3. Unlocking development opportunities with an enhanced mining ecosystem for Västerbotten and Norrbotten

As depicted in Chapter 2, the TL2 region of Upper Norrland is an important economic engine for Sweden and a key player in the national and international mining production. In the short term, the region will face the effects of global slowdown associated with the COVID-19 pandemic, which has particularly affected mining regions (Chapter 2). In the medium and long terms, global megatrends, including demographic change, automation and a transition to a zero-carbon economy, will shape a new future for the mining industry and in turn for the development of the region. Further, the aftermath of this coronavirus crisis can bring new opportunities for Upper Norrland, linked to a renovated global interest to increase self-sufficiency on strategic sectors (i.e. raw materials) and accelerate the transition towards a zero-carbon economy.

To seize the benefits of this future, Upper Norrland needs to mobilise its mining ecosystem and unlock opportunities for a more diversified economy. These strengths include an innovative ecosystem of frontier mining and manufacturing companies that work in co-operation with universities, an enabling infrastructure with low-cost green energy and high-quality broadband coverage, and a skilled labour force.

Nevertheless, Upper Norrland faces a number of bottlenecks in the realisation of its potential and in attaining sustainable growth for people and local businesses. They include a shrinking labour force with outmigration of young women, a lack of co-ordination among municipalities to support local business and employment, challenges for SMEs development and complex framework for mining permits (Chapter 4).

The purpose of this chapter is to identify policy recommendations to realise the potential of Upper Norrland’s mining ecosystem and support a sustainable future for local communities and businesses. The chapter confirms that Upper Norrland is well equipped to become an international leader in environmentally sustainable mining and, thus, along with Sweden, play a key role in global environmental agendas and the EU self-sufficiency strategy of raw materials supply. To this end, Sweden needs to update the national mineral strategy, while the two TL3 regions of Upper Norrland, Västerbotten and Norrbotten, need to strengthen the innovation ecosystem, improve the local business environment and enhance internal and external co-operation to consolidate a unified regional vision on mining development.

This chapter begins with an overview of Sweden’s policy framework relevant to mining development. It then assesses the status of the mining ecosystem in Upper Norrland, identifying its strengths and weakness and its role for economic development and well-being. Finally, it examines the enabling factors for development in Upper Norrland, particularly the innovation ecosystem and set of policies to unleash Upper Norrland’s potential for sustainable development.

Sweden is one of the EU’s leading ore- and metal-producing countries. Sweden has 12 active ore mines (2020) and contributes to 90% of the iron ore, 39% of the lead, 37% of the zinc and 24% of the gold production in the EU. The business-mining environment in Sweden is relatively concentrated in terms of places and companies. The 12 metal mines in Sweden are located in three areas: Norrbotten, Västerbotten and Bergslagen mining district in the Svealand region. The two regions forming Upper Norrland (Norrbotten and Västerbotten) concentrate most of the mining operations in the country. Most of the mining operation and production in the country comes from two Swedish companies: LKAB and Boliden AB. The private company Boliden AB produces a wide range of metals, while the state-own company LKAB primarily produces iron ore. The country is also known by forefront companies in terms of mining equipment and a tight co-operation among mining companies, universities and research centres.

National institutions have an important role in developing the mining ecosystem. As the use of the land in Sweden is defined by national interest, the decision of exploration and exploitation is granted by national bodies:

  • The Swedish Ministry of Enterprise and Innovation is in charge of nationally overseeing the mining sector and developing the national mineral strategy.

  • The Geological Survey of Sweden (SGU) promotes the use of geological information and supports the development of a sustainable mining, rock and mineral industry. Within the SGU, the Mining Inspectorate is a separate decision-making body responsible for issuing permits for mineral exploration and extraction under the Minerals Act (Chapter 4).

  • At the regional level, the Country Administrative Board (CAB) is the national government agency in charge of ensuring the alignment of the regional development with the goals set in the national policy. This body oversees the processes on mining permits, national interest areas and grants municipalities the rights to develop their land (Chapter 4).

Sweden had historically been seen as an attractive country to invest in with regards to mining exploration and operation. Good geological prospect, the sound quality of infrastructure (roads, broadband, harbours, energy and water supply) along with high-skill workers and stable institutions have made Sweden a good place to invest in mining projects.

However, in the last decade, the country has reduced its attractiveness as a place for mining investments. In the last years, Sweden’s ranking in the Fraser Institute’s mining investment attractiveness index has dropped from the top position achieved during 2013. This index is a ranking that represents the opinion of executives and exploration managers in the sector (290 responses in 2019).1 In 2018, Sweden ranked as the 21st most attractive country for mining investment (among 86 jurisdictions), 15 positions below the rank in 2013 (6th out of 112 countries) or the one in 2012 (5th) (Stedman and Green, 2019[1]). In the recent survey published in 2020 (with results for 2019), the country recovered some position ranking at 10th position. In this context, the number of valid exploration mining permits has declined in the last decade, from approximately 1 300 in 2008 to approximately 600 in 2018 (Chapter 4).

The perception of international investors and in turn the position in international rankings has been affected by recent institutional challenges and the improvement of mining potential in other countries. As Chapter 4 will depict, the regulatory framework for mining permits is complex and lacks predictability and transparency. The national government (represented by the CAB) is in charge of land use decisions, with significant discretion on land use issues and without being obliged to consider the regional development perspective (Chapter 4). This situation ultimately hampers the ability of regions to decide on the use of their land, creates uncertainties for investors on the result of the permitting process and led to a perception of a lack of co-ordination among CABs. This situation has very much affected the certainty with which regions plan their economic development and attract investors.

Sweden’s national policy framework acknowledges the relevance of the mining sector to meet the country’s development goals. In particular, the national policy strategies set innovation in the mining sector as a vehicle to accelerate the transition towards a zero-carbon economy. The national strategy for regional growth, the national minerals strategy and the national innovation strategy all provide guidelines for the sustainable development of the mining ecosystem in Sweden.

A national mining strategy is important because it can connect the different actors in the mining industry and provide clarity on the role and importance of mining at the local and national levels. It can help to educate stakeholders and the public on the opportunities and challenges involved in mining development and outline ways to address them. Further, it is crucial to develop a common vision and help to align the objectives of a broad range of actors, define goals and provide guidance on how to best reach these goals.

Sweden’s Mineral Strategy (2013-20) aims to increase the competitiveness of the Swedish mining and minerals industry to maintain its position as a leading supplier of raw materials in the EU. To do this, a priority of the strategy is to ensure sustainable use of mineral resources, in harmony with environmental, natural and cultural values. The strategy acknowledges the relevance of Sweden’s mining industry in the context of the EU strategic goal to facilitate the sustainable supply of raw materials from their own deposits. The strategy defines 5 strategic objectives that contain 11 action areas and goals to achieve the strategies vision.

  1. 1. A mining and minerals industry in harmony with the environment, cultural values and other business activities.

  2. 2. Dialogue and co-operation to promote innovation and growth.

  3. 3. Framework conditions and infrastructure for competitiveness and growth.

  4. 4. An innovative mining and minerals industry with an excellent knowledge base.

  5. 5. An internationally renowned, active and attractive mining and minerals industry.

The national minerals strategy identifies innovation as a cornerstone for the country’s mineral development. Technological progress is set as a crucial tool to attaining sustainable mining activities and developing a strong mining value chain. At the core of such sustainability lays out the need of greater resource efficiency (the first strategic objective and action in Sweden’s Mineral Strategy) to reduce mining environmental impacts and create new business opportunities (Swedish Ministry of Enterprise, Energy and Communications, 2013[2]). The strategy stresses the need to increase the recycling rates of traditional (iron, aluminium and copper) and rare (lithium from batteries, gallium, germanium, indium from solar panels and neodymium from permanent magnets) minerals and metals.

Cross-sectoral and cross-agency work is a key action of this strategy. Most action points of the strategy are carried out by different national agencies, such as the Swedish Agency for Economic and Regional Growth and the National Board of Housing. For instance, collaborative work between the Swedish Transport Administration and the National Board of Housing is set to improve information on the extraction and recycling potential of various metals.

The National Strategy for Sustainable Regional Growth and Attractiveness (2015-20) is the guiding policy framework to stimulate sustainable regional growth throughout Sweden. It aims to invest in enabling factors to develop the potential of all areas of the country with stronger local and regional competitiveness (OECD, 2017[3]). The strategy identifies four challenges related to demographic trends, globalisation, climate change and social cohesion (Box 3.1).

The national strategy for regional growth outlines the relevance of the extractive and nature-based activities to increase resource efficiency and promote environmentally driven businesses in the country. A key development objective of Sweden is to enhance resource efficiency in terms of efficient use of energy, raw materials and ecosystem resources. Although there are no specific policies regarding the mining sector, this national goal provides the opportunity to develop sustainable and resource-efficient goods, services, technology solutions and production systems in mining activities. The so-called green investment fund within the National Regional Fund Program 2014-20 and the Energy Agency’s conditional loan are important mechanisms to support businesses to transition and invest in environmentally sustainable technologies (Ministry of Enterprise and Innovation, 2015[4]).

SMEs’ development is key to implement a regional growth strategy with an environmentally sustainable approach. A cornerstone of the strategy is promoting the development of SMEs that want to transition towards more sustainable business. It supports policies to boost SMEs’ innovation and focuses on their internationalisation as a tool to increase exports and foreign investment in Sweden. The strategy also highlights the importance of increasing collaboration between actors at different levels (regional and international) with different skills and resources around the sustainable supply of raw materials in order to address environmental challenges.

The Swedish Innovation Strategy (2012-20) aims to meet global societal challenges (i.e. climate action and resource efficiency), increase competitiveness, create more jobs and deliver quality public services (Swedish Ministry of Enterprise, Energy and Communications, 2012[5]). This strategy underpins the minerals strategy by setting technological progress as a cornerstone to increasing resources efficiency in the country. Beyond technological progress and new production methods, it recognises that innovation can take the form of new ways of using land, ecosystem services, raw materials from nature and biologically-/ecologically-based technologies.

