Sustainable Arctic Development: What’s Next?

The Interreg NPA Conference session “Sustainable Arctic Development: What’s Next?” offered a timely overview of how the Arctic is changing — economically, socially, and strategically. Drawing on new comparative data from across 22 regions in eight Arctic countries, the Arctic Business Index team presented their latest results, highlighting a North standing at a turning point. Their insights showed how demographic shifts, uneven investment patterns, and evolving national strategies are reshaping development across the region.

A Region of Contrasts

Recent demographic analysis showed sharp differences across the Arctic: while regions such as Iceland and parts of Arctic Canada continue to grow, many Nordic and Russian regions face declining birth rates, ageing populations, and shrinking workforces. The risk of a long-term “vicious circle” — fewer workers leading to fewer families and fewer future workers — was underlined as a central challenge for sustainable development.

Nordic Demographic Pressures

Within this broader Arctic landscape, the Nordic countries present some of the demographic pressures. Birth rates are decreasing, populations are ageing, and many smaller municipalities continue to lose residents through domestic out-migration. International migration is expected to play a growing role in sustaining local communities, though it brings challenges linked to integration and long-term settlement. The overall picture is mixed: some towns are struggling to keep residents, while cities like Bodø are planning for steady expansion. These trends point to a future where population stability depends less on natural growth and more on attracting and retaining people who choose the North as a place to live.

Investment Trends

Despite demographic pressures, Investment in the Nordic Arctic remains stable — about $35-40 billion USD per year, growing by 2.6% annually from 2015 to 2022. Iceland and Greenland have seen the fastest growth rates, though total volumes remain higher in Sweden, Finland, and Norway.

Policies in Transition

The session also traced how Arctic strategies have shifted in recent years. Once centred on cooperation, sustainability, and climate action, national approaches now place greater emphasis on security, defence, and sovereignty. This shift has accelerated since 2022, creating what experts described as a more fragmented policy environment. This raises a fundamental question: Can we still achieve a sustainable Arctic future if security begins to dominate the agenda? The discussion also pointed to the increasingly outdated EU Arctic Policy, which no longer reflects today’s geopolitical reality.

Opportunities for Nordic Cooperation

A potential Nordic growth model was presented as a way forward. By combining complementary strengths in green transition, sustainable resource use, Arctic technology, tourism and culture, and dual-use infrastructure, the Nordic countries could help shape more balanced and people-cantered Arctic development. Stronger alignment of community needs and regional inclusion was highlighted as essential for long-term success.

Food Innovations

The discussion also showcased a growing wave of food innovation across the Arctic. From Iceland to Northern Norway, companies are experimenting with cold-climate agriculture, sustainable fisheries, and resource-efficient production. Fish byproducts are turned into medicines, collagen, and textiles. Hydroponic and aquaponic farms produced by geothermal or waste heat now produce vegetables and fish locally, cutting transport emissions. These emerging industries link economic opportunity with cultural identity, food sovereignty, and environmental resilience.

Looking to 2040

Future scenarios for Northern Norway pointed to three decisive factors for the wider Arctic: people, clean energy, and knowledge. Without these, the region risks becoming a “commuter Arctic”, where operations are managed remotely while local communities weaken. A more optimistic vision imagines strong local industries, advanced energy mix, vibrant towns, and universities deeply connected to regional development.

Audience Priorities in Arctic Investments

The session closed with an interactive Arctic Investment Game, where participants voted to prioritize the strengthening of rural and peripheral development, supporting of sustainable and regenerative interregional tourism, and strengthening Arctic universities.

Sustainable Arctic Development: What’s Next? - Download the presentation

Moderator - Carter Ayasse, Research Assistant Intern, High North Centre, Nord University Business School

Presenters:

Dr. Andrey Mineev, Project Leader of the Arctic Business Index, High North Centre, Nord University Business School

Sakib Jawhar Doctoral Research Fellow, High North Centre, Nord University Business School

Dr. Alina Kovalenko, Researcher of Arctic Business Index, High North Centre, Nord University Business School

Dr. Erlend Bullvåg, CEO, KPB, and Associate Professors, Nord University Business School

Maria Kourkouli Project Manager of the Arctic Food Innovation feasibility study and Research Assistant of the Arctic Business Index, High North Centre for Business, Nord University Business School

About Arctic Business Index

The project, endorsed by the Arctic Council Sustainable Development Working Group, aims to enhance understanding of both the opportunities and challenges tied to sustainable economic development in the Arctic. By developing robust analytical tools and fostering inclusive dialogue among Arctic stakeholders, the project provides reliable, evidence-based insights to inform decision-making by international institutions, national and regional authorities, investors, educators, media, and Arctic communities themselves. Norway and Canada are co-leads of the project.

All photos:  Markus Johnsen Thonhaugen.