1. Introduction
The
Nordic countries combined are home to a geographic territory
encompassing roughly the population of Texas. But, Nordic nations top
recent worldwide rankings as the best places on earth to be a woman
(Iceland), get educated (Finland), be prosperous (Norway), save the
environment (Sweden), and just be happy (Denmark). In fact, Nordic
nations can teach USA about childcare (Sweden), education (Finland),
worker retraining (Denmark) and taxing and regulating the wealth of
natural resources (as done in Norway). These strong, egalitarian
Nordic states might be the product of their particular histories,
cultures or relatively homogeneous populations and therefore that
their way might not be so readily applied to USA. In comparison to
USA, self-expression (rather than survival) values and
secular-rational (rather than traditional or religious) values
happens to be highest in the Nordic nations.
There’s
a significant portion of the Americans left who would like to turn
the United States into something like Nordic region. A socially
democratic state, with free education, free childcare, free health
care and so on. However, Nordic brand happens to be more than that.
Mainly, it conveys Trust, new way of thinking, sustainable
development, compassion and openness.
Due
to current President’s inclination, the United States is in the
midst of an episode of chronic ‘Nordicmania’ , brought on in part
by the habitually high placing of Sweden and its similarly
prosperous, egalitarian, collectivist neighbors — Denmark, Norway,
Iceland and Finland — in global rankings of everything from
happiness to lack of corruption, gender equality and consumption of
organic root vegetables.
When
compared to American ‘individualism’, there is another dimension
that fosters risk-taking on a society-wide basis, which the Swedish
historian Lars Tragardh calls “Nordic statist individualism.” The
basic idea is that individuals who are free and secure are also more
likely to innovate, experiment and take risks.
In
contrast to the American model, which also emphasizes individualism,
in Nordic model every person has a positive (and positively
acknowledged) individual relationship with the state. Accordingly,
the Nordic people view the role of the state and government not as an
intrusion into individual freedom, but actually as an enhancement.
It strengthens their individual development.
In
summary, Finland has the western world’s finest education system,
according to the Organization for Economic Cooperation and
Development. Similarly, Sweden has taken in more refugees,
proportionally, than any European country. Icelanders too - spawn of
a Nordic settler colony - buy more books than anyone and draw most of
their energy from geothermal power. No doubt, in 2012, Denmark took
first place in the United Nations’ inaugural World Happiness
Report, having topped similar surveys for decades. See Figure
1
for index rankings for best countries 2012.
Figure
1: Top of the class countries listings
2. Origin
/ inception & current status
Historically,
the Nordic region’s political economy had developed along somewhat
different lines than America’s. Sweden and Norway had some big
imperialist adventures, but this behavior declined following the
Napoleonic Wars. After that, they invested in the military to ward
off invaders, but they were less interested in building it up to deal
with bloated colonial structures and foreign adventures. Overall
Nordic countries devoted fewer resources to the military — the
arena where patriarchal values tend to get emphasized and entrenched.
Iceland, for example, spends the world’s lowest percentage of GDP
on its military. Subsequently, industrialization has a part of the
story, too: it hit the Nordic countries late. In the 19th
century, Scandinavia did have a rich and powerful merchant class, but
the region never produced ‘the Gilded Age’ industrial titans and
extreme concentration of wealth that happened in America back then,
and has returned today(Income inequality and discrimination of all
kinds seem to go hand-in-hand). Over time, Nordic countries became
modern social democratic states where wealth is more evenly
distributed, education is typically free up through university, and
the social safety net allows women to work comfortably
and
raise a family. Nordic moms aren’t agonized over work-family
balance. Parents can take a year or more of paid parental leave. Dads
are expected to be equal partners in child rearing, and they seem to
like it.
In
this context, Gunnar Wetterberg, a Swedish historian, has proposed a
pan-Nordic federation to unite Denmark, Finland, Iceland, Norway and
Sweden under a single monarch: Denmark's Queen Margrethe. The five
countries (plus their autonomous territories of Greenland, the Faroe
Islands
and Aland) would retain individual legislatures for local matters.
