men shaking hands

The Nordic Model



The Nordic model is and has been our unique way to organise our societies in the Nordic region. It is based on a combination of responsible economic policy, welfare and strong social partners on the labour market. These three pillars interact, and support each other mutually in a form of symbiosis. This makes the model different in many ways from other models found in Europe and the rest of the world.

Specifically, the high degree of trade union organisation and extensive regulation of the labour market through collective bargaining agreements are unique traits. This model has successfully created growth and employment in the Nordics. Coupled with economic policy and public welfare systems, the model has contributed to increased economic and gender equality in the region, even though much still remains to be developed and achieved.

One key component of the model is tripartite cooperation and social dialogue between trade unions and employer organisations. A high rate of trade union organisation, strong and independent social partners on the labour market, a high degree of trust, broad coverage of collective agreements, and constructive cooperation between the partners are all necessary for stability, predictability, and social peace. This has meant that the Nordic labour markets are characterised by a low number of disputes, in international comparisons. This in turn contributes to longer term perspectives and a willingness to invest.

One fundamental prerequisite for the development of the Nordic model, its competitiveness and its functioning, is the respect for democratic and trade union rights and freedoms, and that these are developed and strengthened. These principles permeate all our work to develop and strengthen the Nordic bargaining model.

With the help of the model, structural changes and transitions on the common Nordic labour market can be managed. The Nordic Model has demonstrated that it is possible to successfully combine economic growth and competitiveness with a comprehensive welfare state and high levels of economic equality. This has been demonstrated to work even in small, open economies such as the Nordic ones, where foreign trade is significant.

The Nordic Model has been and continues to be a precondition for building strong and well-functioning  welfare states. Our welfare in the Nordics is based on universal principles, essentially translated as equal opportunities for all. The basis for this is formed by, inter alia, solidarity, equity, gender equality and financial security. These core values enjoy high levels of legitimacy and strong popular support. The public offering of the welfare state in terms of universal education to a high level, is key to employment and production and in terms of promoting social investment. Robust welfare systems have contributed amongst other things to increased gender equality, and with that a high rate of employment.

In other words, the Nordic Model ties in with the UN Agenda for sustainable development on a number of points. Particularly goal eight, "Decent working conditions and Economic growth" is closely connected to the Nordic Model given its strong focus on tripartite cooperation,  but many additional Agenda goals, such as education for all, gender equality, reduced economic inequalities and fighting climate change, can be achieved thanks to the holistic societal focus found in the Nordic Model. This model is a precondition for achieving the vision harboured by the Nordic prime ministers, namely to "make the Nordic region the most sustainable and integrated region globally".

The Nordic Model and the future of work

The future of work involves a number of different aspects of our changing world and the effects these changes are having on our work. In 2019 and 2020 the Nordic Council of Ministers' research project Future of Work looked at which megatrends will influence our future working lives, and what the effects might be.  

The Future of Work project is valuable for our activities, in that it presents relevant research on how our working lives will change and which global megatrends will drive these changes. The researchers identified four megatrends: 

  • Demographic change through ageing populations, changed migratory patterns and changed labour markets affects the availability and composition of the labour force in Europe and in relation to the labour force in other parts of the world.  
  • Globalisation of production, goods and capital has benefited the Nordic countries. At the same time, increased globalisation, through not least technical developments, has created some opposing forces. That is why common rules and multilateral cooperation is fundamental for the Nordic economies.
  • Climate change is having a significant global effect on industry, trade and societies as a whole, both as a result of direct environmental consequences as well as indirectly through the policies aimed at mitigating these consequences. These changes will affect businesses, workplaces and demographics world-wide and require measures to achieve a just and sustainable transition.
  • The fourth industrial revolution covers technical developments in different fields such as AI, biotechnology, IT and robotics. Although the Nordic region is at the forefront of this change, it is also challenging the very foundations of the Nordic Model through new forms of work, working conditions and power relations on the labour market.  

These megatrends have vast consequences for our labour markets and societies both nationally, regionally, on the European and global levels. For us and for our affiliates it is important to see political decision making in these fields drive a just and sustainable transition, which accounts for workers in all social strata and which upholds our welfare state. Our position is based on the belief that although these megatrends pose a challenge to the Nordic Model, this model is the very tool that can help our societies manage the consequences of these same trends.

The Nordic Council of Ministers' project Future of Work is structured into seven pillars, where these megatrends are studied from a number of different perspectives.  

  • Pillar I provides an overview of the factors influencing the Nordic labour market, and the challenges and opportunities identified.  
  • Pillar II reviews the digitalisation of traditional professions 
  • Pillar III covers the self-employed, independent workers and atypical work 
  • Pillar IV looks at new players and their effects on the labour market, especially platform work 
  • Pillar V deals with working conditions and well-being at work in a changing labour market 
  • Pillar VI examines the legislation and regulation of the labour market 
  • Pillar VII concludes by bringing together all the insights from the project about the Nordic model, and regulation of the labour market in the future world of work. 
Nordic model visualisation