The Nordic Countries in an International Comparison Helga Kristjánsdóttir 20. apríl 2012
15 Figure 1. World Bank, GDP growth (annual %) 10 5 0 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). -5-10 Denmark Finland Iceland Norway Sweden United Kingdom United States Source: World Development Indicators (2008).
Table 2 United Nations, Human Development Index. Human United Nations development index (HDI) HID rank value 2005 1 Iceland 0.968 Factors used as a base for the index 2 Norway 0.968 3 Australia 0.962 Life expectancy at birth (years) 2005 4 Canada 0.961 Adult literacy rate (% aged 15 and above) 1995-2005 5 Ireland 0.959 Combined gross enrolment ratio for primary, secondary and tertiary education (%) 2005 6 Sweden 0.956 GDP per capita (PPP US$) 2005 7 Switzerland 0.955 Life expectancy index 8 Japan 0.953 Education index 9 Netherlands 0.953 GDP index 10 France 0.952 GDP per capita (PPP US$) rank 11 Finland 0.952 12 United States 0.951 13 Spain 0.949 14 Denmark 0.949 15 Austria 0.948 Source: United Nations: Human Development Report 2007/2008 (2008).
Hvers virði er atvinnulíf?skýrsla til Viðskiptaþings 2012, bls 48-49.
Table 3a. Real GDP growth per capita Percentage change, based on national currency in constant prices (Updated: JUN 2011) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Argentina -1,85-5,08-11,75 7,72 7,64 8,50 7,54 7,48 3,75 1,87 8,13 Australia 2,04 1,19 2,67 6,75 2,50 1,75 0,90 2,70 0,37-0,65 1,94 Austria 3,40 0,14 1,15 0,35 1,90 1,76 3,06 3,32 1,74-4,19 1,64 Belgium 3,55 0,31 1,05 0,61 7,12 1,39 1,97 2,00 0,80-3,43 1,27 Brazil - -0,16 1,21-0,23 4,33 1,88 2,74 4,92 4,07-1,22 7,49 Bulgaria - 7,57 5,23 6,13 7,28 6,95 7,06 7,00 6,67-4,95 0,63 Canada 4,27 0,72 1,82 0,93 2,15 2,05 1,79 1,11-1,28-3,41 2,18 Chile - - - - 4,92 4,39 3,76 3,40 2,59-2,65 4,18 China Mainland 7,58 7,55 8,38 9,37 9,44 10,66 12,08 13,57 9,08 8,56 9,79 Colombia - 0,37 1,21 2,63 4,04 3,43 5,43 5,64 1,52-0,35 3,09 Croatia 24,86 2,35 4,74 5,39 4,20 4,21 4,98 5,15 2,22-5,88-0,92 Czech Republic 4,05 2,91 2,06 3,59 4,27 6,10 6,65 5,56 1,25-4,57 1,89 Denmark 3,07 0,33 0,13 0,09 0,18 4,09 3,09 1,21-1,65-5,81 1,66 Estonia 11,07 7,94 8,37 7,96 7,59 9,68 10,73 7,08-4,99-13,84 3,11 Finland 5,14 2,09 1,45 1,92 3,81 2,57 4,01 4,89 0,45-8,65 2,63 France 3,48 1,41 0,14 0,40 1,83 1,28 1,08 1,64 0,02-2,90 0,97 Germany 3,08 1,05-0,17-0,26 1,23 0,83 3,52 2,78 1,25-4,49 3,76 Greece - 3,94 3,09 5,58 4,04 1,89 4,77 3,84 0,64-2,45-4,85 Hong Kong 8,57-0,24 1,39 3,21 7,62 6,62 6,33 5,33 1,55-3,03 5,84 Hungary 5,72 2,25 4,46 4,54 2,92 3,37 3,84 0,87 1,08-6,55 1,66 Iceland 3,20 2,45-1,26 2,05 6,59 6,38 2,51 