section offers an analysis of Nordic companies’ economic and innovative activities. This is followed by an analysis of gender wage gaps and gender diversity in Nordic companies. The chapter concludes by looking at the environmental impact of different industries in the Nordic countries.

Economic aspects of the business perspective on the economy

This section examines economic and innovative perspectives relating to Nordic companies. The focus is on regional variations in busiess bankruptcies during and after the COVID-19 pandemic, as well as innovative activities.

Business bankruptcies in Nordic companies during and after the COVID-19 pandemic

The rate of business bankruptcies is a core indicator of the robustness of the economy from the business perspective. This is a particularly important indicator in this 2024 edition of the State of the Nordic Region report since Nordic and international businesses have been impacted by both the COVID-19 pandemic and rising inflation in recent years.
In terms of the level of bankruptcies, data from Eurostat (2024) shows that the Nordic countries fared relatively well compared to other high-income countries between 2020 - 2022. Map 8.1 depicts the change in total number of bankruptcies in the Nordic regions in 2020–2022. In the years during and after the COVID-19 pandemic, the most densely populated regions saw the highest levels of bankruptcies. This finding is partly to be expected, as these regions also tend to be those with the highest number of companies.
However, some variation can be seen across the countries. Overall, Iceland and Finland experienced the lowest rate of bankruptcies in 2020 and 2022. Denmark had the highest level of bankruptcies during COVID-19. Potential explanations for the national variations may include the countries’ varying strategic approaches to the pandemic.
Denmark enforced more restrictive lockdowns compared to, for example, Sweden, where the less restrictive approach has been linked to the more limited impact on business bankruptcies in the early part of the pandemic (e.g. Cella 2021, Danmarks Statistik 2022). Furthermore, there is a large consensus that the many job-retention schemes across the Nordic Region also served to limit the number of bankruptcies (e.g. Hansen et al. 2020; da Silva et al. 2020).
However, new data from early 2024 shows that after the job-retention schemes ended, and while high inflation and interest rates were increasing the pressure on Nordic companies, the level of bankruptcies increased. In 2023, 8,868 companies went bankrupt in Sweden – the highest number of bankruptcies in a single year since 1998 (Tillväxtanalys 2023). Denmark recorded the highest number of bankruptcies in a single year since 2010, at 3,078 (Danmarks Statistik 2024). The pattern was similar in Finland, where 3,293 businesses filed for bankruptcy, the highest level since 1998 (Statistics Finland 2024). The figures from Norway and Iceland also show higher levels of bankruptcies in 2023 compared to 2022, albeit to a lesser extent than the other three Nordic countries.
The difference between the level of bankruptcies in the first phases of the pandemic and the later phases and the aftermath also indicates the importance of observing longer time periods when accessing the economic impacts of different types of policies (e.g. Hendren & Sprung-Keyser 2020) and crises (e.g. Hall 2015).
Map 8.1: Change in the number of business bankruptcies (2020–2022)

Innovation by Nordic companies

Map 8.2a depicts SMEs introducing product innovations as a percentage of SMEs in the Nordic regions, calculated as the share of SMEs who introduced at least one product innovation. The values for the map are normalised from 0–10. In this context, a product innovation is defined as the market introduction of a good or service that is new or significantly improved with respect to its capabilities, user-friendliness, components, or sub-systems.
Rural regions tend to have lower levels of SMEs with product innovations, while urban regions have the highest levels. In 2023, Åland (0.235) had the lowest number of SMEs with product innovations in the Nordic Region, while Oslo had the highest (1.0). Etelä-Suomi and Stockholm regions were slightly behind, with 0.954 and 0.948, respectively. In Denmark, the leading regions were the Capital Region (Hovedstaden) and Northern Jutland (Nordjylland), with 0.719 and 0.715, respectively. Southern Denmark (Syddanmark) had the lowest level in Denmark, at 0.545. In Norway, the lowest value was in Northern Norway (Nord-Norge), 0.67, while in Sweden it was Middle Norrland (Mellersta Norrland), with 0.53. Taken as an average across the Nordic countries, Norway has a significantly higher number of SMEs with product innovations than the other countries.
Map 8.2b shows the share of SMEs introducing at least one business-process innovation, which includes process, marketing, and organisational innovations. In general, Nordic SMEs are more likely to innovate in products rather than processes. The highest shares of process-innovating SMEs are found in most of the Finnish regions ranging from 0,79 in Länsi-Suomi to 0,91 in Etelä-Suomi, except of Åland with 0,58. Other high ranking regions are Stockholm and Osl0 (both at 0.89). The lowest value is in Sjælland in Denmark (0.48). The Nordic average is 0.7.
The more urban regions tend to have higher levels of process innovation, but the geographic rural/urban divide is less pronounced than that seen in product innovation. In other words, more non-urban SMEs are innovative in their processes than their products.
Map 8.2a and 8.2b: SMEs with product and business process innovations

