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Ceccato, V. Davelaar, E. Florida, R. Frykman, J. Henrekson, M. Kalantaridis, C. Knox, P. Knudsen, J.

Stockholm: Nordregio. Kotkin, J. Findlay, A. Morgan, K. Nijkamp, P. Persson, L. Schmid, G. Van Horn, R. Vedsman, T.

Wikhall, M. Williams, A. Source: Adjusted originals from Regional Municipality of Bornholm. In the Danish context, Bornholm is the most peripheral area of the country.

This is due to the local dialect, which to Danish ears may sound like Swedish. Another element here is that Bornholm is situated in the Baltic Sea and is geographically closer to Sweden than to Denmark.

Bornholmere are however very conscious of their national heritage. Less than a year later, Bornholm rebelled and thus became the only part of the conquered territories to succeed in defeating its Swedish attackers.

The neighbouring and former socialist states have become open economies and EU members, while their infrastructure has improved greatly.

There are three transport services of importance to the Bornholm labour market: 1. Door to door travel time is about 3 hours.

In the tourist season there are also ferry connections to the above-mentioned neighbouring countries to the South, though the frequency and capacity of such services are generally adjusted to the demands of the tourist industry.

The age composition which is very important for the number of births 2. The balance between the number of people moving to, or leaving, Bornholm.

On islands with long transport distances the development in the population becomes a very critical factor and thus an indicator of the level of regional development.

Figure 3. According to forecasts produced by Statistics Denmark, this trend is expected to continue. At the same time, the total population of Denmark is expected to increase.

Unless a substantial change in this trend occurs, Bornholm will therefore continue to lose population. There are two essential explanatory factors for the declining population in Bornholm: Figure 3.

Source: Statistics Denmark, The area of Bornholm is km2, with the longest distance from the south to the north of the island being about 45 kilometres.

The network of roads is of a good standard. In other words, principally Bornholm has one coherent labour market. Young people leave the region to study or seek opportunities elsewhere.

This can basically be explained by parents in their thirties, and in their early forties moving to Bornholm with pre-teen and teenage children.

It is a general problem that the number of elderly people is increasing in Denmark, but Bornholm is the county in Denmark with the highest proportion of elderly in relation to the working population CRT Firstly, the under-representation of the age groups between 20 and 55 years has become distinctively aggravated.

One explanation for this is the general development in terms of higher education. More young people now undertake a course of higher education, and the young people of Bornholm follow the same pattern.

Population decline is at its most severe in the rural districts in the centre of the island and at its weakest in parishes close to the coast Statistics Denmark, This development cannot however simply be characterised as urbanisation per se.

Rather it relates more to a settlement pattern based on the recreational and cultural values of the areas concerned than to the possibilities for jobs in the neighbourhood.

Such in-migrants are attracted by the relaxed and beautiful surroundings. In other words, certain areas on Bornholm are very attractive for settlement, but the very small labour market and the long distance to other labour markets creates a substantial barrier to further development.

If we delve a little deeper however we see that Bornholm is changing rapidly, with globalisation, and the emergence of the experience and knowledge economy in particular being the salient factors here.

The trade and industry sectors on Bornholm traditionally focus on either the international or the local market. As such, on Bornholm we rarely see examples of Bornholmbased businesses that are branches of larger Danish companies.

On the other hand there are many examples of Bornholm businesses that have invested in or traded on the international markets.

In all, this business structure means that employment on Bornholm is declining. To a large extent, the increase does not express an increase in the number of persons employed in the public sector but is rather an expression of employment decline in some of the other sectors of the community.

Compared with Denmark in general, the public sector on Bornholm is relatively more important in terms of employment.

In general, the public sector is characterised by a relatively high share of older employees. CRT As noted previously, Denmark is currently undergoing a structural reform of the municipal layer of government.

This reform process will lead to changes in the division of responsibilities and work between the Bornholm Regional Authority, the new Capital Region, and the State.

Thus far, the regional authority has carried the responsibilities for both county and municipal related functions.

In future however, county related functions will be in the domain of the new Capital Region. It is expected then that these changes will lead to a decline in employment in the public sector on Bornholm Bornholm Regional Authority, Employment in these sectors is however declining.

Consequently total employment on Bornholm is declining. CRT In general it can be seen that new jobs are not being created on Bornholm at anything like the same rate that old ones are shed.

