Transcript Scandinavian Model

The Scandinavian
Economic Model
Το Σκανδιναβικό Οικονομικό Μοντέλο
Χαρίκλεια Βανέσα Τόσκα-Hariclea Vanessa Toska
Α.Μ. 290/12
Οργάνωση & Διοίκηση Επιχειρήσεων, Πανεπιστήμιο Μακεδονίας
Καθηγητής Δ. Μιχαήλ
Denmark
Norway
Sweden
Finland
The admirable Scandinavian Model
“Not about ideology but practices”
Financial Crisis 1980s-1990s
Social Expenses down:
•from 67% of GDP (1993)
•To 49% of GDP (2013)
•Lower social debt than France and soon than UK’s too
Scandinavian
Economic Crisis
Taxing Reforms
• Decrease in higher tax rate since 1983 up to 27% (57%)
• Discontinuation of taxes on wills and inherited property
• No housing taxation
• No taxations on donations
• Decrease in corporate tax rate from to 26.3% to 22%
(2013)-Lower than in the U.S.
SWEDEN
Characteristics
•Determined to show economic surplus during the financial
cycles
•Public debt down from 70% (1993) to 37% (2010)
•From deficit of 11% to surplus of 0.3%
•Small but “open” economy that overcame the economic
storm (2007-2008)
•Adaptive society, quick social and economic reforms
(Ευελιξία αγορών, διαφάνεια και άμεση ανταπόκριση
οικονομίας)
SWEDEN
Economic Crisis
•1970s-1980s Sweden from 4th richest country in the world falls
to 14th place
•Average Swed was poorer than the average Brit or Italian
•Unsuccessful “Tax and Spend” model
•Tax rates had reached almost 100% per income for successful
large corporations and entrepreneurs
•Innovation and successful brands (Volvo, Ericsson)
•However between 1980-1993 public expenses rose to 67% of
GDP
•The answer was somewhere between capitalism & socialism
SWEDEN
Getting out of the crisis
• Increase up to 2.7% in GDP annually (1993-2010)
• Productivity increase up to 2.1% annually
• Meanwhile other EU countries demonstrated an increase
of 1.9% and 1% respectfully in the above measures
• Lower tax rates
• Market Competitiveness
SWEDEN
“Swedenisation”-Economic Competitiveness
• Governments work “under the harsh light of day”, meaning
their behavior is controlled and accounted for by citizens
• Official Documents and data concerning the government or
organizations are open to the public and easily accessed
• Politicians are humble and are “vilified” if for example they
get off their bike to get into a fancy luxurious limousine
• All lobbies & vested interests are rooted out
• Transparency-ΔΙΑΦΑΝΕΙΑ
SWEDEN
• Trust-Εμπιστοσύνη
• Equality-Ισότητα
• Corruption root out-Διαφάνεια
Competitive Advantage
of Scandinavian Model
• Higher Education Infrastructure
• Low unemployment-Equality
• Free and strong Health system system for all
The Scandinavian Model
Social Welfare System
“Swedenisation”
•School Vouchers (Skolpeng), have parents selecting among
private or pubic schools to send their children
•Result: Higher education system (Steve Jobs)
•Private for-profit sector competing with Public sector
•Despite large public sector, they do not protect home
owned companies when in debt (Ex. The selling of bankrupt
Saab and the buy-out of Volvo by Chinese Geely)
SWEDEN
Social Health Care System
•“Infrastructure” reforms
that replaced a system
based on set benefits
by one based on set contributions
•Dynamic systems & strategies
considering the higher life
expectancy rates
•Competitiveness of Public & Private Healthcare services &
hospitals
•A Swed is more willing to pay his/her taxes than a Californian
because of free healthcare system to all
SWEDEN
“Getting to Denmark”
•As long as Public Services are efficient it is not a concern who runs
them or who provides them
•Private Corporations can run Public Hospitals
•School “Top-Up” Vouchers have private schools competing with public
schools
•30% of workforce occupied by the public sector (OECD average 15%)
•“Flexicurity”
Makes firing easier but the state helps unemployed with support and
education
•Investment in domestic goods & service exports
•The best place to be a woman
Denmark
Population: 5 million
•Overcame the crisis with high industrialization
•Investments in innovation, services and renewable energy
•Venture Capital Networks help workforce and unemployed
•Small but flexible society
•“Bipolar” economy: Domestic production that meets needs
in consistence with exporting or resources
Finland
• The model is not perfect by no means
• Public Debt will not be viable long-term
• High tax rates in comparison to the rest of the EU pushes
Scandinavians to move or invest in other countries
• More working hours should be added during the week
(Rasmussen)
• Slow Productivity increase
• Immigration Problem (Sweden, Denmark)
The “Trojan horse” for the
Nordic Model
• All Western countries and China will hit the wall when it
comes to public debt like Sweden in the 1990s
• 7% of the world population lives in Europe but 50% of the
worlds public expenses come from there
• Countries should use the Scandinavian example not for its
ideology but for its practices
• Their Public sector is famous not for its size but for its
effectiveness
• All countries should leave behind classic and outdated
methods of the “Right” and “Left” to forge new ideas across
the political & economic scene
WHY should countries
look to the Nordics?
• Financial Times
http://www.ft.com/cms/s/0/65438762-6fef-11e4-a0c400144feabdc0.html#axzz3TmkbPx7M
• Kathimerini.gr
http://www.kathimerini.gr/480457/article/oikonomia/die8nhsoikonomia/stis-skandinavikes-xwres-xtizetai-to-montelo-toyneoy-kapitalismoy
• http://blogs.helsinki.fi/changingdynamics/files/2009/09/Oinas2005.pdf
SOURCES-ΠΗΓΕΣ
THANK YOU
FOR ATTENDING THIS PRESENTATION
& FOR YOUR ATTENTION
ANY QUESTIONS?
Hariclea V. Toska
BSc. Business Administration & Management
University of Macedonia, Greece, March 2015
Student No. 290/12