Circumpolar Business Development: The Paradox of Governance?

Abstract

The purpose of this chapter is to describe the state-of-the-art in commercial activity and raise stakeholders’ awareness of challenges and opportunities for business development in the Arctic using comprehensive, comparable and regular socio-economic information. This information comes from the ongoing project Business Index North (BIN). Based on the BIN project reports, the chapter outlines several paradoxes and dilemmas that may affect the future development of business in the Arctic. These paradoxes and dilemmas, in general put as Paradox of Governance, are associated with two contradicting trends: steady economic growth and depopulation—especially the loss of young people. In particular, there is economic growth in traditional industries and industries based on natural resources. Paradoxically this goes hand in hand with a decline in the number of jobs in these industries. As a way forward, the chapter provides some recommendations for strengthening institutes of governance based on cross-border cooperation, dialogue and involvement of key players in the Arctic, such as the business sector, academia and regional authorities in the decision-making processes. This kind of governance dealing with the regional driving forces, solutions and consequences of circumpolar business development makes it possible to operationalize investments in human and social capital, transport and ICT infrastructure that can fuel sustainable economic growth and a good quality of life for the people working and living in the Arctic.