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Challenges to the Nordic Model: a Swedish perspective Pontus Braunerhjelm Societal Challenges and Clusters: the Scandinavian Model vs other Models 6 September 2013
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TCI2013 Challenges to the Nordic model: a Swedish perspective

Jan 22, 2015

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By Pontus Braunerhjelm, Swedish Entrepreneurship Forum, Sweden, presented at the 16th TCI Global Conference, Kolding 2013.
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Page 1: TCI2013 Challenges to the Nordic model: a Swedish perspective

Challenges to the Nordic Model: a Swedish perspectivePontus Braunerhjelm

Societal Challenges and Clusters: the Scandinavian Model vs other Models

6 September 2013

Page 2: TCI2013 Challenges to the Nordic model: a Swedish perspective

TCI Annual Global Conference 2013

Challenges to the Nordic Model: A Swedish perspective

Pontus Braunerhjelm, Managing Director Swedish Entrepreneurship ForumProfessor in Economics, The Royal Institute of Technology

• International trends• What makes a cluster?• The Nordic model/position• Cluster policies

Page 3: TCI2013 Challenges to the Nordic model: a Swedish perspective

Global manufacturing shares, 1970-2010

1990, G7

65%

China, 3%

6 risers,

5%

RoW

0%

10%

20%

30%

40%

50%

60%

70%

80%

1970

1975

1980

1985

1990

1995

2000

2005

2010

Wor

ld m

anuf

actu

ring

sha

re

Source: unstats.un.org; 6 risers = Korea, India, Indonesia, Thailand, Turkey, Poland

1990, G7

65%

3%

6 risers,

5%

RoW

47%

China, 18%

9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

1970

1975

1980

1985

1990

1995

2000

2005

2010

Wor

ld m

anuf

actu

ring

sha

re

Source: unstats.un.org; 6 risers = Korea, India, Indonesia, Thailand, Turkey, Poland

•7 ‘losers’.•7 ‘risers’.•RoW = little change

Page 4: TCI2013 Challenges to the Nordic model: a Swedish perspective

… and a growing role for services ...

4Source: OECD-WTO, Trade in Value Added database,

Share of service value added in total gross export, 1985-2009

Page 5: TCI2013 Challenges to the Nordic model: a Swedish perspective

Patent applications 1995-2009

Japa

nU.S

.

EU15

China

Kore

a

Russia

Canad

a

Isra

el

Indi

a

Brazil

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

Page 6: TCI2013 Challenges to the Nordic model: a Swedish perspective

Business investment in KBC and tangible assets (% adjusted GDP, 2010)

Source: OECD calculations based on INTAN-Invest, Eurostat and multiple national sources.

Increasing investments in KBC

6

Page 7: TCI2013 Challenges to the Nordic model: a Swedish perspective

New firms matter – they account for 35-65% of job creation The role of young firms (less than 5 years old) for job creation, average from 2001

to 2011.

Page 8: TCI2013 Challenges to the Nordic model: a Swedish perspective

Employment growth in internationally traded sectors, Sweden, 2005-2015

Källa: Bjorvatn m fl. (2008)

Page 9: TCI2013 Challenges to the Nordic model: a Swedish perspective
Page 10: TCI2013 Challenges to the Nordic model: a Swedish perspective

”Silicon Valley is probably the only place on earth not trying to copy Silicon Valley”

Robert Metcalfe, 1998

Page 11: TCI2013 Challenges to the Nordic model: a Swedish perspective

What makes a cluster?

Copycats – but what about the igniting spark and growth potential for clusters?

Serendipity?

Role for policy?

Limited to providing the infra-structure of the cluster?

Page 12: TCI2013 Challenges to the Nordic model: a Swedish perspective

What makes a cluster?

3-stage processes – Knowledge base, entrepreneurs and service providers (VC, legal competencies, etc.)

Variety, heterogeneity and selection mechanisms - dynamics

Pre-existing conditions – unpredictable whether it leads to agglomeration and consolidation of clusters. Once seed is planted – is the local system fit to emerge and grow?

Highly influenced by policy - not only climate (Hollywood) or individual brilliance (Silicon Valley)

Page 13: TCI2013 Challenges to the Nordic model: a Swedish perspective

Immigration and growthIncome per person and predicted openness to migrants

Page 14: TCI2013 Challenges to the Nordic model: a Swedish perspective

Stage

Share of value added

Pre-fab services Post-fab servicesFabrication

1970s & 1980s value distribution

‘Smile curve’: Distribution of value

Post-1990 value distribution

Page 15: TCI2013 Challenges to the Nordic model: a Swedish perspective

Economy Ease of Doing Business Rank

Starting a Business

Dealing with Construction

PermitsRegistering

Property Getting Credit Enforcing Contracts

Denmark 5 11 2 2 9 20

Norway 6 13 7 3 25 4

Finland 11 17 12 8 16 9

Sweden 13 19 8 13 16 17

Iceland 14 15 15 5 16 3

Average , Norden 9,8 15 8,8 6,2 16,4 10,6

Averrage, OECD- high income 29,3 16 16 16 14,4 15,9

The Nordic ModelAn international comparison

Page 16: TCI2013 Challenges to the Nordic model: a Swedish perspective
Page 17: TCI2013 Challenges to the Nordic model: a Swedish perspective
Page 18: TCI2013 Challenges to the Nordic model: a Swedish perspective

-20

-15

-10

-5

0

5

10

15

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Real

GD

P gr

owth

, per

cent

Expenditures on R&D in relation to GDP, percent

R&D-investments and Growth, 2001-2009OECD-countries

Page 19: TCI2013 Challenges to the Nordic model: a Swedish perspective
Page 20: TCI2013 Challenges to the Nordic model: a Swedish perspective
Page 21: TCI2013 Challenges to the Nordic model: a Swedish perspective
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Page 23: TCI2013 Challenges to the Nordic model: a Swedish perspective

Business opportunities and abilities

Page 24: TCI2013 Challenges to the Nordic model: a Swedish perspective

Expected employment growth in new firms, 2010–2012

20 or more employees in the coming five years

Page 25: TCI2013 Challenges to the Nordic model: a Swedish perspective

Change of Share of Chinese Imports

Selected European Countries

2000 2005 20100.00

0.50

1.00

1.50

2.00

(Source: UNCTAD (2011), Ketel 2012.)

Sweden

Germany

Switzerland

Finland

NorwayDenmark

Share of Country in Chinese Imports, Level in 2000 = 1

Page 26: TCI2013 Challenges to the Nordic model: a Swedish perspective

Cluster Policy FrameworkHolistic

Knowledge accumul/upgradin

g

Knowledge conversion

Knowledge critical mass

Policy-areas

• Education

• R&D

• Academic e-ship

• Autonomy

• IPR

• Mobility

• Evaluation

Policy-areas

• Entrepreneurship

• Growing firms, gazelles, iFDI

• Links to universities, collaboration, partnership

• Public sector

• Mobility

• VC, IPRs

• Internationalization

Policy-areas

• Mobility

• Infrastructure

• Universities – local feedback

• Partnership

Page 27: TCI2013 Challenges to the Nordic model: a Swedish perspective

Lessons for policy-makers

“at every step of the way, there were choices – political and economic – that provide real alternatives…path dependency ..is not a story of inevitability…”

North 1990