Business Index North 2017: People Business Production


Population in the north

This chapter focuses on the population development trends in BIN area, including population distribution, gender and age group analysis at county and municipal level. In 2014, BIN area accounted for 8% of the total population of Finland, Norway and Sweden. The population in BIN area has grown by 2.2% from 2006–2014.

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Human capital in the North

This chapter focuses on human capital measured as educational attainment in the BIN area. Human capital is productive wealth embodied in labor, skills and knowledge1. Human capital theory2 views education as an “investment” which yields returns in due course to the individual in terms of pay and to the state in terms of employment and economic growth. More importantly, investments in human capital are not only limited by economic returns, as the true goal of education is the activation and realization of the creative potential of a person. We use the attainment of tertiary education to measure the stock of human capital, i.e. the skills available in the population and the labor force.

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Employment in the North

This chapter provides a historical overview of the employment development in the BIN area and serves the decision maker’s needs with regards to labor politics in the BIN area. In this chapter, analysis focuses on trends in employment rates, unemployment rates and job creations for the time-period 2008-2014. According to OECD definition, the employment rate is a measure of the extent to which available labor resources (people available to work aged 15-65) are being used. It is calculated as the ratio of the employed to the working age population. The unemployment rate is the number of unemployed people as a percentage of the labor force, where the latter consists of the unemployed plus those in paid or selfemployment. This chapter analyses the trends in the employment growth, taking into consideration industry breakdown and gender factors. Moreover, a detailed analysis of the employment trends on the county level of the BIN area is conducted. Age-group analysis provides a tool to analyze labor market dynamics for the different groups of the population ranging from youth 16-24 to people aged 55+.

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Patenting activity, associated with protection of intellectual property, is one of the key indicators of companies’ innovative capacity for development of new competitive products. We use this indicator to measure the innovative capacity of companies operating in the BIN area. In our analysis, we utilize patent applications submitted to the European Patent Office (EPO) and national industrial property offices (patent offices) in Norway, Sweden, and Finland. We consider patent applications statistics over a long term from the early 1990’s to 2014–15, look into the ownership structure of the patents, and trace their technical specifications.

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Renewable Energy

This chapter focuses on renewable power production in the BIN area. The BIN area is a substantial provider of renewable energy to Norway, Finland, Sweden and the Nordic power market. The power production from the BIN area is dominated by hydropower, with a growing wind production. We will look into renewable power production, transmission structure and market conditions. We will also comment shortly on the development of nuclear power in Sweden and Finland. Nuclear power production is not renewable, but this energy source is an important part of the energy market in these BIN countries, and Finland is currently building its sixth reactor in Hanhikivi 1 in Northern
Ostrobothnia. The next editions of the production chapter in the BIN report will focus on mineral production, forestry, paper and pulp production, which are large industries in the BIN area.

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Business in the North

This chapter concerns doing and creating a business in the BIN area. Business creation requires confidence in the market and trust in the growth potential. Institutional settings play a crucial role in new business creation. Finding reliable and comparable information for the BIN area on the firm level created a challenge. Therefore, this chapter only underlines some trends with available and comparable data. Firstly, applying data from World Bank we study the ease of doing business on the county level. The ease of doing business index demonstrates the processes required to set up a business. Secondly, business activity is studied through active enterprise index that compares counties in the BIN area with subsequent country averages. Active enterprises2 here refer to a limited liability company that had either turnover or employment at any time during the reference period (without data on how many people the company employed). Active enterprises index accounts for enterprise opening and closures. Active enterprises index is used for the analysis of the evolution of the enterprises’ population over time and the growth rate of industry sectors. Limitation of this analysis is the lack of comparable data on enterprises openings and closures in the BIN area that would complement active enterprises index. To mitigate this limitation a longer time period 2008-2015 covering eight years is used to account for the effect of volatility of enterprises openings and closures.

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Highlights of cross-border cooperation in the North

The chapter is motivated by our strong belief that cross-border cooperation is key to a successful development of business and society in the northern regions. In this regard, we highlight some important examples of cross-border cooperation within the Barents Euro-Arctic region. The examples come from various sectors in the BIN counties: business, international institutions, media, and the university sector.

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Executive summary

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BIN report #1

Population in the North

Human capital in the North

Employment in the North