This chapter reviews some of the major challenges to the Nordic model as the global economy has evolved from industrial mass production towards information technology based on flexible specialization. It also discusses how the Nordic countries can meet these challenges while reinventing the Nordic model for the globalized age. The chapter focuses especially on the transition from an industrial to a service-based economy; the demanding confrontation with digital sharing and robotization; the pressure exerted by liberalization and Europeanization; and the challenges posed by new forms of industrial organization.
The discussion is presented in the form of a scenario analysis, with three alternative trajectories: “Dualization”, “Resilience” and “Transformation”. Dualization represents a shift of the Nordic model toward a neoliberal direction with more “unfiltered” international market pressure, which increases inequalities, while the Nordic social contract and welfare arrangements weaken. Resilience represents a continuation of the Nordic model through the development of new alternatives to old working arrangements that have been overrun by liberalization, and combining them with the elements of the “classic model” that still work. Transformation goes beyond the dualism and resilience scenarios in factoring in the Nordic model’s exposure to radical technological innovation. This scenario explores the model’s assets and capabilities to meet new challenges and dilemmas.