Go Hanse!

The Hanseatic tradition lives on in the Scandinavian countries. 500 years after the original Hanseatic League disbanded, it is fascinating to see a timeless success story.

While historically not correct, Vikings have become the outward symbol of the region. The original Hanse was active mostly in the Baltic Sea region, avoided war whenever they could (they did not even have a standing army) and never used military force to conquer territories.

The Economist recently asked "Why are Nordic companies so successful?", saying that despite accounting for only 0.3% of global population, there track record of global success is astonishing. The consumer facing IKEA, Carlsberg and Lego are the most well-known, but are only the tip of the iceberg. Novo Nordisk is now the #1 European company by market value having overtaken long-time leader LVMH last year. Similar to companies in much, much larger Germany, Nordic firms are often global leaders in industrial engineering fields.

In terms of stock market performance over the last ten years, Nordic firms have outperformed the rest of Europe by a healthy margin and now account for 13% of the MSCI Europe Index, equaling the share of Germany.

The Economist points out some key success factors:

• "Foreign adventurers": given their small domestic markets and delivering products with global appeal, they were early in seeking markets around the world.

• "Enthusiastic adopters of technology": for example, the adoption of cloud-computing services in Europe is by far the highest in the Nordics. There also is a thriving start-up scene with easy access to capital markets.

• "Economic freedom": while offering the most comprehensive social services in the world, government policies have generally been hands-off in the economy.

• "Patient shareholders": Long before the rise of the Norwegian sovereign wealth fund, Nordic companies already had significant financial shareholders with strategic timeframes, both traditional family shareholders as well as pension funds.

They finish the article with a quote from Lego's CEO: "It's not necessarily the strongest that survives, but the one that will adapt to changes."

The HanseaticHunter

#hanse #hansesticleague #nordics #liberty #economicfreedom