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New study analyzes and compares growth entrepreneurship in the Nordic region

The Nordic region has good framework conditions for entrepreneurship, but there is a lack of skills and finance.
  • Published 22/01/2013
The Nordic Growth Entrepreneurship Review 2012 is the first joint Nordic analysis to focus on growth entrepreneurship and assess the framework conditions for growth and company performance across the Nordic countries. For the first time, comparable data for the whole region shows how big the young Nordic growth firms (gazelles*) become.



The Review reveals many similarities in the Nordic countries, but also points out significant differences.


In recent years the Nordic countries have improved the framework conditions for entrepreneurship, and in important areas these are now as strong as in the best-performing countries. Also the public image of entrepreneurship has become better, and the entrepreneurial culture is world class. The level of startups across the Nordic region is high in international comparison, and the share of gazelles is relatively high as well.


But where the countries are struggling, is with the scaling up of young firms. Across the Nordic region, the skills and capabilities have to be improved to fully realize the companies’ global potential. This challenge seems to be related to the lack of experienced management teams, which results in difficulties when aiming at attracting later-stage venture capital.





Gazelles – growth and sectors

Nordic firms that grow to become large firms in a short period of time are very rare. The vast majority of the gazelles remain under 50 employees in most of the Nordic countries. Only Finland seems to perform somewhat better when it comes to fostering rapid growth in young firms.


However, young Nordic gazelles have a considerable impact on job creation in relation to their number. In the whole region, a total of 602 gazelles created 29.588 new jobs during the period of 2006-2009 which was examined in the Review. For instance, in Norway, 214 gazelles increased the employment with 10.594 new jobs and in Finland 92 gazelles alone created 7.617 jobs.


Nordic gazelles are mainly active in the service sector. In Denmark somewhat more gazelles are active in knowledge-intensive services in comparison with the other Nordic countries.



Framework conditions for entrepreneurship

Overall, the framework conditions for entrepreneurship in the Nordic region are competitive. Compared to Central European countries including Austria, Belgium, Germany, Netherlands and Switzerland, the Nordic countries have framework conditions that are more conducive for entrepreneurship. In particular, the framework conditions are strong in the policy areas related to the regulatory framework and market conditions.


Years of policy improvement in the Nordic startup environment has resulted in that it is easy and cheap to start a new firm. Consequences and risks related to bankruptcy are fairly limited, and labor market regulations have improved in certain Nordic countries. The sub-policy area in which the Nordic region is lagging the most behind in comparison to the best-performing countries is taxation, which is deeply rooted in the Nordic welfare model.


The combined scoring of the framework conditions in each Nordic country shows that Finland has the best framework conditions for entrepreneurship, followed by Denmark and Sweden with Norway lagging a bit behind. Iceland also has good framework conditions, but the economic and financial crisis in Iceland has reduced the business opportunities for entrepreneurs.



Entrepreneurial culture and capabilities

When it comes to entrepreneurial culture the Nordic region scores high although still remains behind best performing countries. Finland and Iceland have been able to develop a stronger entrepreneurial culture compared to their Nordic peers.


Together with Continental Europe, the Nordic region faces major challenges in the area of entrepreneurial capabilities. The combined score for the five countries is low compared to the best-performing countries. Except for Iceland, all Nordic countries are ranked in the lower half in comparison across the OECD countries.



Access to finance 

The access to finance has an impact on the resources available to growth-seeking entrepreneurs. This is a challenging policy area in the Nordic region and the countries’ combined score is medium to low compared to the best-performing countries. They perform relatively well in terms of access to early stage venture capital, but less well on indicators for later-stage capital, including access to expansion stage venture capital and stock markets.





The Nordic Growth Entrepreneurship Review 2012 highlights entrepreneurial ecosystems as a possible instrument for stimulating growth in young firms and as a supplement to effective framework conditions. In strong ecosystems, multiple private-sector resources are mobilized and the intensive collaboration and networking provide complementary skills and experience to young growth firms – and thereby stimulate growth. It could be argued that ecosystem operators provide cohesion to the various framework conditions and function as network fertilizers in strong ecosystems.


Policy recommendations on a Nordic level suggest ways to enhance the Nordic ecosystem for young growth firms. Among other things, it is recommended to establish a public-private partnership around growth.





In October 2010, the Nordic Trade and Industry Ministers agreed on a new industrial and innovation policy cooperation program focusing on green growth. Six lighthouse projects were launched for the period 2011-2013. Nordic Innovation, an organisation under the Nordic Council of Ministers, is contributing to the realization of these projects together with the Nordic countries – one is the Nordic Entrepreneurship Project. The Project owner is Ministry of Employment and the Economy of Finland.


Nordic Innovation commissioned the Nordic Growth Entrepreneurship Review 2012 to a Nordic consortium with research expertise in growth entrepreneurship and innovation for enhancing the understanding of Nordic framework conditions for entrepreneurship and the growth performance in young Nordic firms.


The consortium was led by REG X and the University of Southern Denmark, with participation from ETLA – the Research Institute of the Finnish Economy; HUI Research and Tillväxtanalys from Sweden; RANNIS – the Icelandic Centre for Research; NIFU – the Nordic Institute for Studies in Innovation, Research and Education from Norway; and DBA – the Danish Business Authority.


The Nordic Growth Entrepreneurship Review 2012 aims to provide policymakers across the Nordic countries with new fact-based knowledge about growth entrepreneurship, performance of young growth-seeking firms, and the challenges for growth. This is accomplished by comparing the latest available data and some new indicators for growth entrepreneurship performance and framework conditions.


The study also includes an overview about recent development of growth entrepreneurship policy and initiatives in each Nordic country, and growth entrepreneurial ecosystems and venture capital as specific themes. Based on the findings, certain policy recommendations are made to address the Nordic challenges of growth entrepreneurship.



*In line with the OECD definition, firms that over 2006-2009 have experienced an annual average growth in employment of at least 20%, have at least 10 employees and are less than 2 years old at the beginning of the growth period.