The larger Bornholm industry businesses expect that within a 5-year period they will be unlikely to need unskilled labour.

CRT An investigation of the Bornholm food sector highlights the fact that at the same time as the number of jobs in the traditional food sector declines still further, a number of jobs have been created in smaller artisan food businesses.

Their products are often more expensive but sold on a market of niche products. In addition, a number of businesses produce arts and crafts, design etc.

At the same time many of the work places for unskilled people on Bornholm are disappearing. This has led to an increase in employment and a distinct decline in unemployment.

However, developments on Bornholm have not been as positive. If Bornholm had seen the same development as the Danish average employment would have been at about 23, jobs or about 2, more than we actually see today.

This equates to about 2, persons. Bornholm is characterised by large seasonal variations in the employment rate.

The workforce in these sectors is typically unskilled. On the other hand, one can argue that there is a large group of individuals on Bornholm who are in part maintained through transfer payments and generally do not have a chance of gaining permanent full-time employment again.

Young people on Bornholm follow the general pattern and increasingly undertake a period of higher education in their early adult lives.

This means that the majority of young people have to leave Bornholm to study. Generally speaking, the labour market on Bornholm and the development of its population are characterised by: 1.

A labour market which is almost closed and does not hold sectors with an employment growth that can counterbalance the falling employment in the traditional business sectors of Bornholm 2.

There are very few advanced educational institutions on Bornholm. There is a risk that these people end up in a situation of permanent unemployment, and that in the course of time they become socially excluded from the labour market.

Flying costs are too high for those on a standard income, while the transportation time is too long for the other transport options.

Theoretically, some commuting between Ystad and Bornholm should be possible. As such, EU labour market rules should be further liberalised to better cater for commuting across borders.

The employment agencies in Bornholm and Ystad have been cooperating to integrate the two labour markets for some years.

In practice no such integration has however taken place. Weekly commuting is however a possibility and a number of people organise their working life in this fashion.

At the same time, IT and the development and dissemination of the broadband technology are important factors here, which are now beginning to be of importance to the labour market on Bornholm.

It is now possible to live in Bornholm and work in Copenhagen. This means that there is potential to enter into employment and commercial transactions, not regulated by market driven and transparent mechanisms.

The business structure on Bornholm is among other things characterized by many small and family owned businesses, seasonal work, and tourism.

These are circumstances that are likely to include some economic activities outside the tax system.

As such, the problem cannot be further elaborated here. In proportion to the size of the labour market on Bornholm, very few vacancies are actually advertised publicly.

No data is however available to describe the relative importance of such quasi-market functions on Bornholm as compared with the rest of Denmark.

The policy produced is primarily based on the regional and social fund programmes of the EU and general national arrangements, where the special conditions and preconditions of the peripheral areas are taken into consideration.

In addition, municipal equalization arrangements also exist, which aim to sustain a homogeneous level of services across all Danish municipalities.

In respect of rural districts it is primarily the programmes for these rural districts, worked out by the Ministries for Interior and Health and for Food, Agriculture and Fisheries, that are relevant, while the Objective 2 Programme is managed and coordinated by the National Agency for Enterprise and Construction.

The long-term initiative contained many elements, among others, competence and education initiatives, and the establishment of a social science based institution.

Other initiatives, e. A later state funded support package included a government grant of DKK This wide-ranging IT project is locally initiated.

It includes the implementation of an IT environment in the Bornholm businesses community, as well as research and development on Bornholm.

It is not possible to describe all these programmes here, though in general it can be argued that EU funding has contributed to strengthening areas of the Bornholm economy that have the potential for long term growth.

This is particularly the case in relation to the wider tourism sector, including arts and crafts, and food production.

Food production has succeeded in developing a niche sector based on artisan-based production and regional goods. EU programmes have contributed to a number of physical investments being made in plant and infrastructure.

These investments have contributed to the creation of new jobs and activities. Primarily because it is very easy to dismiss employees.

For the employees, this is obviously a source of great insecurity. Labour market policies in Denmark are the responsibility of the state through a number of labour market regions, each with their own labour market council and employment agencies.

The employment agencies have three main responsibilities; to supply the labour market with a workforce, to combat unemployment and to secure individual rights on the labour market.

In Bornholm, the employment agency visits about employers a year for this purpose. The aim of these interviews is to combine the individual experience related by the interviewees with that of the institutions and structures of the income system dealt with thus far.

