Is digital innovation in The Nordics at risk of stalling?

Last week we revealed that DESI (Digital Economy and Society Index) an index created by the European Commission with the intention of measuring how digital each of the EU's 28 member states placed Denmark, Sweden and Finland in the top 5 (1st, 2nd and 4th respectively.)

This result was not exactly surprising with most of us aware that the Nordics are exceptionally good at providing their inhabitants with (quality) internet connection, and clearly place a strong emphasis on being digital wherever and whenever possible. 

However, as other Countries start to catch up and bridge the gap, then it's more than possible that the Nordic Countries could be overtaken if they don't start doubling down on digital innovation.

And this is exactly what The Fletcher School at Tufts University’s suggests.

The index comprises 50 countries, which were chosen because they are either home to most of the current 3 billion internet users or they are where the next billion users are likely to come from.

Countries on the index were ranked by four main drivers:

  • Supply-side factors (including access, fulfilment, and transactions infrastructure); 
  • Demand-side factors (including consumer behaviours and trends, financial and Internet and social media savviness); 
  • Innovations (including the entrepreneurial, technological and funding ecosystems, presence and extent of disruptive forces and the presence of a start-up culture and mindset);
  • Institutions (including government effectiveness and its role in business, laws and regulations and promoting the digital ecosystem).

On the standard index of how Countries performances stand right now, the Nordics are again performing well, with Sweden 2nd, Finland 7th, Denmark 11th and Norway 14th. (Iceland are not included in the index).

However, when you look at how these scores have changed over time (2008-2013) then a completely different picture emerges.

Of course, when you start at such a high level then it's harder (and slower) to improve than if you are starting at a lower base point, however, there is still a high risk that you can get complacent and experience stagnation, having experienced a high level of evolution in the past but start to lose momentum and begin falling behind. 

Most Western and Northern European countries, Australia, and Japan have been Stalling Out. The only way they can jump-start their recovery is to follow what Stand Out countries do best: redouble on innovation and continue to seek markets beyond domestic borders. Stall Out countries are also aging. Attracting talented, young immigrants can help revive innovation quickly.
— The Fletcher School

While I don't believe the Nordics are at immediate risk of falling behind (there's a big gap for others to bridge first) this research does provide a nice counterbalance to the European Commission's DESI, and serves as a useful reminder that the Nordics should continue to innovate and explore new opportunities both in terms of talent and market in order to keep progressing as a leader in digital innovation. 


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You can access the full Harvard Business Review article here.