But economic and labor-market policy would be coordinated, and
foreign and defence policy would be ceded to the federation. How this
would chime with the European Union is not clear: three of the
countries are in EU, Norway is out and Iceland has renounced
membership attempts ; only Finland is in the euro.
If
Nordic union is such a good idea, why has it not already happened?
According to Mr Wetterberg blame lies in
the failure of previous attempts at unity since the collapse of the
Kalmar union in the 16th century due on meddling foreign powers. The
Hanseatic League, the United States and the Soviet Union all
obstructed attempts at unification, he says. “Nowadays the great
powers no longer interfere and for the first time in 600 years the
Nordic countries have the opportunity to discuss their collective
future in peace and quiet.”
3. Evolution
of Non-Quasi-capitalist Socialist
Historically,
Nordic countries, Germany, Baltic countries and Poland as a group had
formed a separate, viable economic alliance ; a modern version of the
Hanseatic League of merchant guilds and cities that dominated the
region during the 13th to 17th centuries.
Gunnar
Myrdal, the Swedish Nobel laureate, was an influential theorist of
the Nordic approach. As a young economist, he had championed some
demand-side policies. In his 1957 study “Economic Theory and
Underdeveloped Regions” and elsewhere, he suggested that a
Nordic-style model was not only good social policy but smart
economics. Contrary to the classical theory, Myrdal argued,
deregulated markets don’t reach to equilibrium. Myrdal’s thinking
was shaped by years he spent studying the plight of black people in
the United States. His best-known work, “An American Dilemma”
(1944), explored a disconnect : Why was one group persistently at the
bottom of the socioeconomic spectrum in a country that purported to
give everybody an equal chance?
It
is not the first time, the Nordic countries have come in the
international limelight. In the 1950s and 1960s, Nordic region was
famous for ability to combine a great improvement in living standards
with the development of a universal welfare model characterized by
generous public services and higher taxes. Enthusiasm for the model
was dampened over the next few decades, with countries in turn were
hit by banking and housing crises, declining international
competitiveness and low growth. Under the attack was the typical
understanding of the Nordic model as a welfare state with a
relatively even distribution of income generated from a large public
sector, a high tax burden offering a finely meshed social safety net
for citizens and a wide supply of public services 'from cradle to
grave'. In such period, recovery was assisted by the public sector
playing a major role and it was equally significant that the private
sector became market-oriented, with relatively flexible product and
supportive labor market.
The
Vikings—a rapid
seafaring people who assimilated into northern European culture a
millennium ago - happen to be the cause of modern Nordic’s
autonomy, egalitarianism and restraint. (The Danish word for fair and
moderate has origins in the Vikings’ term for passing mead around a
fire.)
4. Welfare
and Taxation
USA
can have such welfare state (like Nordic) and equity just by taxing
the snot out of everyone which in turn impact the growth. So, the
solution is to have as classically liberal an economy as one can,
with the least regulation of who does what and how, then tax the snot
out of it to pay for that welfare state. In comparison, Nordic
welfare states are very local. The national income tax rate in
Denmark starts out at 3.76% and peaks at 15%. There’s also very
stiff, 25-30% of income, taxes at the commune level. A commune being
possibly as small as a township (10,000 people) in the USA . The
point being that this welfare state is paid for out of taxes raised
locally and spent locally. In contrast, the American left tells us
that the USA should work differently - all taxed money goes to
Washington and then the bright technocrats disburse it. In the end,
USA left have to modify its model to suit the local-level. -
collection and spending of taxes locally would lead to people willing
to pay higher taxes. In the United States, freedom is conceived
differently. It distinguishes between the “freedom to be”
(Nordic) and the “freedom to do” (quintessentially American). But
a more basic distinction rests with the locus of control.
4.1
Labour
laws
Denmark
continues to distinguish itself through the benefits of its
flexicurity system, as it has one of the most efficient labour
markets (1st in EU), combined with a strong social safety net. Nordic
consensus can perhaps be best exemplified by the role of unions in
the region, which are often on the side of employers as they seek
workable solutions. Hence, union representatives sit on the boards of
big companies. American-style political gridlock would be
inconceivable in the Nordic region. It is hard time explaining to
outsiders that union stands for innovation, globalization, even
“robots,” because labour knows the Nordic region can’t compete
with cheap labor in China or India. It is new technology and a highly
educated workforce that makes it competitive.