The national innovation strategy acknowledges that regions’ natural endowments can lead to unique innovation systems. Site-specific resources, including mineral resources, promote tacit knowledge and in particular innovation ecosystems. Characteristics around localised resources have been in fact identified in the national strategy as of large importance for innovation in Sweden (Swedish Ministry of Enterprise, Energy and Communications, 2012[5]). To support regional innovation, the strategy stresses the relevance of increasing the added value of activities that are based on site-specific resources, including forests, minerals, water, cold and sparsity.

The strategy envisages a number of measures to support the innovation processes. It includes financing knowledge and innovation infrastructures (e.g. incubators), the formation of clusters or networks, and test and demonstration facilities. For example, the Swedish Energy Agency (Vinnova) and the Swedish research council Formas jointly finance 17 strategic innovation programmes (SIPs) following a cluster approach on specific themes. A number of these horizontal projects involve close work around the mining ecosystem:

  • The Swedish mining and metal-producing industry programme (STRIM) aims to strengthen the sector’s competitiveness and increase the sector’s innovative capacity.

  • The graphene programme has the goal of increasing the use of graphene in Swedish industry. Graphene is a material with the potential to resolve several global challenges (i.e. health, clean and efficient energy). A key action is to strengthen the knowledge transfer between different industries and to contribute to the Swedish graphene-based products reaching the market.

  • The metallic material strategic innovation programme gathers Sweden’s metals industries to meet growing demands for sustainable solutions. Industries involved include steel, aluminium, hard metals, cast steel and cast iron.

  • The Process Industrial IT and Automation (PiiA) contributes to the development and use of automation and digitalisation within the industry. It identifies mining as a sector with high potential to develop automation.

The strategy also recognises the potential of increasing resource efficiency through better synergies among regional, national and international instruments and programmes. At the national level, it requires major efforts in strategic planning and a combined regional leadership in the growth agenda. The strategy also calls for the need to develop co-operation and co-ordination on innovation agendas between the EU and national, regional and local levels. This collaboration in and between innovation environments can take many different forms, including interlinked business networks and clusters in connection with research and education institutions.

The need for a sustained supply of raw materials and metals with an environmentally sustainable mining process are common goals for Europe and Sweden’s policy agendas. The EU has set high in its agenda the strategy to ensure a reliable and sustained supply of raw materials from EU countries (Box 3.2). The EU policy and strategy for raw materials involves strategic programmes to promote mining and research on rare metals and support resource efficiency and recycling.

Sweden has the potential to be a key player in the EU raw materials strategy and contribute to national and international goals on environmental sustainability. The Swedish mining sector is today at the forefront of sustainable practices. Swedish mining companies are developing cutting-edge projects to obtain minerals and produce materials through zero-carbon emission processes and recycling/reuse of waste mining and metals (see next section). Furthermore, the country is one of the most promising areas in Europe to discover traditional and new rare minerals (Luleå University of Technology, 2014[6]).

Current national policy strategies of Sweden are moving in the right direction by supporting a close interaction among innovation, mining development and environmentally sustainable policies. This strategic vision has enabled the implementation of a number of initiatives to co-ordinate national and international actors. For example, the strategic innovation programme for the Swedish mining and metal-producing industry (STRIM), published in 2013, connects the vision of safe and productive mines with research and innovation needs (SIP STRIM, 2020[7]). The programme has supported projects such as Smart Mine of the Future, which involves research and technical solutions to create a “zero-impact mine” that minimises residual products and the footprint of mining operations. Furthermore, in co-ordination with international actors, Sweden has led the European/Swedish SIMS project to develop solutions to test and demonstrate new technology for the mining industry to create a Sustainable Intelligent Mining System. This project involves key players in the Swedish mining environment, from mining companies to equipment suppliers and universities.

However, the national policy framework needs to further clarify the policy strategies to make Sweden an international leader in sustainable mining. Mining regions are key partners to move forward innovation and growth strategies. While there is a clear recognition of the relevance of resource-dependent regions in Sweden to attain a greater resource efficiency in the country, the national policy framework falls short in identifying mechanisms to connect mining activities with new economic opportunities at the regional and local levels. For example, Sweden’s national strategy for regional growth lacks a vision on the role of mining in the future development of Swedish regions. The national government should define a long-term vision to promote regional and local development through greater support for sustainable mining practices.

Such long-term vision will also require a promotion of cross-sectoral policies to support sustainable mining projects. It will require a co-ordinated strategy to unlock the innovative potential of local mining ecosystems and connect them with national and international markets. As we will see, regions such as Norrbotten and Västerbotten have a long history of mining development with a number of assets benefit (i.e. skilled workers, research centres and innovative mining companies) that can support the development of new solutions for a greener mining process and technology. A whole-of-government approach for developing sustainable mining should focus on strategies to mobilise regional assets.

The national strategies need to better co-ordinate their support to SMEs and suppliers involved in the mining value chain. As the next section will depict, small businesses in mining value chains are at risk of being locked into supplier relationships with large mining companies. The national strategy for regional growth and the innovation strategy provide a particular opportunity for SMEs and suppliers in the mining ecosystem. These strategies support investments in environmental technologies and the development of environmentally driven business. A close co-ordination of these strategies with an updated mineral strategy can set the ground for small businesses in Sweden to become an international model in sustainable mining.

A revised mining strategy in Sweden could outline a framework and a set of measures to help improve how mining regions and municipalities benefit from mining activities, ensure shared value creation and compensate for the cost of negative externalities. Mining activities in Sweden as in OECD countries are spatially concentrated. While benefits of mining activities can be reaped by actors outside of the region (e.g. firms and national governments), negative externalities are often concentrated in the locations where mining takes place. This can create an uneven distribution of challenges resulting from these activities across territories.

Increased concerns for negative environmental effects of mining activities combined with the perception that automation can displace or reduce local employment opportunities have led many mining regions worldwide to increasingly emphasise the need for a more even sharing of the benefits of mining ventures (Söderholm and Svahn, 2015[9]; World Bank, 2010[10]). This is essential because support for mining and extractive activities will be undermined if local communities do not benefit from those activities through better economic opportunities and quality of life.

The updated strategy could help the national and regional governments to better share the benefits that result from mining activities with local communities. To this end, the strategy needs to first differentiate monetary and non-monetary benefits for mining communities and, second, make the most out of them. Monetary benefit-sharing mechanisms include investment funds, equity-sharing and tax-sharing mechanisms between regional and national governments. In contrast, non-monetary mechanisms include investments in education and medical facilities, local employment generation, local procurement and training of staff (Söderholm, 2014[11]).

When it comes to monetary mechanisms, many countries specialised in mining and extractive activities have special tax regimes or monetary arrangements that collect the rents from extractives activities and revert them to the regions where they are extracted to different degrees (OECD, 2017[12]). These royalty types of systems are guided by different principles depending on the country (Box 3.3).

  • Some countries collect a proportion of extractive industry revenues at the national level and distribute them regionally through a development fund (Chile, Colombia).

  • In federal countries, regions collect the revenues through differentiated royalty regimes (i.e. Australia, Canada).

In other countries, revenues from mining are mainly collected through national taxes and form part of the consolidated national revenue without a specific revenue transfer mechanism to mining regions (i.e. Finland) (Hojem, 2015[13]). Sweden belongs to this last group of countries, where the tax distribution system does not include a special compensation for regions where the extraction of mining occurs. Sweden’s royalty system introduced in 2005 only retains a small share of rents from mining activities, requiring companies to pay 0.015% of the average value of the minerals mined to the landowner (in many cases the same national government) and 0.005% to the national government (Hojem, 2015[13]). In this regard, local governments of Swedish mining regions receive, just like any other local government in the country, fiscal revenues from the tax on resident’s income, fees from child and elderly care and grants from the national government (through the equalisation and pharmaceutical grant).

Across the OECD, there is no “one-size-fits-all” mechanism to share the monetary benefits of mining activities with local communities. If not well designed, royalty systems that return revenues directly to mining municipalities may produce unintended consequences and even increase territorial inequalities (OECD, 2017[12]). However, beyond the type of monetary sharing scheme, an efficient transfer system should take into account how the resources are utilised, how this aligns with regional development objectives and the way it interacts with other governance arrangement and fiscal equalisation schemes in the country. In Sweden, the equalisation system represents a relevant source of income for subnational governments. Despite this, a number of structural changes, including a shrinking and ageing population, are increasingly threatening the subnational government’s financial capacity to maintain the same quality of services in certain places. Against this backdrop, a national committee in Sweden was established to analyse these challenges at the subnational level. This committee has recommended to Sweden’s national government the revision and monitoring of its municipal equalisation system (Government's Official Investigations, 2020[14]). This is in line with the OECD recommendation (2010[15]) on evaluating mechanisms to increase municipal financial capacity by, for example, reinstituting a property tax at the subnational level.

In terms of non-monetary benefits, the strategy should identify different mechanisms to help mining regions capture greater value from ongoing and planned mining ventures. These mechanisms should consider different dimensions of well-being (income, jobs, education and training, housing, amongst others) to ensure benefits match local needs. This can improve the overall social acceptance of mining in the regions. In Upper Norrland, the identification of local needs and the introduction of new policies in this regard should happen in partnership with the local stakeholders and the Sami Parliament (see also Chapter 4).

Mining companies increasingly recognise that successful long-term business performance includes respecting societal needs and contributing to local economic development. Some of their actions have included local procurement of goods and services, creation of employment and development of local skills (Cosbey, 2016[16]). Swedish mining companies have historically adopted practices to compensate local communities in terms of public goods and enhancing well-being (see next section). However, these are voluntary practices that might stand or not in future arrangements or with new companies, which makes it relevant for the new strategy to clarify a sharing mechanism framework. Further, as national and local governments often play an important brokering role in this regard, policy responses can be quite effective in upgrading or increasing local inputs into the production processes in the extractive industries. These include:

  • Reducing information and capacity gaps that diminish local firms’ chances of responding to extractive firms’ tender.

