TCI2013 Challenges to the Nordic model: a Swedish perspective

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By Pontus Braunerhjelm, Swedish Entrepreneurship Forum, Sweden, presented at the 16th TCI Global Conference, Kolding 2013.

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TCI2013 Challenges to the Nordic model: a Swedish perspective

  1. 1. Challenges to the Nordic Model: a Swedish perspective Pontus Braunerhjelm Societal Challenges and Clusters: the Scandinavian Model vs other Models 6 September 2013
  2. 2. TCI Annual Global Conference 2013 Challenges to the Nordic Model: A Swedish perspective Pontus Braunerhjelm, Managing Director Swedish Entrepreneurship Forum Professor in Economics, The Royal Institute of Technology • International trends • What makes a cluster? • The Nordic model/position • Cluster policies
  3. 3. 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 Worldmanufacturingshare 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 Worldmanufacturingshare Source: unstats.un.org; 6 risers = Korea, India, Indonesia, Thailand, Turkey, Poland • 7 ‘losers’. • 7 ‘risers’. • RoW = little change
  4. 4. … 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
  5. 5. Patent applications 1995-2009 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 Japan U.S. EU15 China Korea Russia Canada Israel India Brazil
  6. 6. 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
  7. 7. 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.
  8. 8. Employment growth in internationally traded sectors, Sweden, 2005-2015 Källa: Bjorvatn m fl. (2008)
  9. 9. ”Silicon Valley is probably the only place on earth not trying to copy Silicon Valley” Robert Metcalfe, 1998
  10. 10. 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?
  11. 11. 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)
  12. 12. Immigration and growth Income per person and predicted openness to migrants
  13. 13. Stage Share of value added Pre-fab services Post-fab servicesFabrication 1970s & 1980s value distribution ‘Smile curve’: Distribution of value Post-1990 value distribution
  14. 14. Economy Ease of Doing Business Rank Starting a Business Dealing with Construction Permits Registering 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 Model An international comparison
  15. 15. -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 RealGDPgrowth,percent Expenditureson R&D in relation to GDP, percent R&D-investments and Growth, 2001-2009 OECD-countries
  16. 16. Business opportunities and abilities
  17. 17. Expected employment growth in new firms, 2010–2012 20 or more employees in the coming five years
  18. 18. Change of Share of Chinese Imports Selected European Countries 0.00 0.50 1.00 1.50 2.00 2000 2005 2010 (Source: UNCTAD (2011), Ketel 2012.) Sweden Germany Switzerland Finland Norway Denmark Share of Country in Chinese Imports, Level in 2000 = 1
  19. 19. Cluster Policy Framework Holistic Knowledge accumul/upgrading 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
  20. 20. 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

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