4.1.1 Working
hours and benefits
Denmark
began offering a state benefits program to older people only in 1891.
The modern Nordic welfare state had its distinctive form. The model,
crucially, interprets “welfare” to mean not just financial
capacity but well-being. It might take into account that a woman
forced to defer dreams of motherhood because of work, or vice
versa,
can be a hostage to her circumstances even if she would be able to
pay her bills. In comparison to other countries, parents in Sweden
and the other main Nordic countries have worked
weeks relatively shorter than the OECD average. This is in addition
to their substantial paid parental leave and publicly provided child
care.
The
lowest wage levels (Lowest wage as a percentage of the average wage)
are considerably higher (Nordic 0.51-0.64) than in countries with
liberal labour market systems, such as the United Kingdom and the
United States, where the minimum wage is, respectively, 0.42 and 0.36
of the average wage.
4.1.2 Unions
& Management
As
unions play a very important role, the social democracies of four
Nordic nations – Sweden, Finland, Denmark and Norway provide
working models in which such problems (of managing natural
resources, education, childcare and worker retraining) have been
addressed by the state and to a large extent solved. Small salary
differences, high welfare levels and high productivity represent the
core of the Nordic model. According to Mark Pearson, OECD’s
Deputy-Director for Employment, Labour and Social Affairs “Let’s
be clear. The analysis shows that the Nordic model has managed to
face the challenges in the wake of economic crisis better than any
other model.”
In
the Nordic region important parts of the wage formation have
been taking place on a nationally coordinated level with strong
social partners. It is necessary to have strong parties representing
both employees and employers to achieve a nationally coordinated wage
formation, because this allows you to take into account both real
wage growth and employment levels. Denmark, like Sweden, invests in
comprehensive skills training as part of providing security and
flexibility in employment. This includes quality skills retraining
programs of the kind which industry workers will need.
The
level of unionization is high in the Nordic countries. An exception
is Norway, where just over 50 per cent are unionized. One reason for
the relatively low level of unionization in Norway is that
unemployment insurance has been compulsory in Norway since the 1930s,
while it is linked to the trade unions in Denmark, Finland and Sweden
(the so-called Ghent model). In Sweden, the level of unionization has
declined from about 90 percent of wage-earners to 70 percent in
recent years.
4.1.3
Unemployment
benefits
Many
left-liberals have a real idea about successful working of the social
democracies of Nordic. As the University of Arizona sociologist Lane
Kenworthy has put it, “Over the course of the next half century,
the array of social programs offered by the federal government of the
United States will increasingly come to resemble the ones offered by
[the Nordic welfare states].” The protection of the workers'
employment relationship is relatively weak (in USA), which in
combination with the rules for unemployment benefits and least active
labor market policies (frequent contact meetings between the
unemployed and job centers and employment program for the unemployed
who have difficulty finding a job) makes it relatively easy both to
fire and hire people. The Nordic tenets champions propagate the
provision of universal welfare, full employment and equality.
4.1.4
Pension
Funds and Benefits
In
1891 by following German model, Denmark became the first country in
the Nordic mainland to legislate that large groups should receive
financial assistance in old age. Sweden's employment pension system
(ATP) was set up in 1960, and in the early 1960s the decentralized
but statutory Finnish pension system was introduced. In 1967 Norway
acquired its national insurance scheme based on the Swedish model. In
Iceland an occupational pension system was established in 1969 by
agreement between the social partners, a system which in 1974 was
made mandatory by law for all wage and salary earners. In Denmark
earnings-related pensions were likewise introduced through agreements
in the labour market, a process that was not completed until around
1990
Another
common feature of the Nordic countries relates to public finances,
which is remarkably stronger than in most other OECD countries.
Citizens here don’t need to save for medical emergencies,
unexpected unemployment, pre-school, or college education.
Nordic
countries have one of the world’s largest pension funds and bonds
market. Nordic pension funds are arguably harbouring more expertise
than their European counterparts in coping with complex investment
instruments, such as derivatives and private equity. Socially
responsible investment is another theme that is being more widely
adopted by Nordic pension funds than other European schemes. The
Nordic region has long been a champion of SRI and many pre and
post-trade related services have been developed for this region.
