The Nordic region’s remote areas need a dynamic employment policy

That was Lise Lyck’s main message to the labour market conference at The Nordic House in Tórshavn in the Faroe Islands on Wednesday 26 August. Lise Lyck is an experienced lecturer at the Copenhagen Business School.

The conference was organised by the Danish presidency of the Nordic Council of Ministers together with the Faroese Ministry of Trade and Industry, and focused on employment in the Nordic region’s remote areas. The conference ‘How do you secure sustainable labour markets in the Nordic region’s remote areas?’ focused on labour markets in the Faroe Islands, Greenland and the Åland Islands as well as regional measures in Denmark, Norway and Iceland.

Growth through aid and block grants

There is wide agreement that the Nordics’ remote areas are facing major challenges when it comes to maintaining employment. They often deal with emigration and shrinking populations. Some areas manage to deal with the challenges, but targeted measures are needed, says Lise Lyck. She believes transfer payments like block grants must take some of the blame for the problems faced by some of the territories.

“Transfer payments like development aid and block grants to Greenland and the Faroe Islands give less incentive for independent economic development, and will therefore not contribute to developing and strengthening local businesses. Targeted employment policies should aim to help local businesses become more independent and stronger,” says Lise Lyck.

The importance of culture

But sensible employment policies for the remote areas go beyond finance and employment politics. This is also about culture, education and taxation.

Maintaining a strong local culture is very important for the project’s success. 

“Culture is an important incentive. If young people who leave to study are to return, they need something to return to. They need something to long for. Culture could be one such strong incentive for returning and contributing locally,” says Lise Lyck.

Local employment

All of the Tórshavn conference speakers underlined the importance of maintaining and developing education locally, especially targeted training linked to existing local businesses. 

But the remote areas will probably not manage to stop the brain drain since there will always be many young people who leave to study elsewhere. Many will not return because they have settled into the big city or because their home area has no jobs which correspond to their education. 

Lise Lyck says Greenland is the most obvious example where highly educated people to a large extend chose to settle in the country where they got their education.

The Faroe Islands have to a certain extent succeeded in getting young people to return home after finishing their studies, even thought the figures do not correspond to the targets set by local authorities.

The Åland Islands also see how many of their youths do not return. Nevertheless, the islands have managed to maintain stable immigration numbers and a growing population in recent years. Specialised businesses within shipping, banking, insurance and lately IT and especially gaming have attracted foreign labour with specialist knowledge.

Don’t forget the women

The Faroe Islands represent a role model when it comes to taking advantage of the labour force’s mobility, thinks Lise Lyck.

“We see many highly educated Faroese within the maritime sector who leave to work in fisheries and in the offshore industry, while keeping their houses in the Faroe Islands. If the islands had not managed to persuade these people to keep their residences, it could have become a problem because these people make considerable monetary contributions to the Faroe Islands,” says Lise Lyck. She believes the Faroe Islands could use taxation policies to encourage even more people to choose the islands as a base.

And then a final but important message.

“Think about women’s workplaces. It is not enough to focus on heavy industries which do not attract female workers. If you want a sustainable jobs market in the remote areas, you also need jobs for well educated women,” says Lise Lyck.