3,20-0,89-8,06-3,17 India 3,51 3,80 2,16 6,77 5,77 7,74 10,76 8,74 4,88 6,16 7,44 Indonesia 5,26 2,35 3,20 3,48 3,72 4,38 4,24 4,87 4,34 3,35 3,25 Ireland - 4,05 4,64 2,84 3,56 3,17 2,74 3,09-5,36-8,35-1,30 Israel - -2,42-2,59 3,28 3,01 3,30 3,40 3,36 2,19-1,12 2,04 Italy 3,49 1,54 0,23-0,02 1,40-0,35 1,51 0,72-2,08-5,88 0,79 Japan 2,68-0,15 0,15 1,27 2,69 1,88 1,99 2,40-1,11-6,16 4,07 Jordan -2,97 2,36 2,87 1,30 11,19 5,72 5,58 6,52 4,84 0,10 0,90 Kazakhstan - 13,58 9,73 8,64 8,73 8,62 9,41 7,71 1,93-1,42 5,57 IMD WORLD COMPETITIVENESS ONLINE 1995-2012
Table 3b. Real GDP growth per capita Korea 7,89 3,21 6,55 2,29 4,23 3,74 4,83 4,76 1,98-0,09 5,83 Lithuania - - - 10,79 8,01 8,50 8,19 10,23 3,75-14,47 3,94 Luxembourg 5,98 2,72 3,98-0,53 3,93 4,46 3,89 3,09-0,31-5,45 1,63 Malaysia 9,83-1,98 2,83 3,28 4,31 2,95 4,66 4,91 3,57-3,12 5,64 Mexico 4,35-1,67-0,84 0,65 2,76 5,51 3,46 1,60 0,71-6,74 4,53 Netherlands 3,14 1,18-0,47-0,07 1,94 1,87 3,24 3,62 1,38-4,17 1,25 New Zealand - - - - - 2,27 1,19 1,16-1,63-1,19 0,59 Norway - - - - - 2,09 1,53 1,83-0,44-2,70-0,83 Peru - -1,24 3,55 2,64 3,61 5,48 6,44 7,64 8,56-0,26 7,58 Philippines 1,83 1,31 3,44 2,96 3,06 2,23 1,18 4,96 1,78 1,03 5,30 Poland - - - 3,89 6,59 3,62 6,32 6,81 4,66 1,96 3,73 Portugal - 1,26 0,02-1,69 0,95 0,24 1,22 2,21-0,15-2,62 1,42 Qatar 4,11-1,33 1,90-2,01 8,11-6,56-2,44 0,35-6,04-3,26 12,16 Romania - 5,82 8,07 5,53 8,79 4,39 8,07 6,52 7,52-6,93-1,09 Russia - 5,52 5,25 7,70 8,03 6,63 8,20 8,55 5,74-7,88 3,51 Singapore 11,83-3,85 3,29 6,15 7,88 4,89 5,35 4,34-3,77-3,72 12,46 Slovak Republic - 3,33 5,22 4,72 5,06 6,46 8,58 10,14 6,12-5,00 3,81 Slovenia 4,39 2,64 3,92 2,78 4,18 4,23 5,44 6,06 3,08-8,27 0,96 South Africa - 0,14 2,22 4,40 0,59 4,60 4,49 4,55 1,80-2,90 1,42 Spain 4,28 2,09 0,93 0,97 2,12 1,47 2,62 2,45-1,23-4,93-0,73 Sweden - - - - - 2,95 3,71 2,55-1,38-6,14 4,64 Switzerland - - - - - - 2,97 2,74-0,10-2,97 1,49 Taiwan 4,92-2,22 4,73 3,28 5,80 4,33 4,94 5,61 0,38-2,28 10,62 Thailand 3,71 1,29 4,45 6,22 4,59 4,56 4,82 4,31 1,59-3,14 6,94 Turkey 5,00-7,00 4,73 3,87 15,71 7,03 5,58 3,40-0,53-5,93 4,24 UAE - -3,68-6,13 9,77 3,99 2,42-4,79-13,50-17,24-14,93 1,64 Ukraine 6,76 11,44 6,29 10,52 13,05 3,35 8,34 8,25 3,24-14,42 4,20 United Kingdom - - - - - - - 2,14-0,88-5,47 0,77 USA - 0,04 0,82 1,53 2,64 2,11 1,71 0,94-0,92-3,47 1,99 Venezuela 1,72 1,48-10,54-9,86 16,23 8,45 8,36 6,05 3,10-4,83-2,89 IMD WORLD COMPETITIVENESS ONLINE 1995-2012