4.2
Healthcare
If
the Democrats of USA have their way than after introducing universal
health-care (Obamacare), they would move into their next project -
universal preschool education (as in Nordic model). In many countries
(such as Nordic countries), health spending is largely financed out
of taxes or social security contributions, with private insurance or
‘out-of-pocket’ payments playing a significant but secondary
role. This is not the case in the United States, where the
government plays the smallest role in financing health spending.
Public expenditure in the United States, the government provides
insurance coverage only for elderly and disabled people (through
Medicare) and some of the poor (through Medicaid and the State
Children’s Health Insurance Program, SCHIP), whereas in most other
OECD countries this is enough for the government to provide universal
primary health insurance.
4.2.1 Child
care
Many
women participating in the labour market have
become an important part of the Nordic welfare model. This has lead
to have enough nurseries and sufficient childcare. The Nordic
countries have seen
cutting edge models in the areas of family policy and child care.
However, there cannot be one Nordic child care model. Sweden in
particular differs from the rest in its strong ideological advocacy
of daycare from age one and its prohibition of home education. If
there is to be an ideal childcare model, the Finnish model seems to
qualify a lot better than the Swedish model. Finland has a universal
home care allowance of about 300 euros per month introduced in 1985,
which any parent can use until the child's third birthday if their
child is not in daycare. Thus, nearly two-thirds of all Finnish
children under three are at home, and less than half go to daycare
during the entire pre-school period. Furthermore, before- and after
school care is much less used in Finland than in Sweden. Also Norway
has a form of home care allowance introduced by a Conservative
government in 1998. Later Social Democratic government wanted to
abolish the allowance for ideological reasons, but realised it could
not afford to do so as there simply weren't enough daycare
institutions available. However, they have lowered the amount paid to
home care parents.
4.2.2
Senior
Citizen care
Leaving
the labour market and becoming a pensioner means making many
re-adjustments, particularly from the financial point of view. The
old-age pension will, on average, be the principal means of support
for the individual for up to 20 years. The statutory pension systems
in the Nordic countries all include basic security. This basic
security entails a right to a certain pension which is payable
regardless of previous earnings or contributions that have been paid
in. It guarantees all pensioners a minimum standard of living. A
retirement age is defined somewhere in the rules governing the
national old-age pension systems in all the Nordic countries – at
present it is 65 in Denmark, Finland and Sweden and 67 in Norway, the
Faeroe Islands and Iceland.
Generally,
public assistance for senior citizens has been provided mainly by the
national government and the local municipalities. The municipalities
set up and run different councils intended to promote user influence
and senior citizen councils. Senior citizens can avail of a wide
range of services. Apart from managed institutions, home care
services do have the most common services. Home care services have
been targeted at seniors who live at home but who cannot manage
everyday life without help. Citizens use both entitled practical
assistance (e.g. cleaning and laundering) and personal assistance
(e.g. bathing or shaving). Both types of assistance
comes free of charge and are made available 24 hours a day.
Municipalities pay an activity based contribution for the treatment
of local citizens in the hospital sector and the primary health care
service. Local co-financing amounts to approximately 18 % of the
funding in 2014. Also for elderly, some 100,000 women have to cut
their working hours because they say they need to look after older
relatives. Norway happens to be the happiest place to age, followed
by Sweden, Switzerland, and Canada. Nordic countries have
well-developed
organizations for the elderly, a long history of state welfare and
strong social media campaigns that create public awareness of
age-related issues.
4.3
Education
and Young employment
Finnish
schools (the best in the world, says Smithsonian Magazine) dominated
the top spot in education for half a decade for many years. Nordic
states also turned to literacy as a stabilizing force in the late
18th century. By 1842, Sweden had made education compulsory for both
boys and girls. Researchers have found that the more literate the
society in general, the more egalitarian it is likely to be, and vice
verse. But the literacy rate in the USA too remains very high.
Basically, no tuition fees remain applicable at the compulsory school
level in any Nordic country.