  • Offering technical or business assistance to suppliers and SMEs and supporting them in the obtention of necessary certifications to respond to the needs of extractive firms.

  • Ensuring timely payment facilities for SMEs with limited cash flow.

The rest of this chapter will describe possible actions to improve local development through mining activities, including further measures to create an open and supportive business environment for both extractive industries and their suppliers, as well as foster the transfer of technology.

Becoming a powerhouse in sustainable mining requires clear communication with local and international actors. Sweden has two main platforms that gather and diffuse information about the mining industry. The Geological Survey of Sweden (SGU) currently features all the information related to ore deposits, active mines and exploration and exploitation permits, among others. Mining for Generations – Mining by Sweden is a different platform developed from a government and industry initiative and run by Business Sweden. This communication platform promotes Swedish mining industry internationally and aims to increase collaboration between mining companies, technology companies and academia. This site gathers information from all Swedish companies, industry association and other relevant actors for the mining industry

While both platforms are useful resources of information and promote the mining industry, Sweden can improve the way of marketing its mining ecosystem and attract foreign companies into the mining value chain. These communication platforms need to promote the future vision for mining in the country and present assets more clearly at the national and regional levels. Currently, both platforms present the information from a national level perspective with little reference to particularities in mining regions and the different mining clusters around the country.

A single platform to display the whole information around mining would help in the endeavour of making Sweden a key player in minerals and metals. It can also help to reach international partners with a unified voice that promotes the benefits of carbon-free mining value chains for global environmental goals. A platform that highlights the assets at the national and local levels and promotes regional clusters can contribute to sectoral and regional collaboration. The Mining Finland programme can inspire the Swedish government to consolidate all the information in a unique platform with a clear link to the mining business ecosystem (Box 3.4). This programme goes beyond information sharing by providing stakeholders of the mining ecosystem with a number of services, including training and networking activities.

Mining, wood and metal processing are major sectors in Upper Norrland. These three sectors are among the main exports of Sweden. Upper Norrland also plays an important role in the national energy sector, providing almost half of the country’s energy production coming from hydroelectricity and with a growing wind and bioenergy sector. Upper Norrland is the main mining region of the country, concentrating most of the national production on iron ore, copper and gold. Norrbotten hosts the largest underground iron ore mine in the world (in Kiruna Municipality), Europe’s largest copper mine and Sweden’s largest gold mine (Aitik).

Västerbotten and Norrbotten have a long history of mining and the sector plays a key role in the economic growth of the region. Since the 17th century, the state facilitated the mining development, with Dutch and Swedish entrepreneurs opening the first iron mines (Keskitalo, 2019[18]). Since the beginning, local communities were very much involved in this activity, to the point that companies contracted Sami and local farmers to transport ore and charcoal with reindeer- or horse-drawn sledges (Keskitalo, 2019[18]). By 2018, the mining and energy sector provided most of the income (25% of total gross value added [GVA]) and the employment of the region (Chapter 2). Given the high contribution from the mining sector to the GDP per capita, Norrbotten ranks in top three Swedish counties in terms of GDP per capita.

Many of the existing mines in the region, as in the rest of the country, are relatively old (Table 3.1). Norrbotten hosts two of the oldest mines in Sweden, that started around 1890 when the railroad reached Gällivare and Kiruna. During the metal price boom of the early 2000s, companies made important investments to boost production and enhance prospecting (Keskitalo, 2019[18]). This led to the reopening of closed mines, mainly in Norrbotten (Kiruna) and the opening of some new mines in Norrbotten (Kaunisvaara) and Västerbotten (Kankbergsgruvan). Upper Norrland was the only region of Sweden that has opened completely new mines in the current century. This dynamic depicts the country relevance of the region but also the slow evolution of mining exploration in the country during the last decade.

By 2019, the region is home to almost all operating mines in Sweden. Out of the 12 mines in production in the country, 9 are located in Upper Norrland, of which 5 in Norrbotten and 4 in Västerbotten (Figure 3.3). In Norrbotten, 4 out of the 5 mines produce iron, accounting for 90% of Europe’s iron ore. Norrbotten mines are located in the northern municipalities of the region, particularly in Gällivare, Kiruna and Pajala. In the case of Västerbotten, most of the mines produce lead, gold, copper, zinc and silver and are concentrated in the municipalities of Lycksele and Skellefteå.

The ecosystem of mining companies in the region consists mainly of Swedish companies (Table 3.1). The state company LKAB and the private company Boliden Mineral AB operate in total seven out of the nine mines in Upper Norrland. LKAB is the main mining company in Norrbotten, while Boliden is the main operator in Västerbotten. Two other Swedish companies, Björkdalsgruvan AB and Kaunis Iron, own one mine in Västerbotten and another in Norrbotten respectively. In the past, companies from Australia and Canada operated mines in the region, but today any foreign company operates a mine. This picture is, however, different in mining exploration, where a number of foreign companies are in the exploration stage or waiting for the exploitation permit to be granted.

LKAB and Boliden have historically established a close collaboration with their communities. In Gällivare and Kiruna, LKAB has contributed to the development of the railway – in particular to the current line connecting Northern Sweden with the Norwegian city Narvik – and the construction of a hospital, fire station, a sewerage system, roads and a church. This long relationship with local communities has contributed to creating a positive social acceptance with the operations of the two major Swedish companies. However, as Chapter 4 will explain, such acceptance is different when it comes to new mining projects led by foreign companies.

The large mining companies in Upper Norrland have developed large mining infrastructure and an extensive network of local suppliers. Mining operations in the region tend to fulfil an important share of the demand with the offer of local business. Ejdemo and Söderholm (2011[20]) have found that, for every 100 jobs created in mining, about 100 to 150 jobs are created elsewhere in the local economy (also referred as an employment multiplier of 2 to 2.5).2 However, the mining ecosystem varies between Västerbotten and Norrbotten in terms of the local actors involved in mining value chains.

Västerbotten has developed a more diversified economy with a lower share of workers in mining industry and smaller deposits and a number of new businesses in both core and related mining activities (MineFacts, 2019[21]). Västerbotten has benefitted from a dynamic entrepreneurship environment with small companies working in sectors outside of mining, which is evident from its higher share in the service sector (Chapter 2). In the region, Boliden is home to Sweden’s only smelter which produce base metals (located in Skellefteå) and a concentrator and leaching plant for gold and tellurium production.

Norrbotten, in contrast, is more dependent on mining activities with a higher share of its population working in the mining industry. The predominance of iron mines in Norrbotten has created a mining environment characterised by relatively larger production volumes than in the rest of Sweden but at the cost of higher vulnerability to fluctuations in the international commodity price of iron (Chapter 2). In Norrbotten, this large scale of mining has led to the creation of local networks of local suppliers. In Kiruna, the manufacturing and extraction industry is the largest employer, followed by the health and social care industry with about half the number of employment share. Furthermore, mining operations in Norrbotten find many of the suppliers in the same municipality or region. For example, in the mining operation in Pajala Municipality, 23% of the suppliers are from the same municipality and 45% from the same region of Norrbotten. This dynamic also creates an environment where entrepreneurial culture is highly driven by mining operations. In Kiruna, out of the 100 companies created per year, around one-third are related to mining activity.

Regional institutions are also involved in mining development. The regional council defines the regional development strategy, including strategies to improve the business environment and the development of local clusters. This body is governed by a regional assembly (regionfullmäktige), elected every four years. The regional councils of Norrbotten and Västerbotten have developed their own regional strategy. When it comes to mining development, the regional council has to co-ordinate strategic policies with the CAB and take decisions based on national guidelines. Trade unions are important players in the mining ecosystem, as Sweden has one of the highest levels of memberships in trade unions in the world. IF Metall is a large union that operates with a large number of metal industries in Sweden, with a division covering the area of the northern parts of Norrbotten.

The mining environment in Upper Norrland benefits from a number of assets, which makes it a strategic place for mining development. It includes innovative large mining companies, a strong pool of research centres and universities, a skilled and experienced workforce and cheap and reliable energy supply.

The companies working in the mining sector of Upper Norrland are at the frontier of mining technology. Given the technical difficulties for mining operations posed by the Arctic climate, the companies have developed cutting-edge technologies and equipment to operate in the region. This technology is now world-renowned and recognised for its quality. ABB, Atlas Copco HW4it (Epiroc), Sandvik, Scania and Volvo are some of the many Swedish companies providing technology solutions to the mining sector.

The mining companies operating in Upper Norrland are at the forefront of technological development in the CO2-free mining process. Regarding the zero-carbon mining process, large mining companies in the region (Boliden and LKAB) have conducted in-house projects to attain environmentally sustainable mining operations. Boliden conducts a number of projects on electrification, automation and 5G network deployment within mines. In the case of LKAB, the state-owned company is currently undertaking a number of key projects that aim to make the entire value chain from mine to steel carbon-free in the next 20 years:

  1. 1. The HYBRIT project aims to produce fossil-free steel, by developing a CO2-free pelletising process and fossil-free iron making through the use of hydrogen gas. This partnership between LKAB, SSAB and Vattenfall will create a competitive advantage for mining production in the region by supporting the carbon-free production of steel.

  2. 2. The REEMap project identifies opportunities to extract critical and rare raw materials from mining waste.

  3. 3. The Sustainable Underground Mining (SUM) project. In joint collaboration with ABB, Combitech, Epiroc and the Volvo Group, the project aims to set a new world standard for sustainable mining at great depths by developing new control systems, mining equipment and complex and efficient management systems (Sustainable Undergound Mining, 2020[22]). This involves a physical testbed in LKAB underground mines and also a virtual mine. The development of an autonomous mine has the scope to increase labour productivity and save costs by using, for instance, autonomous vehicles and a smaller ventilation system.