Table 4a. Corporate tax rate on profit Maximum tax rate, calculated on profit before tax (Updated: JUN 2011) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Argentina - - 35,00 35,00 35,00 35,00 35,00 35,00 35,00 35,00 35,00 35,00 Australia - - 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 Austria - - 34,00 34,00 34,00 25,00 25,00 25,00 25,00 25,00 25,00 25,00 Belgium - - 40,17 40,17 33,99 33,99 33,99 33,99 33,99 33,99 33,99 33,99 Brazil - - 25,00 25,00 25,00 25,00 25,00 25,00 25,00 25,00 25,00 25,00 Bulgaria 32,50 28,00 23,50 23,50 19,50 15,00 15,00 10,00 10,00 10,00 10,00 10,00 Canada - - 35,00 38,07 37,34 41,10 36,10 34,10 31,50 31,00 31,00 30,00 Chile - - 35,00 35,00 35,00 35,00 17,00 17,00 17,00 17,00 17,00 17,00 China Mainland - - 33,00 33,00 33,00 33,00 33,00 33,00 25,00 25,00 25,00 25,00 Colombia - - 35,00 35,00 36,70 36,70 38,50 34,00 33,00 33,00 33,00 33,00 Croatia - - - - - - 20,00 20,00 20,00 20,00 20,00 20,00 Czech Republic - - 31,00 31,00 31,00 28,00 24,00 24,00 21,00 20,00 19,00 19,00 Denmark - - 30,00 30,00 30,00 30,00 28,00 25,00 25,00 25,00 25,00 25,00 Estonia - - 35,00 35,00 35,00 26,00 23,00 22,00 21,00 21,00 21,00 21,00 Finland - - 29,00 29,00 29,00 29,00 26,00 26,00 26,00 26,00 26,00 26,00 France - - 36,40 35,42 35,44 34,42 33,33 33,33 33,33 33,33 33,33 33,33 Germany - - 41,60 41,60 43,20 41,63 39,63 39,63 32,92 32,92 31,00 31,00 Greece - - 35,00 35,00 35,00 35,00 29,00 25,00 25,00 25,00 24,00 24,00 Hong Kong 16,00 16,00 16,00 17,50 17,50 17,50 17,50 17,50 16,50 16,50 16,50 16,50 Hungary - - 20,00 20,00 20,00 18,00 16,00 16,00 16,00 16,00 19,00 19,00 Iceland - - 26,00 26,00 26,00 26,00-18,00 15,00 15,00 18,00 18,00 India - - 35,70 35,70 36,75 35,88 33,66 33,99 33,99 33,99 33,99 33,22 Indonesia - - 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 25,00 25,00 Ireland - - 16,00 12,50 12,50 12,50 12,50 12,50 12,50 12,50 12,50 12,50 Israel - - 36,00 36,00 36,00 36,00 31,00 29,00 27,00 26,00 25,00 24,00 Italy - - 36,00 36,00 34,00 33,00 33,00 33,00 27,50 27,50 27,50 27,50 Japan - - 49,00 42,00 46,29 46,29 47,73 40,87 45,81 40,50 40,87 42,05 Jordan - - - 25,00 25,00 25,00-35,00 35,00 35,00 35,00 30,00 IMD WORLD COMPETITIVENESS ONLINE 1995-2012
Table 4b. Corporate tax rate on profit Maximum tax rate, calculated on profit before tax (Updated: JUN 2011) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Kazakhstan - - - - - - - 30,00 30,00 20,00 20,00 20,00 Korea - - 28,00 27,00 27,00 27,00 25,00 25,00 25,00 22,00 22,00 22,00 Lithuania - - - - - - 15,00 15,00 15,00 20,00 15,00 15,00 Luxembourg - - - 30,38 31,97 30,38 29,63 29,63 29,63 28,59 28,59 28,80 Malaysia - - 28,00 28,00 28,00 28,00 28,00 27,00 26,00 25,00 25,00 25,00 Mexico - - - 34,00 35,00 32,00 29,00 28,00 28,00 28,00 30,00 30,00 Netherlands - - 35,00 34,50 34,50 34,50 29,60 25,50 