Through the interviews we are able to trace the factors that facilitate or hinder transitions within the income system. Such information is not available without focusing on individuals.

The information gained through the interviews illustrates processes and indicates issues that are discussed against the backdrop of the models and concepts presented in chapter 2.

Jointly the eight interviews cover all six categories of interviewees that we aimed for in the study. Four of the interviewees have started their own businesses.

In economies like the one in Bornholm, marked by a decline in the traditional sectors, limited job creation within new service sectors, and high unemployment, the competition for the few attractive jobs is high.

In this competition, certain segments of the labour force primarily young and especially older people without or with only short education or outdated skills face a high risk of marginalisation on the labour market through long-term unemployment or periods with highly insecure employment in short, shifting and low-paid jobs.

The ongoing transition from an agricultural and industrial economy to a service economy, however, not only causes unemployment among traditional low-skilled workers but also produces new types of high-quality job opportunities.

The tourist project has given me a lot. In my younger days, I never imagined becoming an instructor.

My new job has also changed my attitude towards nature. It is a pity that I had to be this old before I found the right niche. The Role of Social Networks Social relations and networks play an important role, particularly in those segments of the labour market attracting the unskilled, the lower educated and those threatened by marginalisation.

The story was that once, during a private visit to my sister, the son of the chairman had seen me helping her with some private accountancy tasks and so he suggested to his father that he employ me for the job.

I called the chairman and got the job. You must never take a refusal on a job application as a permanent refusal.

Many people give up too easily, but it is understandable. The local labour market authorities and educational institutions in particular seem to play an important role in relation to reducing the mismatch between the supply and demand of labour and in promoting the development of new growth sectors in the local economy by overseeing the education and training of new skilled labour.

Nonetheless, the interviews of newcomers indicate that this group of the population holds important potential as entrepreneurs and contributors to economic development and change.

Four of the interviewees who are newcomers have started their own businesses in Bornholm. Transport to and from the island is both expensive and time demanding and thus, for most people it is not possible to live on Bornholm and to maintain a job that demands a daily presence outside the island.

Bornholm interacts with the Copenhagen labour market in particular, but this interaction implies job types that do not demand daily presence or an over-night stay outside Bornholm, as well as intensive use of IT and home working.

The permissive factors that have encouraged this development have been improved transport connections, the development of broadband infrastructures and IT technologies, as well as the attraction of Bornholm for many people as a place to live due to the recreational and cultural assets of the island.

Economic Change and Labour Market Mismatch As with other local economies, the Bornholmian is constantly subject to change and particularly in recent years, 32 this change has brought about something of a transformation.

Many low-skill jobs in the traditional sectors have disappeared and have not been replaced by a similar number of jobs in new sectors.

The seasonal swings obviously cause unemployment periods for a relatively large part of the local labour force.

This group consists of the younger and older segments of the labour force, particularly those without vocational or further education.

As one of the interviewees mentioned, the training and educational activities organised by the local labour market authorities, can sometimes also help the unemployed in making a positive career shift to more attractive new types of jobs.

Regional Policy Programmes Regional policy on Bornholm is mainly carried out with the support of various forms of EU funding and support schemes.

Without doubt, EU funds and support schemes have contributed to the creation of new jobs on Bornholm. In recent years, this has been the case primarily within the tourism industry and in the manufacturing of local quality food and beverage products.

Over the last decade, the actual number of public sector jobs on Bornholm has fallen while the ongoing implementation of the new municipal reform is expected to further reduce this number.

In Denmark, the tradition of establishing regional university colleges and other further educational institutions is not as strong as in other Nordic countries e.

Sweden and Norway, and the Bornholmian milieu for further education is weak and institutionally and geographically scattered.

This contrib- utes still further to the only limited number of jobs for academics and others with further education as well as to the almost unidirectional migration of youngsters from Bornholm to other parts of the country.

Social Networks Bornholm is a small community with tight social networks. Jobs are often mediated through personal contacts.

For the business sector, these social networks are a useful source of knowledge on potential job applicants, enabling them to ensure that the right person is recruited.

As such then, for the well-integrated part of the local labour force, such network relations constitute an important basis for employment and income.

The negative side of these social mechanisms, however, is that they can complicate the nature of labour market access for persons outside the dominant social networks.

Working paper nr. Mikkelsen Palle : Status for Bornholm. Slides from ongoing examination presented on a meeting in the regional growth co-operation work.

