BCG: Nordics must transform to secure future prosperity

04 December 2014

The once so flourishing Nordic model that has served its people well for many decades is facing increasing challenges, such as a decreasing economic complexity, lack of investment in the future and an aging population. In order for the region not to miss out on economic opportunities and to secure a bright and prosperous future, the Nordic model needs to be revised and tweaked, concludes BCG.

The Boston Consulting Group (BCG) recently released a new report into the economies of the Nordics (Denmark, Finland, Norway and Sweden): ‘Nordic Agenda: Transforming for the Next Wave of Success’. The report shows that although the Nordics have been flourishing in the past few decades, their much admired Nordic model is starting to show cracks. In its report, the consulting firm highlights several major challenges the Nordics are facing, and states that, as a result of these challenges, the four countries must transform in order to secure future prosperity. An overview of the main challenges:

Economic complexity is decreasing
As small open economies that rely highly on trade to create wealth, the uniqueness and diversity of the Nordics exports have declined by nearly a quarter in the past 20 years as the emerging economies are caching up. Comparing the Nordic economies with the rest of the world, all except Finland are exporting less to high-growth markets compared to their key competitor group average, and all are average or less than average when it comes to their complexity.

The Nordic Economies are less complex

Not enough future investment
The Nordics have some of the highest levels of government spending relative to GDP in the developed world, but they spend far less on forward-looking investment than their key competitors. All four countries score considerably lower on the ratio of forward-to backward-looking expenditures compared to the average.

Not enough focus on investing for the future

Aging population
Another big challenge is the aging population in the Nordics. BCG’s research shows that by 2030, the workforce gap will reach 2 million*. It is estimated that, by 2030, there will be on average 92 dependents for every 100 workers to support in the Nordics. This will seriously limit the Nordics' ability to create wealth and threaten the sustainability of their current welfare model.

Workforce gap by 2030

Other challenges mentioned in the report are the declining momentum of Nordic productivity as a result of shift from manufacturing to services, the fading competitive advantages and increasing competitive disadvantages, stagnancy in hours worked, and lack of labour immigration and foreign talent.

Lars Faeste - BCG

Transformation of the Nordic model will unleash enormous potential to create wealth and well-being for the Nordic people. According to BCG, Denmark and Finland have the potential to add 1.5 to 2 percentage points to their annual GDP growth while Norway and Sweden have the potential to increase their annual GDP growth by 1 to 1.5 percentage points. Lars Fæste, Senior Partner and Global Lead for Transformation at BCG, comments: “We need to transform the Nordic model in order to protect its core and secure the competitiveness of our nations. We owe ourselves and the future generations this effort. The potential benefit of transformation is enormous. We are confident that our transformation agenda, if implemented, will enable the Nordics to create the next wave of success.”

* See the article 'Labour mismatch risks 10 trillion of unrealised GDP' for more details.

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Project management industry adds £156 billion of value to UK economy

15 April 2019

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”