25,50 25,50 25,50 25,00 New Zealand 33,00 33,00 33,00 33,00 33,00 33,00 33,00 33,00 30,00 30,00 30,00 28,00 Norway - - 28,00 28,00 28,00 28,00 28,00 28,00 28,00 28,00 28,00 28,00 Peru - - - - - - 30,00 30,00 30,00 30,00 30,00 30,00 Philippines 33,00 32,00 32,00 32,00 32,00 32,00 35,00 35,00 35,00 30,00 30,00 30,00 Poland - - 28,00 28,00 27,00 19,00 19,00 19,00 19,00 19,00 19,00 19,00 Portugal - - 37,40 33,00 33,00 27,50 27,50 26,50 26,50 26,50 26,50 26,50 Qatar - - 35,00 35,00 35,00 - - - 35,00 35,00 35,00 10,00 Romania - - - 25,00 25,00 25,00 16,00 16,00 16,00 16,00 16,00 16,00 Russia - - 35,00 24,00 24,00 24,00 24,00 24,00 24,00 20,00 20,00 20,00 Singapore - - 24,50 24,50 22,00 20,00 20,00 20,00 18,00 18,00 17,00 17,00 Slovak Republic - - 29,00 25,00 25,00 25,00 19,00 19,00 19,00 19,00 19,00 19,00 Slovenia - - 25,00 25,00 25,00 25,00 25,00 23,00 22,00 21,00 20,00 20,00 South Africa - - 30,00 30,00 30,00 30,00 29,00 29,00 28,00 28,00 28,00 28,00 Spain - - 35,00 35,00 35,00 35,00 35,00 32,50 30,00 30,00 30,00 30,00 Sweden - - 28,00 28,00 28,00 28,00 28,00 28,00 28,00 26,30 26,30 26,30 Switzerland - - 20,97 24,50 24,10 21,30 21,30 21,33 21,17 21,17 21,17 21,17 Taiwan - - 25,00 25,00 25,00 25,00 25,00 25,00 25,00 25,00 20,00 17,00 Thailand - - 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 30,00 Turkey - - 30,00 30,00 33,00 30,00 20,00 20,00 20,00 20,00 20,00 20,00 UAE - - - 0,00 0,00 0,00-0,00 0,00 0,00 0,00 0,00 Ukraine - - - - - - 25,00 25,00 25,00 25,00 25,00 23,00 United Kingdom - - 30,00 30,00 30,00 30,00 30,00 30,00 28,00 28,00 28,00 26,00 USA - - 35,00 35,00 35,00 35,00 35,00 35,00 35,00 35,00 35,00 35,00 Venezuela - - - 34,00 34,00 34,00 34,00 34,00 34,00 34,00 34,00 34,00 IMD WORLD COMPETITIVENESS ONLINE 1995-2012
Figure 2. Overall Competitiveness Ranking, Nordics 1 3 5 7 9 11 13 15 17 19 2003 2004 2005 2006 2007 Denmark Finland Iceland Norway Sweden Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). Figure 2 exhibits the Overall Competitiveness of the Nordic Countries as measured by the IMD World Competitive Yearbook (WCY). This shows clearly that the Nordic Countries are all quite competitive ranking from number 3 to 17 out of over 50 countries evaluated by IMD. In recent years Iceland has most often been the most competitive but Norway the least with the exception of this year (2007) when Finland fell from rank 10 to 17. The IMD provides the Overall Competitiveness index rank, based on four main factors: 1) Economic Performance, 2) Government Efficiency, 3) Business Efficiency and 4) Infrastructure, which can each be divided further in to several sub factors.