Social aspects of the business perspective on the economy: Closing gender wage gaps in Nordic companies

Gender diversity and equal pay are core social aspects of the economy, seen from the business perspective. The Nordic countries have long prided themselves on being leaders in gender equality (e.g. Wagner et al. 2022), but gender differences can be observed in Nordic companies. In this section, we zoom in on gender wage gaps in the Nordic countries.
Figure 8.1 shows gender wage gaps as a percentage difference across the Nordic countries in 2007–2022. Gender wage gaps, in general, have narrowed across all five Nordic countries over the past 15 years, albeit at varying paces.
Between 2007–2022, Sweden had relatively narrow gender wage gaps, which continued to fall during the period. In 2007, Iceland had the widest gender wage gap of the five countries, but by 2022, it had the narrowest, approximately halving the gap. Researchers have identified several key factors impacting this development, e.g. the Icelandic Equal Pay Standard and several other policies targeting the gap (Kristjánsdóttir & Neunsinger 2023; Olafsdottir 2018). In 2018, Iceland became the first country to introduce a policy obligating all companies and institutions with more than 25 employees to provide evidence of equal pay for equal work (work of equal value). The policy was enforced through the Equal Wage Management Standard, also referred to as “the system” (Wagner 2022).
Finland, Norway, and Denmark are also making progress in this area, but more slowly than Iceland. Overall, Norway has reduced the gender wage gap since 2007, but it began to widen again in 2018–2022, especially between 2020–2022. One explanation for this may be the gender-biased effects of the COVID-19 pandemic, as shown in previous research in certain countries (Bluedorn et al., 2023).
Figure 8.1: Gender wage gaps as a percentage difference across the Nordic countries
Source: Eurostat
Note: Including both the public and private sectors
Table 8.1 shows the age distribution of the gender wage gaps in 2021 across the Nordic countries. Gender divisions begin to emerge from age 25 onwards in the Nordic countries when most individuals have graduated from their highest level of education and entered the job market. This is consistent with previous research on gender gaps in the Nordic countries, which also pinpoint childbearing, parenthood and maternity leave as substantial factors (Gallen et al. 2019; Kleven et al. 2019; Nygren et al. 2021; Nygård & Duvander, 2021).
The countries’ wage gaps also differ by age. Iceland and Norway have the two lowest gender wage gaps for those under 25. These countries also had the lowest Gini coefficients in 2022, as shown in the previous chapter on the regional perspective. However, while the gender wage gap for Iceland remains relatively low across all age groups, the same is not true for Norway, where the gap widens by age and ends up surpassing several other Nordic countries.
25 and less
From 25 to 34 years
From 35 to 44 years
From 45 to 54 years
From 55 to 64 years
From 65 and over
Table 8.1: Gender wage gaps as percentage difference by age across the Nordic countries (2022)
Source: Eurostat
Note: Blue colors represent a lower wage gap between age groups within a country, while red colors indicate a higher wage gap between age groups within a country.
Map 8.3: Gender distribution in employment by municipality in the Nordic countries (2021)
Map 8.3 shows the gender distribution in employment at both municipal and regional levels in the Nordic countries in 2021. Most regions had higher employment rates for men than women, with an average of 3.7% more men across the countries and sectors. In Finland, the rates were more balanced, with only 1.3% more men in employment. In three regions in Finland, employment rates were slightly higher for women: Etelä-Karjala – Södra Karelen, with 0.8% more women than men; Kainuu – Kajanaland, with 0.4%; and Uusimaa – Nyland with 0.1%. These are the only regions in the Nordic countries with a prevalence of employed women at the regional level. For the rest, employment rates were higher for men, with Icelandic regions having the largest share: Suðurnes had 11.3% more men than women, Vesturland 8.8%, Austurland 8.7%, and Suðurland 8.2%. The average for the Icelandic regions was 7.5%. For Denmark, this was 4.9%, for Sweden, 3.9%, and for Norway, 3.4%.
At the municipal level, however, the situation was much more varied. Åland is one of the most extreme examples. Although the average was 2.5% more men employed than women, Åland has several municipalities with extremes at both ends. On the one hand, there are municipalities like Lumparland, with 16% more women than men, and Brändö, with 11.3%. On the other hand, Kökar had 64% more men than women. The variations between Ålandic municipalities can largely be attributed to the municipalities’ population size. The larger cities, like Trøndelag in Norway, may be more balanced at the regional level, but within the region, there are municipalities with a 20% prevalence of women in employment (Namsskogan, Meråker, Holtålen), as well as some with 18% (or higher) more men, such as Overhalla and Åfjord. 