Silkeborg 3. February Revideret Udgave, januar Figure 4. The fjord itself is some 60 km long and the main valley to the south is an additional 60 km long.

The size of the area is around 4, km2. The population density is however only 5. Akureyri assumes a central location in the region with the longest distance to it from within the region being just over 60 km.

This employment market is the most populous outside the capital area but can be termed insular due to topography and the distances involved to the adjacent labour markets in the east and west.

In the region as a whole, there are three towns and four small villages. Communications Road connections to the west to the capital area and to the east are via mountain passes of and metres respectively above sea level.

The distance to the capital area is km, usually taking around four and a half hours to travel in good conditions. The main Icelandic highway passes through Akureyri.

The transportation network naturally has a very important role to play in shaping the future economic development of the region.

Current developments in the area of sea-transportation seem however to be further increasing the insular character of the region.

The general trend here is now that the shipping companies have stopped sailing between the various harbours in Iceland.

Instead, goods to and from the area are generally trucked to and from the capital area where most of the import and export business now takes place.

As such, a more positive development strategy for the hinterland would undoubtedly strengthen the region as a whole. Population pyramids for the region indicate a lack of young adults as is common with regions that have experienced net out-migration.

During the 20th century industries based on processing agricultural products developed. To some extent, this remains true even today.

Public sector employers, both at the state and at the municipality level are still few and relatively large, such as the regional hospital, the university, two secondary schools, and the local authority.

This is in fact the only large addition to the economy of the town in recent years, though it came at exactly the right moment when there was a recession in many privately run activities.

Most of the new jobs that became available as a result of this change were however suitable only for those with higher education.

Its operations were diverse, e. As such, it actually now employs very few people. The Samband of Iceland, operated factories in Akureyri employing a considerable share of the workforce.

In the last company in Akureyri that had previously belonged to the manufacturing arm of the Samband was shut down, i. Iceland Skin Industries ltd.

The shipyard also went bankrupt and today it is only engaged in ship repairs. The former factory specialized in canning, and its major market area used to be the Eastern block.

Those who did establish their own business and succeeded were frowned upon. To leave the established companies for a job in a business like that was considered unwise and a sign that one was unreliable.

Obviously, this interviewee draws strong conclusions but this gives an indication of the local attitudes and norms. The major change in attitudes towards work and the workplace has been that nowadays it is expected that one change jobs frequently.

One of them was sold to investors outside the region in while it remains to be seen to what extent this will have an impact on local jobs and the economy of the region.

Structural Change in the Industrial Sector The region has undergone dramatic structural change over the last twenty years.

Therefore, when entire sectors are badly hit, as was the case in this area, fewer options are available to the surplus labour than those in regions closer to the capital area.

Manufacturing had been one of the major pillars of the 3 Composition is a settlement whereby creditors agree to accept partial payment of debts by a bankrupt party, typically in return for a consideration such as immediate payment of a lesser amount.

Akureyri was generally termed the manufacturing town of Iceland. However, during the last quarter of the 20th century this manufacturing structure began to crumble.

The largest and most symbolic event of this structural change was when companies owned by Samband of Iceland were sold or became bankrupt.

According to the expert interviews undertaken, there were several reasons for this development.

One was international development such as competition from low-cost areas. Another reason was the collapse of the Soviet Union and the closure of important markets for Icelandic products in Eastern Europe.

In addition, several other explanations were also available relating in the main to internal developments within individual companies, e.

Finally, a major structural weakness remains the fact that the local market for production is small.

The general trend is a decrease in manufacturing and construction and an increase in the service sector. Parttime jobs appear to be more common in the service sector than e.

The downsizing of the manufacturing sector left many people unemployed, often with skills other than those suited for the newly emerging industries such as the higher education sector.

There was then a mismatch between the demand and the supply of labour. One of the expert interviewees emphasized that the community had been strongly shaped by following this path for so long.

If one did change jobs, it was considered a sign of personal instability. In addition, in this atmosphere it was only considered acceptable for a few local companies to make money and to expand, such as the cooperative.

If new individuals or companies set up in business, it was generally frowned upon. Today the company has operations in various locations in Iceland besides being a multinational corporation with operations in Norway, The Faeroes, Scotland, England and Germany.

Its size in terms of foreign activity in was comparable to that of its domestic activity. In terms of wages, this company has a considerable economic weight as many of its jobs are well paid, e.

