High taxes, strong unions and plenty of government regulation do not sound like elements that would incentivize the private sector. Why is it then that all of the Nordic countries have these elements and are among the top five countries to do business in?
The European Chamber, an independent non-governmental business organization, did research on which European countries were the best for doing business by taking into account elements such as corporate environment, legislation, government policies and social climate. They looked at how these factors enable or prevent the private sector from operating both in the short and long term.
Denmark, Norway, Finland and Sweden got the highest scores of all.
From 2017 to 2018, there has been some shuffling among the top four Nordic countries with the highest ranking. However, some friendly competition is always good, whether it is in winter sports or conducive business environments. For the past three years, the Nordic countries have swapped places, but they have all consistently ranked top four.
Having populations not very different from Serbia, Nordic countries have always been relying on open markets and trading across borders. Today, they are among the world best digital economies. Their economies are characterized by a combination of private and public ownership, and offer their citizens a wide array of public services. Not to mention that Norway, Sweden, Finland and Denmark remain among the countries with the least amount of corruption and high levels of transparency. Nordic countries are well-known for their high levels of flat social structures, trust and stability. All of these factors contribute to a predictable and favorable business environment.
Right behind the Nordic countries, we find the UK, Switzerland and Germany – larger countries that share most of these these characteristics.
The lesson learned can be that having a good environment for businesses is not all about low taxes, low salaries and deregulation. Predictability, transparency and good public services also count. So does social trust. Together they make a good environment for business, but more importantly for the citizens.