Environmental aspects of the business perspective on the economy

Finally, this section looks at territorial GHG emissions, both at regional level and for the different sectors. As the countries and regions have different energy mixes and production structures, and therefore different emission patterns and climate goals, the key indicators are emissions by region and by sector.
The OECD (2021) shows that the inter-regional variations in territorial (production-based) GHG emissions per capita are larger than between countries, as the emissions are closely linked to the countries’ production structures. In general, metropolitan regions contribute about 60% of the territorial GHG emissions in the OECD countries. However, measured per capita, remote rural regions emit three times more than large metropolitan regions. This illustrates the nature of economic activities and settlement patterns in these areas. Remote rural areas tend to host a larger proportion of carbon and material -intensive industries (such as forestry and mining), and households in these areas generally have greater energy requirements, considering both housing and transport.

Regional GHG emissions

Map 8.4a and Map 8.4b show regional GHG emissions per capita on a territorial basis, although the picture may be skewed due to the inter-regional dynamics of energy processes, natural resource distributions and concentrations of industrial activities. From 2017 to 2021, the Nordic regions cut their per-capita GHG emissions by on average 11.3%, with an overall Nordic average fall of 8.7% over the same period.
In regions historically reliant on fossil fuels for heat and power generation, emissions have continued to decline. This trend is evident in Denmark, as well as in Southern Sweden and Southern Finland – densely populated areas that have taken steps toward expanding district heating coverage and reducing carbon intensity. The largest decrease in GHG emissions per capita was found in Troms and Finnmark, with a 42.3% decrease, Satakunta with a 30.2% decrease and Päijät-Häme – Päijänne-Tavastland with a 29.2% decrease. Only three regions (Greenland, Trøndelag and Blekinge) saw an increase in GHG emissions per capita.
At an aggregated level, industrial-related emissions decreased throughout the Nordic Region, but this trend does not hold true for regions in Norway with intensive offshore oil and gas operations. For instance, Nordland, Vestland, Møre og Romsdal, Vestfold and Telemark exhibited the highest per capita emissions in 2021. Between 2017 and 2021, emissions were increasing in many Norwegian regions with intensive offshore oil and gas activity, but also in Norrbotten in Sweden (21.2 tonnes of CO2 equivalent per capita) and Gotland (33.6 tonnes of CO2 equivalent per capita) due to intensive activity in the metal and cement industries, respectively, as well as in several Finnish regions. At the other end of the scale, the lowest emissions were seen in Oslo (1.32 tonnes of CO2 equivalent per capita), which is characterised by hydropower-based heating and a prevalence of electric cars. These tendencies align with OECD (2023), in which rural regions that specialise in natural resource extraction emissions were seen to be declining more slowly.
Map 8.4c new.jpg
Map 8.4a and 8.4b: Regional GHG emissions per capita on a territorial basis.