In , the activity rate was For men the activity rate was higher, at Another distinctive feature of the Icelandic labour market is the large number of people holding more than one job simultaneously.

This is slightly more common in regions outside the capital area. Seasonal Jobs Seasonal changes in the labour market are becoming less pronounced according to the expert interviewees consulted for the purposes of this project, and there are indications that the general trend has been that labour is becoming less mobile.

In the case of families, instead of one of the parents, usually the father, taking a seasonal or temporary job in another region, the family may opt instead to migrate.

However, this may also be due to the fact that the location of the project is somewhat removed from the most populous regions of the country.

Unemployment The unemployment5 level in Iceland was 2. In North East Iceland, the area to which our study area belongs6, the unemployment rate was 2.

In the North East region the unemployment rate among women was 3. This is twice as high a share as the national average. In recent years however there has been a huge increase in the supply of education in Icelandic society.

Expert interviews shed light on the interplay between the opening of the University and the performance of the local economy. One of the major concerns here is that the local economy is not large enough to be able to absorb the university graduates.

Parental Leave In , the regulations concerning parental leave changed considerably. Prior to this, mothers were entitled to 6 months leave and fathers to two weeks.

The new regulations entitle mothers and fathers each to three months leave, in addition to a further three months between the parents.

The payment of full wages at the rate received prior to the period of leave is also guaranteed. Sick Leave The rights to sick leave to a certain extent depends upon which labour union the individual is a member.

In the case of sick children, each parent is entitled to seven days leave from work on full salary. Pension The right to a pension very much depends upon which labour union and pension fund an individual worker belongs to.

Every individual has the right to a certain minimum pension from the state at age The income of this group varies greatly since the pension funds of the labour unions are not equally strong.

Other options are becoming more common such as payments to additional pension funds and private pensions.

Disability has, according 39 to a recent study become most common in three communities in North Iceland; i.

There is little incentive moreover to give up a disability pension unless a well-paid job becomes available Herbertsson, There has been a huge increase in those unemployed among this group.

In some cases, paying for day-care can prove more expensive than the net wages gained from a lowincome job.

A sizeable share of the labour market seems however to have moved into the group receiving disability pensions, and has thus in a way become marginalized in the process.

Gender Issues The gender balance in the region as a whole is relatively even. In Akureyri, women predominate as is often the case in urban locations.

Data on labour force participation by age shows that older women in the labour force across the region tend to be disproportionately fewer than the national average.

Commuting There are indications that commuting has increased considerably, especially around the capital area and to a smaller degree around other towns.

In Iceland, there are no tax deductions for those who commute, making commuting a less desirable option, particularly for those with lower wages and in cases where the employer does not pay this cost.

This issue was brought up repeatedly in life-story interviews. Public sector jobs must, by law, be advertised however. In a sense then this could be considered a quasi-market situation.

A national committee on tax fraud, tax evasion and black market activity has estimated that this caused the state and the municipalities an income loss of between 8.

Older reports estimated the black market to be around 4. It is possible that there has been an increase in the size of the black market economy in the country as a whole, though no regional estimates are available.

The same general policy should now apply to all regions with more emphasis on market solutions with the government also planning to support certain growth regions.

Four clusters were included; education and research; health services, tourism and food production. Its main purpose is to strengthen the region as a desirable place in which to live.

Emphasis here is on strengthening the competitiveness of the economy and the region as well as increasing sustainable growth and thus the number of available jobs and inhabitants.

Labour Market Policy Here we can divide the labour market policy into two main categories. On the one hand services to the unemployed and on the other services to innovators, entrepreneurs, and others who run, or intend to run, their own businesses.

The institutional framework of North-East Iceland did not score high on these factors. Job-seeking is also more active; each unemployed individual in cooperation with a counsellor now prepares a job-seeking schedule.

The unemployment insurance fund can, according to certain rules, provide grants to special projects under the control of the employment agencies.

These projects and jobs can include temporary projects exceeding the regular activity of municipalities and the state, projects for students and people with an impaired ability to work, and grants to unemployed persons to establish their own business.

The unemployment rate in Akureyri was 5. Measures were however taken to address the problem in several ways with the municipal authorities to the fore.

The workshop is still open today, but with a more general function; employed and unemployed people alike attend the place and it is primarily considered a recreational facility where old expertise in handicrafts can be preserved and people can develop personal skills www.