Swedish companies have also become international leaders in circular economy strategies for the mining process. A number of projects have invested in recycling waste material to extract traditional and rare metals. LKAB is conducting a research project to extract rare earth metals from apatite, a material that today goes to waste in the Kiruna and Malmberget iron ore mines. The recycling progress in iron ore is conducted in joint work with steelmaker SSAB, which has major operations in Luleå. In Västerbotten, Boliden’s smelter in Skellefteå has become a world leader in the recycling of electronic waste (MIREU, 2020[23]). This plant processes copper and lead concentrates from Boliden’s own mines and external suppliers and produces copper, zinc, lead and precious metals. It has a capacity of waste recycling of 120 000 tonnes of electronic scrap per year. From that waste, the company extracts copper, gold and silver.

A pool of academic and research centres supports the development of eco-friendly products, processes and technology for mining and metallurgy. Umeå University, Luleå University of Technology and Tromsö University are recognised for their specialised academic track on design, mining and environmental sciences. Luleå University is the main high education institution in Norrbotten and stands out for having the highest percentage of externally-funded research of any university in Sweden (61%) (Academic Ranking of World Universities, 2019[24]). It has become the research and training centre for the mining industry and process metallurgy with specialised courses for young people and professionals in the mining sector. Umeå University, in Västerbotten, has a large number of degrees taught in English, including more than 30 two-year master’s programmes in science and technology, social sciences, business, health and medicine and the arts.

The mining industry has historically collaborated with universities to conduct research on mining and metallurgy. In close collaboration with Luleå University, Boliden, LKAB and Zinkgruvan, through the Bergforsk foundation, created the Rock Tech Centre AB (RTC), which gathers expertise from academia, independent consultants and smaller companies to improve the mining process by working on demand for specific projects from the industry (the centre is currently undergoing a voluntary liquidation process). Luleå University also hosts the Centre for Advanced Mining and Metallurgy (CAMM), a strategic national research area assigned to the university with the goal to study the sustainable use of natural resources. Norrbotten also hosts the national innovation programme SIP STRIM. Another relevant outcome of research and private sector co-ordination is the research institute Swerim (formerly MEFOS), based in Luleå and Stockholm, which focuses on metallurgy. Boliden and LKAB are both industry partners in this institute, together with other major actors in Sweden including Sandvik, Scania, SSAB and Volvo.

Furthermore, Skellefteå Science City is promoting innovation in established companies with the ambition of creating a world-class cluster for battery manufacturing and recycling. The skilled and experienced workforce in mining activities is also a strength in the region (Chapter 2). There is good access to higher education with universities, colleges, vocational colleges and active research and development activities in a number of localities.

The region also benefits from a platform – Georange – to promote knowledge exchange and co-ordinated work around different actors to develop the mining and minerals industry. This is a non-profit organisation that gathers 54 members – including municipalities, organisations, universities and private companies – with the aim to create conditions for the development of new and existing companies in the mining industry. Main goals of the organisation involve: i) securing a frequent meeting place for mining, mineral and associated industries in the north of Sweden; ii) forming a working network of companies, academia and the public sector; and iii) creating constructive and efficient methodologies to be used in the event of overlapping activities within the same land areas. It participates in applications for national and EU funds and develops conferences and trade fairs on mining every two years.

Sustainable and reliable green energy powers most of the industries in the region. Upper Norrland provides 21% of the energy in Sweden, mainly from hydropower, and hosts wind power with the greatest generation capacity in the country (Arjeplog, Norrbotten). Wind and solar power are increasing rapidly in the region thanks to extended hours of direct light in summer to feed the solar panels and strong winds to power the wind farms. By 2020, Sweden plans the construction of the largest wind farm in Europe (Markbygden Wind Farm) – providing almost 30% of current national capacity (EC, 2017[25]). The low-cost and secure energy provision in the region has contributed to attracting global companies and electricity-intensive investments, such as Facebook that built, in 2013, its first European data centre in Luleå.

The region also benefits from an important geological potential. The region is part of the Fennoscandian Shield, an area of old crystalline and metamorphic rocks, whose mineral deposits are considered high quality internationally (Warell and Häggquist, 2016[26]). Iron, zinc, silver and rare earth metal deposits represent an opportunity for Sweden to become a key player in the supply of minerals worldwide. According to the Fennoscandian Shield database, jointly produced by the geological surveys in Finland, Norway, Russia and Sweden, 90% of the country’s non-exploited sites are located in the region of Upper Norrland (GTK, 2020[27]). The largest non-exploited areas in Northern Sweden have been identified in Arvidsjaur, Jokkmokk and Kiruna Municipalities in Norrbotten and Skellefteå mining district in Västerbotten.

Furthermore, Sweden is also known as a potential bedrock for rare metals. Some authors refer to Sweden as the "home of the rare earth elements", given that both the first light and first heavy rare earth elements (REE) were discovered there during the late 18th and early 19th centuries (EURARE, 2020[28]). Great potential for these metals comes from the same iron deposits located in Upper Norrland, which has anomalously high concentrations of REE (EURARE, 2020[28]). Hence, Upper Norrland has the opportunity to become a key player in the European strategy for raw materials by enhancing the mineral recycling process and the extraction of rare materials from known deposits.

The geographical location, close the Arctic circle, makes Upper Norrland a strategic region for national and international interests. The region is the northernmost in Sweden, featuring some of the richest ecosystems in the country – Sweden’s highest mountain and its deepest lake (Hornavan). The Arctic’s fragile environment and its relevance for domestic and foreign policy have led Sweden to develop a particular Arctic policy strategy (Box 3.5). The Arctic environment offers the ability to create sustainable growth and development in areas with a cold climate, long distances, sparse population and a sensitive environment.

An ageing and declining population can affect future business growth in the region. The population in Upper Norrland is ageing rapidly with local fertility rates that are below natural replacement rates. As depicted in Chapter 2, in 2019, the share of population above 65 years old over the work age population in Upper Norrland (37%) was above Sweden’s average (32%). Within the TL2 regions, Norrbotten has a higher share of elderly population than Västerbotten. Furthermore, Upper Norrland faces greater outmigration than the average of Swedish regions, especially in Norrbotten where the population has decreased 3% since 2000. In Upper Norrland, the mining municipalities in the region experience a larger population decline than the urban centres – in particular from young women. These demographic trends lead to local labour shortages and business competition to attract and retain talent. Furthermore, outmigration of the young population affects the local cultural life, weakening the mechanisms to integrate new inhabitants and migrants to the local community (OECD, 2017[3]).

The expanse of land and sparse nature of human settlements bring some challenges in terms of stakeholder co-ordination and services provision. Low-populated municipalities covering large geographical areas has led to fragmented labour markets that struggle to create economies of scale in certain economic areas and face skill mismatches. Public programmes for business support or service delivery face challenges to reach out to the entire population and co-ordinate with nearby municipalities. Likewise, municipalities face challenges to share labour and business information, hampering labour mobility from municipalities with low to high unemployment rates. To deliver public services, the region has to succeed by implementing innovative mechanisms and leveraging digital solutions. The region has a strong platform based on good quality access to broadband that supports innovation in the aged care and health system. However, this digital approach for services has paid less attention to other policy services such as training, business advisory or spatial planning.

SMEs tend to be over-dependent on a few large mining firms and those outside the mining sector face difficulties for growth. The nature-based and small size of the market characterises an economy dominated by a small number of large firms focused on extractive sectors. Many of the SMEs and suppliers are located in the backward linkage of the mining value chain, i.e. in the provision of goods and services for mining exploration, exploitation or logistics, while just a few businesses are connected to forward linkages in the transformation of minerals or manufacturing of new metals. This dynamic has led to a market where many SMEs are locked into supplier relationships with a few large firms (OECD, 2017[3]). For example, in Pajala Municipality, the main client of a large number of suppliers is the mine and this picture mimics Gällivare and other neighbour municipalities. The dynamic has also leads to a crowding-out effect in sectors outside extractive industries. New businesses can face extra challenges in accessing skill labour, infrastructure, financing and inputs, as many of these factors are focused or locked in extractive activities.

The capacity of infrastructure in both east-west and north-south corridors can be enhanced. Most mining companies in Upper Norrland, particularly in Norrbotten, rely on the rail network to Narvik, Norway, to export the production. Some mines far from a rail connection (e.g. Pajala mine) use trucks to transport ore to a railway station. Such transportation occurs via the county’s main highways and roads, which are in many cases two-lane roads. A first policy of co-ordinating mining transport via these roads (allocating specific times or days) or enhancing the routes would help to improve the flow of goods and people in the area. The labour market and exchange of goods should be boosted with improvement of east-west connections and links between northernmost municipalities with centres in the south of the region. Modern transport roads with Finland and Norway can also facilitate interaction with the mining sector in those countries. However, the national focus of transport planning for the north still prioritises north-south linkages (OECD, 2017[3]). In this sense, the completion of the North Bothnia Line connecting Luleå (Norrbotten) with Umeå (the southern city in Västerbotten) with a high-speed railway will enable regional expansion and accessibility to larger markets.

The high reliance on extractive industries (mining and forestry) closely connected with global trade makes the region vulnerable to external shocks on the global economy. The recent crisis from the COVID-19 pandemic hit mining sectors – especially iron and base metals – harder given the drop in the demand from the manufacturing and construction industries. As in the 2008 crisis, this will affect local income and slow down investment and exploratory decisions from mining companies. These factors can particularly affect local businesses locked into supplier relationships with large firms. For this reason, diversification in terms of markets and economic activities is a pressing policy in the region, especially when it comes to small firms.

The table below summarises the main strengths and challenges for Upper Norrland’s mining ecosystem.

Upper Norrland has the potential to position itself as a leader in technology development for environmentally sustainable mining. The region has a number of assets that can be mobilised to deploy new types of jobs and businesses linked to environmentally friendly technology. These include sustainable and reliable green energy, a pool of universities and research centres, frontier companies investing in mining technology and a highly skilled population. However, the region faces some challenges to consolidate a dynamic mining ecosystem and facilitate synergies with other economic sectors. They include a shrinking labour force, co-ordination challenges to support local businesses and labour mobility, and locked-in SMEs. This section will examine the regional strategies and policies to mobilise such assets while addressing the current challenges.