The
Nordic countries characterize high educational participation.
International statistics show that the expected period in education
for children at seven years of age remains among the highest in the
world. The proportion of students that embarks on upper secondary
school studies after compulsory school exceeds 90 per cent in all
Nordic countries. Also, Young people in Denmark and Norway have
enjoyed a markedly higher employment level than those in Finland and
Sweden, where levels remains close to the EU15 average. In Denmark
and Norway, where large cohorts of young people undergo
apprenticeship training, the employment rate becomes higher because
apprentices gets registered as employees, while students in
school-based vocational training programmes which dominate in Sweden
and Finland (countries without extensive apprenticeship training) do
not reflect as a part of the workforce.
4.4
Taxation
As
prevailing in the USA, the Washington Post cannot remain immune to
Nordic’s charms, recently marveling at how Danish branches of
McDonald’s manage to pay their employees 2.5 times U.S. McDonald’s
workers’ wages (however, about 75 percent of earnings may disappear
as taxes). The earned income tax burden for a family of four with a
single wage earner in Sweden is close to 38 percent, according to the
Organization for Economic Cooperation and Development (OECD),
compared with the United States at 20.3 percent (and 38 percent in
Finland, 31 percent in Norway, and 28 percent in Denmark).
5.
Standard
of living
According
to Newsweek, Iceland happens to be the best place in the world to be
a female, and gender equality in Denmark remains so deeply rooted
that it startles even some enlightened American women - checks on a
first date are split, and door-holding - considered rude. In terms of
income distribution, the Nordic countries have much more equality
than Australia, Britain, New Zealand and Canada – and nearly twice
as much as the United States.
5.1
Happiness
index
Nordic
people happen to be among the happiest and healthiest people on
Earth. Iceland, Denmark, Norway, Sweden and Finland all were placed
among the world’s ten happiest countries. The second World
Happiness Report utilized factors such as GDP, life expectancy,
social support, “perceptions of corruption”, and “freedom to
make life choices”, to assign each country a total score. The
report was based on statistics compiled between 2010 and 2012 by the
United Nations Sustainable Development Solutions Network. See Figure
2 for the Happiness Report.
Figure
2: The happiness report 2010-12
5.2
Technology
/ Innovation oriented
With
university systems over a century ago, Denmark and Sweden, have
developed innovation policies in which universities play a very
central role. In contrast, Finland and Norway - relatively younger
nation states with less - well developed university systems a century
ago – developed systems in which public research organizations
outside universities – the “institutes”- became large and
powerful actors in the innovation system.
Nordic
countries have created new organizations within the public sector
devoted to supporting innovation, such as TEKES in Finland (1983),
VINNOVA in Sweden (2001), The Norwegian Research Council’s
Innovation Division (2002) and Innovation Norway (2004) in Norway,
and The Council for Technology and Innovation (2002-3) and the new
Innovation Foundation to be set up in 2014 in Denmark. Accordingly,
Nordic countries have an international orientation in the form of
large trade and integrated financial markets with the rest of the
world. Also a positive attitude to the introduction of new technology
has long been a central part of the Nordic model. Finland remains one
of the innovation powerhouses in Europe, ranking 1st. Sweden’s
number two ranking in the innovative Europe pillar.
5.3
Climate
friendly
Thirty
years of environmental awareness in the Nordic countries, mixed with
continuing rising oil prices and a global economic crisis, have
led to more investment in the Nordic capitals towards sustainable
practices across sectors. Previously, green efforts were mostly taken
as private initiatives with households recycling waste and buying
more environmentally friendly products. Today, green initiatives have
taken place at national and global levels – and most importantly –
they have been linked to the economy giving the green issue a whole
new powerful force.
Nordic
nations continue to provide living proof that economic prosperity can
be combined with social equality and environmental responsibility.
Sweden is also ranked 1st in the environmental sustainability pillar.
5.4
Digitized
Society
Nordic
countries can be truly called digitized societies of the world.