GHG emissions by source sector

Figure 8.2 shows the changes in territorial GHG emissions (excluding LULUCF) by source sector for each of the Nordic countries from 1990–2021. The countries show different patterns in reducing industrial emissions during this period, which is due not only to climate goals and implementation policies but also differences in economic specialisations, natural resources, and energy mixes. Denmark, Finland, and Sweden all show a reduction in GHG emissions for most sectors, especially in fuel combustion.
Since the 1990s, the share of renewable and non-fossil fuels in the Nordic energy mix has increased steadily. As noted by the IEA (2024), the advanced economies’ electricity sectors have been undergoing a transformation since around 1990 that has pushed coal demand to a previously unseen low (except for a brief period during the Great Depression). Since reaching its peak in 2007, coal demand has nearly halved. Map 7.4 (Electricity production in 2021) in Chapter 6 in this report shows the composition of the different energy sources for electricity. In 2021, 73% of the primary energy consumed in Iceland and 67% of that in Norway for electricity came from renewable energy, in particular hydropower and geothermal energy – the latter of which accounts for 12% of the primary energy consumed in Iceland.
Looking at GHG emissions, emissions in Norway’s energy industries sector increased by 108% in the period due to the toll of oil production (Hall, 2020). In Sweden, hydropower (31%) was supplemented by wind (12%), with small contributions from other renewables like biofuels and solar power. In Denmark, there has been a 67% reduction in GHG emissions in the energy industries sector in the period, mainly due to a large increase in wind power, which has replaced coal and gas (GreenPower 2024).
Dixon et al (2023) shows in an overview of the energy consumption and energy mixes in the Nordic countries, that, the contributions of wind (26%), solar (2%) and other renewables (6%) were more substantial in Denmark than in the other Nordic countries. In Finland, wind (7%) and hydro (14%) produced the largest proportion of renewable energy consumed locally in 2021. Liquified biofuels represented 2% of primary energy consumption, whereas other renewables, in particular biomass, constituted an even larger proportion of the total primary energy consumed in Finland (5%). Nuclear energy played a major role in Sweden (22%) and Finland (21% of primary energy consumption).
Fuel combustion in the transport and energy industries was the largest contributor to GHG emissions in 2021 in all of the Nordic countries except Iceland, where the dominant sectors were industrial processing (e.g. of aluminium) and product use. In Norway, 25% of GHG emissions from fuel combustion stemmed from processing in the oil and gas sector
It should be noted that North Sea oil and gas are not accounted for prior to the processing stage (Golombek and Hoel 2023).
(Golombek & Hoel 2023). From 1990 to 2021, only Sweden and Finland managed to reduce GHG emissions by 15% and 7%, respectively, in the transport sector.
During the same period, emissions in Iceland increased slightly, driven by the boom in tourism that began around 2013. As long-distance tourism became more popular over the 30-year period, the emissions from international aviation increased substantially in all of the Nordic countries, ranging from a 77% increase in Denmark to a 336% rise in Iceland, although COVID-19 brought the industry to a halt (Norlén et al. 2022). Post-pandemic figures from 2021 show decreases from international navigation in Denmark, Finland and Norway but increases in Iceland (632%) and Sweden (196%). In the agriculture sector, only modest reductions have been seen, ranging from 6% for Norway to 13% for Denmark.
Regardless of past trends, coal, oil, and gas are still major components of primary energy consumption structures in the Nordic countries. Even if major progress has been achieved in terms of renewable energy production, substantial decarbonisation challenges remain in all Nordic countries due to fossil-based energy mixes (Sweden, Finland, and Denmark), oil production (Norway) and industrial processing (Iceland) in order to decrease the GHG emissions.

Waste management
Other fuel combustion sectors n.e.c.
Other fuel combustion sectors
International navigation (memo item)
International aviation (memo item)
Industrial processes and product use
Fuels, fugitive emissions
Fuel combustion in transport
Fuel combustion in manufacturing industries and construction
Fuel combustion in energy industries
Figure 8.2: Greenhouse gas emissions in the Nordic countries by source sector (million tonnes of CO₂ equivalent)
Source: Eurostat
Note: Excluding Land-Use Change and Forestry and memo items but including international aviation and navigation.


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