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The Nordic cluster: leading in innovation and growth

Investment Insight

BNP Paribas Asset Management

In our view, there are compelling reasons for understanding and appreciating the investment opportunities in the Nordic countries, which top international rankings for economic performance, innovation and social well-being.

If I have a thousand ideas and only one turns out to be good, I am satisfied. Alfred Nobel, Swedish inventor and founder of the Nobel Prizes.*

This quote summarises the essence of Nordic innovation very well. Throughout history, the Nordic countries have consistently managed to overcome challenges in a creative and pragmatic manner. As a result they ‘punch above their weight’ as world leaders in numerous domains. Not only have they come up with new inventions and become globally competitive but they have also been ready to make tough choices in order to ensure economic sustainability. Innovations from society to business and involving technology as a core enabler have been essential elements of the Nordic region’s success. Examples of this are the solutions they have found to deal with ageing populations, sustainable development, and the organisation of a society in which almost all women work.

In our view, these are compelling reasons for understanding and appreciating the investment opportunities in these small countries on the edge of Europe, which top international rankings for economic performance, innovation and social well-being.

The Nordic region (Sweden, Norway, Denmark, Finland and Iceland) has a collective population of 27 million and all Nordic countries are in the top 20 globally, measured on GDP per capita1. 

The Nordic region is strong and economically stable. Its nations are competitive and acknowledged for entrepreneurship, innovation and high mobile and broadband penetration. There are major local technology hubs established in the region, with Stockholm now boasting the highest number of software companies per capita in Europe and the second highest worldwide after the Silicon Valley in the US2.

As to its long-term commitment to innovation, the Nordic region has enjoyed higher economic growth than the rest of Europe over the past 20 years, which has been reflected in Nordic equity markets’ healthy performance. Also of benefit to Nordic companies is the stable political and technologically receptive environment.

In recent years, several global enterprises from the Nordic region have achieved great success. The likes of Skype, Spotify, Rovio (Angry Birds) and King (Candy Crush) have paved the way for many new companies. These success stories are not only fuelling money back into the Nordic economic system, but also encouraging young talented people to choose careers within a start-up, rather than in large corporations. In short, the Nordic region is fertile ground for growth companies with global potential.

What sets the Nordic countries apart? What are the drivers behind the strong economic growth in the Nordic region? How does innovation translate into long-term growth for Nordic companies? By answering some of these questions, we portray a region with attributes that distinguish it for global investors in a world where developed nations are subject to increasing turmoil.

As a Nordic-based asset manager, Alfred Berg advises on investment themes such as Nordic innovation through its local investment centres in Stockholm, Oslo and Helsinki. To tell the story of the Nordic region’s competitiveness, we decided to write a white paper on the innovative capacity of the Nordic countries and the role that innovation plays in the long-term growth of Nordic companies and economies as a whole.

The content of this white paper is based largely on published research. The sources of the most important information and conclusions are included and available upon request.

Enjoy the read and welcome to the Nordic Model of Innovation.


* Sweden was home to Alfred Nobel who invented dynamite in 1866 and founded the Nobel Prizes, perhaps the world’s most
prestigious awards inspiring innovation. Since 1901, the Nobel Prize ceremonies have taken place annually in Stockholm, except
for the peace prize which is held in Oslo, Norway

1. World Bank’s databank (2016): GDP per capita (current US$)

2. Prokopets, Elena, “Nordic Tech: How Sweden Became The European Startup Central”, Romexsoft, April 2016

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