Regional development policies are instrumental to provide the vision of the type of development in the region, align actors and set the strategies to overcome development challenges. Effective strategic planning can also help reduce asymmetries of information, contribute to better functioning markets and create new markets where there are none (OECD, 2016[31]).

In Sweden, the national government plays a strong role in shaping the strategic policy setting at the regional level. In the context of the OECD, Sweden has a relatively centralised approach to strategic planning and policy development (OECD, 2017[3]). The Ministry for Enterprise and Innovation is the national body responsible for regional and rural development as well as state-owned enterprises, enterprise and industrial policy. The Swedish Agency for Economic and Regional Growth, a part of this ministry, is in charge of managing the European Regional Development Fund (ERDF).

At the regional level, both Västerbotten and Norrbotten regional councils conduct economic strategies by setting out the vision, goals and priorities for sustainable development. These economic strategies are based on the overall vision of the EU and national level strategies, in particular the policy priorities set by the National Strategy for Regional Growth.

Both TL3 regions in Upper Norrland have well-defined development strategies aiming to mobilise its main competitive advantages. The two regional strategies put a strong focus on quality public services, innovation and entrepreneurship, transport and digital connectivity, and educational attainment.

Västerbotten Regional Development Strategy 2014-20 identified six policy priorities for creating a sustainable, attractive region from the coast to the mountains (Table 3.3). Västerbotten identifies mining as an engine to support regional development with a focus on long-term sustainable growth. It recognises the capacity of mining ecosystem know-how (expertise from universities, businesses and the engineering sector) to develop products and processes based on renewable raw materials. A concrete strategic goal is to unlock the local expertise to consolidate the region as an international model in clean-tech.

Västerbotten is currently developing a new strategy for the period 2020-40. This long-term plan is under discussion with a range of stakeholders and will have a stronger link with the Sustainable Development Goals. The new plan defines nine targets with the aim to adapt the region to the future technological changes and accelerate the transition towards a zero-carbon economy. The goal of a sound circular economy process and the use of fossil-free materials and infrastructure have a central role in the policy agenda.

In Norrbotten, the regional council has defined the Regional Development Strategy 2030 through co-ordinated work with regional actors. This is a cross-sectoral strategy that identifies four main objectives to enhance attractiveness and innovation (Table 3.3). The strategies are very much in line with global, EU and Swedish strategies for sustainable growth. A main goal for the 2030 development strategy is to enable an environment for innovation and entrepreneurship. It recognises the region’s need to diversify the economy and reduce vulnerability to cyclical changes and technological shifts. To move forward this ambition, the strategy identifies the transition to a circular economy as an opportunity to create new business, supported by policies to scale up SMEs and promote open innovation entrepreneurship.

The regions have also defined a number of areas to unleash growth opportunities and create complementarities. This strategy focuses on unlocking opportunities from the region’s competitive advantages, namely the nature-based economy – minerals and forestry resources – and the energy infrastructure. It supports knowledge dissemination and diversification among related sectors as a mechanism to promote innovation.

Västerbotten and Norrbotten smart specialisation strategies have identified a number of areas to make the most of the existing potential in the region (Table 3.4). Västerbotten’s innovation strategy (2014-20) focuses on seven areas, including healthcare and medical technology and bioenergy. In the case of Norrbotten, the innovation strategy (2019) defines five areas of specialisation to unlock opportunities from the nature-based economy – minerals and forestry resources – and the energy infrastructure. These strategies aim ultimately to support knowledge dissemination and diversification among related sectors as a mechanism to promote innovation.

Both regions share the interest of becoming a world-leading region in testing technologies. The cold climate of Upper Norrland with excellent areas for winter testing and a stable winter climate with negative temperatures for several months offer attractive test environments for the automotive, train, wind power and aircraft industries, new composite materials, wind power plants, rail vehicles and a wide range of future solutions. Currently, the testing of vehicles in cold climates has become one of the most important industries in Norrbotten. Those similarities open opportunities to further explore common strategies in this area.

Other areas of great complementarities are culture, creative industries, tourism and the space industry. Tourism has seen the fastest growth in the region and the Sami culture together with an Arctic lifestyle (northern lights and midnight sun) and the sky resorts pull in an important number of tourists yearly. While this sector suffered a drop due to the pandemic crisis of 2020, particularly from international tourism. Policies to attract international tourists are going to be crucial for the recovery of the sector in the years to come.

The region also benefits from a dynamic creative industry including design, architecture, music/audio, film, literature, photo and games. This can create a positive environment to retain and attract new skills and talent. Furthermore, a close collaboration between the mining and space industries can further unlock new growth opportunities for the region in terms of development and use of new materials or technologies.

When it comes to the future of the mining industry, the strategic plans of Västerbotten and Norrbotten acknowledge the potential of local assets to develop new technologies and practices to support environmentally sustainable mining. The mining ecosystem is seen as a platform to add innovation and potentiate other economic activities by enhancing the involvement of technological development process on raw materials with the rest of the economy. For this, the strategies have set a number of actions that can be complementary.

Västerbotten aims to increase the value-added of natural resources and resource-efficient technologies. For this, the region is supporting investments in technology, professional development and production methods that promote sustainable development. A clear strategic programme for this is the development of fossil-free materials and minerals, system solutions for the commercialisation of biorefineries as well as information technology (IT) systems that reduce energy consumption.

Norrbotten development strategy acknowledges the vulnerability of being too dependent on the mining industry as cyclical technological changes in the world can quickly have major effects. The strategy aims to keep the focus of research on its natural recourses (ore and minerals, forests and hydropower) to complement the extraction of unique raw materials to contribute to the global sustainability agenda and European competitiveness. The strategy also intends to benefit from natural resource technology innovations to promote research in digitalisation, space and artificial intelligence.

Norrbotten and Västerbotten development strategies can better identify the specific actions to strengthen the local value chain on mining and promote mining clusters. A common approach in the development strategies is leveraging on mining innovation to support other industries. However, little attention is given to how to foster a more competitive mining ecosystem. Strategies to support a clear integration of actors in the mining sectors can very much benefit both regions in consolidating a single cluster of innovative mining technologies and practices.

In sum, both regional strategies could better align their growth priorities to exploit synergies and build a common vision for Upper Norrland. Both strategies target similar industries (testing industries, energy technology or creative industries) but there is no clarity on the type of co-ordination to meet common objectives. Co-ordination in strategic implementation can also lead both regions to benefit from economies of scale and knowledge exchange. Furthermore, clarifying a common future for mining development in the region could also help to design specific policies to reach similar objectives and move forward a common agenda that leverages on mining technology. Such common strategy has to be built upon the development of a functional mining ecosystem to position Upper Norrland’s competitive advantages internationally and create a diversified and sustainable economy. The next section will offer a strategic orientation and set of policy recommendations to unlock the potential of the mining ecosystem and address the challenges tor a sustainable future for people and businesses.

Upper Norrland can leverage the assets of its mining ecosystem to become a model in environmentally sustainable mining. If well managed, this technological progress can offer the opportunity to position itself as the technology provider for the Arctic region, which will help diversify the economy and provide a sustainable future development for its people and businesses.

As presented in the previous sections, Upper Norrland is already moving forward in developing technology to reduce the CO2 footprint in the mining and metal making process. Innovative large mining and extractive companies along with the skilled labour force and the industrial partnership with universities can lead to first-class innovations to attain a zero-carbon emission mining process and reuse of waste mining. The regional strategies in Upper Norrland also target this overall objective to attain sustainable growth based on an innovative mining and mineral processing industry. This strategy is valuable to complement the international efforts to transition to a zero-carbon economy, where many green technologies (electric batteries, solar panels, etc.) and rare metals to build them will be increasingly required.

The undergoing innovation efforts in mining also provide the scope for Upper Norrland to become the know-how and technological provider for the Arctic region. Many of the technological solutions developed by mining companies address common challenges faced by industries operating in the arctic environment. The climate characteristics in the north (low temperatures in winter and long days in summer) coupled with the shortage of easy-to-access mineral deposits require the use of adapted machinery and equipment (i.e. adapted trucks or ventilation systems). The technologies underproduction can contribute to developing the mining industry in other Arctic countries. Furthermore, the initiatives of producing fossil-free materials can also contribute to attaining environmental agendas in other industries. Industries are also looking for strategies to make their products more environmentally friendly. For example, the space industry in Kiruna is conducting a project to build more environmentally friendly engines. In a near future, automobile manufacturers might increase the offer of cars made with zero-carbon materials, responding to increasing environmental regulations and a more conscious demand (Hertwich et al., 2019[34]).

To become a reference in technologies for sustainable mining and support a more diversified economy, Upper Norrland needs to ensure all actors can benefit from innovation activities and address labour market challenges to enhance well-being for communities and growth opportunities for local businesses. For this, Upper Norrland needs to:

  • Develop an innovation policy approach that enables synergies among the mining sector and the local economy.

  • Improve the co-ordination within regional actors to improve the local labour market and business environment.

  • Enhance regional and international co-operation to consolidate a unified vision on mining development between Västerbotten and Norrbotten.

Upper Norrland is considered a highly innovative region in the national and European contexts (Chapter 2). The TL2 region has particularly evolved in terms of technological innovation, mainly driven by the mining industry. This important asset positions the region to enable it to reach technological frontiers and become an international model on this matter. Non-technological aspects of the innovation can also be further exploited. The OECD/Eurostat Oslo Manual acknowledges a broader role of innovation, from product innovation to business process and social innovation (OECD/Eurostat, 2018[35]).

In Norrbotten, large mining companies are driving the technological innovation process. LKAB plays a key role in leading innovation in the TL2 region by gathering other companies’ expertise around the projects on zero-carbon mining process and mining recycling as well as offering its mines as a testing platform for equipment manufacturing companies. Such innovation leadership has led to important technological progress in mining automation and new production processes for raw materials. However, this innovation process has followed a mostly in-house development approach, involving selected research centres, innovative suppliers and equipment manufacturers, but low interaction with local SMEs and municipalities.