Assistance to Companies and Start-ups There are various actors in the business support system. Municipalities in Iceland often run their own business or promotion agencies.

The Akureyri Region Business Agency is one of these institutes www. Finally, it acts as a link between supporting governmental institutions and local companies.

According to the managing director of the Akureyri Region Business Agency, the role of the company has however changed from being a reactive and defensive support for businesses in trouble to a proactive supporter promoting the area to investors in targeted industries.

Tourism currently has its own support agency in northern Iceland, located in Akureyri. This applies to property taxes, and electricity and water costs.

Innovation and new jobs in high technology and ITindustries. Cooperation projects between the University of Akureyri and the private sector.

There has not however been much continuity in the operation e. In October the research and innovation building Borgir was erected on the campus of the University of Akureyri, where several institutions e.

This may increase their cooperation and make their access to potential clients better. In spite of the relatively comprehensive support system, this is an obvious drawback.

The concentration of government jobs is disproportionately high in the capital region. Indeed, a number of institutions have moved to Akureyri in recent years, e.

In addition, other institutions have moved parts of their operations and run sub-divisions in the region. Furthermore, several small institutions or sub-division in Akureyri have been established.

The largest share of these types of actors is located in the Borgir research and innovation building on the campus of the University of Akureyri.

The most important addition to government jobs in the region is however the University of Akureyri. Importance has long been placed on trying to attract foreign investment into the area.

In a way, the emphasis on a large factory, a single solution, would have been in line with the previous development and characteristics of the region and its economy.

In the past few years however further discussion of the aluminium smelter or a smaller factory have taken place.

It is apparent from what many of the expert interviewees have said that a relatively large workplace is considered desirable and it would be a welcome addition to the local labour market.

The Role of the Municipality in the Local Economy The role of the municipalities as regards the local economy has changed considerably in recent years.

Instead of being involved in the economy and even owning individual companies, the general role of the municipalities has changed into that of being a facilitator.

Municipalities are generally expected to provide the necessary infrastructure and in general to create a suitable environment for companies to operate in.

Evaluation of Policy Little in the way of the formal evaluation of policy initiatives in the region has taken place.

The Minister of Industry, which is responsible for putting the regional development policy into practice, must each year deliver to parliament a report on the progress of regional development policy.

The aim here is to combine these individual experiences with the previously undertaken analysis of the institutions and structures of the income system.

Through the interviews, we are able to trace the factors that facilitate or hinder transitions within the income system.

Moreover, these life stories can be a sensitive matter for the individual. Their education levels range from primary education to a PhD.

The area seems to be attractive to those who have relocated for either studies or work. As can be seen from the labour statistics, activity rates are very high.

As such, it was obvious that the individuals interviewed here did not want to talk much about the periods during which they were unemployed.

Those who were faced with this situation generally displayed a good survival instinct, e. The interviewee in question wanted an exemption from these embarrassing weekly visits since it was clear that a solution was being worked on.

It is apparent that those with a longer period of education behind them have more job opportunities and that the number of such opportunities in the region is growing considerably.

Nurses, lawyers, business administrators, and teachers have various opportunities. When it comes to certain other disciplines however, such as architects, geographers and social scientists with postgraduate degrees, far fewer jobs seem to be available.

Taking this into account then, the location of e. Those who had not obtained an education beyond the primary school level appeared to regret this.

This was apparently rather common in the textile, leather, and fur industries in Akureyri. These skills were not however easily transferable into other jobs and industries.

These connections can occur in several ways. Employees may lecture at the university, or they may recruit graduates from the university and so on.

In this way, reciprocal support is provided by the university on the one hand and the remaining institutional environment of the region on the other.

Alarming voices can however be heard regarding the future development of the region and the University. The interviewee sees a lot of demand for these jobs in Akureyri but not much supply.

This is also bad news for the University, as those who graduate, especially from the Faculty of Management or the Faculty of Information Technology face limited job opportunities in the area and thus may be forced to migrate from the area.

Commuting is something that a few of the interviewees had experienced. Both found it tiresome to drive this distance and hard for the family to be away for several days at a time.

All three mentioned the cost of commuting as considerable. It is clear from some of the interviews that the old in- dustries of Akureyri have been struggling for some two decades with considerable consequences for their employees.

They have in fact been virtual bystanders as these changes in the business environment of the Akureyri region, in Iceland and in a global context, occurred around them.

The interviewees were also concerned as to how the employment market was changing, and how also attitudes towards work were changing.

