European productivity growth has increasingly fallen behind the United States, creating renewed focus on European competitiveness. This debate intensified following the Draghi Report from 2024, which highlighted a persistent productivity gap between Europe and the US. 

 Historically, the Nordic economies have remained close to the global productivity frontier while combining strong institutions, high labour-market participation, social cohesion, and relatively ambitious climate policies. At the same time, there are increasing indications that the Nordic model is facing new challenges. 

 This report examines the factors that have historically contributed to strong Nordic competitiveness and productivity performance and analyses key challenges and barriers that may shape the ability of the Nordic economies to remain among the world’s leading economies in the years ahead.