Becoming an international provider of technologies for environmentally sustainable mining will require an innovation process that involves all local actors. Despite the comprehensive innovation policies of the two TL3 regions, which address opportunities among different economic sectors (see the previous section), the regions have scope to improve the co-ordination and the mechanisms to implement the innovation strategy across municipal governments and local business. For this, Västerbotten and Norrbotten regional councils should:

  • Better integrate local governments with the innovation process of universities and firms.

  • Increase the innovation and the absorptive capacity of local firms.

  • Strengthen the implementation of smart specialisation strategies with a cluster approach on mining.

Upper Norrland’s private-driven technological approach for innovation requires better co-ordination with regional and municipal strategies. Today, private-led innovation has a weak involvement with development or investment strategies of municipal governments. The technological ventures in local communities can offer key opportunities to create a larger innovative ecosystem involving customers, service providers and governments. To create the synergies with the local economy, the in-house projects from mining companies need to be aligned with the strategic projects at the municipal level. For this, the regional councils should formalise the co-operation between municipal governments and mining companies around innovation projects. This can be done through periodic meetings open to local businesses and research institutions.

Promoting open or user-driven innovation can contribute to balanced growth across different municipalities in the region. Not all municipalities in Upper Norrland are benefitting from the innovation process driven by the extractive industries. Municipalities with no mining or forestry activities have relied mainly on services or tourism to remain competitive, leading to a different innovation and growth path. To extend the innovation outcomes from the mining industry to the whole region, Upper Norrland can put a stronger focus on innovation diffusion mechanisms. Many OECD regions have moved towards open or user-driven innovation, acknowledging that innovation diffusion (and not just knowledge creation) is key to productivity and employment growth (OECD, 2019[36]). Policies to promote innovation diffusion from frontier companies to all municipalities can unleash new business ideas and support economic growth across Upper Norrland. For this, regional councils should also involve non-mining municipalities in the co-operation on innovation with mining companies.

Upper Norrland has scope to improve the co-operation on innovation between academia and the public sector. Universities can also play an important role to strengthen the innovation strategies and capacities of municipal governments at the same time as improving the impact of research projects. While the regional innovation process has benefitted from a close co-ordination between academia and industry, the interaction of universities and research centres with the regional and municipal strategic priorities remains low. Both regional and local governments have fewer spaces to collaborate with the undergoing research projects carried out by mining companies and universities. The lack of involvement in the innovation system is particularly high in municipalities that are far from university campuses. Furthermore, municipal governments tend to lack the skill capacity to benefit from innovation partnerships, due to staff shortage and lack of appropriate skills. To improve the co-operation on innovation, the regional councils of the two TL2 regions should promote formal partnerships with universities for strategic development. The regional councils can get inspiration from the partnership between Karlstad University and Region Värmland to support regional development (Box 3.6).

Small businesses are often a driving force of innovation and knowledge diffusion and contribute to the empowerment and inclusion in society (OECD, 2017[3]). However, across OECD countries, small firms tend to find larger barriers to absorb new digital technologies. OECD research shows that the uptake and diffusion of digital technologies and activities are much lower among SMEs than among large firms (OECD, 2019[36]). SMEs also tend to get involved in “doing, using and interacting-based innovation” (DUI) rather than “science and technology-based innovation” (STI). Common barriers include a shortage of skills or staff to keep up with technological progress and low capacity to access funds to update technology. Further, in mining regions, an overreliance on mining can reduce the incentives for SMEs to participate in the regional innovation programmes and diversify their business.

The promotion of SMEs is a key aspect in the development strategy of Upper Norrland. Both TL3 regions have developed specific strategies to internationalise and increase innovation in SMEs. Norrbotten and Västerbotten have a number of support mechanisms to promote the innovation capacity of SME. It includes co-financing projects to increase collaboration of SMEs with academia and research industry as well as grants for innovation, digitalisation and internationalisation. In Norrbotten, a key policy is to extend the survivable rate of entrepreneurs and SMEs by promoting the intake of digitalisation. The region has an incubator in Luleå and incubators for cultural companies in some municipalities (Norrbotten Regional Council, 2019[33]). In Västerbotten, main policies target greater participation of local firms in international networks and fairs and the deployment of science parks with local and/or virtual nodes throughout the region (Västerbotten Regional Council, 2013[32]).

The innovation strategy in Upper Norrland needs to further involve and ensure sustained participation of mining and non-mining SMEs. Despite the SME programmes and support in Upper Norrland, many small and micro companies lack interest in innovation and digitalisation programmes or have reduced capacity and time to participate in them, which make it difficult for the innovation strategy to sustainably engage a representative share of SMEs (OECD, 2017[3]). To address this challenge, regional councils should:

  • Enhance work with universities to boost the entrepreneurship culture, especially involving women.

  • Collaborate with mining and innovative firms to facilitate technology transfer to SMEs.

When it comes to an entrepreneurial culture, regional councils can leverage on universities and training to foster entrepreneurship. Common policies in OECD countries to boost an entrepreneurial culture include entrepreneurship courses in education programmes, improving information and mentoring activities as well as reducing the negative social consequences of business failure (OECD, 2017[38]). Regional councils can learn from intentional experiences to develop information campaigns to raise awareness about entrepreneurship (i.e. France) or provide financial support and insurance guarantees to entrepreneurs that are active or already failed (i.e. Portugal). In Upper Norrland, these strategies should be coupled with joint work with educational institutions at all levels by integrating entrepreneurial courses into the curriculum of these institutions and training for wage-earning employees. Given the increasing need to retain and attract women, these programmes should have a special focus on women by developing particular networks and targeted training courses (Box 3.7)

Alongside this, joint work with universities can also enhance micro companies’ participation in innovation systems. In some OECD regions, a closer co-operation with academia allows the small companies that are not able to finance an internal research facility to leverage cutting-edge research equipment, techniques and workforce from universities and public research institutes (OECD, 2019[41]). As many small companies struggle with innovation in science and technology, this type of partnership can provide them basic tools to accelerate DUI innovation. The regional council should expand the existing programmes that promote co-ordination among academia and SMEs to all sizes of companies and women-led SMEs. It can be done by supporting small and micro companies to access training (i.e. managerial training via webinars or personal counselling) and universities’ research equipment and staff. Targeted loans or regional vouchers to non-repayable grants can also complement this partnership with education institutions (Box 3.8) (OECD, 2019[41]).

Large extractive and mining manufacturing companies can further improve the innovation capacity of small supplier firms in Upper Norrland. In the region, many of the small firms involved in supply relationships with the mining companies are family businesses or single-owner companies, focused on services (i.e. maintenance, cleaning). This is especially the case of the northernmost municipalities where large firms leverage local markets to obtain basic products and services. This small-size and family-oriented nature of the companies creates capacity barriers to develop appropriate skills and free up time to get involved in innovation exchanges (i.e. new managerial approaches) or embracing new technologies (new tools and installing technologies). In OECD countries, large firms have been supporting suppliers and associated SMEs through a number of partnerships, including deploying specialised accelerators for start-ups and individuals, setting up innovation labs with a view to encouraging “out-the-box” thinking and new collaborations within the firm (OECD, 2019[41]). Upper Norrland should further facilitate or collaborate with large firms to develop capacity programmes for suppliers – especially targeting less involved segments of the population such as women-led SMEs or entrepreneurs. They can take the form of accelerators or open lab collaboration. The example of the BHP accelerator programme for suppliers in Chile is a guiding practice (Box 3.9).

Finally, an important strategy to support the goal of becoming a key player in sustainable environmental technologies is to strengthen the environmental practices of SMEs and suppliers. Ensuring environmental good practices across the local mining value chain will help to strengthen the perception of the environmentally friendly mining industry. Thus, it is an important mechanism to position internationally not only the final product (i.e. iron pellets and technologies) as environmentally friendly but also open up opportunities for small suppliers to export their knowledge and practices on this type of green provision of inputs to their mining industries. Hence, the region should support small businesses already integrated into local (and global) value chains to transition to environmentally friendly practices and technologies. The former accelerator programme for suppliers can include a stronger focus on these practices.

Regions are seen as increasingly important to the delivery of innovation policy outcomes, particularly in terms of the idea of “smart specialisation” (OECD, 2018[43]). Smart specialisation strategies aim to strengthen regional competitiveness by identifying and prioritising areas of potential growth. The role of the government in this strategy is helping the private sector and entrepreneurs to identify their knowledge-based strengths at the regional level through a range of mechanisms, including public-private partnerships, technology foresight and road mapping. The success of smart specialisation policy is closely dependent on the capacity of regional government institutions to act as co-ordinators or facilitators of the innovation process.

A key challenge for Västerbotten and Norrbotten is to operationalise the smart specialisation strategy. TL3 regions lack clear tools to implement the strategy in a co-ordinated fashion with municipalities and local actors. The implementation of the strategy is conducted mainly on a project-basis approach rather than following a concerted strategy. Some specialisation strategies (i.e. technology development for sustainable mining) are mainly driven by private actors or universities, with a low degree of joint planning with local municipalities. Larger distances also make it harder to establish a constant exchange with municipalities around the implementation and monitoring process of the strategy. Constant engagement with local actors is crucial to maintain trust and commitment as the strategic projects established in the smart specialisation can vary and modify with the time (Gianelle et al., 2016[44]).

To align all actors in the implementation strategy, the Norrbotten and Västerbotten councils need to assume a more active role as a broker to facilitate innovation. Facilitating a constant dialogue and engagement among local actors is especially needed in sparsely populated areas, where the physical distance among municipalities can lead to pursue individual approaches and lose co-ordination with time. To maintain a constant commitment, both regional councils should establish an institutionalised platform to monitor the implementation of the strategy and ensure the continuous engagement of different actors through regular meetings under a formalised setting. The region has already a similar type of platform –Georange – that focuses on mining and mineral development. The region can follow the model of this sectoral platform to create a broader platform – that also involves civil society representatives – to implement the smart specialisation strategies of the main regional competitive advantages (tourism, space industry, etc). The example of Lapland can also help guide the strategic approach of this platform (Box 3.10).