Individually, the contributions that Denmark, Norway, Sweden, Finland
and Iceland have made to the Internet and technology have been
extremely impressive. C++ was created by Bjarne Stroustrup and is the
foundation for operating systems for pretty much everything
including; servers, mobile phones, routers,
databases,
cars and airplanes. While, the open source Ruby on Rails from David
Heinemeier Hansson is the foundation that Twitter, Github and Shopify
have been built on. Linux one of the most prominent examples of free
and open source software collaboration, with the author Linus
Torvalds
going on to develop Git. Nokia was at the forefront of technological
innovation in the nineties, and they are also home to Rovio, the team
behind Angry Birds, the best selling paid app of all time. Birthplace
of iZettle, and Spotify, Sweden is also widely regarded as the number
one game producers in the world, including Mojang, makers of
Minecraft, and King.com the leaders in the social gaming space, and
producers of Candy Crush. Norway also gave birth to Siri, the
personal assistant software developed by Dag Kittlaus, and
subsequently sold to Apple in 2010 for a rumoured $200 million. The
Norwegian software company Opera produces the worlds most popular
cloud-assisted mobile web browser.
Finland
has become a global leader in a digital economy space (1st rank).
Sweden also has made great strides in encouraging the uptake of
latest digital technologies to enhance productivity and innovation
(2nd in the digital agenda pillar).
5.5
Homogeneity
Compared
to other European nations, the income spread in the Nordic countries
has been relatively small measured by the Gini coefficient and the
80/20 quotient and that the poverty rate remains low. The Gini
coefficient has been known to be a measure of how a society’s total
income is distributed among individuals (or households) and assumes a
value between 0 and 1. Relative to EU15 nations, income differences
gets even greater in America - USA has a Gini coefficient of 0.38 and
a poverty rate of about 17 per cent (OECD 2011a and 2011b). In
contrast, for Nordic region value varies from 0.24 to 0.27 (EU 0.31).
See Figure
3
for gini coefficient distribution across countries.
Figure
3: Gini Coefficient Distribution
“Integration”
has become a watchword in Nordic ethnic politics. It underscores the
social and economic pressures to join the Swedish pack, the common
turf where its supportive, all-
embracing
system thrives. Nordic voters have never rejected the fundamentals of
a welfare state. Nor did the Swedish people recently vote in favor of
more economic inequality on the scale which exists in the
English-speaking world. Neighbourly, Denmark too remains a more
homogenous society.
6.
Commerce
and Trade
The
Nordic economies have come under more pressure than many other
developed economies, partly because of a large public sector. Norway
and Sweden outperformed the rest of Europe in 2013, posting economic
growth of 0.7 percent and 1.3 percent respectively, versus a European
Union
(EU) average of no growth. As Europe's biggest oil exporter, falling
oil prices are weighing on Norway, although its reserves remain
bolstered by a sizable sovereign wealth fund. The Norwegian krone,
whose performance get strongly tied to oil prices, has steadily
weakened against the U.S. dollar since mid-August last year. Krone
had fallen down around 2.5 percent since
the start of 2015 - providing a possible spur to exports. To reduce
the risks linked to the increasing household debt, Sweden was forced
to introduce stricter rules for amortization, which would increase
savings and thereby reduce the strength of domestic demand – the
main engine in the Swedish economy in recent years. As Russia being
Finland's largest trading partner, with major exports such as
machinery, forest and chemical products and dairy foodstuffs.
Nordic
country continues to face trade embargo imposed by EU on Russia.
Still, foreign buyers get attracted to the region’s many
export-driven companies, whose revenue is less dependent on any one
country. Many Nordic-headquartered businesses have specific
technologies and products with global reach. The U.S. remains the
world’s undisputed economic superpower with a GDP of $16.7 trillion
last year, nearly a quarter of the global total. Relatively, the
Nordic region’s total GDP has reached the world's 11th largest
spot. While Southern Europe struggles to bring in foreign money for
mergers and acquisitions, the Nordic region has been on fire. Sweden,
Norway, Denmark, Finland, and Iceland have seen about $288 billion in
deals since the financial meltdown began in 2007, according to data
compiled by Bloomberg.