Figure 3. Economic Performance, Nordics 1 6 11 16 21 26 31 36 2003 2004 2005 2006 2007 Denmark Finland Iceland Norway Sweden Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). When it comes to Economic Performance Iceland ranks best in most cases but Finland and Denmark least. Economic Performance can be drilled down to the following 5 sub factors: 1) Domestic Economy, 2) International Trade, 3) International Investment, 4) Employment and 5) Prices. It is interesting that when the Nordic Countries have ranked in the top 20 in recent years they rank much lower in Economic Performance, suggesting that Economic Performance is a field that allows for much improvement in Iceland and it s neighbors.
Figure 4. Government Efficiency, Nordics 1 6 11 16 21 26 2003 2004 2005 2006 2007 Denmark Finland Iceland Norway Sweden Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). Government Efficiency measures the extent to which government policies impact competitiveness. It can be divided into 5 sub-factors; Public Finance, Fiscal Policy, Institutional Framework, Business Legislation, Societal Framework. Government Efficiency is best in Finland, Denmark and Iceland ranking from first to 17 in recent years. Worst in Sweden ranking from 14 to 21 in recent years. Iceland and Finland are ranking much lower this year than in previous years. Here Denmark, Finland and Iceland seem to be similar but quite far from Norway and Sweden.
Figure 5. Business Efficiency, Nordics 1 6 11 16 21 26 2003 2004 2005 2006 2007 Denmark Finland Iceland Norway Sweden Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). Business Efficiency measures the extent to which enterprises are performing in an innovative, profitable and responsible manner, it consists of the following sub factors; Productivity & Efficiency, Labor Market, Finance, Management Practices and Attitudes & Values. The Nordic countries rank high in Business Efficiency from second to 23rd in recent years. Iceland ranks best at second in 2005 and 2006 but Norway has the least Business efficiency of the Nordic countries and has ranked close to 20 in recent years and at best 15th. Flexibility and adaptability of people when faced with new challenges is most in Iceland and Denmark, but least in Finland and Norway. Norway has only recently risen above 6 (on the scale 1 to 10) but Iceland has reached 9.
Figure 6. Infrastructure, Nordics 1 3 5 7 9 11 13 2003 2004 2005 2006 2007 Denmark Finland Iceland Norway Sweden Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). The Infrastructure measure is composed of 5 factors: 1) Basic Infrastructure, including population market size and railroads. 2) Technological Infrastructure, including High-tech exports, levels. 3) Scientific Infrastructure, including Scientific articles and Nobel prizes, levels. 4) Health and Environment, including Quality of life (1-10) and Renewable energies (%). 5) Education, including University education to measure how well it meets the needs of a competitive economy.
Figure 7. International Investment, Nordics 1 11 21 31 41 51 61 2003 2004 2005 2006 2007 Denmark Finland Iceland Norway Sweden Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). When Economic Performance is further investigated, the sub factor International Investment shows significant differences among the Nordic countries. Whereas Iceland has ranked amongst top 12 in recent years, even topping the list in 2006 when the other Scandinavian countries have ranked below 40 at times and rarely above 20. International Investment is based on the following criteria: Direct investment flows abroad, Direct investment stocks abroad, Direct investment flows inward, Direct investment stocks inward, Balance of direct investment flows, Net position in direct investment stocks, Relocation threats of production, Relocation threats of R&D facilities.
Figure 8. Iceland: Factors of Competitiveness 1 3 5 7 9 11 13 15 17 19 2003 2004 2005 2006 2007 Overall Competitiveness Economic Performance Government Efficiency Business Efficiency Infrastructure Source: IMD WORLD COMPETITIVENESS YEARBOOK (2007). It is obvious that it is Business Efficiency that is the main reason for Iceland's high competitiveness with support from Government Efficiency. Infrastructure is close to 10th in the world but Economic Performance is only in top 20 in the world. Improved Economic Performance could possible improve Iceland's competitiveness.