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Radar + Nagarro Report

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Threats to Nordic competitiveness:
A three-thesis analysis

The report examines the declining productivity of Nordic countries, which challenges future competitiveness and welfare. While digitalization and innovation are highlighted as important tools to address and reverse this trend, data shows a weakened focus on innovation among businesses, as well as challenges in realizing the full value of implemented digitalization initiatives. The report explores the productivity loss in Nordic organizations and discusses the various contributing factors that must be addressed to overcome it. Radar Group has prepared this report in collaboration with Nagarro.

The Nordic countries have long been leaders in digitalization and have strong economies, but they are now experiencing lower productivity, subdued growth, and lost positions in emerging technological areas. This development threatens their competitiveness and welfare. 

This report is based on three theses, which together provide an understanding of why competitiveness in the Nordic countries is under threat and where the focus should be to better address our challenges.

Nordic businesses require significant transformation

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Nordic businesses are under considerable pressure to transform due to various external factors contributing to declining productivity and reduced value exchange. Traditional business models, strategies, and workflows are struggling to adapt to rapid changes necessitated by new market demands and conditions. Innovation, digitalization, and the adoption of digital tools are critical to overcoming current challenges and generating new value. These elements are also vital for maintaining competitiveness and welfare, particularly as the Nordic region faces demographic challenges associated with an aging population and a shrinking workforce.

Inefficiency in IT projects and value creation

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Despite having a strong history of digitalization and high IT maturity, businesses in the Nordic countries often struggle to realize the value from their IT projects. Many initiatives do not achieve their intended outcomes and suffer from resource wastage. This leads to lost value and unnecessary costs, which in turn limits the ambition of businesses and reduces their capacity to invest in future development. Despite the vast potential of new technologies and innovative solutions, many organizations find it challenging to implement these advantages effectively.

Organizational processes misaligned with the digital age

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The root of this challenge is primarily organizational rather than technical. An evolving operating environment and IT landscape require a shift in how businesses are organized and managed. The increased pace of change and faster cycles demand a more dynamic and flexible organizational structure. This report highlights that insufficient organization, collaboration, governance, and follow-up contribute to the challenges of productivity, innovation, and employee engagement. To successfully transform and achieve our goals, a concerted effort on the organizational dimension is essential.

The report also provides a summary of these three main arguments, which both provide an overview of the report’s key insights and demonstrate how they are interconnected. Finally, the report offers recommendations for business leaders on how to address the highlighted challenges.
By emphasizing the urgency for change and providing actionable suggestions, this report aims to strengthen the resilience and competitiveness of the Nordic ecosystem.

 

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