6.1
Ease
of business
Recently,
Forbes magazine has
put together their annual list of best countries for business and
Denmark tops that list. In contrast to USA, Denmark has been a rather
large welfare state built upon a classically liberal economy. In the
same survey, USA ranks 18th down four spots from last year. It marks
the fifth straight year of declines since 2009, when USA ranked
second. Denmark continued its reign three straight years between 2008
and 2010. One of the keys to Denmark’s pro-business climate have
been its flexible labor market known as “Flexisecurity,”where
companies can easily hire and fire workers with out-of-work adults
eligible for significant unemployment benefits. Unemployed workers
become eligible for training programs. It creates one of the most
productive workforces in Europe.
6.2
Entrepreneur
oriented
Again,
Finland ranks 1st in the latest edition of the Europe 2020
Competitiveness Index. Finnish have a creative capacity that
transcends language and cultural barriers to fascinate, humor, and
entertain global markets. They create the games and toys that
mesmerize mobile users worldwide, such as the Swedish Candy Crush
Saga or the Finnish Angry Birds, and the Danish LEGO bricks that
litter modern childhood. Skype – a company founded by a Swede and a
Dane, along with some Estonian developers – revolutionized
telecommunications, too. The Nordic countries simply work well,
sustaining the security of a welfare state while being unabashed capitalists
and innovators, adapting to change, and doing so with a long
tradition of pragmatic consensus. No doubt, Nordics always argue that
it is their social security net that fosters innovation by allowing
entrepreneurs to try, err, and still survive. For assistance, the
Nordic Web exists which is a digital publication taking an in-depth
look at the Nordic technology scene, with features and analysis on
ideas, innovation, design and startups originating from the region.
Similarly, Denmark too happens to be one of the most entrepreneurial
countries in the world. The government streamlines the startup
process with only four procedures needed to start a new business and
at minimal costs. The regulatory climate is also one of the most
efficient.
6.3
Co-operative
sector
Nordic
cooperative sector played an important role in the society. For
example, in consumer sector or in agricultural products or in
elderly care or in pension funds or in animal husbandry, cooperative
sector has
shown excellence politically and economically. To quote a few, Arla
Foods has been a Swedish-Danish cooperative based in Aarhus, Denmark,
and the largest producer of dairy products in Nordic. Danish Crown
AmbA too happens to be Denmark's largest meatpacker cooperative based
in Aarhus, Denmark. It processes meat from pigs and cattle, but not
from chicken and other poultry. It is the world's largest exporter of
pig meat products with subsidiaries in other countries. FDB (Danish:
Fællesforeningen for Danmarks Brugsforeninger), or The Danish
Consumers Co-operative Society exists as a consumer co-operative
based in Denmark.
7.
Governance
When
it comes to Nordic model of governance, different political parties
have ignored their differences and accepted better solutions for the
region. Many experts in western (especially USA) countries would be
surprised to note that in Sweden and Norway members of parliament sit
according to their geographic constituencies not their parties, an
arrangement that fosters the discovery of shared interests between
neighbours rather than hectoring between opposing
teams.
The Nordic countries have been very good at adapting if they do
something wrong. So you would be able to say, hey, we have made a
mistake, we need to change this. The Nordic countries have the
world's top four judicial systems according to the World Justice
Project's Rule of Law Index 2014. The ranking, compiled by
accountancy firm PwC, was based on a twenty different factors
including technology, regulatory framework, sustainability, and other
economic indicators to give a "holistic measure of a country's
performance and progress over time". Sweden tops the list, which
achieved an overall score of 70.5 on PwC's Escape (Economic, Social,
Communication, Political and Environmental) index, Nordic neighbour
Finland landed in fifth place, followed by Denmark. Once the darling
of progressives, Sweden has now become a model for
free-market-leaning thinkers. If Sweden is the Nordic country to have
gone the furthest in shrinking its welfare state, Denmark too has
moved the farthest. Only Norway looks unlikely to reform entitlements
anytime soon, bolstered by its oil wealth. The country houses the
world's largest sovereign wealth fund. Worth 5,116 billion kroner,
each of Norway's 5,096,000 inhabitants remains, at least on paper, a
millionaire.
