The Northern Sparsely Populated Areas (NSPA) is a network of Nordic regions established in 2008 with the aim to foster collaboration and facilitate the exchange of best practices. It includes:
the seven northernmost and eastern regions of Finland (Central Ostrobothnia, Kainuu, Lapland, North Karelia, Northern Ostrobothnia, Pohjois-Savo, and South-Savo),
the four northernmost regions of Sweden (Jämtland Härjedalen, Norrbotten, Västerbotten, and Västernorrland), and
the three northernmost regions of Norway (Finnmark, Nordland, and Troms).
The NSPA face significant socio-economic challenges, including demographic decline, ageing populations, and geographic isolation. These challenges, which are more pronounced compared to other OECD regions, require targeted, innovative policy responses to ensure long-term sustainability and economic growth. At the same time, NSPA regions also possess unique assets, including abundant natural resources, a tradition of innovation, and a strong welfare model, which can be leveraged to overcome these hurdles and build a resilient future.
NSPA regions are facing declining and ageing populations, exacerbating challenges such as workforce shortages, skill mismatches, and increasing public service costs. The rising demands of an ageing population, particularly in sectors like elderly care, further strain municipal resources. Consequently, there is a pressing need for policies that both adapt to demographic change and attract younger, skilled workers by enhancing regional attractiveness and facilitating migration. Key solutions to ensure economic stability with fewer resources include the adoption of labour-saving technologies, the digitalisation of services, and the enhancement of digital infrastructure.
The NSPA's competitive advantage stems from its natural resource sectors, including forestry, fishing, mining, and renewable energy—particularly hydropower and wind. These sectors present opportunities for sustainable economic development, especially within the green transition. However, regional disparities persist, with some areas remaining reliant on energy-intensive industries. To advance the green transition, NSPA regions should further increase investments in renewable energy, promote circular economy practices, and foster innovation in green technologies. Additionally, cross-border collaboration among Nordic countries—Finland, Norway, and Sweden—can create synergies, scale local solutions, and facilitate the spread of low-carbon practices across these countries and the European Union.
Innovation and entrepreneurship are critical to the NSPA’s socio-economic development. Despite challenges such as limited infrastructure and long distances, the region possesses strong potential for innovation, particularly in emerging sectors like digital services, bioeconomy, and sustainable industries. Supporting SMEs and new entrepreneurs through better access to all forms of finance, accelerator programmes, and public procurement for innovation projects is essential for fostering growth. Furthermore, enhancing digital infrastructure and promoting digital literacy can bridge the digital divide, enabling business transformation and the creation of new business models.
Better aligning education systems with the evolving needs of the labour market is also imperative for the NSPA. This alignment can be achieved through strengthened partnerships between educational institutions and industry, vocational training programs, and opportunities for lifelong learning. Addressing workforce shortages, especially in high-demand industries, may require introducing retraining programmes, offering incentives for migrant workers, and integrating Indigenous peoples’ knowledge into local workforce development.
Inclusive governance is fundamental to the NSPA’s development. The region's multilevel governance structure, encompassing local and regional governments that share responsibilities with national authorities, facilitates inclusive and participatory policy design. This framework ensures that diverse stakeholders, including Indigenous communities, are involved in decision-making processes related to land use, natural resource management, and the green transition. Transparent governance, equitable resource allocation, and financial mechanisms that support underserved areas are essential to ensure that all communities benefit from regional growth.
In conclusion, to unlock the full potential of the NSPA requires a comprehensive and integrated approach that harnesses the region's natural resources, technological innovation, and welfare-driven employment strategies. This calls for deepening and revisiting the existing co‑operation frameworks among the fourteen NSPA regions to develop targeted, forward-looking solutions while optimising available resources. Policies should prioritise economic diversification, green growth, and inclusive governance to foster sustainable and resilient local economies. By aligning regional strategies with the European Green Deal and Arctic initiatives, the NSPA can continue to advance its model of sustainable and inclusive growth in rural Europe and the OECD.