This again could relate to the increase in disability pensions, which is one of the most noteworthy changes in the Icelandic employment system in recent years.

Conclusions Permissive Factors for Sustainable Employment Here a few indicators of, and conclusions on the likely factors contributing to sustainable employment will be discussed, based on both the study of the economic environment of the region, including the expert interviews, and the working life story interviews with individuals.

The town of Akureyri is by far the largest outside the capital region. Moreover, there are few alternatives for those seeking an urban lifestyle outside the capital region and its immediate hinterland.

The Akureyri region appears in fact to have some attraction for young people. It was e. The educational institutions of the area are certainly one of its particular strengths.

This applies both to secondary and tertiary education. The existence of the University of Akureyri has to be considered one of the main factors contributing to sustainable employment in the region.

If potential customers are familiar with how the system works there is a good level of assistance available in the region.

This environment is however changing over time. Many companies have expanded in recent years. One important issue in this regard is the excellent level of air transportation to and from the capital region.

This makes it easy for business trips and meetings to occur, and makes it possible for a certain part of the workforce to commute between the regions on a weekly basis.

The municipalities, particularly Akureyri, have been proactive in planning for growth in the area by e. A growth in the number of those receiving disability pensions is alarming, and provides a general cause for concern in Iceland.

The industries in the region have been hit hard by foreign competition and this appears likely to continue.

Due to the topography there are continuous demands for better road connections over the mountains to the west and east of the region, i.

Furthermore, due to the long driving distance to the capital region there are increasing demands to shorten that distance, which is considered a drawback for industries in the region.

The University of Akureyri has been a vital addition to the economy of the region and it is thus necessary to allow the University to continue to grow and expand.

Emphasis on education has to be put at the forefront of any future regional strategy. Tax deductions or other incentives for those who want, or need, to commute to work over considerable distances would be desirable.

Increased emphasis on continuous training and retraining for those who want, or are forced, to change jobs is also important.

This applies in particular to those with lower education levels. Emphasis has to be put on programmes aimed at the rehabilitation of those disabled who could potentially be reintroduced back into the labour market.

Better road connections to better connect this labour market with the adjacent labour market areas to the east and west, and to better connect the area to the capital area are also required.

Nordic Innovation centre. Copenhagen: Nordic Council of Ministers. Akureyri: Samherji. Statistics Iceland : Labour Market Statistics.

Statistics Iceland. Internet Data Sources www. Source: Adjusted original from Gotland Municipality. How do people in Gotland make a living in a period of fundamental economic restructuring?

In this chapter, challenges to the income system in Gotland are discussed against the backdrop of the models and concepts presented in chapter 2.

The chapter begins with an introduction to Gotland providing the context for the income system on the island.

This section is followed by a discussion of the structural characteristics of the labour market and the workforce in Gotland.

Special interest is paid to transitions in the income system, while the individual experiences conveyed are linked to the structural framework of this system.

The chapter is based on information taken from an investigation of already existing reports, a general literature survey, key informant interviews, and a number of biographical interviews.

The fact that Gotland is an island lying some distance from the mainland has a number of implications for the issue of insular income systems.

Furthermore, its location also suggests the need for a larger public sector than the size of the population would otherwise suggest.

Healthcare and emergency services, for example, cannot be shared with a neighbouring local authority. Communication with the mainland is very important, and has improved in recent years.

In addition, Gotland is subject to a pilot project relating to the changed division of regional responsibilities. Some of the responsibilities normally held by the state at the regional level have been transferred to the local authority.

Statskontoret, This is highly relevant for this study, since these responsibilities include strategic work for regional development.

The 49 Figure 5. Source: www. One reason for this is the establishment and expansion of the university college. In contrast to many other regions in Sweden, Gotland has a small peak of net in-migration in the age groups around the retirement age.

Gotlands kommun, In the summer months, the population increases by around 20, In addition, around , tourists visit during each summer season.

Over time, we can see that there has been an ongoing population shift towards Visby. Gotland has a disadvantageous age structure with an ageing population.

There is also an important tradition of exploiting the limestone of the island, both as a raw material in stone works and for cement production.

Farm houses and outbuildings have also been turned over to other uses such as for housing, second homes, bed and breakfasts and workshops. New niche products are also being produced from e.

The manufacturing sector, apart from food processing, has traditionally been strongest on the northern part of the island. Today this company is called Cementa and employs around people.