7.1
Transparency
/ Openness
Generous
welfare systems, collective bargaining and high taxes have been the
features of many societies around the world. However, one thing that
distinguish the Nordic countries from
other
developed nations - particularly characteristic of the Region -
trust. In the Nordic countries, trust has been generated by
delivering relative economic equality and maintaining low levels of
corruption. The degree of trust in the governance structures, and
especially in the legal system, also influences mutual trust between
people. In the Nordic countries, the level of trust in other people
was 6.6 (on a 0-10 scale); in politicians 4.8; and in the legal
system 6.9. In continental Europe, the comparative figures were 5.0,
3.9 and 5.3, respectively. Nordics are one of the world's least
corrupt states at number ones in the world. Accordingly, as per the
Transparency International, Nordic remains among the best countries.
7.2
Women
empowerment
A
high employment rate for women has been crucial to the future of the
Nordic model. The latest Global Gender Gap rankings from the World
Economic Forum were topped by Iceland (for
the
fifth year in a row), followed by Finland, Norway, and Sweden.
(Denmark came in eighth). See Figure
4
for the Global Gender Gap Report ranks countries based on where women
have the most equal access to education and healthcare, and where
they can participate most fully in the country’s political and
economic life. According to the 2013 report, Icelandic women pretty
much have it all. Their sisters in Finland, Norway, and Sweden have
it pretty good, too: those countries came in second, third and
fourth, respectively. Denmark continues not far behind at number
seven. The U.S. comes in at a dismal 23rd. Lutheran state churches in
Denmark, Sweden, Finland, Norway and Iceland have had female priests
since the middle of the 20th
century, and today, the Swedish Lutheran Church even has a female
archbishop.
Figure
4: Global Gender Gap Report- 2013
7.3
Foreign
Policy
The
Nordic foreign ministers collaborate on joint missions abroad and
development projects in the Third World, defense ministers
collaborate on joint procurement and emergency services. Except for
Norway and Iceland, Nordic countries have joined EU. But, in case of
EURO zone, only Finland agreed to participate.
7.4
Security
and Defense
Since
the end of 2009, The NORDEFCO (Nordic Defense Cooperation) structure
includes political and military cooperation levels. In the Policy
Steering Committee, nations have been represented by senior
departmental officers, such as the Policy Director, The Military
Coordination
Committee consists of flag-officers, representing the nations´
chiefs of defence. However, The NORDEFCO structure remains to be a
cooperation structure, not a command structure. Cooperation
activities get initiated from top or bottom have to be facilitated
and agreed within the structure, but the actual realization and
participation in activities remain national decisions. Norway,
Iceland and Denmark are part of NATO. While Sweden and Finland have
resisted joining USA in security matters.
7.5
Infrastructure
and easy accessibility
In
Nordic region, Sweden can boost about its road safety record (New
York Mayor Bill de Blasio wanted to borrow the model). Compared to
USA, Nordic region has relatively low crime, great public
transportation and lowest-cost day care. Foreigners, especially
Americans, often ask someone how the country’s business success
coexists with its big-state mentality. Nordic answer remains - the
country’s uncontested embrace of an open economy. “That has never
been
challenged” Nordic social reformers – as early as the 1930s –
were genuine in their ambition to marry government stimuli and social
solidarity on the one hand with open trade and private
entrepreneurship on the other. It was the only way to grow their
economies and continue paying for their welfare states.
Conclusion
Finally,
after evaluating the pros and cons of 'Nordic Model' and 'American
Capitalist (filtering down from rich to poor)', it was found that
Nordic model has a better chance of acceptance in the society at
large. Almost,
whole of Europe has
a
similar model of welfare and healthcare features. Government
supported features (sometimes called Socialist) has certain
constraints in terms of efficiency and productivity, but Nordic
countries have shown 'how a combination of socialist frame-work along
with super-rich individuals can work together for the benefit of
society and country and region'. In the present world scenario,
emerging countries in Asia (India, Indonesia), Africa (South Africa,
Kenya, Nigeria) and South America (Brazil, Argentina) are better
place to emulate Nordic model due to the societal disparity in
standard of living and income.
This article is published by Indo- Nordic Association to create awareness about Nordic countries in India and vice-versa. It would provide a forum for active interactions & networking among Indian,world and Nordic entities. You may contact us for more information on www.indonordicassociation.org .
