Why Are Nordic Companies So Successful?

From Ikea to Novo Nordisk, many of Europe's top firms come from the region.

From the dining room on the ground floor of Carl's Villa in Copenhagen, guests are treated to views of a charming garden adorned with classical statues. The art nouveau house was built in 1892 by Mr Carl Jacobsen, son of the founder of Carlsberg. Since then, the brewer, which now uses the house for meetings, has become one of the biggest in the world. Sitting across the table, Mr Jacob Aarup-Andersen, Carlsberg's current boss, admits that the company's success is part of a bigger puzzle about Danish businesses. Just last night at dinner, he says, someone asked him how a country so small could produce so many large companies.

What is true of Denmark is true of Sweden, Norway and Finland. The Nordic region accounts for about 1 per cent of the world's gross domestic product and 0.3 per cent of its population. Yet it has produced an impressive list of corporate giants. Lego is the planet's biggest toymaker by revenue; Ikea is its biggest maker of furniture (and, thanks to Swedish meatballs, its sixth-largest restaurant chain).

The Nordics are home to leading manufacturers of everything from industrial machinery (Atlas Copco) and telecoms equipment (Nokia and Ericsson) to seat belts (Autoliv) and lifts (Kone). The region has also produced the world's biggest music-streaming company (Spotify) and its largest buy-now-pay-later provider (Klarna). Novo Nordisk, a Danish pioneer in weight-loss drugs, is Europe's most-valuable company, even after its shares slumped in December in response to disappointing trial results for a new drug.