The way forward to crack the code to an efficient, well-coordinated business financing system, covering the Arctic as a whole.
The purpose of this project is to enable the Arctic businesses to access potentials in commercial transportation opportunities in the Arctic, closer integration of the Arctic business community with the world market, easier access to natural resources, increase in tourism etc.
Insufficient finance the missing link to business growth
The Arctic regions contain many promising opportunities for development – culturally, demographically, commercially and economically. This project aims to support an economic growth that respects traditional values and environmental concerns to benefit all of the Arctic communities.
The Artic regions have a lot in common but are also very different. First, they are all sparsely populated. This means that economies of scale are difficult to reach, adding transportation or communication costs the other costs of production. Second, even though the geographical extension is huge, total population sizes are small and divided between the different countries and regions.
An analysis of business financing opportunities
A growing business sector depends on many factors – sufficient demand, transportation and communication possibilities, technologies and competent labour. These factors are all recognized and analysed with the aim to understand how to overcome the barrier of lacking and insufficient business financing in the Arctic.
In the field of financing, the central challenge is to develop well-functioning financial ecosystems. This will take some years, but some initiatives may be effectual already in the short run. We already know – from our work in many remote regions – that interregional and cross-border collaboration, pooling of resources and better coordination and targeting and finetuning of existing instruments towards the specific local and regional framework conditions can help improve and build up business culture and investments climate significantly.
Key steps in Business Financing Analysis
First, a mapping of financial institutions providing business financing for entrepreneurs and SME’s in the Arctic will be carried out. Second, signposting interviews and a basic telephone study will be conducted to get an overview of the existing business financing in the Arctic regions. To support the analysis experts and key stakeholders in the field of entrepreneurship and SME financing will be interviewed to produce an overview of the current investment climate, cross-border cooperation, the role of regional and international agencies to gather perspectives on untapped potentials. The final report will include a set of policy recommendations to support future policy development at the Ministry of Foreign affairs, Denmark together with the Arctic Economic Council.