The regional councils can further leverage on Georange organisation to move the innovation strategies in the mining and minerals industry forward. Georange is a well-conceived organisation that provides the mechanisms to align the interests for mining development across the private sector, research institutions, universities and governments in both Norrbotten and Västerbotten. Researchers have found that a cluster of economic activities around mining ventures can lead to innovation and economic diversification, becoming hence an important instrument to provide socio-economic benefits to a region (Söderholm and Svahn, 2015[9]). This type of cluster policy is a powerful instrument to channel funding for and follow up on the implementation of innovation strategy in mining. For example, the batteries cluster in Skellefteå will largely benefit from network creation through this organisation. For this, both regions should use the platform to agree on a common vision for the future development of mining (i.e. Upper Norrland branding) and linking with actors of other economic sectors and civil society to unlock growth opportunities.

Furthermore, there is scope to better channel national innovation funds with the strategic priorities in the region. The OECD (2017[3]) finds that opportunities related to innovation in Upper Norrland, as in northern Swedish regions, are not adequately reflected in the prioritisation of innovation investment at a national level. As national policies are designed to be applied across the national territory, the policy does not take sufficiently into account the specific characteristics in northern areas in regards to the more densely populated areas in the south.

Greater involvement from local actors to set the priorities of European funds can contribute to sustained implementation. There are three EU funds relevant for regional development in Sweden: the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the European Agricultural Fund for Regional Development (EARDF). From the ERDF budget 2014-20, around 65% of the funding for Upper Norrland focused on SMEs, whilst about 25% focused on infrastructure (OECD, 2017[3]). In terms of the ESF, around 70% focused on promoting employment and labour mobility. Other OECD work has found that these funds can help promote co-ordination and the realising of policy complementarities among different levels of governments in northern sparsely populated areas in Sweden (OECD, 2017[3]). Both regional councils should further leverage on these funds to align municipalities, universities and local businesses with the innovation strategy.

The success of Upper Norrland as a region relies on a co-ordinated action to implement its development plan across the territory and address common challenges. Supporting municipal governments to overcome local challenges in the labour market and attract investment and people is key to achieving the desired policy outcomes for the population.

Better co-ordination among municipalities can contribute to address the shrinking labour force trend and support local business. Upper Norrland municipalities, in particular more remote ones, face structural challenges to support the development of the local market, including a lack of staff capacity and fragmented information on business and labour. These challenges are more acute with the increasing demographic pressure brought by ageing and outmigration (Chapter 2). Furthermore, a larger co-ordination among municipalities to expand the local offer of products and services will help retain locally the economic benefits from mining operations. The indirect impacts of mining ventures (better known as multiplier effects) are more likely to remain in the region if the local market is big enough to fulfil the demands of labour and goods (Söderholm and Svahn, 2015[9]).

In Upper Norrland, the sparse nature of the region has led to small municipal governments that cover large geographical areas with a rather small population. On top of that, municipal governments have scarce financial resources, which make it difficult to compete with the private sector for skilled workers. While the challenges for development are similar across municipalities (i.e. labour market shortage), there are no co-ordinated strategies to implement joint policy solutions. Municipalities have developed individual and, in some cases, competing policy approaches to attract skilled workers, retain the young population or support entrepreneurship. It has led to a competing environment among local markets and prevented them from benefitting from sharing information and attaining economies of scale. Alongside that, information on business characteristics and needs has scope to be better shared across municipal governments for them to identify opportunities of collaboration on labour mobility and business development.

The above-mentioned challenges ultimately create difficulties for the municipal governments to be strong partners in developing the local business environment. Municipalities in Norrbotten have already promoted a type of development agency, generally in collaboration with private companies, to provide services to businesses and promote investment in the local market (i.e. Strukturum – the business corporation of Jokkmokk Municipality or Gällivare Municipality’s Business Corporation). These municipal development agencies play a key role in supporting the implementation of the regional strategy and helping the municipality to identify its strategic priorities. However, these agencies face staff shortage and their effectiveness relies very much on the leadership and personal relationships of the person in charge. To address municipal fragmentation and improve the business ecosystem in the region, regional councils should establish a stronger co-ordinating mechanism that supports economies of scale, co-ordinates joint policies and centralises economic information. For this, the regions could establish a municipal co-ordinating body in the regional council to oversee and align the work of the different developing agencies and municipal governments.

Other OECD mining regions have also improved municipal co-ordination by creating an inter-municipal development agency. A unique development agency can integrate common strategic municipal tasks under one single agency and have the resources to hire skilled staff and find synergies among municipal strategies through more efficient exchange of information. Finland offers an example of these kind of agencies. Business Joensuu Ltd in North Karelia is an agency from whom municipalities buy services according to a service agreement or Real Estate & Development companies in Varkaus area (Box 3.11). This agency was an instrument to build trust among municipal actors to conduct joint strategic projects and helped municipalities to feel that they gain more from co-operation in business development than from competition amongst each other.

The co-ordinating body needs to be the vehicle to address business challenges in a region with a shortage of labour force and small markets. This includes advice on ownership transition (in individually owned and family SMEs), developing and setting up a business (start-up, growth and mature phases) and funding opportunities. This co-ordinating body can also facilitate collaboration among municipal governments and the Platform for Regional Competency to improve the match of skills and focus on new job opportunities for women. It can also co-ordinate the implementation of smart specialisation strategies in Upper Norrland by involving local businesses and governments in the innovation process of large companies and developing internal and external networks for local businesses.

An ageing population and outmigration can negatively affect future labour force dynamics and public service delivery (OECD, 2017[3]). To support the transition towards new economic activities linked to green technologies and meet industry demands, Upper Norrland needs to ensure the supply of labour with the right skills is in place. The region currently faces challenges to fulfil the labour demand on some basic and advance competencies (Norrbotten Regional Council, 2019[33]). For example, mining companies in some municipalities find it hard to find electricians and there is a lack of workers in battery manufacturing, which can hamper the development of an eventual cluster of batteries in Skellefteå. Furthermore, automation in mining and extractive industries poses a high risk of job displacement, which requires target policies to upskill Upper Norrland’s labour force, especially the most vulnerable workers (Chapter 2).

Attracting workforce into Upper Norrland

Both regions in Upper Norrland have developed a number of strategies to attract new residents. These include attracting immigrant to address labour shortages and the improvement of local attractiveness. Both TL3 regions pay particular attention to delivering quality public services. Through a co-ordinated approach between the region and municipal governments, both TL3 regions have deployed good ICT infrastructure that has set the basis for deploying innovations in the education, health and care systems (e-Education, e-governance and e-Health) (OECD, 2017[3]). However, there is a lack of co-ordination in programmes to retain workers and share information on the specific needs of skills at the local level (Regional Government of Norrbotten, 2019[47]). Furthermore, the national institutional bodies that address these challenges work with reduced staff: the Platform for Regional Competence in Norrbotten has one worker and Västerbotten has a group of five employees.

A co-ordinated approach to migrant assimilation can further revitalise the labour market in the region with a skilled labour force. Given the harsh climate and young outmigration, immigrant integration with a long-term perspective of staying is a challenge in northern rural municipalities (OECD, 2017[3]). Furthermore, refugees, asylum seekers and their families face challenges such as lack of appropriate qualifications and recognition of prior experience as well as lacking the sufficient proficiency in the Swedish language. The OECD (2018[48]) outlines a number of actions for local governments that can contribute to greater integration of migrants in the local economy, making the most of their skills and in turn enhancing the local labour market (Box 3.12). In the case of Upper Norrland, the development of new technological projects can be an entry door to attract new skilled residents. The region can accelerate the integration of foreign-born workers into the market through work placements, job-matching services and support with skills assessment across rural municipalities.

A co-ordinated strategy to integrate migrants needs to improve information sharing mechanisms and collaboration with on-the-ground associations. Regional councils and municipalities should support a free exchange of information on migrants’ skills and centralise the information in a single open platform to allow easy access for professional actors. Promoting partnerships between migrant organisations, unions and businesses can also help the assimilation of newcomers and facilitate its integration in professional and personal networks.

Partnerships among municipalities and education institutions can support the strategies to attract new residents into the region. Universities can pull in skilled and young population to the region and connect them with local businesses. Some authors have found that research universities can leverage knowledge-industry clustering to increase the wealth of an entire region by attracting highly educated people and drawing in private investment (Abel and Deitz, 2009[49]). Other OECD mining regions such as North Karelia have conducted strategies to leverage the high quality of their educational institutions to pull in young people and families (OECD, 2019[46]). The innovative mining environment in the region and the close link with universities like Luleå can be of interest for specialised researchers or students in this field. For example, some OECD regions have increased the promotion of industrial PhD programmes to link long-term research projects with industrial needs (OECD, 2010[50]). Offering students greater possibilities to link with the local industry should facilitate a long-term integration with the region.

Preparing the labour force for technological change

Rapid digitalisation is transforming what people do in their jobs, how they work and the skills they need to remain in employment (OECD, 2019[51]). The technological change and automation are able to replace some repetitive tasks and make some occupations redundant. At the same time, they create new types of tasks, which require workers to have a new set of skills and knowledge (Chapter 2). The recent COVID-19 pandemic has placed high on the policy agenda the need to provide workers with skills to work digitally (or remotely) and transition to high-value-added service activities. Reaping the full benefits of digitalisation will ultimately depend on the ability of governments to develop a set of policies that help workers adapt to these changes and develop relevant skills to thrive in the digital world.

Norrbotten and Västerbotten have set the upskilling of the labour force high on their development agenda. Both TL3 regions have defined measures to reduce the risk of young people leaving upper secondary school, for example by promoting meaningful leisure activities, and ensure employers take more responsibility for employees’ lifelong learning through collaboration between workplaces and educational providers. Both TL3 regions need to pay special attention to upskilling the labour force in the manufacturing and extractive industries. OECD (2018[52]) finds that jobs in rural regions with a lower share of service activities, low productivity and a high share of repetitive tasks face higher risks of job displacement. Economies with a high degree of specialisation in the manufacturing and mining sectors, such as Norrbotten, could then face important risks of job displacement (Table 3.5).