Ericsson, later Flextronics, was a major manufacturing employer in Visby. The location of the island has for centuries brought trade and visitors.

In recent years, the establishment of Gotland University has resulted in an important expansion of the educational sector. The University has build on these topics but broadened the course programme to a wider range of subjects.

The public sector as a whole is the largest source of employment on the island. Previously, the armed forces played a key role. The single largest employer on the island is Gotland council, which, as a unitary authority, carries responsibility for health and medical care as well as education, public transport, social services, and all of the other tasks of the local authorities.

There have been several rounds of state agency relocations in Sweden. Many individuals in the cultural sector are micro businesses and have started their own companies, often in the countryside.

Gotland is the county with the largest share of companies with less than 20 employees. Multiple job holding is still common, and households with assets such as a small farm, outhouses or perhaps machinery can earn their income from several sources today often with tourism in one form or another as playing an important part.

This is stressed in many of the interviews, both with key informants and the individuals that were interviewed about their working life biographies.

Structural Characteristics of the Gotland Labour Market The largest economic sector in Gotland in terms of employment is the public sector where the single largest employer is the unitary authority of Gotland Council employing almost 7, people in Gotlands kommun, Alongside the importance of the public sector, the Gotland economy has for long been characterised by agriculture and the food industry together with the tourism sector.

Other parts of the service sector have played a smaller role. Faktab Finans and Svenska Spel. Gotlands kommun, The ongoing restructuring of the Gotland economy has impacted quite severely in employment terms with around 2, jobs being lost in four years.

Prognos Gotlands Arbetsmarknad, As indicated above, both private and public sector jobs have been lost.

Restructuring of the Public Sector The restructuring of the public sector includes sectoral shifts where the military bases are being closed down at the same time as the higher education sector is expanding rapidly.

According to a National Defence decision of , the regiment will be disbanded during a process that will run until the end of August The disbanding of KA3 was particularly troublesome from an employment point of view 51 since it was located in small settlement.

As compensation for job losses, the state has decided to allocate several government agencies, or parts of agencies, to the island over the next few years.

This is a policy that has been used previously, both in Gotland and in other parts of the country. We will return to this policy later in this chapter.

Another large public employer is Samhall with around employees. Samhall nationally, as well as on Gotland, have experienced cutbacks over the last few years due to a policy change which has seen the company being run in a more competitive manner.

Samhall has undertaken extensive activity on the island, something that is linked to the relatively limited opportunities for people in this group to attract other forms of income in a small labour market.

Private Sector Restructuring in Gotland Restructuring within the private sector includes the continuous decline in the agriculture and food processing sectors, and job losses in manufacturing, particularly relating to the closure of the large company Flextronics.

The track is also used as a testing facility, for training of driving skills and events. The island is also used for fashion shoots making use of the unique landscape and light on the island.

Some of these activities may not, on their own, contribute many new jobs, but they bring some employment and play a role in the place marketing of the island.

Employment in the agricultural sector has declined over a number of years. Furthermore, those in the younger generation that are interested in continuing with farming activities often adopt new approaches, such as ecological production and the use of advanced technology.

ALMI, Agricultural productivity on Gotland is below the Swedish average, but the open landscape is needed for conservation and tourism.

Faktab Finans, for example, a company started by a young local entrepreneur, has outlets in Stockholm, Copenhagen, 52 Oslo, and Helsinki.

There are also micro businesses that operate on the international market, both within manufacturing and in the service sector. One attempt to address this issue was a project in aiming at encouraging companies to expand.

ALMI has the task of stimulating growth and development in small and mediumsized companies and innovators.

Compared with the national average, business start-ups by women in Gotland are quite common. Many new companies are established in the crafts sector, e.

A fairly common category of start-up entrepreneurs are women that have previously worked in the public sector and whose children have left compulsory schooling.

This is a recently established meeting-place, incubator, and studio focusing on interactive media, game development, and experience tourism.

However, the actual labour force is considerably smaller since not everyone in this age group is available for work. A large share of the younger age groups are studying, while others, such as the disabled or otherwise incapacitated are also unable to participate in the labour force.

The actual labour force therefore consists of those that have a job and those that are unemployed. According to the same statistics, approximately 26, of these had a job but only 22, were actually working.

The tourism industry is very important for employment in Gotland. Commuting Patterns It is not realistically possible to commute on a daily basis to and from Gotland.

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