Upper Norrland can further capitalise on the close collaboration among companies and universities to upskill its workforce. The OECD (2018[52]) has highlighted the importance of better engaging employers in skills development programmes to ensure that training programmes are well aligned with the skills needed by the local labour market and target the right key segments of the population – women and immigrants. For the young population, governments are promoting apprenticeship programmes along with on-the-job as well as off-the-job training to smooth the school-to-work transition. For the workforce population, facing automation involves policies that promote training at the workplace in alignment with the industry’s future needs (OECD, 2019[51]). Other OECD mining regions, such as Western Australian, have developed partnerships with private companies and universities to develop targeted training curriculums for the mining industry’s jobs of the future (Box 3.14). Norrbotten and Västerbotten regional councils should strengthen the collaboration with mining companies and universities to retrain workers in the workplace with digital and cognitive skills and leverage on technological change to involve women in value-added activities.

Supporting the workforce to re-enter formal education and transition to other occupations can also help to reduce the negative effect of automation in the labour market. The automation of some activities can lead to a greater need for workers to move away from declining occupations. Governments need then to design policies to support workers movement from declining occupations (which are highly intensive in low-skilled routine tasks) to growing ones that have similarities (which are characterised by high-level, non-routine cognitive skills) (OECD, 2019[51]). To do this, some OECD governments have designed targeted support or individual training accounts (ITAs) for workers to manage disruption in the labour market (Box 3.15). These type of accounts or direct grants allow workers to use available funding at any point in their careers to invest in training – either to help them with career advancement or to adjust to a new job as a result of automation (OECD, 2018[52]). Identifying the workers at greater risk of job displacement involves comprehensive mapping of sectors and occupations within the local economy that are most susceptible to automation. Västerbotten and Norrbotten should develop, with the input of firms, a map of workers with a higher risk of job automation and develop targeted policies to help these workers re-enter formal education and be able to move to non-routine activities.

National and international co-operation will pave the path for Upper Norrland to become a model in zero-carbon footprint mining processes and technology. Links with external markets can also improve competitiveness and innovation in the TL2 region, as business collaboration benefits the technological progress of the mining ecosystem and offers new business opportunities for large and small companies. Researchers have found that almost half of new product and process innovations occur through external partnerships (Carlino and Kerr, 2014[54]). Linking local economy to new markets and knowledge also leads to diversified sources of growth and hence increase the resilience of the economy (OECD, 2019[46]).

Västerbotten and Norrbotten can explore stronger mechanisms to consolidate Upper Norrland as a brand of technological provider for mining. A common view of mining development between the two regions will help unleash business opportunities and pull in investments. This common vision will help to strengthen the co-ordination with the national government and help define the role of mining in the national policy framework (in particular in the regional and mineral strategy).

As presented in Chapter 2, both regions have differences in their economic structures, which provide scope for complementarities in strategic policies. Västerbotten is a more diversified economy with a higher share of the service sector in the economy. These services can be better integrated to support the industrial developments undertaken in Norrbotten mines. The OECD finds that the interaction between the mining and service sectors can lead to positive outcomes in the local economy. For this, a comprehensive map of the backwards and forward linkages of the mining sector across both regions would be useful to identify opportunities to add value in the mining local chain. The research found that, on average, a 10% increase in services used in the production of mining exports is associated with a 2.8%-3.4% increase in mining domestic value-added (Box 3.16). Greater co-ordination to enhance services through mining activities will benefit sustainable development in both regions.

This common vision could be materialised through a clear brand to become internationally visible as an attractive region on mining and environmental technology. A common branding is more than a simple question of labelling; it could be used to shape the vision, projects and stakeholders that can be empowered to join forces and act stronger together (OECD, 2018[43]). The process of branding also leads to identifying and engaging all relevant stakeholders. Benefitting from an international frontier mining industry, Upper Norrland can shift the perception away from mining as an extractive-only sector towards a branding where the mining sector is seen as a high-tech industry contributing to green technologies.

To operationalise the collaboration among the two regional agendas and the different local actors, the regional councils could agree on a common flagship mining project between both regions. A common project could be materialised in a joint activity that unlocks synergies in a project strategic for both regions, such as the batteries cluster in Västerbotten and the automation mining strategies in Norrbotten. Such a flagship project should trigger value-added across the value chain of both regions. If well co-ordinated, this common project would lead to the strong development of technologies for the zero-carbon mining process and materials. Georange should be the platform where actors from both TL3 regions discuss and agree on common project and vision.

A common project and a single marketing strategy would help both regions to reaching national and European funds in a co-ordinated fashion. This approach coupled with networking activities with other international clusters and global companies would also enhance the chances of attracting international investors.

Co-ordination with other regions in Sweden would also help to build a strong mining network across the country. Norrbotten and Västerbotten have the technology and know-how to support the mining or metal processing industry in other Swedish regions. For instance, a closer collaboration with the mining industry in South Central region can create opportunities for technological and knowledge transfer and new partnerships for local businesses. Various exploration and mining recycling projects throughout Sweden can benefit from the experience of mining-related companies in Upper Norrland. To make the most of this network, the Ministry of Enterprise, Energy and Communications can explore the creation of mechanisms for regional co-ordination on mining activities. It can apply mining partnership schemes inspired by regional association experiences in the Czech Republic and Germany (Box 3.17)

Collaboration with other countries and in international networks can help Upper Norrland consolidate its new vision and gain visibility as an international provider of green technologies and practices. Upper Norrland’s transition towards a high technological and expertise hub for environmentally sustainable mining and minerals value chains is very much in line with the efforts undertaken by various EU networks and countries and plays a key role in the collaboration with the Arctic agenda.

The EU has a number of co-operation programmes promoting collaboration among mining and metallurgy regions across Europe. These programmes have promoting the EU critical materials initiative as a central agenda, aiming to attain a sustainable supply of mineral raw materials for European countries. These programmes include:

  • The Smart and Green Mining Regions (REMIX) project, a network that links EU mineral-rich resource regions to support innovations of large- and small-scale companies in their regional mining value chains.

  • The Mining and Metallurgy Regions of EU (MIREU) project, a network of mining regions aiming to develop guidelines and recommendations for the sustainable supply of mineral raw materials to the EU.

  • The European Institute of Innovation and Technology (EIT) RawMaterials initiative. Funded by the EIT, this initiative aims to enable the sustainable competitiveness of the European minerals, metals and materials sector along the value chain by driving innovation, education and entrepreneurship.

Upper Norrland needs to enhance its participation in the available networks to strengthen its position as a technology provider of carbon-free materials and minerals. Norrbotten hosts one of the hubs of the EIT RawMaterials innovation programme. Innovation hubs support this initiative by setting up knowledge and innovation community activities, triggering the emergence of new ideas and innovations and ensuring that infrastructures are shared amongst partners. Region Västerbotten is a member of the MIREU network. However, despite being an important player in the EU mining ecosystem, Norrbotten has been little involved in EU MIREU and REMIX networks. TL3 regions should take a more active role in EU mining networks in order to benefit from knowledge exchange and lead projects on environmentally sustainable mining.

Furthermore, there exists a number of initiatives trying to unleash synergies among countries in the Arctic and Baltic Sea area. The Arctic is a fragile environment with unique species that play a key role in the regulation of the world’s climate and hosts an important diversity of natural resources. This factor has led to an increasing geopolitical interest in the Arctic. The Arctic Council is an intergovernmental forum that promotes co-operation among the Arctic states and stakeholders to address issues of sustainable development. The members of the Arctic Council include Canada, Denmark, Finland, Iceland, Norway, the Russian Federation, Sweden and the United States. Non-profit organisations, such as the Arctic Circle, also promote international dialogue and co-operation on the future of the Arctic through international assemblies and fora.

Furthermore, a higher level of co-operation and knowledge exchange with Arctic regions can address shared development challenges and unlock business opportunities. Regions in the Arctic share similar characteristics. Common assets include the internationally strategic location coupled with a cold climate and large geographical extension, with common challenges on depopulation, ageing and environmental vulnerability. Upper Norrland regional councils should promote exchanges of workforce and practice sharing to deal with ageing and outmigration. Furthermore, as other Arctic regions are located in the same geological bedrock – including Lapland (Finland) and Nordland and Troms (Norway) – developing common mining projects will help to build scale, pool knowledge and resources to strengthen a green and technology-driven mining ecosystem in this part of the world. To benefit from those opportunities, the regions in Upper Norrland should enhance their participation in co-operation activities with Arctic and Baltic countries.

The co-ordination with other Arctic regions and European mining networks needs to promote the benefits of environmentally sustainable mining to support the global environmental agenda. To this end, Upper Norrland needs to co-ordinate awareness campaigns and knowledge exchange with EU official and other mining and environmental actors on the positive effects of carbon-free value chains to support the EU green deal and the EU agenda of the zero-carbon energy transition. This also involves creating the scenario to support the development of EU standards on the use of carbon-free minerals and materials (Chapter 4). Strengthening the environmental lens in the market of minerals can level the field with international mining products and move forward the EU agenda of self-sufficiency on critical minerals. The aftermath of the COVID-19 pandemic offers a fertile ground to discuss self-sufficiency and the relevance of supporting high-quality environmental in goods.


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← 1. The Investment Attractiveness Index is a composite index that combines both the Policy Perception Index (PPI) and results from the Best Practices Mineral Potential Index, which ranks the jurisdictions based on whether region’s geology “encourages exploration investment” or is “not a deterrent to exploration investment”.

← 2. Regional impact analyses typically distinguish direct effects, including increased income, output and employment, in the sector under scrutiny and indirect or multiplier effects, which embody the effects of changes in demand for various goods and services caused by the initial change in economic activity in one sector (Ejdemo and Söderholm, 2011[20]).

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